The Externalizing Machine Essay Example for Free

The Externalizing Machine Essay In todays mostly capitalistic world people who are consumers think that they have power to decide what products to purchase; people who are stockholders are only interested in the profit; people who run corporations make that profit regardless of the price others have to pay; and people who live in developing countries work for 3c per hour making brand name cloths which then are sold for $20, $60, $100, $200, $500, making at the same time the corporations profit skyrocketing. It is widely known that there are sweatshops in developing countries, where people are treated like slaves but practically they are not slaves because they always can walk off the job. It is known that in such countries there is exploitation of child labor, but practically what can a citizen of other country do to help if they have enough their own problems. It is also known that work conditions in such factories are horrible, but what one can do if those companies offer lower prices. Is it fair towards society as a whole that some people are exploited so others can make skyrocketing profits? Is it fair that your TV was partially made by a 6-year-old child? Is it fair that the product you bought harms or even kills you or one of your family member? Is it fair if this does not happen to you but to some other people in some other countries? Is it fair that infants are given harmful baby-formula prohibited in developed countries? There are many questions that can be asked whether it is fair or not, but what happens if we interchanged the word fair with legal and instead we ask whether all those actions are legal or not, and who makes them legal or not. The author Joel Bakan of The Corporation tries to find an answer to those questions and tries to show what impact corporations actions may have on human beings and environment. Joel Bakan in his book brings up issues of sweatshops, environment pollution, externalities, government regulations, advertisement, and many others. He uses concepts of corporation as a psychopath and doom machine. By this Bakan means that corporations, in its pursuit of maximizing the profit at any cost, they destroy people, environment, and themselves at the same time. Even thought there are many important issues throughout the book my focus will be on chapter three Externalities. As the title of the chapter says the most important issue in it is externalities, the effect that corporations have on third parties. The author explains the concept of externalities and gives some examples; this chapter also focuses on the process of how corporations make decisions regarding the products safety, how they make decisions whether to improve products safety or not, or how they make decisions regarding the possible corporate options in the light of profit. The author used some concept and theories in this chapter so lets start with identifying and explaining them. First the concept of externalities. An externality is the effect of a transaction on a third party who has not consented to or played any role in carrying out of that transaction. ; the effect can be either good (creation of new jobs, lowering unemployment) or bad (pollution, diseases, deaths, etc). They literally mean other peoples problems. Whether or not exernalitie have good or bad impact they are only the result of pursuit to make higher profits, and are only the result of self-interest; furtheremore it does not matter for corporation whether the results of corporations decisions are good or bad externalities, as long as the profit raises. (pg60,61) Bakan uses the concept of doom machine (example of paper mill) to explain why corporations are successful in destroying world they operate in. The concept means that corporations dynamic does not take into account the concerns of flesh-and-blood human and that in our search for wealth and for prosperity, we create a thing thats going to destroy us (Monk pg71) The author also uses the concept of corporation as a pschopath which means that corporations are ego-centric, irresponsible or refuse to accept responsibility, have asocial tendencies, and they will do anything to satifsy their goal which is to maximize profit at all costs regardless what harm it may cause. The author assums that many, if not all, corporations make harmfull decisions that will eventually destroy the world, and at the same time will destroy the corporatins themselves. I think that Joel Bakans assmumptions are that all corporations do not care about the environment they operate in, that they would pollute everything to maximize profit, that the only guideline corporations use in making a decision is a cost-benefit analysis, and that eventhough corporations are made of individuals who would not want to harm other people together they would kill other people if it maximizes the profit. The author takes for granted that all corporations do not care, and that if they pretend they care, it is because they want to maximize the profit, and that if they comply with the law it is beause it would cost more not to obey the law, the author takes for granted that all decisions made by corporations are based solely on cost-benefit analysis not on ethical or moral codes or guidelines. The author assumes that corporations eventhought they are made up of individuals with ethical codes they do not