May 19th 2001

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Articles from this issue:

Canberra Observed - Private opinions politicise High Court

AFA intervenes in IVF test case in High Court

True competition only way to keep banks honest

Franklins' sale shows supermarkets' power

The Media

Straws in the Wind

Straws in the Wind - Straws II


Victoria abandons marriage

Will CEOs rule the world better than governments?

Why the domestic market is so important.

The next American Century begins,

Europe's ticking time bomb

COVER STORY: Gene manipulation: time to call a halt

Books promotion page

Will CEOs rule the world better than governments?

by Bob Browning

News Weekly, May 19, 2001
Whether heads of corporations will rule the world better than governments should be a frivolous question. Unfortunately it is not entirely.

Those pushing globalisation openly declare their determination to minimise government and the public sector. They make no bones about wanting to ensure that corporations and capital get maximum freedom to operate on a global scale, unimpeded by the elected representatives of the people or by any principle of social responsibility other than maximising profits for their shareholders.

True believers and big business propagandists insist that the sort of globalisation they are pushing is nothing other than making the world safe for "free trade" against special interest protectionism. Obviously, it is not just that. In important respects it is not that at all.

If all that globalising policy entailed was genuine free trade, there would be little to worry or complain about. Increased trade between peoples around the world, fairly conducted, and with damaging market failures corrected, would raise all boats. But free and fair is not what current globalisation is mostly about.

Whatever theory and propaganda may claim, and whatever good outcomes US-led globalisation achieves, its cargo includes transferring greater political, social, cultural and economic power to unelected and comparatively unaccountable corporate managers and their financiers - to the Chainsaw Als of this world and their fund managers.

Ironically, the transfer is performed by politicians whom the supposedly sovereign people elect to represent them rather than promote the special interests of corporations. He who pays the piper calls the tune. Corporations have become the big funders of high spending major political parties. They look after favoured politicians in various ways after they leave parliamentary politics.

Level playing fields

According to the current neo-liberal policy orthodoxy, government intervention reduces productive efficiency and wealth creation. Regulatory "interference" in free enterprise by governments is an ideological no-no.

Government intervention is acceptable only when it acts to impose a "level playing field". So far, the field is more level for multinational corporations (mostly American) than anyone else. The corporate giants are hugely-resourced, vertical-integrated, globally relocatable, and frequently actual or virtual oligopolies. In Australia many small and rural businesses are losing an uphill battle trying to compete with the raw market power of the mega-corporations.

Even the biggest Australian firms struggle to remain in Australian hands. As Federal Treasurer Costello recognised in stopping the Woodside take-over, multinational giants can promise to develop the full export potential of Australian enterprises, but such promises can and have been broken. Multinationals buy up global resources so that they can control development where, when and if it suit their global strategies. They are not primarily concerned with the national interests of countries in which they operate, especially in countries that are not even their home base.

Corporate values

Government intervention, particularly when it involves social security and welfare, is denigrated as a moral hazard. According to the dominant ideological orthodoxy, welfare erodes personal responsibility and encourages dependency. Corporation-funded think tanks refer to social justice as a "weasel word".

Corporations want access to key public services. In particular, they have their eyes on health and education. In most developed countries, governments spend up to 20 per cent or more of GDP on public education and health care. So far these vital services have resisted total privatisation, remaining largely within the not-for-profit public sector.

According to the current policy wisdom, increasing wealth, even if it is very unevenly distributed, will eventually "raise all boats". The stress is on eventual. The benefits flow quickly and magnanimously to the winners, but the majority get theirs via the "trickle down effect". There is little emphasis on the disproportionate distribution or the social costs that the left-behinds are forced to bear to facilitate the neo-liberal project.

Within the corporate world, the voice of social conscience rarely goes against the tide of economic rationalist promotion. A recent exception came from the unlikely source of Saatchi & Saatchi, one of the world's leading advertising and PR agencies. Its chairman warned business leaders (Australian Financial Review, April 6, 2001) that they were turning voters "feral" by failing to ease the impact of globalisation. Corporate executives were "fixated with the need to defend globalisation and economic rationalism at any cost. I think we just incense people by telling them it's good for them when they're really hurting".

Tools of trade

One of the ways of downsizing governments and democratic sovereignty and transferring power is by insinuating clauses into international trade and investment treaties that amount to a bill of rights for multinational corporations.

Laws introduced indirectly by such international back door methods reduce the legal rights of governments, trade unions, consumer groups and other representational agencies to protect the collective interests of citizens and employees against the corporations.

There are numerous other methods of transferring power and redistributing wealth. Apart from privatising - or rather corporatising - vital public services such as health and education, governments can be induced to compete for corporation favour by minimising company taxes and providing infrastructure and energy subsidies.

Increasingly, individuals are required to pit their bargaining power and negotiating skills against those of the corporate giants and their legal firms in securing employment contracts and working conditions.

Corporate welfare often involves turning a blind eye to tax dodges like transfer pricing. Many multinationals operating in Australia avoid tax altogether. The tax burden is transferred to ordinary consumers through regressive consumption taxes - i.e., taxes that fall disproportionately on low income earners and cannot be avoided.

Corporate governance

Some of the necessary characteristics of good governance are notably absent from the on-the-record behavior of big business. Few people regard big business as a byword for social responsibility, public accountability, honesty, credibility, openness, transparency, even at times common morality.

People are more likely to associate big business with the profit-maximising pursuit of special interest, commercial-in-confidence secrecy, deceptive and false-need-creating advertising, competition-reducing mergers and take-overs, and stealthy political influence through intense lobbying and political party funding.

The images paramount in many people's minds include the long, unscrupulous campaign that major tobacco corporations waged against the public interest. For years, tobacco CEOs denied they even knew of the addictive and harmful effects of their products, let alone deliberately used chemical additives to increase that addictiveness.

Also dominant in many people's minds are likely to be the toxic pollution created and defended by chemical, petroleum and mining companies; the efforts of the pharmaceutical drug giants to deny affordable medicines to the densely populated, poorer countries; the use by clothing and sporting goods multinationals of child and even slave labour to maximise their profits, and the general downsizing, casualising and other changes to employment and the work place that have had such a severe social impact on individuals and families.

To the extent that corporate governance replaces democratic governance, the world can expect an increase in self-righteous contempt for "losers".

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