So, the initial premise is that the legal structure of the corporation creates a wedge between human morality and the actions of a corporation. This, combined with the mandate of a corporation to maximize profits, creates an inherintly evil force that will destroy our world as we know it. Profits over people and the public good. Corporations are also bad because they allow mass consumer culture (or they create that culture, in the case of children's products) and consumerism is bad. Not only are corporations evil, but the movie also argues that if corporations were actual people (and not just legal entities with the rights of a person), they would be considered psychotic because of their blatant self-interest, their harmful beahvior, etc. So, the solution, then, is to disband corporations and to replace them with some sort of common ownership or mass direct democracy, or protests, or . . . well, they're actually not that clear about what the soultion is, other than "the people, united, will never be defeated."
Now, I'm not always a corporate slut. I dispise Starbucks, loathe the major music lables, and prefer independent movies. That being said, I think the makers of the film knew the story they wanted to tell ahead of time. And this is a shame, really, because they had all the parts in their to make a really powerful critique of corporate behavior, but they just mock them.
So, the misdiagnosis. They say that the profit motive is the root of all evil, which may be true, but they also point out that it is concern for stock holders that is the enforcement mechanism for profit maximization. This is a problem, because on of their initial assumptions is that people are moral and that it's the legal disconnect of the corporation that allows good people to do bad things. But, if individuals are so virtuous, then why do they act as profit maximizing individuals when they are stock owners? The film makers want to blame the form of the corporation and thus ignore the role that individuals play in the process.
A second problem is their dismissal of externalities. Essentially, externalities are effects of an economic exchange that are not included in the price. They can be bad, like chemical runoff into a river that allows plastic to be sold cheaper than it actually costs (to society), or good. The problem with externalities, is that they distort the free market and lead to inefficiencies. If people had to pay the actual cost for some goods that are currently artificially cheap, they would use less of them. eg, people wouldn't drive so many big SUVs if gas cost $5/gallon or more. Plus, if priced correctly, alternative fuels would be more competitive. Yet, the film makers are so anti-market that they cannot see how one could sell environmental regulations, for example, as solving externalities and making the free-market more free. Have Milton Friedman disagree with that.
The film also is somewhat dismissive of using consumer boycots etc. to change corporate behavior. The patient cannot be rehabilitated, in their view, even though they state that corporations can be pro-environment, for example, if they can make money in it. This provides the possible route to improving corporate behavior, as if you make it in the interests of corporations to act more responsibly, then they will.
Another problem was their disdain for private property. They almost fetishized the pre-modern economy of Europe based around the commons. They fail to mention that the "tragedy of the commons" had been endangering the very resources the people needed. It was providing property rights to the land, people had an incentive to maintain and preserve the land, not over use it. Again, they dismiss it, but in some instances emission credit trading has helped reduce pollution. Will it work everywhere? No, but that's no reason to remove it from the policy options.
Finally, there are reasons why corporations exist. Limited liability makes it easier to start a small business, b/c your personal wealth isn't put in danger. Also, a lot of items need to be built at very high volume before it becomes profitable to make/sell them. Compare the cost of a hand built automobile like a Rolls Royce to a mass produced luxury car like a Mercedes. Some things we like to have small and handcrafted. Single malt scotch, for one, and we're willing to pay more for that. But not all people want to pay more for local organic apples, or can't afford to pay more. But people should have choice.
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