In this episode of Industry Focus: Energy, Nick Sciple chats with Barbara Freese to discuss her latest book, Industrial-Strength Denial: Eight Stories of Corporations Defending the Indefensible, from the Slave Trade to Climate Change. She talks about how businesses throughout history have distorted facts and contorted the truth to fit their own narratives, how they handled criticism for their bad practices and finally what made them mend their ways. She also shares her thoughts about social media, climate change, and much more.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
This video was recorded on September 3, 2020.
Nick Sciple: Welcome to Industry Focus. I'm Nick Sciple. Today, we'll be discussing how businesses throughout history have distorted the facts in the face of clear evidence that they were causing harm. My guest is environmental attorney and author, Barbara Freese. Her latest book is Industrial-Strength Denial: Eight Stories of Corporations Defending the Indefensible, from the Slave Trade to Climate Change. Barbara Freese, thanks so much for joining us on the podcast.
Barbara Freese: Thanks for having me, Nick.
Sciple: So, first off, just off the bat, what got you interested in this topic of corporate denial?
Freese: Well, as you said, I'm an environmental attorney, and for a number of years I worked as an Assistant Attorney General for the state of Minnesota. And I found myself in a proceeding back in the mid-1990s effectively litigating the science of climate change against the coal industry. And was faced with a lot of scientists that the coal industry brought to the state that were telling us that we didn't have to worry about climate change. And as the years went on, I saw that denial spreading from the coal industry, really, through society and into the political sphere and to the point where now climate denial has clear footing in the Federal government, in the White House. And I started thinking about this kind of denial, you know, not so much as individuals making a decision to ignore data, but as a social phenomenon. And that got me thinking about where else this particular social phenomenon has affected society, how it's affected society in the past, how other industries have reacted when confronted with evidence of harm. And that's what got me to plunge into the archives and write this book.
Sciple: Sure. When we're talking about industrial denial, when does a company's actions reach that threshold of denial versus a company that's vigorously defending itself from criticism and that sort of thing?
Freese: Right. Well, and of course, that's a really hard question. There's going to be a big gray area for a long time. I picked eight different campaigns that were so clearly beyond the realm of reasonable doubt that I didn't really have to define that border. And also, I felt that because they were so far beyond the realm of reasonable doubt, they were particularly revealing examples of what industry is willing and capable of denying.
Sciple: Sure, I think that the first example in your book is the British slave trade. I think that's an industry, we can all agree, just patently on its face, the business itself is immoral and causes massive amounts of harm. What were the campaigns used to defend that industry during that time?
Freese: Yeah, it was actually really astonishing. I mean, the British at that time, we're talking in the late-1700s, early 1800s, dominated the global slave trade. They have the ships, they went to Africa, they got the Africans, enslaved them and brought them, mainly to sugar plantations in the Caribbean. And the British public was confronted with an abolition movement, which said, hey, this is brutal, and brought forth all kinds of evidence of that brutality, and the industry then really saw its legitimacy being threatened and they knew they had an audience that really knew nothing about conditions in Africa, conditions on plantations, so they could pretty much say whatever they wanted to in terms of characterizing it. So, they created this, sort of, alternate reality where they actually argued that the Africans wanted to be purchased, that some of them were marketing themselves as fit for labor. They explained that the crossing across the Atlantic on the slave ships was festive with singing and dancing and lots of games of chance. They described the sugar plantations as comfortable and, sort of, a cradle to great welfare state where people were taken care of, they were sick and had their own cozy cottages.
And then, by contrast, they explained that if they had not rescued these people from Africa, they would have been put to death as prisoners of war or eaten by cannibals or face some other horrendous outcome. And so, what happened there was they didn't just argue that, hey, we're not brutal, they could actually flip it around and say, we're the heroes, we're rescuing people, and abolition is a form of violence. And in fact, if you put an end to this trade, you are, as one of the quotes went, cramming liberty down the throats of people incapable of digesting it and shutting the gates of mercy on mankind, etc., etc. So, that was one of their denials, there were a lot of other kinds.
