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Study Finds Dangerous Rise in Corporate Power

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    News for Anarchists & Activists: http://www.egroups.com/group/smygo Study Finds Dangerous Rise in Corporate Power by Tamara Straus, AlterNet December 7, 2000
    Message 1 of 1 , Dec 13, 2000
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      News for Anarchists & Activists:
      http://www.egroups.com/group/smygo

      Study Finds Dangerous Rise in Corporate Power

      by Tamara Straus, AlterNet
      December 7, 2000

      Not since the Gilded Age when John D. Rockefeller dominated
      the oil industry and J. P. Morgan served as America's
      unofficial central banker has there been so much talk about
      how big corporations threaten democracy. Al Gore got on the
      bandwagon this summer; wherever the vice president went he
      talked about the powerful -- "big tobacco, big oil, big
      polluters" -- versus the powerless of the people. And of
      course corporate power and its discontents were at the
      center of Ralph Nader's run for the presidency.

      A critic of corporate power will probably not occupy the
      White House in January. But whoever the 43rd president of
      the United States is, it is doubtful he will see the issue
      go away. According to a September 2000 Business Week/Harris
      Poll, between 72 and 82 percent of Americans believe that
      "business has gained too much power over too many aspects of
      American life" and 74 to 82 percent believe that big
      companies have too much influence over "government policy,
      politicians, and policy-makers in Washington."

      Now, to add to this growing consensus is a new study,
      published by the Institute for Policy Studies, a think tank
      in Washington, DC. "Top 200: The Rise of Corporate Global
      Power" argues that the leading economic story of the last
      five years is one of rapid growth of the world's top 200
      corporations and diminishment of government and citizen
      control.

      Perhaps the most important finding of IPS's study is that of
      the 100 largest economies in the world, 51 are corporations,
      whereas 49 are countries. In other words, General Motors has
      greater economic power than the majority of the world's
      nation-states, as does Wal-Mart and Exxon Mobil.

      The report also provides statistical evidence that combined
      sales of the top 200 corporations are bigger than the
      combined economies of all countries minus the biggest 10,
      and that such sales are 18 times the size of the combined
      annual income of the 1.2 billion people (or 24 percent of
      the world population) living in "severe" poverty.

      "Growing private power has enormous economic consequences,"
      concludes the study. "However, the greatest impact may be
      political, as corporations transform economic clout into
      political power."

      To learn more about IPS' study, AlterNet spoke with Sarah
      Anderson, co-author of "Top 200" and director of the Global
      Economy Project of Institute for Policy Studies.

      AlterNet: How does the 2000 report on global corporate power
      differ from the one IPS published in 1996?

      Anderson: One disturbing change is evident in the largest
      employers on the top 200 list. In 1995, General Motors was
      the biggest, with 709,000 workers. By 1999, GM's employment
      had dropped to only 388,000, largely because of outsourcing.
      The firm that took GM's place as the No. 1 employer is
      Wal-Mart, with a staggering 1,140,000 employees, up from
      648,500 in 1995. Whereas a good share of GM's jobs were
      unionized and decently paid, Wal-Mart is a notorious
      union-buster that employs armies of workers on a part-time
      basis to avoid paying benefits. These changes reflect the
      overall trend towards fewer and fewer union manufacturing
      jobs and the rise in poorly paid, non-union service-sector
      work.

      Another dramatic development over the past five years is the
      surge in economic power of U.S. firms over those in other
      countries. Largely because of economic stagnation in Japan
      and mega-mergers among U.S. firms, the United States
      dominates the top 200. U.S. corporations hold 82 slots,
      followed by Japan, with only 41. In 1995, these countries
      were virtually tied, with 59 and 58 firms in the top 200,
      respectively.

      AlterNet: What do you consider to be the most surprising
      results of your research?

