The right do it right. It is time for the left to get it right.
When George W. Bush set the scene for his obscene adventures in Afghanistan and Iraq, he identified particular wrongdoers. The countries were harbourers of known killers or run by vicious individuals. He demonized them. He named names. Osama bin Laden, Saddam Hussein. Osama bin Laden had infected a whole country with his venom and Afghanistan needed to be cleansed to get rid of Osama, the despicable, and to eradicate his legacy. And, when talking about the invisible weapons of mass destruction, Bush and his minions would invariably invoke Saddam’s hands-on evil-doing: “He has them. He is not co-operating. He is lying. He gassed his own people.” The media, cartoonists and stand-up comedians obediently fell into line. It had become unanimous: Osama bin Laden and Saddam Hussein were the toxic agents that had produced festering sores. They had to be removed to lance the poisoned hosts, whatever the cost might be to anyone, including the hapless hosts.
It is much easier for citizens to grapple with the evil of a person, to want to brand and stigmatize a person, rather than a system. In the case of the wars, personalizing the enemy made it so much easier to bomb and kill; the victims were not the intended target and the benefit of the killing to the victims would easily outweigh the harm done to them by the bad guys. Collateral damage would be just that: a side effect of conduct based on a supposedly virtuous impulse.
The left fulminates against capitalism, against corporations. It rarely names names. It is time to do so. Capitalism is a system, an evil system. It is right to rage against it. But, if we want to change the system, let us pick better targets than the system itself. The corporation is the principal mechanism through which capitalism’s evil goals are pursued. But, these goals are pursued by, and for, flesh-and-blood human beings who control these corporations. Let us take that seriously and, then, like the right, identify individual wrongdoers to attain our aims. Let us pick, as targets of our campaigns, people who can be characterized as spineless, avaricious, callous villains. Let us attack the knowing beneficiaries of the evil capitalist system and its corporate activities. It can be done and actually will be a virtuous act.
Imagine a bunch of profiteers who decide to produce an addictive substance for sale. They favour its addictive properties because, once a sale has been made, it is likely to lead to many more profitable sales. It is a marvellous way to generate a “spontaneous” market demand. One of the regrettable properties of the substance, however, is that it leads to debilitating diseases and premature deaths amongst those who use it as they are supposed to do. Although the profiteers know all this, they destroy and hide the evidence of these impacts from their victims and potential victims. They destroy documentation that exposes their knowledge. This is the story of tobacco. It is also the story of capitalism, a system that does not care how private accumulation of socially produced wealth takes place, as long as it does.
The proof is in the eating. The tobacco industry has been pilloried in the courts. Recently, in the U.S., large damage assessments have been made against tobacco corporations to compensate governments for the huge medical costs they have incurred as a consequence of tobacco sale and use. The Canadian government, having acknowledged the claim that about 40,000 people per year die premature deaths because of their use of tobacco, is trying to further constrain tobacco corporations’ advertising and selling ploys in the hope that this will lessen the use made of this noxious substance. Worldwide, the tobacco industry is perceived as preying on the ignorant, as an industry that grows fat on the (millions of) corpses of its addicted victims. Yet, the profiteers are not discouraged. They continue to peddle their drug wherever they can, cunningly, aggressively.
A large British tobacco outfit, reviled in some of the recent court cases, turns out to be a philanthropic organization. Recently it was filmed handing out free cigarettes to youths at beach parties it was organizing in Africa. Such generosity! In the Czech Republic, Phillip Morris brazenly argued that government should not use heavy-handed regulations against its market activities, as this would cost the government dearly. After all, if people died earlier than they otherwise would, was the tobacco corporation not helping the government control its medical and welfare costs, a disproportionate amount of which were expended on the elderly? And Phillip Morris, always on the look-out for a good deal, has offered $6.5 billion for an Indonesian cigarette maker. Phillip Morris is eager to have a presence in a market that is largely unaffected by the health and litigation concerns that are prevalent in developed economies and that have curbed sales there somewhat. In tobacco regulation-light Indonesia, 60 percent of males smoke, and this proportion is rising. About 57,000 people die each year from tobacco-related diseases. Clearly, this presents an opportunity not to be missed. The capitalist, the profiteer, knows no remorse, feels no pity.
Or again: The same kind of profiteers get together to mine and process a substance that they know will cause serious harm and premature death to those exposed to it. They lie to everyone about what they know and when they knew it. They destroy as much of the evidence as they can. They do all this because it is profitable. This is the story of asbestos. It is the story of capitalism. The World Health Organization has calculated that, world-wide, a minimum of 100,000 and a maximum of 140,000 people will die horrible premature deaths every year for the next 50 years, somewhere between five and seven million people. Has this given the peddlers of death-for-profit cause for reflection? Of course not.