Sciple: Yeah. And I think one of the things you talk about in the book is this idea that some of these folks who were part of disseminating some of this narrative were people who had religious backgrounds and were very much had a strong moral footing. When you're in a business, and you're operating in this type of industry, how does that psychologically bias someone to try to come up with these defenses, when I think, you know, in the case of slavery it's very clear the harms that are being caused to individuals?
Freese: Right. Well, that is part of the book. I try to identify a lot of different psychological factors in play. Overall, we're talking about a group enterprise and when you're in a group you feel loyal to that group more so than to society more generally. So, immediately your, sort of, tribal biases and animosities all come into play. Obviously, money is at stake. I mean, I don't want to minimize that at all, it's always going to be a factor, the fact that denial is lucrative. And in many of these cases you have issues of hierarchy, that people who are not at the top are differing moral responsibility to those running the organization. And corporations are particularly prone to that, because, of course, the people at the top of corporations, the major ones, are able to say, well, I am acting on behalf of my shareholders. So, to the extent they feel group loyalty, they're told by law, although there are some questions about this, that they have to maximize shareholder profits, they're told that that's the dominant, sort of, business philosophy. Shareholders aren't feeling morally responsible, because they're far away and they don't know what's going on.
So, there was a noted cynic in the 1920s that described the corporation as an ingenious device for delivering individual profit without individual responsibility. And I think that's pretty accurate here for a lot of reasons.
And of course, one thing I want to add on top of the whole division of labor and division of responsibility is the ideology of the marketplace and the psychology of the marketplace, you generally don't feel responsible for the other side of the transaction. And of course, we do have an ideology that says that the pursuit of your own self-interest will automatically, through the invisible hand, lead to social good, and more recently, we have more market fundamentalism that is suggesting that government interference in the marketplaces is immoral and inappropriate.
So, I think the ideology, the psychology, the structure, and I haven't even mentioned limited liability, but of course, that goes along with it, all of these things combined to both enhance the natural self-interest in pursuit of profit while muting our natural social responsibility, and I think triggers a lot of very tribal instincts that bond people and bias people more toward their enterprise than toward society generally.
Sciple: Yeah, I think, you see this instinct of, when you feel attacked, you'll circle the wagons and want to protect your business, your industry, your livelihood, that sort of thing. When you see these cases of denial, who are the types of people that expose cases of denial and start to reverse this; in the case of the slave trade and then some of these other industries that you discussed in the book?
Freese: Well, it is almost always outsiders. I mean, you know, there are stories of whistleblowers and whatnot, but generally speaking, it's other segments of our society. The slave trade was largely driven by religious movements at the time, particularly the Quakers. In the case of other industries, it's typically outside scientists who discovered that there's a problem there, there may be some activists involved, but often the next step is journalists, they will bring some attention to this. There might be a movement involving activists and other groups, there may well be lawyers, if there is something, some liability that might be involved. Typically, then you will get some attention from the political realm, maybe state legislators, then somebody in Congress will have hearings, then there will be a law. That's kind of the progression as it normally unfolds.
Sciple: So, another topic I wanted to talk about, obviously, we talked about the slave trade and I think that's pretty clear, the harm that it's causing to people. Some of the other issues that you write about in the book are a little bit more attenuated between the harm that was put in place in the product, you talk about radium, leaded gasoline, things like that.
When there's these multiple causations in place around what could be causing harm that people are criticizing, what strategies do corporations use to, kind of, muddy the waters to, I guess, increase doubt and uncertainty among consumers and perpetuate the ability to sell their product going forward?
