by Tony Clark
The men who run global corporations are the first in history with the organisation, technology, money, and ideology to make a credible try at managing the world as an integrated economic unit.
Richard J. Barnett and Ronald E. Mueller, Global Reach
In the twenty-odd years since these words were penned, transnational corporations (TNCs) have consolidated their power and control over the world. Today, 47 of the top 100 economies are actually transnational corporations, 70 percent of global trade is controlled by a just 500 corporations, and a mere one per cent of the TNCs on this planet own half the total stock of foreign direct investment. At the same time, the new free market and free trade regimes (eg. GATT, NAFTA) have created global conditions in which transnational corporations and banks can move their capital, technology, goods, services - freely throughout the world unfettered by the regulations of nation states or democratically elected governments.
In effect, what has taken place is a massive shift in power, out of the hands of nation states and democratic governments and into the hands of transnational corporations and banks. It is now the TNCs that effectively rule and govern the lives of the vast majority of the people on earth. Yet, these new world realities are seldom reflected in the strategies of citizen movements for democratic social change. All too often, strategies are primarily aimed at changing government policies while the real power being exercised by the TNCs behind the scenes is rarely challenged, let alone dismantled. And when the operations of TNCs become the prime target for citizen action campaigns, there is a tendency to employ a more or less piecemeal approach to what is a deeply systemic problem.
As we approach the 21st century, it is imperative that social movements in both the North and the South develop a new politics for challenging the dominant global rule of transnational enterprises.
The following are some of the salient ingredients of the new powers that now give corporations effective control over the lives of peoples and nations in this age of globalisation, and then some suggestions as to changing the situation.
Over the past three decades, as David Korten points out, the world's leading business and governmental elites have been gathering on a regular basis in elite fora such as the Council on Foreign Relations, Bilderberg, and especially the Trilateral Commission to develop a consensus on an agenda for globalisation.
Behind closed doors, these leaders have been able to agree on certain common approaches that include: global economic integration, the harmonisation of various trade, tax and regulatory measures, and an economic philosophy that should guide all nations, combined with political strategies to achieve such changes. With passage of the new free trade agreements to augment the Bretton Woods agreement, and establishment of the World Trade Organisation, this unelected and unaccountable global elite has effectively seized important instruments of governance in the three dominant regions of the world.
Regardless of their nominal home bases, Japanese, American, and European corporate giants have increasingly become stateless, juggling multiple national identities and loyalties to achieve their global competitive interests. No matter where they are operating in the world, these transnational conglomerates can use their overseas subsidiaries, joint ventures, licensing agreements, and strategic alliances to assume foreign identities whenever it suits their purposes. In so doing, they develop chameleon-like abilities to change their identities to resemble insiders wherever they are operating. As one CEO put it: "When we go to Brussels, we're member states of the EEC and when we go to Washington we're an American company too." Whenever they need to, they will wrap themselves up in the national flag of their home governments to get support for tax breaks, research subsidies, or governmental representation in negotiations affecting their marketing plans. Through this process, stateless corporations are effectively transforming nation states to suit their interests.
CORPORATE STATE ALLIANCE
In most of the industrialised countries, business councils composed of the CEOs of the largest corporations and banks, have formed new corporate state alliances. In the U.S., for example, the Business Round Table's 200 members include the heads of 42 of the 50 largest Fortune 500 corporations, 7 of the 8 largest U.S. commercial banks, 7 of the 10 largest insurance companies 5 of the 7 largest retail chains, 7 of the 8 largest transportation companies, and 9 of the 11 largest utility companies. In countries like Canada, the Business Council on National Issues has organised itself into a shadow cabinet of the federal government with CEOs heading up task forces on major public policy issues. Once policy consensus is reached amongst the principal TNCs, massive lobbying and advertising campaigns are mounted around key policy issues. Armed with a network of policy research institutes and public relations firms, these business coalitions are able to mobilise facts, policy positions, expert analysis, and opinion polls as well as organise citizen front groups for their campaigns to change national governments and their policies. By campaigning for debt elimination, privatisation, and deregulation, business coalitions have effectively dismantled many of the powers and tools of national governments.
The fundamental purposes of the new free trade deals (eg. GATT, NAFTA) are to provide protection among national constitutions for the freedoms of transnational corporations and banks to act unhindered by national laws. As Carla Hills, chief U.S. negotiator for both NAFTA and the GATT, put it: "We want corporations to be able to make investment overseas without being required to take a local partner, to export a given percentage of their output, to use local parts, or to meet a dozen other restrictions." As a result, the "national treatment" clauses in NAFTA and GATT guarantee that foreign investors have the same rights and freedoms as domestic firms. The investment codes in the new free trade regimes ensure that various regulations of nation states are removed, including foreign investment requirements, export quotas, local procurement, job content, and technology specifications. Through this kind of consitiutional protection, the rights of TNCs take precedence over the rights of citizens in their respective nation states. In addition, the legislative authority of the GATT and the NAFTA supercedes the legislation of participating nation states when matters of conflict arise.
The creation of a globalised consumer culture is another key element of the new corporate tyranny. The transnationals want to be able to sell their products with the same basic advertising design in Bangkok and Santiago as in Paris, Tokyo, New York or London. The prime example is the way Coca-Cola has become a global symbol transcending all national and cultural boundaries. Through television images and satellite communications, a homogenous set of perspectives, tastes, and desires can be transmitted to all corners of the globe. It is now estimated that transnationals spend well over half as much money in advertising to create corporate friendly consumers as the nations of the world spend on public education. In turn, all this corporate advertising tends to forge a connection in people's mindsets between private interests (ie. of the TNCs) and the public interest. As a result, a global monoculture is emerging which not only disregards local tastes and cultural differences, but threatens to serve as a form of social control over the attitudes, expectations, and behaviour of people all over the world.
Cont ...