0:23 150 years ago, the business corporation was a relatively insignificant institution. Today, it is all-pervasive. Like the Church, the Monarchy, and the Communist Party in other times and places, the corporation is today's dominant institution. This documentary examines the nature, evolution, impacts, and possible futures of the modern business corporation. Initially given a narrow legal mandate, what has allowed today's corporation to achieve such extraordinary power and influence over our lives? We begin our inquiry as scandals threaten to trigger a wide debate about the lack of public control over big corporations. >> I do think there is
1:09 an overhang over the market of distrust. Listen 95%, or some percent, huge percentage of the business community are honest and reveal all their assets, got compensation programs that are balanced... but there are some bad apples. >> The media debate about the basic operating principles of the corporate world was quickly reduced to a game of "follow the leader". >> I still happen to think the United States is the greatest place in the world to invest. We have some shakeups that are going on because of a few bad apples. ♪ Some people call me a bad apple ♪ ♪ Well I may be bruised
1:55 ♪ But I still taste sweet ♪ Some people call me a bad apple ♪ ♪ But I may be the sweetest ♪ Apple on the tree >> These are not just a bunch of bad apples. >> This is just a few bad apples. >> It's not just a few bad apples. >> We've gotta get rid of the bad apples... you can start with Tyco. >> Bad apples. >> We know all about Worldcom. >> Bad apples. >> Xerox corporation. >> Bad apples. >> Arthur Anderson. >> Bad apples. >> Enron, obviously. >> Bad apples. >> Kmart Corporation. >> The fruit cart is getting a little more full. >> I don't think it's just a few apples, unfortunately. I think this is the worst crisis of confidence in business. >> What's wrong with this picture? Can't we pick a better metaphor
2:40 to describe the dominant institution of our time? Through the voices of CEOs, whistleblowers, brokers, gurus and spies -- insiders and outsiders -- we present the corporation as a paradox, an institution that creates great wealth, but causes enormous, and often hidden, harms. >> I see the corporation as part of a jigsaw in society as a whole, which if you remove it, the picture's incomplete.
3:26 But equally, if it's the only part, it's not going to work. >> A sports team. Some of us are blocking and tackling. Some of us are running the ball. Some of us are throwing the ball. But we all have a common purpose, which is to succeed as an organization. >> A corporation's like a family unit. People in a corporation work together for a common end. >> Like the telephone system, it reaches almost everywhere. It's extraordinarily powerful, it's pretty hard to avoid. And it transforms the lives of people, I think on balance, for the better. >> The eagle. Soaring, clear eyed, competitive,
4:15 prepared to strike, but not a vulture. Noble visionary majestic, that people can believe in, and be inspired by, that creates such a lift, that it soars. I can see that being a good logo for the principled company. Okay guys, enough bullshit. >> Corporations are artificial creations. You might say they're monsters trying to devour as much profit as possible at anyone's expense. >> Dr. Frankenstein's creation
5:02 has overwhelmed and overpowered him, as the corporate form has done with us. >> The word "corporate" gets attached in almost, you know, in a pejorative sense to -- and gets married with -- the word "agenda". And one hears a lot about the corporate agenda. As though it is evil. As though it is an agenda which is trying to take over the world. Personally, I don't use the word "corporation", I use the word "business". I will use the word, uh, uh, "company".
5:49 I'll use the words "business community". Because I think that is a much fairer representation than zeroing in on just this word "corporation". >> It's funny that I've taught in a business school for as long as I have without ever having been asked so pointedly to say what I think a corporation is. >> It is one form of business ownership. >> It's a group of individuals working together to serve a variety of objectives, the principal one of which is earning large, growing, sustained, legal returns for the people who own the business.
6:40 >> The modern Corporation has grown out of the industrial age. The industrial age began in 1712 when an Englishman named Thomas Newcumen invented a steam driven pump to pump water out of the English coal mine, so the English coalminers could get more coal to mine, rather than hauling buckets of water out of the mine. It was all about productivity, more coal per man hour. That was the dawn of the industrial age. And then it became more steel per man hour, more textiles per man hour, more automobiles per man hour, and today, it's more chips per man hour, more gizmos per man hour, the system is basically the same, producing more sophisticated products today.
7:30 >> The dominant role of corporations in our lives is essentially a product of the, roughly the past century. Corporations were originally associations of people who were chartered by a state to perform some particular function. Like a group of people want to build a bridge over the Charles River, or something like that. >> In both law and the culture, the corporation was considered a subordinate entity that was a gift from the people in order to serve the public good. So, you have that history, and we shouldn't be misled by it, it's not as if those were the halcyon days, when all corporations served the public trust, but there's a lot to learn from that.
8:18 >> The Civil War and the Industrial Revolution created enormous growth in corporations. And so there was an explosion of rail roads who got large federal subsidies of land. Banking, heavy manufacturing. And corporate lawyers, a century and a half ago, realized that they needed more power to operate, and wanted to remove some of the constraints that had historically been placed on the corporate form. >> The 14th Amendment was passed at the end of the Civil War to give equal rights to black people. And therefore it said, "No State can deprive any person of life, liberty or property without due process of law."
9:05 And that was intended to prevent the States from taking away life, liberty or property from black people as they had done for so much of our history. And what happens is the corporations come into court and corporation lawyers are very clever, and they say, oh you can't deprive a person of life, liberty or property. We are a person, a corporation is a person. And so Supreme Court goes along with that. >> And what was particularly grotesque about this, was that the 14th amendment was passed to protect newly freed slaves. So, for instance, between 1890 and 1910, there were 307 cases brought before the court under the 14th amendment.
9:51 288 of these brought by corporations, 19 by African Americans. >> Six hundred thousand people were killed to get rights for people, and then with strokes of the pen over the next thirty years, judges applied those rights to capital and property while stripping them from people. >> Every body makes a mistake once in awhile. But I just can't be personally responsible.