Freese: Right. Well, increasing doubt really is the key there. And part of that is keeping the burden-of-proof on the other side, so that you always get the benefit of the doubt. Using, for example, the tobacco industry, which is famous, and sort of the posterchild for sustained science denial, one of the things they would do is argue that maybe there was a separate cause that was causing people, both, to No. 1 smoke, and No. 2 to get lung cancer. So, that you know, statistically there is this epidemic of lung cancer that followed the rise of cigarette smoking.
A couple of decades later as the latency period went on, and almost all of the people getting lung cancer were smokers, and so statistically, I mean, the odds of this being random were a million to one, but so the industry was saying, well, maybe there's something genetic that makes people want to smoke and makes them prone to lung cancer or maybe it's something in their personality, something about stress. Then, of course, there are other arguments like, well, maybe it's stress that's actually causing the cancer, and because tobacco reduces stress among smokers, smoking actually could be a benefit to those worried about cancer. So, pointing to other causes was a big part of it.
Trying to minimize the risk and put it in the category of accepted risks was often very common. They would say, well, you know, nicotine is no more addictive than gummy bears. And, you know, I love gummy bears and if I don't get them, I get cranky, but -- this is actually a quote from one of the tobacco executives -- but they're not addictive.
Another category would be to just try to minimize the notion of risk altogether, sort of, blur things. Comparing, again, the risk of smoking to owning a dog or driving a car or kissing someone. These were all examples set forth in an article written by someone who's being paid to write that article by the tobacco industry as, sort of, front. But that wasn't revealed at the time.
So, yeah, there are lots of different strategies there that relate to the notion of a risk.
Oh, and another very common one was to try to imagine a counterfactual, that if you didn't smoke other really bad things would happen. So, I begin the book with a quote from a tobacco executive saying that, who knows what the hell you'd do if you didn't smoke, you might beat your wife, you might drive cars fast. So, trying to imagine all these other bad things that might happen. I think what you see there is an effort to create these, sort of, psychological rationalizations, both for the smoker so they could rationalize taking an obvious risk, and for the industry itself, so they could continue selling the tobacco and not feel bad that they were selling a deadly and addictive product.
Sciple: Right. I mean, that's one thing that I think about a lot with the smoking topic, because even after a lot of the regulation of the industry and changes in advertising, people continue to smoke. What do we do in the case where these facts are well communicated to consumers but they choose to consume anyway even after the denial has been exposed?
Freese: Well, again, if you look at the tobacco industry as an example, the facts pretty much came out in 1964 with the Surgeon General's report, and you saw only a fairly small dip in people's decision to smoke. I mean, the evidence going directly to them had some effect, but not as much of an effect as you would expect. But what it did do was start changing social policy very, very slowly, but what you'd seen was that smoking rates had gone up and up and up and up until that time, then they started to go down, down, down. And what drove them down, I think, wasn't so much the scientific evidence, but the various social responses to that scientific evidence, including changing the advertising, changing where people were allowed to smoke, lots of social signals, some based in law, some just new cultures that reinforced that science. And so, where we used to have, I think it was about 45% of adults smoking around them, now it's down to something more like 14%, 15%. So, it's been a very dramatic shift not in direct response to the scientific evidence, but when that scientific evidence is converted into social signals that are sent consistently over time.
Sciple: Sure. Another topic I wanted to talk about, and it kind of maybe links in with the smoking idea and what you mentioned earlier of pushing toward the special characteristics that the people who are harmed might have. And you mention fast driving, and automobiles, that's another topic you talk about in the book, of auto companies, despite being confronted with evidence that the design of automobiles, whether that's a lot of protuberances in the car, steering columns that could impale you in an accident, even in the face of some of that evidence, the industry chose to blame that on poor drivers. Can you talk about that campaign of denial and what the strategy was behind that?
Freese: Sure. That chapter focuses mainly on the 50s and 60s in the auto industry. And the auto industry, at the time, was just booming. It was on top of the world, especially GM, which sold something like half the cars in the U.S. and had enormous budget and so many engineers and engineering resources, but they basically decided that they were only responsible for the car before it crashed, because of course, you weren't supposed to crash in your car. And if you did crash, that was evidence that you had done something wrong as the driver and they really didn't want to take responsibility for what happened afterwards, they didn't want to study it and they certainly didn't want to make their cars more crashworthy.