      Anderson: What surprises most people is not that these firms
      have tremendous power, but that their power is so out of
      whack with the contributions they make in terms of jobs and
      taxes. When I tell people that their sales are the
      equivalent of more than a quarter of world economic
      activity, they assume that they must provide somewhere near
      an equal amount of the world's jobs or taxes. The reality is
      that they employ less than 1 percent of the world's
      workforce and many of the top corporations don't pay any
      U.S. federal taxes at all.

      Many people also ask whether the clout of global
      corporations is really new. How is this different from the
      power of the Rockefellers and the Rothschilds in the last
      century? What the report shows is that the concentration of
      power among the top 200 firms has been steadily increasing
      in relation to world economic activity in general. Between
      1983 and 1999, the top 200s' sales grew from the equivalent
      of 25 percent to 27.5 percent of world GDP. Yes, we've had
      mammoth firms for a long time, but we haven't had this level
      of concentration of economic clout on a global scale.

      AlterNet: What has the feedback on the report been so far?
      Have conservative think tanks, for example, contested your
      research?

      Anderson: USA Today quoted two people who were critical of
      the study. The first was Murray Weidenbaum, former economic
      adviser to President Reagan, who pointed out that a large
      share of corporate revenue goes to pay for worker
      compensation. My response to that is yes, many workers do
      depend on wages from these firms, but they are hardly
      getting their fair share of the dramatic profit growth we've
      seen over the past decade. In the United States alone, CEO
      pay grew 535 percent during the past decade while average
      worker pay grew only 32.3 percent. And of course many of
      these firms are shifting production to low-wage countries,
      making the global gap even wider.

      The other person they quoted was Michael Santoro, of the
      Rutgers Business School. He stated that these corporations
      create products that consumers want and that they are "in
      general using the resources of the world in a positive way."
      Our study doesn't deny that these firms influence our lives
      in ways other than by providing jobs and taxes.
      Nevertheless, I thought Santoro's statement was a rather
      sweeping one to make about a group that includes
      tobacco-peddler Philip Morris, major polluters like Exxon
      Mobil, companies with questionable environmental and human
      rights records like Royal Dutch/Shell and Chevron, and
      controversial genetic engineer Novartis.

      AlterNet: Given that 51 of the largest 100 economies in the
      world are corporations, what conclusions can be drawn about
      the state of economic democracy?

      Anderson: I think once you understand the extent of their
      economic power, it should be no surprise that most
      governments in the world have been pursuing policies that
      are in the interest of these large corporations. Through the
      World Trade Organization, the World Bank, the International
      Monetary Fund and also regional trade agreements, large
      corporations are getting more and more powers and privileges
      to operate as they like around the world.

      Meanwhile, workers and communities are not getting any new
      powers to fight for their fair share of the benefits of the
      globalized economy or to prevent these corporations from
      destroying the environment to make a profit. It's a dismal
      scenario, but what I always try to remember is that while
      they might have the economic power, we have the people. And
      as we've seen in Seattle and Prague and many other places
      around the world, a new peoples' movement against corporate
      globalization is beginning to take off.

      AlterNet: In your opinion, what can be done to restore
      greater economic egalitarianism?

      Anderson: One reason corporations have so much power around
      the world is because so many countries are so desperate for
      foreign investment and export revenues to pay off their
      external debts that they are willing to look the other way
      when global corporations behave in socially irresponsible
      ways. So full debt relief for the poorest countries is a
      first step.

      The bigger challenge, though, is to rewrite the rules of the
      road to globalization. Right now, the rules set by the WTO,
      World Bank, IMF and other trade and investment agreements
      are designed to benefit large corporations. We need new
      rules that will put the goals of environmental
      sustainability, reduced inequality and human rights at the
      forefront. To create a political climate in which these
      types of radical changes would be possible, we also need to
      get big money out of politics and to regain the spirit of
      monopoly-busting that has been subverted by the goal of
      global competitiveness.

      "Top 200: The Rise of Corporate Global Power" can be found
      at:
      http://www.ips-dc.org/top200.htm.

      --
      ---------------------------------------------------
      Dan Clore

      The Website of Lord We├┐rdgliffe:
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