10:39 That's one of the weaknesses of a partnership. Isn' it, Sid? >> Well, maybe you'd better incorporate the store. >> Incorporate?! >> Yes. Incorporating would give you the big advantage of what you want right now -- limited liability. You start with a group of people, who want to invest their money in a company. Then these people apply for a charter as a corporation. This government issues a charter to that corporation. Now that corporation operates legally as an individual person. It is not a group of people. It is under the law, a legal person. Imperial Steel Incorporated has many of the legal rights of a person.
11:25 It can buy and sell property. It can borrow money. It can sue in court, and be sued. It carries on a business. Imperial Steel, along with thousands of other legal persons, is a part of our daily living. It is a member of our society. >> Having acquired the legal rights and protections of a "person", the question arises: What kind of person is the corporation? >> Corporations were given the rights of immortal persons. But then special kinds of persons. Persons who had no moral conscience. These are a special kind
12:10 of persons which are designed by law to be concerned only for their stockholders. And not, say, what are sometimes called their stakeholders, like the community or the work force or whatever. >> The great problem of having corporate citizens is that they aren't like the rest of us. As Baron Thurlow in England is supposed to have said: "They have no soul to save, and they have no body to incarcerate." >> I believe the mistake that a lot of people make when they think about corporations, is they think you know, corporations are like us... >> General Electric -- is a kind, old man with lots of stories. >> Nike -- >> Young. >> Energetic.
12:55 >> Microsoft -- aggressive. >> McDonald's -- young, outgoing, enthusiastic. >> Monsanto -- immaculately dressed. >> Disney -- goofy. >> The Body Shop -- um, deceptive. >> Very lovely. >> Do you know what The Body Shop is? >> Nope. >> They think they have feelings, they have politics, they have belief systems, they really only have one thing: the bottom line. How to make as much money as they can in any given quarter. That's it. >> Of course they make a profit, and it's a good thing. That's the incentive that makes capitalism work. To give us more of the things that we need. That's the incentive that other economic systems lack.
13:42 >> People accuse us of only paying attention to the economic leg, because they think that's what a business person's mindset is, it's just money. And it's not so, because we as business people know that we need to certainly address the environment, but also we need to be seen as constructive members of society. >> There are companies that do good for the communities. They produce services and goods that are of value to all of us, that make our lives better, and that's a good thing. The problem comes in, in the profit motivation here, because these people, there's no such thing as enough.
14:28 >> And I always counter-point out, there's no organization on this planet, that can neglect its economic foundation. Even someone living under a banyan tree is dependent on support from someone. Economic lack has to be addressed by everyone -- it's not just a business issue. >> But, unlike someone under a banyan tree, all publicly traded corporations have been structured -- through a series of legal decisions -- to have a peculiar and disturbing characteristic. They are required -- by law --- to place the financial interests of their owners above competing interests. In fact, the corporation
15:13 is legally bound to put its bottom line ahead of everything else, even the public good. >> That's not a law of nature, that's a very specific decision, in fact a judicial decision. So they're concerned only for the short term profit of their, stockholders. >> To whom do these companies owe loyalty? What does loyalty mean? Well, it turns out that that was a rather naive concept anyway as corporations are always owed obligation to themselves to get large and to get profitable. In doing this, it tends to be more profitable to the extent it can make other people pay the bills for its impact on society.
15:58 There's a terrible word that economists use for this called "externalities". >> An externality is the effect of a transaction between two individuals on a third party who has not consented to, or played any role in, the carrying out of that transaction. And there are real problems in that area, there's no doubt about it. >> Running a business is a tough proposition, there are costs to be minimized at every turn, and at some point the corporation says, you know, let somebody else deal with that. Let's let somebody else supply the military power to the Middle East to protect the oil at its source, let's let somebody else
16:44 build the roads that we can drive these automobiles on, let's let somebody else have those problems, and that is where externalities come from, that notion of, let somebody else deal with that -- I got all I can handle myself. >> A corporation is an externalizing machine in the same way that a shark is a killing machine. Each one is designed in a very efficient way, to accomplish particular objectives. In the achievement of those objectives, there isn't any question of malevolence or of will, the enterprise has within it, and the shark has within it, those characteristics that enable it to do that for which it was designed. >> So, the pressure's on
17:30 the corporation to deliver results now, and to externalize any cost that this unwary or uncaring public will allow it to externalize. >> To determine the kind of personality that drives the corporation to behave like an externalizing machine, we can analyze it, like a psychiatrist would a patient. We can even formulate a diagnosis, on the basis of typical case histories of harm it has inflicted on others selected from a universe of corporate activity.
18:28 >> Well, this is the office of the National Labor Committee here in the garment area of New York City. It's a little bit disheveled. These are all from different campaigns. To make this stuff concrete as possible, we purchased all of the products from the factories that we're talking about. This shirt sells for $14.99. And the women who made this shirt got paid 3 cents. Liz Claiborne jackets, made in El Salvador. The jackets are $178.00, and the workers were paid 74 cents for every jacket they made. Alpine car stereos, 31 cents an hour. It's not just sneakers. It's not just apparel. It's everything.
19:17 We were in Honduras and some workers -- they knew the kind of work we did -- and they approached us, these young workers. And they said, conditions in our factory are horrible. Will you please meet with us? And we said we would. But you can't meet in the developing world, you can't walk up to a factory with your notebook and workers come out and interview them. I mean, there's goons, there's spies, the military police. So you do everything in a clandestine manner. We're about to start the meeting, and in walk three guys. Very tough looking guys. The company had found out about our meeting and sent these spies. Obviously, we didn't have the meeting. But these young girls were really bright. And as they were leaving, away from the eyesight of the spies, they started to put their hands underneath the table. And I put my palm under there, put my hand under there and they put into my hand their pay stubs
20:04 so we'd know who they were, what they were paid and the labels that they made in the factory so we'd know who they worked for. And I took my hand out after everyone had left and in the palm of my hand was the face of Kathy Lee Gifford. But the bottom of it is the interesting part: "A portion of the proceeds from the sale of this garment will be donated to various children's charities." It's very touching. Gets you right here. Walmart is telling you if you purchase these pants, and Kathy Lee is telling you, purchase these pants, you're going to help children. The problem was the people who handed us the label were 13 years of age.
