The final installment of my diary series on the history of the supranational corporations. This section covers the various anti-corporate tactics that have been tried by labor unions and others--and why they have all failed--and discusses the future of the supranational corporation.
This is a book manuscript I am working on that I am posting, one piece at a time, as it is written.
Links to the previous parts of the series are below.
The other installments, for those who didn't see them or don't remember them, are here:
Part One: The Anti-Corporate Revolution of 1776
http://www.dailykos.com/...
Part Two: The Robber Barons
http://www.dailykos.com/...
Part Three: The Progressive era
http://www.dailykos.com/...
Part Four: The Roaring Twenties
http://www.dailykos.com/...
Part Five: New Deal and World War 2
http://www.dailykos.com/...
Part Six: The Organization Men
http://www.dailykos.com/...
Part Seven: The Man
http://www.dailykos.com/...
Part Eight: the Reagan Revolution
http://www.dailykos.com/...
Part Nine: The Multi-National Wars
http://www.dailykos.com/...
Part Ten: NAFTA and WTO
http://www.dailykos.com/...
Part Eleven: The Failed American Century
http://www.dailykos.com/...
Twelve: Opposition
http://www.dailykos.com/...
Thirteen: The Democratic Party and Fair Trade
http://www.dailykos.com/...
The Labor-Union/Corporate Partnership
The tiny remnant of the American labor union movement that still remains has, of course, been staunchly protectionist since the late 1970’s, when they joined with the steel and auto corporations in “Buy American” campaigns that targeted Japanese corporations. That effort failed spectacularly—the American corporations used the threat of “foreign workers” to extract wage and benefit concessions in exchange for not moving the factories overseas, and then moved most of them anyway.
Despite that utter failure, however, the remaining remnants of the American labor movement still maintain their alliance with their employers, still put all their faith in protectionism and “Buy American” strategies, and, unlike the environmentalist and social justice groups who view the overseas victims of multinational corporations as their natural allies, still treat “foreign workers” as enemies and opponents. In effect, the American labor movement is now nothing more than a junior partner to a handful of declining corporations who preach patriotism and nationalism in a desperate effort to maintain their own narrow economic interests.
The Labor Movement’s Failed Strategies
The AFL-CIO has attempted to argue in favor of several different protectionist strategies to shield itself from cheaper foreign labor and to help defend American companies from foreign corporations. Some of these strategies have also been advocated or used by other progressives and anti-corporate activists to try and curb corporate power. All of them, alas, have been failures.
Flag-Waving
Nearly all of the protectionist “solutions” offered by the labor movement appeal, in one way or another, to someone’s patriotism, whether it’s asking employers to voluntarily pay higher wages to American workers and patriotically refuse to relocate their jobs to low-wage havens like China, or asking American consumers to voluntarily pay higher prices for American-manufactured products than for cheaper imports. As President Obama summed up the argument, “Look, people don’t want a cheaper T-shirt if they’re losing a job in the process. They would rather have the job and pay a little bit more for a T-shirt. And I think that’s something that all Americans could agree to.” Reality, however, demonstrates conclusively that Obama is wrong—people do indeed want the cheaper T-shirt. Any time that either employers or consumers have been asked to choose between their wallet and their patriotism, the wallet always wins.
There are many reasons why “Buy American” campaigns that appeal to patriotic nationalism have failed every time they have been attempted.
In the United States, real wages have declined steadily for the past 30 years, the wealth held by the lowest 80% of the population has decreased drastically, and unemployment levels are at their highest in many decades. Under those conditions, consumers are forced to stretch as much value as they can out of every scarce dollar—and asking them to patriotically (and voluntarily) pay higher prices to protect someone else’s job, is unrealistic at best.
Any attempt to appeal to the “patriotism” of the multinational corporations is also unrealistic. They have no patriotism; they belong to no country.
It was, after all, American-owned corporations who began the global rush to relocate their plants to Mexico and China, and the reason for that is simple—the corporations will always go where the costs are lowest. It was not the Chinese or Mexican or American governments who forced all those corporations to move their plants or outsource their jobs—the American business owners did that all by themselves, for their own selfish motives. The corporate owners don’t care about patriotism or national interest—all they care about is their bank account, and their bank account likes being able to pay workers in Mexico one-tenth as much as workers in the US. American corporations don’t mind putting thousands of workers out of work by moving their jobs overseas; they don’t even mind relocating their factories inside a single-party Communist police state like China, as long as they can make a ton of money doing it.
And of course there is the simple fact that there is no “American” to buy anymore. It is no longer the 1970’s, when Hondas were all made in Japan and Fords were all made in Detroit. All of the large corporations are now global, and none of them have any loyalty whatsoever to any national government anywhere. General Motors is no more or less “American” than BP or Toyota. Which is the “American” car?—the GM (which is partially foreign-owned) that is made in Canada, or the Toyota (which is partially American-owned) that is made in Tennessee? What happens when you have an electronics device that is made from material mined in South Africa and plastic from Germany, using semiconductors from Ireland that were designed in Costa Rica, whose parts were shipped here on a Swedish ship that's financed by an Icelandic bank, then assembled in Mexico and sold in an electronics chain store in Boston that is owned by the Japanese?
