February 24th 2001

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Articles from this issue:

THE ECONOMY: Manufacturing key to economic health

EDITORIAL: A time bomb under the Howard Government

CANBERRA OBSERVED: WA result shows Coalition's dilemma

WESTERN AUSTRALIA: ALP rides One Nation to victory

NATIONAL AFFAIRS: Behind the push to become part of Asia

AGRICULTURE: ABARE report underestimates dairy backlash

Straws in the Wind



Indonesian wrath causes exodus of Papuans

CORPORATIONS: Does shareholder value makes everything acceptable?

COMMENT: Media's North Korea blindspot

FAMILY: Marriage is good for you


FILM: "Hannibal" raises issue of film violence

Books promotion page

Does shareholder value makes everything acceptable?

by Bob Browning

News Weekly, February 24, 2001
Capitalism may well be the most rational way yet developed to organize a modern economy. But there are many forms of capitalism - democratic capitalism, authoritarian capitalism, crony capitalism, market capitalism, Keynesian capitalism, corporate capitalism, laissez-faire capitalism, and so on.

So, when powerful forces and their lobbyists seek to promote "capitalism", it is important to know what form of capitalism they favour.

The form being pushed globally since the collapse of the Soviet empire is the one wanted by several of the world's strongest trading and financial nations.

Led by the United States superpower, a campaign is being waged internationally though inter-government agencies like the G7, the World Trade Organisation (WTO) and the International Monetary Fund (IMF).

Characteristic of this form of capitalism is the promotion of the ideological doctrine that no social responsibility is required of corporations other than to secure the financial interests of their shareholders.

Another ideological characteristic is that democratic participation is achieved by individuals more effectively through exercising choice in the economic marketplace than by voting in the political process and by governments exercising effective national sovereignty.

Such ideas and the public policies they engender have resulted in the growing international influence of the financial markets and the rise of mega-corporations.

Multinational corporations are becoming huge competition-limiting conglomerates. Oligopolies resulting from giant mergers increasingly dominate many of the world's key industries. Corporation money and think tanks increasingly influence the political process, political parties, public policy, and the social and cultural environment of nations.

Two incidents - one local and one overseas - add to the growing list of corporate behaviours that raise doubts about whether the form of capitalism that the dominant powers are promoting really is the one best suited to serving the interests of most people around the world.

In Australia, the multinational pharmaceutical drug corporation Pfizer bought expensive advertising space in the internationally influential Economist magazine. It promoted the federal Health Minister Michael Wooldridge and the Coalition's program for changing Australia's health system.

Whether by coincidence - as the Howard Government claims - the Government subsequently appointed a former drug industry lobbyist and multinational drug corporation executive to the Pharmaceutical Benefits Advisory Board. The PBAB is the committee that decides which drug company products will get taxpayer-funding.

In America, the internationally regarded magazine Atlantic Monthly revealed (February 7, 2001) that the multinational tobacco corporation Philip Morris had considered buying it, along with several other media outlets. According to early 1990s in-house tobacco corporation documents now in the hands of government investigators, the giant corporation's intention was to "influence the public policy agenda and the information flow to the populace".

The Atlantic Monthly also quoted a tobacco industry publicist warning would-be opponents: "You don't know what you are up against. We have more money than God."

Other such revelations have come from the US Food and Drug Administration (FDA). After years of sifting through tobacco corporation documents, evidence is now overwhelming that corporation money was used to influence not just the media and politicians but former officials of the FDA itself. Tobacco money even reached the Institute for Cancer Research and the American Medical Association. The US AMA accepted money from the tobacco industry to finance its lobbying campaign against Medicare in the 1960s.

The Atlantic Monthly detailed how tobacco corporations, in seeking to manage the social climate to suit their own special interests, contributed heavily to major think tanks - in particular the Heritage Foundation, the Manhattan Institute, the Hoover Institution, the National Association of Manufacturers, and the National Journalism Center.

Philip Morris corporation claimed this gave them access to "journalists at print and visual media throughout the country ... [that] resulted in numerous pieces consistent with our point of view."

Concentration on the tobacco industry, however, can lead to the misconception that tobacco corporations are a special, one-off case. It is a mistake to think that that the pursuit of special interests in the face of the public interest does not extend to many other corporations.

If corporate culture, and even the present ideology of major political parties, insists that the social responsibility of business extends only to serving the financial interests of its own shareholders, then anti-social behaviour is only to be expected.

In Britain, the New Statesman recently noted (December 11, 2000) the sudden appearance in the media of a "bumper crop of scare stories about organic farming". The magazine claimed that big business was trying to stem the popularity of pesticide-free food. It said the scare stories were thin on sources, but added that one did not need to look far to identify where the stories were coming from:

"The claims are identical to those made by a section of the scientific establishment ... [that] present themselves as independent ... [but] many of the scientists concerned, or the institutions they work for, are funded by or otherwise connected with corporations involved in genetically modified (GM) organisms".

The New Statesman revealed that one of the most prestigious plant science centres in Europe, the John Innes Centre in Norwich, which describes itself as independent, has long-term research alliances with the giant corporation DuPont and the bioscience group Zeneca.

The Centre is also grant-aided by the Biotechnology and Biological Sciences Research Council, the public funding body for biological sciences research in Britain - whose chairman was until recently executive director of Zeneca.

Reduce competition

The new corporation capitalism being tirelessly promoted around the world helps multinationals grow in size and competition-reducing, price-setting market share. It also increases their political and cultural power.

More people need to be asking whether we really want the CEOs of giant corporations - the Chainsaw Als of this new "globalised" world - to exercise increased power at the cost of democratically elected politicians and accountable governments.

Examples are readily available to show that many corporations are prepared to act with as little concern for cultural and moral standards as the tobacco companies did in respect of public health standards.

The New York Times recently revealed, for example, that the notorious pornographer Larry Flynt is only small fry in the porn "industry" compared with some of the most respectable and biggest names on Wall Street.

General Motors Corporation, the world's largest company, now sells more graphic sex films every year than does Larry Flynt, owner of the Hustler empire. Nearly nine million Americans subscribe to DirecTV, a General Motors subsidiary, buying nearly $200 million a year in pay-per-view sex films from satellite.

EchoStar Communications Corporation, the No. 2 satellite provider, whose chief financial backers include Rupert Murdoch, makes more money selling graphic adult films through its satellite subsidiary than Playboy, the oldest and best-known company in the porn business.

AT&T Corporation, the nation's biggest communications company, offers a hard-core sex channel called the Hot Network to subscribers to its broadband cable service. It also owns a company that sells sex videos to nearly a million hotel rooms.

The NYT commented:

"For all the money being made on sex - legally - by mainstream corporations, the topic remains taboo outside the boardroom.

"The major satellite and cable companies do very little marketing of their X-rated products, and they are not mentioned in annual reports except in the vaguest of euphemisms.

"None of the corporate leaders of AT&T, Time Warner, General Motors, EchoStar, Liberty Media, Marriott International, Hilton, On Command, LodgeNet Entertainment or the News Corporation - all companies that have a big financial stake in adult films and that are held by millions of shareholders - were willing to speak publicly about the sex side of their businesses."

The question is, can we comfortably leave our social, cultural, moral and political futures increasingly in the unelected, bottom-line-driven hands of corporation executives?

Isn't a better form of capitalism than corporation capitalism possible?

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