Now, to some extent there were factual denials here as well as just the, kind of, responsibility denial. The Chief Safety Engineer at GM, there are some pretty astonishing quotes from him in the book, basically saying, in the 50s, that he didn't really think seatbelts were going to offer you much protection in a crash beyond what you could get from just holding on properly to the steering wheel and bracing your feet, which, you know, for somebody who's supposed to understand these things, is a particularly astonishing claim.
But generally speaking, the approach of the industry was, it's all about the drivers, we need to train them. Although, of course, it wasn't the industry training them, it would be the high schools mainly. We needed to have good roads and the government would build those, we need to have laws governing traffic, which the government would have to pass and enforce. And they basically tried to stay away from having any responsibility for what happens once the driver loses control of the car and physics takes over.
And finally, a lot of people from outside the industry did a lot of research. The rate of auto accidents was growing to a really alarming level. The public got involved, legislators got involved, and finally in the 60s laws were passed putting in basic safety requirements and then the rates of deaths started a very, very long decline.
Sciple: Yeah. One of the things you mentioned in the book, I think, the auto industry chapter is one of the better examples of the industry leaders explicitly saying, we're focusing on our profit motive at the expense of maybe some other considerations. One example you give in the book is Ford in the late-50s introduced some safety features to the market and then actually removed those subsequently or removed access to them citing this argument, that safety doesn't sell; that sort of thing.
Do you suspect that automakers were purposefully not introducing safety products in order to not allow folks to be aware of what they're missing, I guess?
Freese: You know, the history of the auto industry is kind of surprising to me, because clearly, you don't lose any market share if all of the automakers are putting in seatbelts, or if all of the automakers are doing something safe, there was almost, just more of a, you know, a basic ego thing involved, that the industry did not want outsiders coming along and telling them how to design cars.
And you'd have these very contrary arguments, for example, they would say, if you put seatbelts in cars, it will just encourage the nuts to drive in a crazier way and it'll actually be more dangerous. And at the same time, they would argue, if you put seatbelts in cars, it's going to remind people that this is a dangerous activity and that'll take the fun out of driving and that's just bad for the whole industry. As I argue in the book, I think that was a ridiculous argument because the world, the United States was reinventing itself around the automobile at this time with the interstates and the suburbs and the drive-ins. And you know, there was just very, very little likelihood that people were suddenly going to stop driving if they had a seatbelt. And, of course, that didn't happen, the cars have gotten much, much safer and we've been continuing to drive them.
Sciple: Right. And I guess, were the consumers aware of the safety risk inherent in driving in cars or was the marketing campaign of Nader and others really what made the general public aware of the risk?
Freese: I think the work of Nader and others made the general public aware of the fact that you could make cars much, much safer, but the public was certainly aware that driving was dangerous. I mean, this was becoming a very salient issue in the public sphere. And there would be these drives that would publish, you know, before every holiday weekend, predictions of how many people were going to die. I mean, they were really trying to just encourage people to drive more safely. So, it's not like the danger was hidden, it was very evident, it was just that somehow, they managed, as an industry, to prevent people from thinking beyond the cause of the crash and focusing on the cause of the injury. And making that leap, that mental leap would prove to be very important in figuring out how to bring that death toll down.
Sciple: Right. I think in all of these cases that we see in the book where there's multiple causation, you always see these businesses try to find some other, you know, it's not what we're doing, it's what some other business is doing to really, really change the narrative.
One other, kind of, anecdote from the book, or chapter from the book I wanted to go into is the chapter on CFCs in the ozone layer. And I think this one stands out among the other vignettes that you tell in the book, in that, it was probably the quickest to go from discovery of the risk to CFCs being banned. Do you have any insight on why that was or what made CFCs special there?