In one surreal scene, US Steel and the Steelworkers Union jointly organized a “Rally to Restore American Manufacturing” in Illinois to protest the use of “foreign steel” to build a Canadian-American oil pipeline—while at the very same time US Steel itself owned manufacturing plants in England, China, Mexico, Canada, Slovakia, Brazil and Serbia. Even as US corporations were busily outsourcing American jobs all over the globe, unions were appealing to the patriotism of those same corporate bosses: at a meeting to discuss AT&T’s outsourcing of jobs to India, one American union official declared, “In this time of high unemployment, the company could be a leader and bring these jobs back here and be patriotic.” The steel company Nucor helped form the Domestic Manufacturing Group, which, in partnership with the Steelworkers Union, lobbies for trade sanctions and tariffs against China to “protect American jobs”—while at the same time Nucor itself negotiated a deal with the Chinese Shougang steel company to build a joint operation in Australia.
That is why “Buy American” campaigns always fail. There is simply no way to force business owners to continue to pay workers in America higher wages when they can easily move the entire plant somewhere else and make lots more money—and any attempt to entice the boss to voluntarily keep his factory in places where wages are higher, out of pure benevolent patriotism, is the height of idiocy.
And yet that is precisely the strategy that most labor unions practice, because they have fallen into the trap of believing that the employers and employees are partners with similar interests, and that one of the goals of the corporation is to give us all good-paying jobs. It’s not. The corporations aren’t in business to give us jobs. They’re in business to make as much money as possible—for themselves, not for us.
That is why, despite all the noise we make in the US about opposing sweatshops and supporting human rights and democracy, not a single multinational corporation in China has ever pressured the Chinese government to pass minimum wage laws or workplace safety laws or consumer protection laws or child labor laws. The simple fact is that the corporations don’t want any of those things. That’s why they all moved to China in the first place.
Indeed, the very idea of a “national economy”, or even a “nation-state”, is now dead; the supra-national corporations have killed it. Economically, there is no longer any sovereign nation anywhere on earth. Economic decision-making power is no longer exercised by national governments--it is exercised by supra-national corporations who owe loyalty to no national government, and by the international bodies (like the WTO and IMF) that those corporations have set up. No nation, not even the “only remaining superpower”, holds its economic destiny in its own hands anymore. Indeed, the WTO and the rest of the multinational economic structure was set up specifically so that no “nation” can stand against the corporations.
Tariffs
A favorite tactic utilized by protectionists is the punitive tariff. Tariffs are surcharges that are added to the price of cheap imports in order to artificially raise their selling price to match those of more expensive domestic products.
As the global economy declined in 2008-2010, calls for protective tariffs became increasingly common from both Democrats and Republicans, even those who had formerly supported tariff-free “free trade”, as a measure to “help the American economy”. In 2009, Obama, bowing to pressure from the United Auto Workers union, imposed a 35% tariff on imported Chinese tires, which had captured about 17% of the US market. Some American tariffs actually double or even triple the price of particular imported products; the American synthetic-textile clothing industry is protected by a 32% tariff, most imported automobile parts have a 25% surcharge, imported sneakers and sport shoes pay a 48% tariff, some European meats and cheeses pay a 100% import tax, and the American tobacco industry is protected by a whopping 350% tariff. In 2010, the House passed, with heavy bipartisan support, a bill empowering the Commerce Department to impose a new round of tariffs as retaliation for China’s policy of manipulating its currency to keep the value of the yuan artificially low and thereby make Chinese imports cheaper for other nations.
The whole intent of the WTO’s free trade framework is, of course, to eliminate tariffs and other trade barriers, and WTO has the authority to unilaterally invalidate protective tariffs passed by any member nation. The WTO agreement, however, does not cover all areas of trade, and the WTO does not have any jurisdiction over tariffs in economic areas that fall outside of those covered by GATT.
Even in areas where the WTO cannot invalidate a trade barrier, however, it is unlikely that protective tariffs will actually play any effective role.
Tariffs can be justified in certain cases. For decades, small nations in the developing world suffered as predatory corporations, most of them American, dominated their economy, crushed domestic industries, and turned the country into a virtual economic colony—and tariffs were seen as one weapon to gain economic independence. The “Asian Tigers” (Singapore, Korea, Taiwan), for instance, used tariffs to protect their infant industries until they were strong enough to compete in the world market and become economic powers in their own right. Developing nations in particular are still anxious to utilize protective tariffs to protect their small-scale farmers who are incapable of competing with the heavily-subsidized American and European agribusinesses (though the developing nations would prefer instead that the wealthy economies stop subsidizing large agribusinesses and drop their own protective tariffs against the small farmers in poorer countries). In cases where smaller and weaker economies are protecting themselves from larger and wealthier ones, tariffs may indeed have a progressive role to play.
