The Corporation

The oil shock of the 1970s, when OPEC raises the price of oil, demonstrates the limits of government in managing economies; thereafter, companies campaign to unshackle corporate energies. The collapse of the Soviet Union in the early 1990s signals the victory of capitalism over communism, and a worldwide process of converting government services into private businesses, or “privatization,” gets underway. Western nations also continue to loosen restrictions on corporate activities. Malfeasance by corporations becomes more apparent during this period.

Companies are sensitive to how they are seen by society, and when masses of citizens protest corporate misdeeds—as during the Great Depression and, later, when ecological crises multiply—corporations make efforts to portray themselves as socially responsible, good citizens. Often they do this while simultaneously committing egregious acts that cause harm or death. This points out the sometimes psychopathic nature of corporations, who, like many antisocial humans, will say whatever makes them appear concerned for others, even if they care only for themselves. 

An externality is a cost borne by someone else. Examples of externalities for corporations are when overseas sweatshops cause misery for workers, who suffer so that the corporation can acquire cheap goods for retail sale, or when a company’s manufacturing creates pollution that causes problems downstream or downwind and the victims must suffer the consequences. Unless citizens support a regulatory regime that imposes penalties for these harms, corporations will continue to externalize costs wherever possible. 

Enron is at once an example of corporate publicity run amok and of deregulation that leads to disaster. Having painted their company as one conscious of environmental responsibility, Enron executives engineer a phony energy crisis in California, then sell electricity to the state at exorbitant prices. When the government imposes price controls, Enron is revealed as a financial house of cards, and it collapses in one of the great scandals of the privatization era. 

The Nag Factor is how marketers get children to pressure their parents into buying products that contain things the kids value. Amusement parks rely on the Nag Factor, and fast-food chains use toys to entice children, who then nag their parents into taking them to those restaurants. Even car companies and beer distributors have learned how to attract children with toys and clothing that they can have if their parents purchase the attached adult products.