Freese: Yeah. Well, a couple of things, first of all, just to remind your listeners, CFCs were used in aerosols, they were a propellant, and so they were in hair sprays and deodorants and all kinds of spray cans. They were also used for refrigeration and air conditioning. And these issues were, sort of, attacked in two different periods. Well, first of all, this issue was not understood at all until the 70s, and some scientists looked at, tried to figure out what is the ultimate fate of these CFCs, the chlorofluorocarbons, and realized that they'd be going up into the stratosphere and they would come apart under solar radiation and then they would deplete the ozone which protects us from dangerous solar radiation.
But they didn't have any evidence this was happening at the time; this was just based on their understanding of the physics. And they raised the alarm in the 70s. The aerosol industry, which knew nothing about atmospheric chemistry, basically responded very directly by saying that this was an attack on capitalism. This was an era where a lot of industries were facing criticism and they saw this as an attack on capitalism. I got a quote from the head of one aerosol company blaming the KGB, there they basically argued that they all needed to be defending free enterprise by responding to these zealots and alarmists.
But the use of CFCs in aerosol was such a trivial benefit, and it could be so easily replaced that early in the 70s, it was under actually the Ford administration, they said, OK, we don't know for sure if this is happening, but the risk is so huge and these are so easy to replace that, industry, you got a couple of years to replace them. And the industry said, OK. And they did, and it wasn't a big deal.
Then the harder question of replacing CFCs from air conditioning and refrigeration was there, and the government was starting to tackle that the EPA, but then Reagan got elected and the threat of regulation went way down, the industry stopped looking at this issue until the ozone hole over Antarctica was discovered in the mid-80s and then alarm rose again. And then very quickly after that, we had the Montreal Protocol, the global agreement that would eventually ban CFCs. And fairly soon after that, you actually had the chemical industry saying, OK, this is enough evidence, after all of these years of denial, they said, we accept the science, we're going to stop making our product, even a little bit before the law required them to stop making their product; they basically didn't resist the exit.
What I think makes this a particularly unique case is that there wasn't a CFC industry, there was a chemical industry, and CFCs were just one of their products. They could move on and manufacture the replacement products for CFCs. And so, I think that made this much different than, say, the tobacco industry or the fossil fuel industries where the product causing the harm is at the core of their industry.
Sciple: Yeah. I think another important factor that I think about with CFCs, as you mentioned is, there was the ozone layer, this clear demonstrable harm affecting the entire world, in that, a lot of these, we will begin to move on to global warming now, this idea of the buildup over time is causing harm, but until we see this catastrophic issue like a hole in the ozone layer or that sort of thing, is there just a psychological barrier for people to want to not move away from the status quo?
Freese: Sure. I mean, the one problem that climate change activists have always had, those trying to protect the climate, is that climate change manifests as a natural phenomenon, just more severe ones or more common ones, and so that does make it harder. And the ozone hole -- I mean, what's strange about this, of course, is that nobody saw the ozone hole, it wasn't like it was, you know, directly affecting people, it was over Antarctica, an uninhabited place, and they still had to trust the scientists to tell them that this was there and that this is a threat. So, in some sense, the ozone hole shouldn't have been as scary as, say, California burning down. But it was scary because people had never seen anything like it, but also it was a more trusting time.
And what happened after, what I think we can all call the success of responding to the threat to the ozone was, you know, a lot of efforts from other industries facing regulation to basically build distrust in science, certainly the kind of science that the government relies on for regulation, and that distrust-building really picked up in the 90s and beyond to the point where now even though the scientific consensus around the threats of climate change is so strong, and the evidence really is accelerating all around the world, there's still a significant chunk of the population that doesn't believe it's happening, believes that the mainstream scientific global community has perpetrated this, sort of, 30-, 40-, 50-year hoax. That was not the case in the 80s and 90s when CFCs were being phased out.