The Canadian government has been persuaded by the asbestos manufacturers (and the Quebec government, which, in a moment of total madness, came to own an asbestos mountain) to continue to press for the unhindered free movement of asbestos to nation states where its deployment is not yet seriously regulated. Helped by other nations that boast corporate asbestos producers, like Zimbabwe and Russia, our government has sought to oppose a World Trade Organization ruling that nation states are entitled to halt the free trade in asbestos. Our knowledge that it kills and that we have had to regulate it fairly strenuously and that it has been banned altogether in other parts of the world, has not led our government (whose position is complicated by the Quebec issue) to abandon its profiteering entrepreneurs. In Australia, James Hardie, a major miner and processor, was going to be held to pay compensation for its 40 years of wilful exposure of unknowing workers (often indigenous people desperate for a job) to asbestos. It promptly set up a corporation with funds to compensate the victims who could prove their case. Then it took all its other assets away from Australia, relocating them in new corporations registered in the Netherlands. It turns out that James Hardie always knew it had not left sufficient funds in Australia to compensate all its victims. When, almost by chance, this attempt to avoid the actual costs of admitted liability came to light, a new arrangement was forced on James Hardie. But the episode again demonstrates that, no matter where they operate, no matter what the issue is, these profit-hungry actors know no remorse, feel no shame.
In both these well-known sagas, and countless others just like it, there were either deliberate decisions to, or a wilful blindness to the possibility that the conduct might, inflict harm on others. In different settings, this behaviour would be called criminal. For instance, deliberately beating someone because of an uncontrolled surge of anger, or selling forbidden addictive drugs, or stealing a television set, or holding someone up with a gun in order to get their valuables, or sexually assaulting another, or injuring someone after drinking oneself into a stupor before getting behind the wheel of a car are garden-variety crimes. They are the object of our law-and-order fanatics. In these kinds of cases, the harms inflicted are the result of poor socialization, alienation, stupidity, personality defects, or poverty. The tobacco and asbestos cases—and the multitude of other corporate-garbed acts of egregiously harmful deviance—have only one explanation. The wanton disregard for the physical integrity of others and for the shared values of our polity are attributable to the heedless chase for profits. Actors who use the corporation do not feel the pressure of need, as the thief of television sets or the street mugger does. There are few break-ins or hold-ups committed by people who own cottages in several countries. The corporations and their movers and shakers rarely suffer from alienation or a lack of conventional bonds, as the street thug and offender often are said to do. The titans of the corporate world are lauded for their acumen and smarts. The drunk driver is stupid. He is not injuring and killing for any concrete reason, as do the tobacco and asbestos magnates. Unlike most murders, which are highly personal, their killing is impersonal, less morally defensible.
Why is it difficult to make these well-known phenomena a powerful plank in the struggle against capitalism?
The answer is that capitalism dresses itself in corporate clothing. This, in turn, obscures the lines of authority and responsibility. To return to the war analogy: just as Dubya and Rummy hide behind the fact that they were merely acting on advice, that they were not hands-on, that they did not ask for torture and illegal bombings, etc. that is, just as a series of plausible deniability mechanisms have been established in that setting this is replicated, indeed, implemented even more sophisticatedly, in the corporate setting.
The corporation is a separate legal person, distinct from those whose capital was invested to form it, and distinct from those appointed by those investors—the board of directors and their hired executives—to deploy this capital. The investors are totally divorced, in legal terms, from the corporation’s activities.
They are to sit back and wait for the stream of income yielded by the profitable use of the corporation’s aggregated capital. As that capital belongs to the corporation, they, as totally distinct persons, cannot be held responsible for the way in which the corporation produces that profit. Now, as the corporation is not a real person, this means that it is left to the board of directors and executives to determine how that capital should be used. They, in turn, should be relied on to abide by existing laws and their moral compasses.
Let us pause here. The capitalist, the investors, the shareholders, have no responsibility for the way in which capitalist acts engaged in on their behalf, are executed. They have no responsibility for what is done, to whom or to what injury is done. They are legally immune and socially irresponsible. Inevitably, they do what comes naturally for capitalists: they get others to plunder and ravage so that they will be enriched. Corporate management is charged by law to act in the best interests of the corporation. This is equated as being in the best interests of the shareholders. While many well-meaning, progressive people continue to press corporations to act in a socially responsible manner, to take stakeholders other than shareholders into account, this is not the pressure felt by managers as a result of legal decision-making or because of any facts on the ground. If examples are needed, note that, while the outrage over executive compensation often comes from workers who bemoan the excessive payments at the same time as jobs are lost, action on executive compensation only comes when shareholders feel that their well-paid flaks are not maximizing shareholder values as they are supposed to do. Similarly, when the capital markets—that is, the shareholding and financial interest holders—feel cheated by corporate conduct, we get instant government intervention on their behalf. This is not the case when, say, workers are killed on the job. The Westray Bill was a rare success story. It took 12 years to be enacted; Sarbanes-Oxley less than 12 months.
