The Guardian: The wealth service: A new documentary says businesses are like psychopaths. The "oppressive giants sent by evil enchanters" - according to the film: What does corporate champion Ruth Lea make of it?: “If these sovereign countries decide that they do not want them within their national boundaries, they can tell them to leave. This applies to Shell in Nigeria as well as to the many manufacturing companies that have set up in China and Indonesia.” (ShellNews.net)

Friday October 22, 2004

The Corporation is a polemical documentary based on a book which, I confess, I have never heard of, called The Corporation: The Pathological Pursuit of Profit and Power. The core thesis of the film is that businesses are bad, very bad, and corporations, if they were people, would be regarded as "pathological". According to the film, corporations harm workers, harm human health, harm animals and harm the biosphere. And - sin of sins - they produce and market goods and services that people buy but don't really need.

You would have to have a very blind spot indeed not to acknowledge that some companies behave badly. Indeed the film's coverage of a dairy milk-enhancing hormone called Prosilac (manufactured by Monsanto) raised some very apposite questions about the safety of the product. Checking and questioning the activities and claims made by business, especially where there are health and safety considerations, is a valuable and necessary exercise.

But the problem with this film is that, because it never acknowledges that companies can do anything right or have any positive impact on people's lives, any constructive questioning of business's behaviour gets lost in the thicket. The film cries wolf so often, and in such self-righteous tones, that I, for one, began to discount everything that was said. Which is unfortunate, as it limits the potential audience. This will probably be a film that will be utterly adored by anti-capitalist and anti-globalising zealots, thus preaching to the converted, but ignored by everyone else.

It would have helped the film if they had started by giving some serious thought as to what business is and what it does for people. Businesses are usually defined as profit-generating organisations (otherwise they go bust) that sell goods and services to independent and responsible consumers who want to buy them. In doing so, they also create jobs, generate income and create the wealth that sustains higher living standards. They are therefore defined as having a very limited set of activities. These strike me as positive things.

But the film is never explicit about what it means about business. Instead it prefers to make the usual, sadly predictable, noises about the inherent wickedness of making profits and is sniffily patronising about the gullibility of consumers. Incidentally, why are middle-class anti-capitalists so patronising about everyone else?

Throughout the film, I kept asking myself what economic vision the film-makers wished to impose on the hapless public. One where all businesses are bankrupt and there were no jobs? Or a pre-industrial world in which we all sit under a tree recycling seeds (there were some touching shots of this in the film)? Or one where there was public ownership of the means of production and no nasty capitalists? The latter option, as we all know, has been utterly discredited with the collapse of the USSR and satellite economies. (The Soviet economy was, incidentally, far more damaging to the world's biosphere than any capitalist economy.) The film, quite simply, provides no answers. It is clear that capitalism is the worst way of running an economy - until you see the others.

The film also seemed fashionably unhappy with the notion that companies should be accountable to their shareholders, instead of to the broad church of their "stakeholders". This is a frequently expressed concern that I simply fail to understand. Shareholders invest their savings, including their pensions, in companies. Surely, therefore, it is appropriate that company directors should be primarily motivated by the objective of providing the owners (the shareholders) with the best possible return.

Shareholder accountability does not, however, mean that businesses ignore their other "stakeholders". On the contrary, employers, at least in developed countries, have legally specified responsibilities towards the other stakeholders. As well as very extensive employment and health and safety legislation, employers have a duty of care to their employees. There are, quite rightly, tough environmental laws. Businesses also have responsibilities towards their consumers and suppliers.

According to the film-makers, corporations aren't just concerned with profit ("pathologically"), they are also concerned with power (also "pathologically"). It is obvious that successful companies, especially large multinationals, have "power" in the marketplace and it is equally obvious that they can have political "power" in government and international circles. Moreover, they can abuse this political power and such abuse needs thorough questioning and exposure. In forthcoming months let us hope we see more about the role of French and Russian oil companies in the UN oil-for-food programme in Iraq.

But this film is not interested in specific misdemeanours. Instead, like Don Quixote tilting at windmills, it tilts at the "oppressive giants sent by evil enchanters" of its own imagination - the corporations.

What the film simply fails to acknowledge is that corporations do not function in a vacuum of their own creation. They all exist within sovereign nation states, with their own governments and own laws. If these sovereign countries decide that they do not want them within their national boundaries, they can tell them to leave. This applies to Shell in Nigeria as well as to the many manufacturing companies that have set up in China and Indonesia.

But when the film discusses the "exploitation" (sic) of developing countries by the multinationals, it never stops to ask why governments permit multinationals to invest in their countries. It doesn't ask why, because the answer would be deeply embarrassing. Governments want them there to raise living standards and help their countries grow out of poverty - a poverty that our comfortable western, middle-class anti-capitalists would, incidentally, find deeply unpleasant. The attitude of the film-makers, all from affluent western countries, towards developing countries is deeply patronising. The suggestion is that they know more about them than the people who actually live there. It's grotesque.

This film is a missed opportunity. Companies are not all squeaky clean but, rather than target genuine corporate misdemeanours, it splatters bullets all over the wall and misses the miscreants.

· Ruth Lea is a former director of policy at the Institute of Directors and is now director of the Centre for Policy Studies. The Corporation is out October 29

· Send any comments or feedback about this article to friday.review@guardian.co.uk

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