Sciple: We want to move on to the global warming issue and oil companies and those topics. As we mentioned with tobacco, obviously, some of those issues became apparent, but the tobacco companies' public statements differed from what they communicated in private, etc. And I think you see a similar characteristic with the oil industries. When you look at oil businesses, how do their internal documents, their internal communications around their concerns about climate change differ from the way they discuss climate change publicly with their public relations campaigns, etc.?
Freese: Well, I don't go too deeply into that because a lot of the -- to the extent we're talking about their internal communications, a lot of them go way back. Some of those have been archived and made public. We do have documents from the late 70s and early 80s from companies like Exxon talking about climate change, talking about the scientific consensus and the future harm. And they actually were doing their own research in collaboration with outside researchers and publishing it. And basically, their own approach to it was that, yeah, this is going to be a crisis. And there wasn't an internal "this is wrong, we have to question the science." There was an acceptance of the science around the late-70s, early 80s.
But by the late-80s, when, for example, we were dealing with ozone through the Montreal Protocol, we had put together the intergovernmental panel on climate change to look at fossil fuels and CO2 and climate change, the threat of regulation became much more real, that's when you saw the oil industry and others basically trying to stoke as much doubt as possible. And one of the things that I think becomes clear from this history is that, if you are an industry trying to prevent regulation, you do not need to convince people that you are right, that you don't need to convince them that the science that your opponents are using is wrong, you just need to create doubt and that's enough to paralyze a lot of movements, it's a lot certainly to paralyze legislatures. And that's often enough to prevent any regulation.
So, raising doubt, even if you do in fairly subtle ways, and that's something, of course, the oil industry did for a long time, can be very, very effective.
Sciple: Right. That tie goes to the runner mentality, if you want to use, like, a baseball reference. For you as an individual, obviously, people in the industry are aware of the facts on the ground, scientists, etc. Do you have any advice for an individual, an individual citizen to try to suss out the truth from denial, when you're keeping track of what's going on in business and your everyday life?
Freese: Well, you know, we do have all kinds of systems we've set up over the decades regarding science to try to separate good science from bad. You know, you need to make sure the science has been peer reviewed; you want the science to come from a lot of different sources. If you've got multiple lines of evidence coming to the same point, that's very important. For the big issues, we bring in the big guns. We bring in the National Academy of Sciences, we pull together panels of experts, advisory panels to the EPA, and we ask them to look at the science. And once the scientific evidence has been through those processes, that's very reliable science. And so, I think it's incredibly risky to ignore that kind of science.
Sciple: Indeed. One point you talk about in the book, though, is this idea that, as you mentioned, if there's any doubt, there's an advantage to corporations. In a lot of these instances of denial, there are cases where corporations, there's always some ambiguity when it comes to science in any developing field, the corporations will find some scientists or some group of scientists that fit the narrative that they need to communicate to the world and will amplify that perspective, how do you, as someone who, kind of, susses out news, how do you separate out or how do you distinguish when these folks are experts coming from motivated reasoning versus the accepted science? As a total novice who hasn't done any research on the industry and just turned on your TV on Saturday night or what have you.
Freese: Well, I won't pretend it's really easy to do. [laughs] I mean, for some of these issues, after a few decades, you start to get an idea of what's real and what isn't. But I do look at the source, you know, to the extent that the science is coming from an independent source, I'm going to take that a lot more seriously than the science being provided by the industry or the scientists that the industry is promoting. That doesn't mean you don't listen to them and it doesn't mean they're necessarily wrong. But you have to recognize that they are always going to have a sustained financial incentive and a whole lot of psychological biases that are going to prevent them from being objective.
Sciple: Right. I think one of the quotes from the book that, kind of, best illustrated that was there was one oil group, I don't remember the name of the group itself, but they had a quote about ExxonMobil calling them part of the "discredited and anti-energy global warming movement," so that just can go to show how some of these groups can get really out there on a limb after a while.