20:52 >> Let's look at it from a different point of view. Let's look at it from the point of view of the, the people in Bangladesh who are starving to death, the people in China who are starving to death and the only thing that they have to offer to anybody that is worth anything is their low cost labour. And in effect, what they're saying to the world is they have this big flag that says, "Come over and hire us, we will work for ten cents an hour. Because ten cents an hour will buy us the rice that we need not to starve. And come and rescue us from our circumstance."
21:38 And so when Nike comes in, they are regarded by everybody in the community as an enormous godsend. >> We went through the garbage dump in the Dominican Republic. We always do this kind of stuff, we dig around. One day we found a big pile of Nike's internal pricing documents. Nike assigns a time frame to each operation. They don't talk about minutes. They break the time frame into ten thousandths of a second. You get to the bottom of all 22 operations, they give the workers 6.6 minutes to make the shirt. It's seventy cents an hour in the Dominican Republic. That's 6.6 minutes, equals eight cents. These are Nike's documents. That means the wages come to three tenths of one percent of retail price. This is the reality. It's the science of exploitation.
22:36 >> What happens in the areas where these corporations go in and are successful? They soon find that they can't do anymore in that country because the wages are too high now. And what's that another way of saying, well the people are no longer desperate. So okay we've used up all the desperate people there, they're all plump and healthy and wealthy. Let's move on to the next desperate lot and employ them and raise their level up. >> Well the whole idea of the export processing zone is that it will be the first step towards this wonderful new development. Through the investment that's attracted to
23:23 these countries, there will be a trickle down effect into the communities. But because so many countries are now in the game of creating these free trade enclaves they have to keep providing more and more incentives for companies to come to their little denationalized pocket. And the tax holidays get longer. So the workers rarely make enough money to buy three meals a days, let alone feed their local economy.
24:18 >> Something happened in 1940 which marked the beginning of a new era. The era of the ability to synthesize and create, on an unlimited scale, new chemicals that had never existed before in the world. >> And using the magic of research, oil companies compete with each other in taking the petroleum molecule apart and rearranging it into, well, you name it... >> So, suddenly, it became possible to produce any new chemical, synthetic chemicals, the likes of which had never existed before in the world, for any purpose and at virtually no cost. >> Fabrics, toothbrushes, tires insecticides
25:07 cosmetics, weed killers. A whole galaxy of things to make a better life on Earth... >> For instance, if you wanted to go to a chemist and say, look I want to have a chemical, say a pesticide, which will persist throughout the food chain, and I don't want it to, have to renew it very often, I'd like it to be relatively non-destructible and then he'd put two benzene molecules on the blackboard and add a chlorine here, and a chlorine there -- that was DDT! >> When the 8th army needed Jap civilians to help them out in our occupation, they called on native doctors to administer DDT under the supervision of our men to stem a potential typhus epidemic. Dusting like this goes a long way in checking disease,
25:53 and the laugh's on them. Pardon our dust. >> As the petrochemical era grew and grew, warning signs emerged that some of these chemicals, could pose hazards. The data initially were trivial, anecdotal, but gradually, a body of data started accumulating to the extent that we now know that the synthetic chemicals, which have permeated our workplace, our consumer products,
26:39 our air, our water, produced cancer, and also birth defects and some other toxic effects. Furthermore, industry has known about this, at least most industries have known about this, and have attempted to trivialize these risks.
27:27 If I take a gun and shoot you, that's criminal. If I expose you to some chemicals, which knowingly are going to kill you, what difference is there? The difference is that it takes longer to kill you. We are now in the midst of a major cancer epidemic and I have no doubt and I have documented the basis for this, that industry is largely responsible for this overwhelming epidemic of cancer, in which one in every two men get cancer in their lifetimes, and one in every three women get cancer in their lifetimes.
28:23 Towards the end of 1989, a great box of documents arrived at my office, without any indication where they came from. And I opened them, and found in it a complete set of Monsanto files, particularly a set of files dealing with toxicological testing of cows who'd been given rBGH. >> BST, trade name Posilac, is being used in more than a quarter of the dairy herds in the United States, according to Monsanto. The milk is being drunk by a large portion of the American population, since the Food and Drug Administration declared it safe for both cows and humans four years ago... >> ...and at that time, Monsanto was saying, "There's no evidence whatsoever of any adverse affects, we don't use antibiotics." And this clearly showed
29:08 that they had lied through their teeth. >> The files described areas of chronic inflammation in the heart, lungs kidneys spleen also reproductive effects, also a whole series of other problems, >> ...the most comprehensive independent assessment of the drug, concludes that BST results in unnecessary pain, suffering and distress for the cows. This is not acceptable for a drug designed simply to increase milk production. >> It is a silly product. We have, the industrial world is awash in milk. We're over producing milk, we actually have governments around the world who pay farmers not to produce milk.
29:54 So the first product Monsanto comes up with is a product that produces more of what we don't need. >> ...of course you'll want to inject Posilac into every eligible cow, as each cow not treated is a lost income opportunity. >> But the problem was that use of the artificial hormone caused all kinds of problems for the cows. It caused something called "mastitis", which is a very painful infection of the udders. When you milk the cow if the cow has bad mastitis, some of the -- and I don't know how to say it this in a, you know, I hope people aren't watching at dinner time, but the pus from the infection of the udders ends up in the milk. And the somatic cell count, they call it -- the bacteria count -- inside your milk goes up. >> There's a cost to the cows.
30:42 The cows get sicker when they're injected with rBGH. They're injected with antibiotics. We know that people are consuming antibiotics through their food and we know that that's contributing to antibiotic resistant bacteria and diseases. And we know we're at a crisis when somebody can go into a hospital and get a staff infection and it can't be cured, and they die. That's a crisis. >> Bad for the cow, bad for the farmer, bad potentially for the consumer. The jury is out, we see a lot of conflicting evidence about potential health risk. And of course, as a consumer, my belief is why should I take any risk?
