How “Good” Corporations are Bad for Democracy

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This page is a sub-page of our page on Humanity Inc. – From Corporation to Cooperation

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Related KMR-pages:

• …

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Books:

• The Corporation: The Pathological Pursuit of Profit and Power, by Joel Bakan, 2004.
• The New Corporation: How “Good” Corporations are Bad for Democracy, by Joel Bakan, 2020.

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Other relevant sources of information:

• Environmental, Social and Corporate Governance

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/////// Quoting Bakan – The New Corporation (2020, p. 95)

The Internet Of Things (IOT) lies at the frontier of this new technological deregulation. Creating Internet connectivity and sensors across life’s infrastructure – appliances, smartphones, wearables, vehicles, utility systems, clothing, door locks, and so on – it vastly expands data-mining domains, while also creating direct channels for corporations to control people’s behavior. Eventually able to “capture and utilize every bit of data which you share or use in everyday life,” as the Analytics Vidhya website exclaims, the IOT – and this is the supposed allure – will ultimately “make the machines smart enough to reduce human labor to almost nil.” The problem, however, is that it may equally reduce the effectiveness of democratic regulation to almost nil. Its direct monitoring and control of consumers effectively “strip[s] away governance and the rule of law,” says Shoshana Zuboff, Charles Edward Wilson Professor of Business Administration at the Harvard Business School (retired), and thereby “annihilate[s] the freedom achieved by the rule of law.”

That is because the IOT effectively allows companies to bypass legal constraints by directly controlling behavior. A bank, for example, can use the IOT to shut off and lock an Internet-connected vehicle, locate it, and repossess it if its owner fails to make a payment. An insurance company can cancel a policy if vehicle sensors indicate the owner has been driving unsafely. In these ways, the IOT helps banks and insurance companies in their businesses. For consumers, however, the effect is to subvert legal protections. Typically, a bank wanting to seize a car, or an insurance company wishing to cancel a policy, has to go through legal processes – prove facts; prove that contract terms comply with consumer protection law; prove that a consumer is in breach of a contract; prove that the remedy sought (like repossessing a car or canceling an insurance contract) is appropriate. With the IOT, in contrast, they can do what they want directly, by way of, as Zuboff describes it, “a privately administered compliance regime of rewards and punishments … aimed at modifying and commoditizing behavior for profit.”

Health providers might lock people out of their fridges if they eat too much ice cream. Banks might lock them out of their homes if they miss a mortgage payment. An employer might discipline an employee who has left her house when she’s supposedly home sick. When corporations know everything that we do, and hold the on-off switches to every piece of our live’s infrastructures, they’re able to control what we do, in ways that best serve their interests. Where it all leads, says Zuboff, is to a “new kind of sovereign power” where “human autonomy is irrelevant and the lived experience of psychological self-determination a cruel illusion”; where “human persons are reduced to a mere animal condition, bent to serve the new laws of capital imposed on all behavior through an implacable feed of ubiquitous fact-based real-time records.

As more and more of our thoughts, feelings, and behaviors are translated into data and mined by corporate-controlled machines, we lose not just our privacy but potentially our autonomy. And that is a scary prospect. It’s still early days and hard to predict exactly how the vast and increasing amounts of data being collected about us will be used. But one thing is certain – for the corporations doing the collecting, creating profit will always be the overarching goal. That will drive the kinds of data-collecting technologies they develop and the ways in which they use the data they mine. And perhaps just as certain, profitability will lie in finding ever-new ways to control and modify behavior, at the expense of our freedom as citizens and consumers – and as workers too.

/////// End of Quote from Bakan – The New Corporation