use them in making decisions regarding profit. Therefore the author is asking why they make such decisions, why they only consider profits that can be made in near future but do not consider their future existance. The author asks how corporations make such decisions that in long run will destroy human beings, environment and corporations themselves. Joel Bakan is asking why people as a corporation harm other people and themselves. As an example, the author gives Monks story. (Monk is one of Americas most important and influential businessmen, he worries about what is going on in modern corporations. ) Monk was staying in a motel in a small town. He was shocked when he discovered that paper mill is polluting the river in that town. Monks says that he knew everyone there, the mayor, the mill employees and owners, and he also knew that no one wanted the river to be polluted and yet it was being polluted every night. (pg71) Therefore, why if no one wanted it to be polluted they were still polluting it? The question is why corporations make such decisions that harm other human beings. If there is no person in a given corporation who would want to harm others, why as a corporation they not only harm people but even kill them. What is the difference between murdering someone by using a firearm or a knife and murdering someone by letting him drive unsafe vehicle or drink polluted water or eat poisoned food. Who assigns the difference and who lets those murders happen everyday around the world. The question is why corporations are not prevented from doing harm, and why they decide to harm others in the first place. To back up the issues raised in The corporation Joel Bakan uses a lot of data, information, and facts regarding corporations and the legal breaches that they did. Two most important informations include data used by GM in calculation of cost-benefit analysis of improving products safety; and General Electrics major legal breaches including many contaminations of the environment and the amount that they had to pay between 1990 and 2001 for those legal breaches. GM in deciding whether to improve cars safety calculated how much it would cost them. Therefore they calculated how many accidents would happen on US highways, how many fatalities it would cause, and how much it would cost the company in lawsuits and other expenditures, mainly meaning the cost of a fatality. The calculation was as follows: 500fatalities x 200,000 per fatality / 41,000,000 = $2. 4 per automobile. To make the car safer, it would cost company $8. 59 per car. Therefore, it was cheaper not to improve vehicles because GM would save $6. 19 per car in production. Armstrong and her children, that had second- and third degree burns resulting from a rear-end accident in 1993 due to the fire caused by unsafe positioning of the gas tank in GM Malibu, were awarded $1. 2 billion. (pg63) Two significant orders for GE to pay was i 2 billion for asbestos cleanup and related pollution, and $95 million in damages for contamination from dumping of industrial chemicals. (pg75-78) The total GE had to pay for contamination of the environment alone, between 1990 and 2001 was approximatelly $3 000 106 million (over $3 billion); total for violations of safety rules at nuclear fuel plant, for design flow in nuclear plants, for illegal sal of fighter jets, and for overcharging on defense contracts was $300 million. GE was also ordered 14 times to clean up contamination of drinking water (ground water, river, water supply) and soil. The assumptin is that General Electric makes huge amounts of profit, because GE is able to exist on the market even though it was ordered to pay over $3 billion puls the cost of cleaning up contamination. The broader assumption, based on GE example, is that corporations make huge amounts of profit at the cost of environment and human lives and they continue to do so even though they are ordered to pay millions or billions of dollars in fines. Given the information regarding corporations actions and the impact they have on developing countries, on societies, on environment we all live in, and on individuals, who should care the most and why should we care at all. Joel Bakan is trying to make the reader think about the reality we live in, about what is really going on in the world, about bigger picture than only ones family, job, or friends. I think that in Joel Bakans opinion everyone should care about what he says, everyone should care aout future generations, and future of this planet, therefore everyone should take an action in order to make this world a better place. If we take his line of reasoning and accept his arguments it would mean that we should stand against the big corporations and their exploitation of people and environment. We should not agree with their actions and should do something to stop those big corporations destroying the world. We as people and customers have lots of power, however we are lazy to use our collective power to stop those corporations in their harming actions, instead we prefer to pay less for products eventhough we know that those products were made by child labouer. If we agree with Bakans arguments it means that we say no to corporations and to their exloitation of people and environment not to business in itslef, we do not stand against the business but against those corporations that are overtaking the world.