31:27 >> Factory farm cows have not been the only victims of Monsanto products. Large areas of Vietnam were deforested by the US military using Monsanto's Agent Orange. The toxic herbicide reportedly caused over 50,000 birth defects, as well as hundreds of thousands of cancers in Vietnamese civilians and soldiers, and in former American troops serving in South East Asia. Unlike the Vietnamese victims, US Vietnam veterans exposed to Agent Orange were able to sue Monsanto for causing their illnesses. Monsanto settled out of court, paying $80 million dollars in damages. But it never admitted guilt.
32:33 >> Sleeping in a motel in Brewer, Maine one night, I woke up with terrible hay fever and my eyes were burning. And I looked out at the river and there were great mounds of white foam going right down the river. And the next morning I got up and I said my God, what was that happening last night? He said, oh that's just the river. And I said, what do you mean? He said, well, look every night the paper company sends the stuff down the river. And I said, what are you talking about? And he said, don't you understand? That's how we get rid of the effluent from the paper mills. Well I knew at that time, I had been in the business. I had sold oil to the paper mills. I knew all the owners. I had been in politics -- I knew the people in the towns. I knew not one constituent of the paper mills wanted to have the river polluted. And yet here the river was being polluted. And it was more or less as if we created a doom machine.
33:20 In our search for wealth and for prosperity, we created something that's going to destroy us. >> At Multinational Monitor, we've put together a list of the top corporate criminals of the 1990s. We went back and looked at all the criminal fines that corporations had paid in the decade. Exxon pled guilty in connection to federal criminal charges with the Valdez spill and paid $125 million in criminal fines. General Electric was guilty of defrauding the federal government and paid $9.5 million in criminal fines. Chevron was guilty of environmental violations and paid $6.5 million dollars in fines. Mitsubishi was guilty of anti-trust violations and paid $1.8 million in fines.
34:05 IBM was guilty of illegal exports and paid... Eastman Kodak was guilty of environmental violations... Pfizer, the drug manufacturer, was guilty of anti-trust violations... Odwalla was guilty of food and drug regulatory violations... Sears was guilty of financial fraud. Damon Clinical Laboratories was guilty of... Blue Cross Blue Shield was guilty of... [ indistinct chatter as illegal actions are spewed ] Hoffman la Roche, guilty of an anti-trust violation, paid $500 million dollars in criminal fines. >> Again and again, we have the problem that whether you obey the law or not, is a matter whether its cost effective. If the chance of getting caught and the penalty are less than it costs to comply,
34:54 people think of it as being just a business decision. >> Drawing the metaphor of the early attempts to fly. The man going off of a very high cliff in his airplane, with the wings flapping, and the guys flapping the wings, and the wind is in his face, and this poor fool thinks he's flying, but in fact he's in free fall, and he just doesn't know it yet, because the ground is so far away, but of course the craft is doomed to crash. That's the way our civilization is.
35:40 The very high cliff represents the virtually unlimited resources we seemed to have when we began this journey. The craft isn't flying because it's not built according to the laws of aerodynamics, and it's subject to the law of gravity. Our civilization is not flying because it's not built according to the laws of aerodynamics for civilizations that would fly. And of course the ground is still a long way away, but some people have seen that ground rushing up sooner than the rest of us have. The visionaries have seen it and have told us it's coming. There's not a single scientific, peer-reviewed paper published in the last 25 years that
36:26 would contradict this scenario: Every living system of Earth is in decline, every life support system of Earth is in decline, and these together constitute the biosphere, the biosphere that supports and nurtures all of life and not just our life, but perhaps 30,000,000 other species that share this planet with us. The typical company of the 20th century: extractive wasteful abusive, linear in all of its processes, taking from the Earth, making, wasting, sending its products back to the biosphere,
37:12 waste to a landfill... I, myself, was amazed to learn just how much stuff the Earth has to produce through our extraction process to produce a dollar of revenue for our company; when I learned, I was flabbergasted. We are leaving a terrible legacy of poison and diminishment of the environment for our grandchildren's grandchildren, generations not yet born. Some people have called that intergenerational tyranny,
37:58 a form of taxation without representation, levied by us on generations yet to be. It's the wrong thing to do. >> One of the questions that comes up periodically is to what extent could a corporation be considered to be psychopathic? And if we look at a corporation as a legal person, that it may not be that difficult to actually draw the transition between psychopathy in the individual, to psychopathy in a corporation. We could go through the characteristics that define this particular disorder, one by one, and see how they might apply to corporations.
38:49 >> They would have all the characteristics, and in fact, in many respects, a corporation of that sort is the prototypical psychopath. >> If the dominant institution of our time has been created in the image of a psychopath, who bears the moral responsibility for its actions? >> Can a building have moral opinions? Can a building have social responsibility? If a building can't have social responsibility, what does it mean to say that a corporation can? A corporation is simply a artificial legal structure, but the people who are engaged in it, whether the stockholders, whether the executives in it,
39:34 whether the employees, they all have moral responsibilities. > It's a fair assumption that every human being, real human beings, flesh and blood ones, not corporations, but every flesh and blood human being is a moral person. We've got the same genes, we're more or less the same, but our nature, the nature of humans, allows all kinds of behaviour. I mean every one of us, under some circumstances, could be a gas chamber attendant and a saint. >> No job, in my experience with Goodyear, has been as frustrating as the CEO job.
40:20 Because even though the perception is that you have absolute power to do whatever you want, the reality is you don't have that power. Sometimes, if you had really a free hand, if you really did what you wanted to do, that suits your personal thoughts and your personal priorities, you'd act differently. But as a CEO you cannot do that. >> Layoffs have become so wide-spread that people tend to believe that CEOs make these decisions without any consideration to the human implications of their decisions. It is never a decision that any CEO makes lightly. It is a tough decision. But it is the consequence of modern capitalism.
