Will the global economy improve for the average person? Or are we sinking into an age in which workers are more and more powerless before their corporate employers and 99% of us live as serfs, forced into poverty and submission to our corporate overlords? Almost everyone agrees that corporations have far too much influence on government, laws, and our lives today. This situation has evolved slowly, but today corporations, aided by corporate-dominated government, are pushing harder than ever to take control of our lives and economies, purely for profit. As a result, the direction of most economies is towards businesses increasing control of government and a decline in the power of the individual. This suggests political and economic turmoil could increase as unscrupulous corporations skew economies for profit and people react and organize to oppose them, but that it is unlikely the situation will get better. The big issues we all face, like the population explosion and dependence on fossil fuels, will continue to be mostly ignored, though some portions of the population understand and will fight back to keep their rights and protect society, with limited effect. So where might we be in a few decades, and how likely is it that change could favor the people?
Corporate power is far greater than most people realize. In 1990 I was studying at one of the top business schools in the country, taking a corporate strategy course taught by the ex-Controller of American Motors (bought by Chrysler in 1971). He revealed to us that, at that time (1990) there were more than 100 companies with more financial power than all but the 7 richest countries in the world. Consider that point for a moment. That leaves over 230 countries that could conceivably be BOUGHT by any of more than a hundred companies. Could that happen? Why not?
Many corporations have the ability, but not the justification, to buy whole countries. Why would a corporation want to buy a country? Along with it they would acquire all its problems, such as corruption, ethnic rivalries, infrastructure problems, etc., but fixing those problems would not necessarily benefit the corporation. In fact, fixing a lot of the country’s problems might benefit competitors as much as the owner-company. In addition, fixing problems might require increasing labor costs, taxes, or other factors that would hurt the corporation’s profits. So what’s the alternative?
A corporation can make better profits manipulating a country from behind the scenes. It’s much more cost-effective to leave problems countries face in the hands of career politicians. In most cases their support can be bought to optimize specific economic and regulatory factors that enable better results for the corporation (though in many cases these changes are bad for people). Some economic problems such as high unemployment actually benefit the corporation, giving it the opportunity to skim the best workers from the workforce and, at the same time, pay them less than they might earn in another country or in better economic conditions.
Profit and influence can be maximized by shrinking the middle class. Much has been said about so-called “job creators”, a label mistakenly applied to corporations and billionaires. In reality no business will hire anyone (create a job) without a specific need, and no sensible person would invest in a company that would create jobs for the benefit of the economy – it would obviously decrease their short-term profits. Thus, corporations and billionaires are NOT job creators, but are actually job creation avoiders.
Popular protest has had less and less effect in recent decades. If corporate actions are seen as bad for the average person, people will protest and find ways to resist. Some of those ways, such as lawsuits, can be costly to address. Others, such as public protest, can harm the image of a corporation but may have little or no profit-impact, meaning corporations don’t have to care much about them.
Politics, and campaign finance in particular, give business powerful tools. By allying with a political party that has at least some influence, a company can get protection from popular movements, and more favorable treatment both in legislation and in judicial and regulatory matters. The situation existing today in the U.S., in which huge amounts of money can be anonymously poured into political campaigns and the spreading of propaganda in the media, illustrates a clear path to increased profits for big businesses.
Reducing the size of the middle class is good for business. Since the middle class tends to be more educated they are also more likely to understand and react to what is being done to them, and more able to pool resources and fight against predatory corporate maneuvers. Thus any measure that diminishes average household income and opportunities for a good education is good for business. This gives corporations a powerful incentive to see economies languish, suffer declines in employment, wages, and the quality of education, and remain weak as far as regulation. A less well off, less educated middle class is much less powerful, more receptive to media propaganda, and easier to misdirect away from the truly important issues. Keeping unemployment high and government assistance low can also contribute to an electorate too poor to easily assert their rights with lawsuits or support for progressive, populist, and less business friendly candidates.
Propaganda works – that’s no surprise. Meanwhile, corporations can use corporate mass media and “captive” politicians and celebrities to misdirect people’s attention to the government – “big government is the problem” – providing misleading reasons to decrease regulation and the funding of watchdog agencies so they can make more money. Long experience has taught corporations that bribing the political leadership can provide prolonged profit enhancement, though it has to be done carefully in some countries. (Note that bribes can take many forms, many of them extremely hard to detect or prove.)
Will the trend toward corporate domination change? The so-called Arab Spring of 2011 seemed to be a resurgence of the popular will in a number of countries long dominated by corporate-friendly, right-wing puppet regimes, some of which admittedly had become mavericks in the international community. As the turmoil settles in the countries where a real regime change was achieved, however, it is hard to say whether the good of the people is winning out. Established political power structures including the rebels and various religious and ethnic sub-groups have staying power, and are by nature self-interested, so a resurgence of minority control and subjugation of the populace is quite possible, though it may be under a different banner than before, swapping fascism or dictatorship for a religion-dominated state, for instance, which could be worse for big business instead of better. Note that which regimes the US favors seems clearly tied to how friendly they are to big business, indicating the level to which the US government is influenced by corporations.
Bribery is still a standard business tool in many countries. In the end, multinational corporations have the one thing most national governments don’t have, money, and that buys a lot of advantages in countries where there isn’t sufficient legal precedent, funding, or government infrastructure for enforcement of anti-corruption laws, and where the average income is so low that even a small bribe has enormous influence. By taking advantage of poor countries, multinational corporations can increase profits significantly. Huge sales volumes in the biggest countries can be recorded as revenue in small countries that won’t tax the income, and vast sums can be hidden by small, corporate-owned banks. The list of tactics (some would say “scams”) is virtually endless.
While there might be improvement in our future, it doesn’t seem likely. So far, corporations have been very effective at reducing or blocking the voice of the people. The Occupy movement is a clear example. Many large demonstrations were held in 2011 that went entirely unreported by the corporate-owned media, suggesting that corporate control of the media is already sufficient to effectively stifle dissent, and that it is unlikely that populist movements will get very far in opposing corporate control.
Regulation of business, badly needed at the international level, is unlikely. The alternative to corporate domination might be more strongly regulated business, but that would have to occur internationally to be effective (corporations will just move, after all). Unfortunately there is too little agreement between governments, and many are so influenced by business that they would not cooperate to increase regulation of businesses under any circumstances. Widespread regulation is also unlikely to occur until the developing countries have caught up with the developed countries economically so that resistance to corruption is more equal, and that may never happen. In addition, businesses will work to maintain things as they are and, given their comparative wealth, they are likely to prevail.
As the population peaks and energy supplies dwindle, corporate power will make things worse for everyone. Corporations, like people, don’t often see eye to eye on things, so corporations can be expected to act as “wild cards” in our economic future, mucking up the processes of government, muddling public opinion, and manipulating political parties, politicians, and whole countries into actions that will make everyone worse off (except those benefiting from the next quarter’s profits, which will themselves be short-lived). I wish I could be optimistic, but the limited success of the latest populist movements has not been encouraging. Awareness is the first step in dealing with a problem, however, and this article is intended to increase that. I know there are people much smarter than I working on this huge problem. I hope they meet with some major successes.
As always, I welcome your comments, and thanks for reading. — Tim