This immunity, this irresponsibility, allows the investing classes—and I am not including the increasing number of small shareholders forced into the equity markets by their need to provide for their own security as health care, welfare and pensions furnished by the state are degraded—to make their wet dreams come true. They can follow their inclination to make money out of anything—out of killing, addicting, war—out of anything. Through the corporate vehicle, capitalism has devised an almost perfect system to let its wealth owners pursue their goals. And, more importantly, they are hidden as they do this, deflecting attention to the bodiless, soulless corporation, and/or the occasional sacrificed executive. The left must act on the knowledge that there are human beings out there who have been given an incentive to harm workers and the environment and that they do so through their lieutenants in charge of their artificial creation, the corporation.
Back to tobacco. While it is conventional wisdom that tobacco use should be limited because it is widely agreed by ordinary people that tobacco production and sale are noxious practices, red-blooded capitalists do not care about any of this. On March 6, the New York Times carried a news item that showed that, on Wall Street, tobacco remained a desirable investment. In the last five years, the Standard & Poors Index fell 2.2 percent while its tobacco component rose a staggering 26.4 percent. Investors—hidden and protected money chasers—do not see broken bodies; all they see is gold in all the killing yet to come. This is the key: shareholders, as capitalists hiding behind corporate vehicles, are no less rapacious than the much more up-front pillagers of yesteryear. They are always on the look-out for an opportunity to make money, even if it means wreaking havoc on people and their environments. In the wake of the tsunami, there was an outpouring of charitable feeling. In Australia, the corporate sector’s willingness to contribute to the reconstruction efforts in Southeast Asia was widely hailed by the corporate press. Less noted was a report in the February 11 issue of the Australian Financial Review, that asbestos was being used to rebuild ravaged towns in Sri Lanka after the asbestos industry had conducted an “aggressive campaign to convince [the destroyed nations] that asbestos (especially white asbestos) products are safe.” Asbestos can no longer be used in Australia, and the shareholders in the asbestos mining companies, some of whom probably made donations to the relief funds, must have been chuffed at these new opportunities for sales.
Capitalism is criminogenic because it is anti-human, because it has only one logic, namely, the private accumulation of socially produced wealth. Every now and again, even the greatest cheerleaders for the status quo acknowledge that these criminogenic properties manifest themselves in corporate activities. But this is not attributed to the inherent character of capitalism that is served by the corporation. The legal architecture of the corporation makes it appear that it is the corporate umbrella that has been misused by some wayward managers and that, if this could be corrected by re-educating managers, the corporation again will be a facility engaged in virtuous conduct, that is, market practices. This hides the fact that the corporation actually is far more than a convenience that can be put to whatever use we want. It has a specific objective. It is a business form that permits capitalists to behave as exploiters without fear of being blamed for the consequences.
What needs to be done is to make the major shareholders—and in Canada, it is easy to identify them—personally responsible for the misdeeds of the corporation. Only then will there be pressure to change the conduct of the corporation. What is remarkable is that in none of the significant instances of wrongdoing—from tobacco to asbestos to negligently manufactured cars, tires, poisonous chemicals, etc.—has a single shareholder been held criminally responsible. They are never even made to account fiscally for the profits they made at the expense of broken bodies, spoiled environments, bankrupted communities, etc. No shareholder has been asked to return monies made as a result of asbestos or tobacco poisonings. At worst, the shareholders who hold the shares when they have become depressed in value because of the revelation of the wrongdoing may lose part of their investment. There is to be no stigmatization, no incarceration; there is to be no treatment of these profiteers as receivers of stolen goods.
We must name names. We must learn to say: “X” has made squillions by having workers exposed to lead or aresenic or asbestos or isocyanates; we must say “Y” has bought villas in Tuscany out of Nestle convincing women to mix powdered milk with contaminated water, rather than use their breast milk, that they made their money by having babies killed. Their names and addresses can be found from the shareholder registers. While this may not lead to immediate changes, it will reveal how obscurantist line of plausible deniability have been established. It should go some way to the delegitimation of the corporate mechanism and allow us to inflict collateral damage on the system it maintains. If we succeed in having some named evil-doers imprisoned—not only pay back some of their corruptly earned monies but also jailed for their role in injuring and killing people—it would be a bonus. Of course, some capitalists would probably make money out of that. I am all for it! Private prisons are floated on stock exchanges and widely touted as great investment opportunities, because law and order is a growth industry. I say that we should really get it to grow by filling the prisons with the most cold-hearted criminals of all: flesh-and-blood capitalists hiding behind their impersonal corporate shells.
Harry Glasbeek is a Professor Emeritus and Senior Scholar, Osgoode Hall Law School, York University. His latest books are Class Privilege: How Law Shelters Shareholders and Coddles Capitalism (2107) and the follow-up, Capitalism: A Crime Story (2018) both published by Between the Lines, Toronto. Professor Glasbeek is a frequent contributor to Canadian Dimension.
This article appeared in the September/October 2005 issue of Canadian Dimension (The Battle for Canadian Universities).