41:10 >> When you look at a corporation, just like when you look at a slave owner, you want to distinguish between the institution and the individual. So, slavery, for example or other forms of tyranny, are inherently monstrous, but the individuals participating in them may be the nicest guys you can imagine -- benevolent friendly nice to their children, even nice to their slaves, caring about other people. I mean, as individuals they may be anything. In their institutional role, they're monsters because the institution is monstrous. And the same is true here. >> My wife and I, some years ago, had at our home, a demonstration,
41:56 25 people arrived, they hung a big banner on the top of our house, saying, "murderers". They danced around outside with gas masks and so on. As a public demonstration, it wasn't very effective, this is a very rural area, two people and a dog, and it's not a very big house, which I think rather surprised them. But then we sat down and talked to them for a couple of hours, and we gave them tea and coffee, and they had lunch on our lawn... >> After about 20 minutes, they said, well the problem is not you,
42:43 it's Shell. So I said, now wait a minute, let's talk about, what is Shell -- it's made up of people like me. In the end, what we found in that discussion was all the things they were worried about, I was worried about as well. Climate, you know, oppressive regimes, human rights, the big difference between us was, I feel that I actually can make a contributions to this, these people were frustrated, because they felt that they had no, nothing to do. >> So, an individual CEO, let's say, may really care about the environment. In fact, since they have such extraordinary resources, they can even devote some of their resources to that without violating their responsibility to be totally inhuman. > Which is why, as the Moody-Stuarts serve tea to protestors,
43:31 Shell Nigeria can flare unrivaled amounts of gas, making it one of the world's single worst sources of pollution. And all the professed concerns about the environment, do not spare Ken Saro Wiwa and eight other activists from being hanged for opposing Shell's environmental practices in the Niger Delta. >> The corporation is not a person, it doesn't think. People in it think, and for them, it is legitimate to create terminator technology, so that farmers are not able to save their seeds. Seeds that will destroy themselves through a suicide gene.
44:19 Seeds that are designed to only produce crop in one season. You really need to have a brutal mind. It's a war against evolution to even think in those terms. But quite clearly profits are so much higher in their minds. >> The profit motive, which drove Putzy to accomplish so much, may bring out the evil, as well as the good. Hello?... >> My work spans all industry sectors. I mean, I virtually have worked for, like, I'd say, 25% of the Fortune 500. I've posed as an investment banker. I've posed as a venture capitalist.
45:05 I set up front companies that are executive recruiting firms. Essentially, I'm a spy. I'll locate your employees, and I will tell them that I'm calling from "Acme Recruiting Agency". and that I've got a job that pays them considerably more than what they're paying. Would they mind meeting me for an interview? And when the executive shows up, what he doesn't realize is, I'm actually debriefing him on behalf of a competitor -- that there is no job and that the office that he's at has been rented, and the picture on my desk of my family is a phony, and it's all just a big, elaborate ruse
45:50 to glean competitive information from him. I don't feel any guilt. You have to expect that guys like me are out there. We're predators. If you're are CEO, I mean, do you think your shareholders really care whether you're Billy Buttercup or not? I think people want money. That's the bottom line. >> The fact that most of these companies are run by white men, white rich men, means that they are out of touch with what the majority of the world is. Because the majority of this planet are not a bunch of rich white guys. They're people of other colours, they're the majority. Women are the majority,
46:37 and the poor and working poor, make up the majority of this planet. So the decisions that they make come from not the reality that exists throughout the world. How much is enough? How much is enough? If you are a billionaire, wouldn't it be okay just to be a half a billionaire? Wouldn't it be okay for your company to make a little less money if it meant... When I bought those two airplane tickets for Phil Knight and myself, to fly to Indonesia, I was prepared for him to say, "Okay, let's go." >> Oh no, not a chance. Not a chance. >> No? they're transferable. I can change it to another day. V.O: And call me on it. Call my bluff. He's a smart guy. I mean, he's not, he's not stupid. And so I thought, okay, get ready for this.
47:22 Especially because, you know, I bought him first class tickets. So, you know, it would be a comfortable ride at least. And of course he tells me then, on camera... >> I've never been to Indonesia. >> And I'm like taken aback by this. I can't believe it. The guy's the head of the company, he's never walked through his own factories. >> Oh, you've got to go. >> I can't go right now and the rest of this year. >> When we were done filming, he calls me up, a couple of weeks later, and he goes, "I may have a chance to go there with you to the factories. I'm going to the Australian Open to watch some tennis." And uh, you know, "Maybe I can get up there, or at least you can go there. Would you like to go to the Australian Open?"
48:12 >> For 21 years, I never gave a thought to what we were taking from the Earth or doing to the Earth in the making of our products. And then in the summer of 1994, we began to hear questions from our customers we had never heard before: "What's your company doing for the environment?" And we didn't have answers. The real answer was, not very much. And it really disturbed many of our people, not me so much as them. And a group in our research department decided to convene a task force and bring people from our businesses around the world to come together to assess our company's worldwide environmental position to begin to frame answers for those customers. They asked me if I would come
48:58 and speak to that group and give them a kick off speech and launch this new task force with an environmental vision -- and I didn't have an environmental vision, I did not want to make that speech. And at sort of the propitious moment, this book landed on my desk. It was Paul Hawkins book, The Ecology of Commerce. And I began to read the Ecology of Commerce, really desperate for inspiration, and very quickly into that book, I found the phrase, "the death of birth". It was E.O. Wilson's expression for species extinction, "the death of birth", and it was a point of a spear into my chest, and I read on, and the spear went deeper,
49:45 and it became an epiphinal experience, a total change of mindset for myself and a change of paradigm. Can any product be made sustainably? Well not any and every product. Can you make land mines sustainably? Well, I don't think so. There's a more fundamental question than that about land mines. Some products ought not be made at all. Unless we can make carpets sustainably, you know, perhaps we don't have a place in a sustainable world, but neither does anybody else, making products unsustainably. One day early in this journey,
50:31 it dawned on me that the way I'd been running Interface, is the way of the plunderer. Plundering something that's not mine, something that belongs to every creature on Earth, and I said to myself, my goodness, the day must come when this is illegal, when plundering is not allowed. I mean, it must come. So, I said to myself, my goodness, some day people like me will end up in jail. >> I've got to be honest with you. When the September 11th situation happened, I didn't know that the,
51:19 and I must say, and I want to say this because it's -- I don't want to take it lightly, it's not a light situation. It's a devastating act. It was really a bad thing, it's one of the worse things I've seen in my lifetime, you know. But, I will tell you and every trader will tell you, who was not in that building, and who was buying gold and who owned gold and silver, that when it happened, the first thing you thought about was, well how much is gold up? The first thing that came to mind was, my God, gold must be exploding! Fortunately for us, all our clients were in gold. So when it went up they all doubled their money. Everybody doubled their money.