Freese: Yeah. That was from The Heartland Institute, which Exxon used to fund years ago, and which is one of the more extreme groups arguing that climate change is a hoax. And now they are not as extreme. I mean, Exxon is no longer denying the basic facts of climate change. And so, it means that they've got, you know, their former fundees turning against them, they sort of fueled this monster, and it's still there. Now, who knows to what extent that that's a problem for Exxon, because while they are saying, yes, climate change is real, yes, our product is causing it, yes, we have to do something to reduce emissions. And they're even saying we support the Paris Agreement, they are still projecting their oil production, for example, global oil production, to rise a bit and then, sort of, level out until 2040. But what they're not acknowledging, and what I think is important for your listeners to understand is that the IPCC is telling us that, in fact, our emissions have to be cut roughly by half by 2030 if we're going to keep warming under 1.5 degrees centigrade, or I think it's more like 25% by 2030, if we're going for the 2 degrees. These are targets that aren't going to make us safe, they're targets that are going to make us safer.
So, I think you have this interesting case there of an industry that is no longer directly denying the science, but it still hasn't really integrated the implications of that science into its own projections and its own decision making.
Sciple: And so, what do you think is the path forward for some of these oil companies or hydrocarbon companies more broadly? Clearly there's a mandate and the science shows that we need to reduce our emissions, but also, we need to keep the lights on. So, what do you think the path forward should be for these companies when it comes to continuing to exist as a business in the 21st century?
Freese: Yeah, I don't know. I mean, I just honestly don't know what's going to happen. If I were an oil company and my goal was to keep my oil company going, or if I owned shares in that oil company, and hoped to see a way for that industry to survive, I just don't honestly see how it can at this point. Now, if Exxon and all the oil companies and all the fossil fuel industry had, back in 1980, say, started to take this seriously, they would have had time to convert themselves into something that isn't all about fossil fuels, they could have become energy companies. And you do see, for example, British Petroleum now, I think they're the first company, that's come forth and said, we really are going to slash our production of oil and gas in the next 10 years. And we'll see if they can do that. But the problem is, of course, they have waited so long that I have no idea if they can convert themselves into something sustainable as the world moves away from their core product. They are very late in the game.
Sciple: You mentioned BP. There have been a number of European oil companies, BP and others, trying to invest more in renewable energy. Part of what's driving that is this growth of ESG investing, environmental, social, and governance, where investors are pledging not to invest in companies that don't satisfy those requirements. What do you think about that growth in ESG investing and more mindfulness among shareholders in that realm?
Freese: Yeah, I think that's helpful. I think it's one of the factors pushing companies in the right direction. But I also think that because we are at this point where we need to make such dramatic changes in the next 10 years, I think all of these companies need to be taking very seriously the prospect of laws like the Green New Deal. Obviously, it depends on what happens in November. But I think we're going to be seeing very dramatic legal changes or push for those, which I hope will succeed. So, I think that things that the investor concern has been keeping the better industries alive, and maybe keeping the more polluting industries from doing some of the bad things, but I think things are going to now soon be moving beyond that stage where it's really going to be driven more by laws than by investor preferences.
Sciple: Well, that brings me to the next question I want to ask. You are an attorney; you have a background in the law. If you were in-charge for the day, how would you change the law to help make corporate denial less likely and improve the system?
Freese: Well, let me divide that into a couple of different categories. One is to try to make corporate denial less harmful and that is to reduce corporate power, basically, over our democracy, over our political system. Because the pattern we see over and over again is that corporate denial happens. Other segments of society push back against it, and eventually the harm is reduced, maybe it's eliminated, maybe it's just reduced. So, reducing corporate power, reducing their ability to influence our laws is probably the first step. And partly that's electoral, partly that maybe it's about campaign, finance reform and things like that.