52:06 It was a blessing in disguise. Devastating, crushing, heart shattering, but on a financial sense, for my clients that were in the market, they all made money. Now, I wasn't looking for this type of help, but it happened. When the US bombed Iraq back in 1991, the price of oil went from $13 to $40 a barrel for Christ sake! Now we couldn't wait for the bombs to start raining down on Saddam Hussein. We were all excited. We wanted Saddam to really create problems. Do whatever you have to do,
52:52 set fire to some more oil wells, because the price is going to go higher. Every broker was chanting that, there was not a broker that I know of that wasn't excited about that. This was a disaster this was something that was -- you know, catastrophe happening. Bombing wars. In devastation there is opportunity. >> The pursuit of profit is an old story, but there was a time, when many things were regarded either as too sacred or too essential for the public good -- to be considered business opportunities. They were protected by tradition and public regulation.
53:40 >> ...this man needs the fire department... >> Fire-fighters started as private companies... >> ...yes, and lots of other people need the fire department too... >> And if you didn't have the medallion of a given fire-fighter brigade on your house and it was on fire, those fire-fighters would just, you know, ride on by because you didn't have a deal. Well, we gradually evolved a public trust for the provision of safety on that very specific level. This is important. We should not go back from that and start saying, "Well, you know, why don't we put that back in the market and see what that does? Maybe it will make it more efficient."
54:28 >> Privatization does not mean you take a public institution and give it to some nice person. It means you take a public institution and give it to an unaccountable tyranny. Public institutions have many side benefits. For one thing they may purposely run at a loss. They're not out for profit. They may purposely run at a loss because of the side benefits. So, for example if a public steel industry runs at a loss, it's providing cheap steel to other industries, maybe that's a good thing. Public institutions can have a counter-cyclic property. So that means that they can maintain employment
55:16 in periods of recession, which increases demand, which helps you get out of a recession. Private company can't do that. In a recession, throw out the work force 'cause that's the way you make money. >> There are those who intend that one day everything will be owned by somebody and we're not just talking goods here. We're talking human rights, human services, essential services for life. Education, public health, social assistance, pensions, housing. We're also talking about the, the survival of the planet. The areas that we, we believe are -- must be maintained in the commons, or under common control or we will collectively die. Water and air...
56:07 >> Even in the case of air, there's been some progress. And here the idea is to say, look, we can't avoid the dumping of carbon dioxide. We can't avoid the dumping of sulphur oxides, at least we can't at the moment afford to stop it, so we're dumping a certain amount of stuff into the environment. So we're going to say with the current tonnage of sulphur oxides for example, we will say that is the limit. And we'll create permits for that amount and we'll give them to the people who've been doing the polluting and now we will permit them to be traded. And so now there's a price attached to polluting the environment. Now, wouldn't it be marvelous if we had one of those places for everything? >> It sounds like you're advocating private ownership of
56:54 every square inch of the planet. >> Absolutely. >> Every cubic foot of air, water... >> It sounds outlandish to say we want to have the whole universe, the whole of the Earth owned. That doesn't mean I want to have Joe Bloggs owning this square foot. But it means the interests that are involved in that stream are owned by some group or by some people who have an interest in maintaining it. And that, you know, that is not such a loony idea, it's in fact the solution to a lot of these problems. >> 5, 4, 3, 2, 1! Off into space. Man, that takes real teamwork. And here's a team of junior spacemen
57:41 with an out of this world breakfast. >> Comparing the marketing of yesteryear to the marketing of today is like comparing a BB gun to a smart bomb. It's not the same as when I was a kid, or even when the people who are young adults today were kids. It's much more sophisticated, and it's much more pervasive. It's not that products themselves are bad or good. It's the notion of manipulating children into buying the products. >> In 1998, Western International Media, Century City, and Lieberman Research Worldwide,
58:27 conducted a study on nagging. >> We asked parents to keep a diary for three weeks and to record every time -- you could imagine -- every time their child nagged them for a product, we asked them to record when, where, and why. This study was not to help parents cope with nagging. It was to help corporations help children nag for their products more effectively. >> Anywhere from 20% to 40% of purchases would not have occurred unless the child had nagged their parents. That is, we found for example, a quarter of all visits
59:13 to theme parks wouldn't have occurred unless a child nagged their parents. Four out of ten visits to places like Chuck E. Cheese would not have occurred. And any parent would understand that, you know when I think of Chuck E. Cheese, oh my goodness, it's noise... >> ♪ 'cause we're going to Chuck E. Cheese's ♪ >> ...and there's so many kids. Why would I want to spend two hours there? But if the child nags enough, you're going to go. We saw the same thing with movies, with home video, with fast food... We do have to break through this barrier where they do tell us, or they say, they don't like it when their kids nag. Well that's just a general attitude that they possess. It doesn't mean that they necessarily act upon it a 100% of the time.
59:58 You can manipulate consumers into wanting and therefore buying your products. It's a game. >> Children are not "little adults"; their minds aren't developed. And what's happening is that marketers are playing to their developmental vulnerabilities. The advertising that children are exposed to today is honed by psychologists, it's enhanced by media technology that nobody ever thought was possible. >> The more insight you have about the consumer, the more creative you'll be in your communication strategies. So if that takes a psychologist, yeah, we want one of those on staff.
1:00:44 >> I'm not saying it's wrong to make things for children, you know, and I also think it's important to distinguish between psychologists who work on products for children who help toy corporations make toys that are developmentally appropriate. I think that's great, that's different from selling the toys directly to the children. >> Initiative is huge. I think in the US we place about 12 billion dollars of media time. So we'll put it on TV, we'll put it in print, we'll put it up in outdoor, we'll buy radio time, so we're the biggest buyers of advertising time and space in the US, and in the world. One family cannot combat an industry that spends 12 billion dollars a year trying to get their children.
1:01:30 They can't do it. >> They are tomorrow's adult consumers, so start talking with them now, build that relationship when they're younger... and you've got them as an adult. Somebody asked me, "Lucy is that ethical?" You're essentially manipulating these children. Well, yeah, is it ethical? I don't know. But our, our role at Initiative is to move products. And if we, know you, move products with a certain creative execution placed in a certain type of media vehicle, then we've done our job. >> Like the waters of a mighty ocean, people also represent a tremendous force. The understanding of which is of greatest importance to the American way of life.
1:02:15 This force is known as "consumer power". >> The goal for the corporations is to maximize profit and market share. And they also have a goal for their target, namely the population. They have to be turned into completely mindless consumers of goods that they do not want. You have to develop what are called "created wants". So you have to create wants. You have to impose on people what's called a philosophy of futility. You have to focus them on the insignificant things of life, like fashionable consumption. How many created wants can I satisfy? We have huge industries,
1:03:01 public relations industry is a monstrous industry, advertising and so on, is uh, which are designed from infancy to try to mold people into this desired pattern. >> I saw a homeless person in New York City and he had like a TV set up, and people were going up and trying to get pictures with him. And they wanted to look like -- be there, and if he had, like, a company sponsor him, that might be kind of interesting. Like Polaroid could sponsor him and give out free pictures or something like that. I don't know. It would be a possibility for someone who doesn't have that many possibilities. >> We saw Tiger Woods on TV with a hat with a Nike logo on it and we figured, you know, he probably gets, like, millions of dollars
1:03:47 just to wear the hat on a press conference. And therefore, we figured we can do that for someone else. And hopefully get money, in turn, so we can go to school. And that's how we came up with being corporately sponsored. >> We made our sponsor announcement on the Today Show on June 18. ...we're thrilled to be sponsored by First USA. ...we're thrilled to be working with First USA as our corporate sponsor and they're covering our college tuition. >> ...we found First USA as our sponsor and we're proud to be working with them. >> ...our sponsor is First USA. ...so, we're really thrilled to announce First USA as our sponsor. ...we're thrilled to be working with First USA. And so we gave First USA a good name in the media, and include them in our news stories, and then through there they get as much advertising as we can give them. >> ...they'll be conforming, not to the wishes of demanding parents, but to the wishes of an image conscious corporation.
1:04:35 >> They're not just out there for the money and they're just, I mean, they want to work with us, and be our friends and let us help them help us and vise versa. ...and we became walking billboards to pay for our college tuition. Cool Site of the Day picked us as cool site and Yahoo picked us and we were in USA Today. When we did our photo shoot for People Magazine this is where we stood, up on top. >> We stood up here and we smiled. >> We smiled and took the picture. >> Our parents had war stories and stuff to tell us. We have our corporate sponsor story. >> Exactly. I have a lot of faith in the corporate world because it's always going to be there so you may as well have faith in it because if you don't, then it's just not good.
1:05:25 >> Corporations don't advertise products particularly, they're advertising a way of life. A way of thinking. A story of who we are as people and how we got here and what's the source of our so-called liberty, and our so-called freedom. You know, so you have decades and decades and decades of propaganda and education teaching us to think in a certain way. When applied to the large corporation, it's that the corporation was inevitable, that it's indispensable, that it is somehow remarkably efficient, and that it is responsible for progress and the good life. They're selling themselves, they're selling their domination,
1:06:11 they're selling their rule, and they're creating an image for themselves as just regular folks down the block. >> Hi, How y'all doing today? Good to see you. How are you doing today? Hi. How you doin' today? We're from Pfizer. We're your neighbors. You're in the new houses? Are you in the new houses? Oh! These are some neighbors. Can we say hello? Can we say hello just for a minute? So, what do you think of the neighborhood now? >> It's alright, it's good. >> Yeah, I think it's been getting better over the last 20 years that I've been comin' here. Ya. So I think together, you know, working with you, and Pfizer and our other partnership, we'll make this a better place. >> Okay. >> Okay, nice to see you, Miss Frazier, bye.
1:07:01 KLINE V.O: There used to be a lot of crime at this subway. One night as I was going home, I got caught and was almost mugged. So we decided to make a change to make this community better. We're looking at turnstiles that prevent fare-beating. It used to be you could just hop right over. So Pfizer, in collaboration with the transit authority, actually purchased these machines. This is a talkback box that allows us to speak to the Pfizer guard, which is approximately 500 yards from here.
1:07:49 Now I haven't seen the Pfizer guard today, but I'm going to see if I can call him. If he's not, I'll have to go wake him up. Hello. Hello. Tom Kline speaking -- So I'm sure before we're through, he'll call back. But particularly on the off-hours, this allows a passenger to call directly to the Pfizer desk for assistance. And then the Pfizer guard calls the transit police and the transit police respond to any crime situation. As a result of all this, crime is down in the station. It's much safer for our community partners. Thank you. I'll press the other button just to be sure...
1:08:36 Tom speaking, Hello? We'll stop over and see him personally. >> It's tough, you know -- they're putting some taxpayer and shareholder money into helping and who can say? But that money should be going to the taxpayers to decide what to do. And while they're doing those sort of nice things, they're also playing a role in lowering taxes for corporations and lowering taxes for wealthy people, and reconfiguring public policy. What we don't see is all that reconfiguring going on; we don't see all that vacuuming up of money, vacuuming out the insides of public processes, but we do see the nice facade. >> I can give you the day in the life of a person
1:09:23 who might be the target of undercover marketing. And I will tell you that some of these things are happening right now, around you. So you walk out of your building in the morning, some city, and you walk out into the street, and you hear some people having kind of a loud conversation about a musical act and they are passing the head phones back and forth and wow, this is great! >> Oh yeah! >> Isn't that good? >> Hey, do you know that I heard this CD is really hard to find but I heard they sell it at store X. >> I better go pick it up. It's so good. >> It's great, isn't it? >> You hear that and you register it and you might kind of pick up on that and maybe later on, you'll think, hey I wonder what the hot act is, bang, that might be in your head. Now you get into your office and there's a certain brand of water in the refrigerator. What is that? You take it out,
1:10:08 you drink, you slug it down, it's there, not really thinking about it. Wow! That's pretty good water. Who knows? Maybe someone placed the water there. You kind of go out for your lunch break, you're sitting in the park and people are kind of out there, talking in the park and bang, all of a sudden you see another message. By the time you go to bed, you've probably received eight or nine different undercover messages. People are always thinking, well, oh I know product placement. That's when they put stuff in movies! Well, yes, kind of. I mean, that's definitely traditional product placement. But real life product placement is just that: placing stuff in movies but the movie's actually your life. We'll take a group of attainable, but still aspirational people -- they are not supermodels -- they are kind of people just like you,
1:10:54 they're doing something for us, whether they are having a certain kind of drink or they are using a certain laundry detergent, whatever it may be. They are kind of kind of the roach motel, if you will. People are going to come over to them and they are going to give them this little piece of brand bait. It could be a sound bite of knowledge or a ritual, consumers will get that piece of roach bait, then they would take it. "Oh, pretty cool!" Then they go out and spread it to their friends. If you want to be critical, if you want to go through your life like that, sure, be critical of every single person that walks up to you. But if they are showing you something that fits, and something that works, and something that makes your life better in some way, well then who cares? Again, just say thanks!