The other question, how do you make corporate denial less likely in the first place? This is I think a much longer term one. We certainly see some industries experimenting, some corporations experimenting, with benefits corporations, for example, putting other missions, missions other than maximizing shareholder profits into their mission statement and trying to make it clear that that's a part of who they are. We've seen socially responsible investing and socially responsible consuming and those factors, I think that's helpful, because it helps the people in the corporations who want to reduce harm argue that those are the right policies.
I'm honestly not sure where that's going to go, I encourage that experimentation, I hope we can figure it out. We may, way down the line, find ways to really change corporations more profoundly, so that this kind of denial isn't so lively present. But I think that's a much longer-term endeavor and I hope that today's experimentation with different kinds of organizations and different kinds of missions will inform that.
Sciple: So, I asked a few questions about how do you spot corporate denial in real-time. When you look at the book, you have eight instances of corporate denial, and when I look at the table of contents, it looks like it's about in chronological order. So, if you had to add a ninth chapter, a ninth story of what's going on in corporate denial, something that's going on right now, topical today, what would it be and why?
Freese: I am really keeping my eye on social media, generally, and big tech, generally. I can't pretend to be enough of an expert to really understand what's going on, but I do think that -- let's not make it another chapter, let's make it another book, and let's not make it me, let's make it somebody who's more tech-savvy writing about this. But we've got, you know, a lot of things going on there, some of which are reminiscent of earlier chapters, harms being done, industries claiming, no, they couldn't have possibly done it. Facebook claiming they couldn't have had an influence on the 2016 election. I think Mark Zuckerberg later apologized for calling it crazy to think that his little company could have much of an influence.
But I think what's going on here is social media is not just in denial about some of its harms, but it becomes a vector for denial by all of these other industries. So, I look forward to somebody writing that book that really talks about all of the different denials that were perpetrated by the industry and also just spread by the industry. And hopefully, it won't take too many years before we put in place the social reforms, we need to constrain some of those abuses and denials.
Sciple: Yeah, I think social media is a great example of one. It's got all of those characteristics we talked about of multiple causation, the issues that come up from social media, I think get attributed to a bunch of different causes. It's a new technology, you know, we talked about radium, it was something that was discovered that took a number of years before society realized the harm in place. And as you mentioned, the messaging is incredible. We talk about slavery, these are pamphlets in favor on the pro-slavery lobby putting out today, this is an incredible social media campaign with bot networks on all that sort of thing.
Do you think, I mean, will we see more corporate denial going into the future, given how much easier the internet makes some of these campaigns to carry out, and to target people specifically that might agree with you?
Freese: Yeah, oh, absolutely. I mean, I think that you're going to be seeing more and more and, you know, you compared the technology to radium, I think you can also compare it to nicotine, because of its addictive nature. And when cigarettes were being promoted, people just had no idea how they affected the brain. And, of course, that made it a real growth industry. And I think we're seeing the same thing with social media and it's going to take a while to understand it. It's certainly going to take a while to push back, because not only is it a new technology with lots of unintended consequences, but it is right now an incredibly powerful industry.
And, you know, sometimes I look at that and I think, well, at least that means the fossil fuels industry isn't quite so powerful, and maybe that'll give us a little bit more of an ability to tackle climate change, but certainly it's a new industry that's going to be raising lots of new problems and denying them.
Sciple: And we'll be talking about it a lot more, and we'll be waiting for that book you mentioned, sometime in the future, from you or somebody else, to really break down all the ways that social media contributes to this corporate denial trend.
Barbara, thank you so much for taking the time to join us on the podcast here today. If folks want to find your book or keep track with the work that you're doing, where can they go do that?
Freese: Well, the title Industrial-Strength Denial, you can buy that wherever fine books are sold. I have a website, BarbaraFreese.com and that will also link it.
Sciple: Awesome!
As always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against any stocks discussed, so don't buy or sell anything based solely on what you hear.
Thanks to Tim Sparks for mixing the show. For Barbara Freese, I'm Nick Sciple, thanks for listening and Fool on!