1:11:42 >> Today the job of building this nation geographically, is completed. There are no new frontiers within our borders. So to what new horizons can we look now? Where are tomorrow's opportunities? What's ahead for you, for your children? The frontiers of the future are not on any map. They're in the test tubes and laboratories of the great industries. >> The Chakrabarty case is one of the great judicial moments in world history. And the public was totally unaware it was actually happening as a process was being engaged. General Electric and Professor Chakrabarty went to the patent office
1:12:28 with a little microbe that eats up oil spills. They said they had modified this microbe in the laboratory, and therefore it was an invention. The patent office and the US government took a look at this quote "invention" they said, "No way. The patent statutes don't cover living things." This is not an invention. Turned down. >> Then, General Electric and Doctor Chakrabarty appealed to the US Customs Court of Appeal. And, to everyone's surprise, by a three-to-two decision, they overrode the Patent Office. >> ♪ GE, we bring good things to life ♪ >> They said, "This microbe looks more like a detergent, or a reagent, than a horse or a honeybee." I laugh because they didn't understand basic biology; it looked like a chemical to them. Had it had an antenna, or eyes, or wings, or legs,
1:13:14 it would never have crossed their table and been patented. Then the Patent Office appealed. And what the public should realize now is the Patent Office was very clear that you can't patent life. My organization provided the main amicus curiae brief. "If you allow the patent on this microbe," we argued, "It means that without any congressional guidance or public discussion, corporations will own the blueprints of life." When they made the decision, we lost by five to four, and Chief Justice Warren Burger said, "Sure, some of these are big issues but we think this is a small decision." Seven years later the US Patent Office issued a one sentence decree: You can patent anything in the world that's alive, except a full-birth human being.
1:14:02 We've all been hearing about the announcement, that we have mapped the human genome. But what the public doesn't know, is now there's a great race by genomic companies, and biotech companies, and life science companies, to find the treasure in the map. The treasure are the individual genes that make up the blueprint of the human race. Every time they capture a gene and isolate it, these biotech companies claim it as intellectual property. The breast cancer gene, the cystic fibrosis gene -- it goes on, and on, and on. If this goes unchallenged in the world community, within less than ten years, a handful of global companies will own, directly, or through license, the actual genes that make up the evolution of our species. And they're now beginning to patent the genomes of every other creature on this planet.
1:14:49 In the Age of Biology, the politics is going to sort out between those who believe life first has intrinsic value, and therefore we should choose technologies and commercial venues that honour the intrinsic value. And then we're going to have people who believe, look, life is simple utility. It's commercial fare, and they will line up with the idea to let the marketplace be the ultimate arbiter of all of the Age of Biology. >> In a world economy where information is filtered by global media corporations keenly attuned to their powerful advertisers, who will defend the public's right to know? And what price must be paid to preserve our ability to make informed choices?
1:15:40 >> What Fox television told us the people to be The Investigators. >> Do any stories you want, ask tough questions and get answers. So we thought, "This is great, this is a dream job." Fantastic. The very first thing they had us do was not to research stories, but to shoot this promo, which was, The Investigators. >> The Investigators. Uncovering the truth, getting results, protecting you. >> And they had a film crew and a smoke machine, and we were silhouetted... >> One of the first stories that Jane came up with was the revelation that most of the milk in the state of Florida and throughout much of the country was adulterated with the effects of bovine growth hormone. >> With Monsanto, I didn't realize how effectively a corporation could work to get something on the marketplace.
1:16:27 The levels of coordination they had to have. They had to get university professors into the fold. They had to get experts into the fold. They had to get reporters into the fold. They had to get the public into the fold. And of course the FDA, let's not leave them out. They had to get the federal regulators convinced that this was a fine and safe product to get it onto the marketplace. And they did that, they did that very, very well. >> Posilac is the single most tested new product in history, and is now available to use specifically so you can increase your profit potential. >> The federal government basically rubber stamped it before they put it on the marketplace. The longest test they did for human toxicity was 90 days on thirty rats. And then either Monsanto misreported the results to the FDA,
1:17:13 or the FDA didn't bother to look in depth at Monsanto's own studies. >> The scientists within Health Canada looked very carefully at bovine growth hormone and came to very different conclusions than the Food and Drug Administration in the US did. >> Monsanto's engineered growth hormone did not comply with safety requirements. It could be absorbed by the body, and therefore did have implications for human health. Mysteriously, that conclusion was deleted from the final published version of their report. >> I personally was very concerned that there's a very serious problem of secrecy, conspiracy and things of that nature. ...we have been pressured and coerced to pass drugs of questionable safety, including the rBST...
1:17:58 >> We wrote the story. We had it ready a week beforehand. They bought ads... >> Farmers in the milk industry say it's safe, but studies suggest a link to cancer. Don't miss this special report from The Investigators. >> That Friday night before the Monday the series was to begin, the fax machine spit out a letter from this very high priced lawyer in New York that Monsanto had hired. It contained a lot of things that were just off the wall false.
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