Most tariffs, however, have the purpose of protecting those large wealthy industries from competition by cheaper products in developing nations—not of protecting the weak from the strong, but of protecting the strong from the weak. The American industries with the loudest calls for protective tariffs—steel, textiles and auto parts—are formerly-huge rich industries who now face the stiffest competition from younger foreign companies. I.e., they are industries who are desperate to protect their formerly privileged position. Not coincidentally, they are also industries who still have large and politically-powerful labor unions.
As the furor over the “Buy American” provision in the Stimulus Bill demonstrated, however, most corporations still reject protectionism and embrace the free-trade framework, making it difficult for the US to pass protective trade barriers. American corporations opposed tariffs not only because they did not want to re-ignite the destructive trade wars of the 80’s, but also because most American corporations now had large portions of their productive capacity located overseas. For instance, at least 60% of all the products exported to other countries from China actually came from companies that are owned by Americans, Europeans or Japanese. Critics point out that tariffs to keep out cheap imported Chinese products are pointless when it is American companies themselves who are making and importing them. The American corporations do not want tariff “protection” from low-wage unregulated Chinese products—they are the ones who have been flocking to China to make them, and they want to be able to continue importing them back into the US as cheaply as possible.
Other critics point out that measures to “protect American industry” are useless in a global economy where there are no “American industries” anymore. As American-based corporations move productive capacity overseas, the “foreign” corporations are locating more and more of their factories in the US. When the US used tariffs and import quotas in the 1980’s to try to keep Japanese cars out of the American market, Toyota and Honda responded by simply moving their factories here—today, most of the Japanese cars sold in America are actually manufactured within the US. In 2009, the German steel industry responded similarly to protectionist sentiments in the US by building a huge production plant in Alabama.
Finally, progressive critics point out that protective tariffs don’t help American workers, and don’t help workers in developing countries either. Although tariffs raise the prices of imported goods, they don’t raise anyone’s wages, including those of the American workers they are supposed to be “protecting”. Indeed, by artificially raising prices and denying consumers access to cheaper imported products, tariffs actually hurt American workers by forcing them to pay more for products that they could otherwise get less expensively, thereby pushing their purchasing power even lower and decreasing their real wages. And, since the indigenous workers in developing countries do not get any of the money from the increased price of their product, they continue in the same low-wage poverty as before. The situation helps no one except the particular American corporations whose profits are being artificially protected.
Anti-immigration
One of the most common refrains heard in the US—largely from rightwing nationalists but also from many labor unions—is that immigrants (particularly illegal immigrants) are flooding into the US and “taking our jobs”. In Arizona, draconian laws were passed targeting illegal immigrants, and several other states considered similar measures. The Coalition for the Future American Worker, a conglomeration of anti-immigration groups who advocate limiting both legal and illegal immigration, ran ads proclaiming, “With millions jobless, our government is still bringing in a million-and-a-half foreign workers a year to take American jobs.” Republican Senator Jim DeMint announced, “South Carolina has already passed laws to crack down on illegal immigrants. Many other states are also under a lot of pressure because of high unemployment to not let illegal immigrants come and take jobs,” while Democratic Senator Byron Dorgan opposed legal immigration as well as legal immigration, saying, “I don’t think you need a professor to understand that when you import substantial cheap labor, it displaces American workers.”
Most economic studies have rejected the hypothesis that immigration, whether legal or illegal, displaces American workers, raises unemployment, or hurts the economy. A study conducted by the Migration Policy Institute, a nonpartisan think-tank funded by corporations, foundations and international organizations, concluded: “The impact of immigration remains small, for several reasons. Immigrants are not competitive in many types of jobs, and hence are not direct substitutes for natives. Local employers increase demand for low-skilled labor in areas that receive low-skilled immigrant inflows. Immigrants contribute to demand for goods and services that they consume, in turn increasing the demand for labor. And immigrants contribute to labor market efficiency and long-term economic growth.” A study carried out by the Bush White House found, “The foreign-born are associated with much of the employment growth in recent years. Between 1996 and 2003, when total employment grew by 11 million, 58 percent of the net increase was among foreign-born workers… Employment of natives as operators, fabricators, and laborers fell by 1.4 million between 1996 and 2002, while employment in such occupations grew by 930,000 among the foreign-born. This should not be taken as evidence that the foreign-born displace native workers; rather, it reflects the fact that immigrants have made up all of the growth in the low-skilled workforce.” Other studies have noted that the primary effect of immigration is to push down wages among low-wage jobs held by natives without high-school diplomas, by an average 7%—wages for higher-paying jobs were unaffected.
When, during the Bush Administration, a law was introduced that would provide a “pathway to citizenship” for illegal immigrants which would allow them to stay in the US, the measure was opposed by the anti-immigrant American nationalists. It was also opposed by most American labor unions (the AFL-CIO, Teamsters, United Auto Workers and the construction worker unions), who clung to their traditional attitude of defending only “American” workers and treating “foreigners” as enemies. Only the Service Employees International Union, the United Farm Workers, and Unite Now (which represents hotel, restaurant and textile workers) supported the bill, arguing that if immigrants were going to be here anyway, it was better to make them legal so they could be organized, rather than forcing them to become a pool of cheap exploited labor without rights.
To the corporations, the entire debate was irrelevant. National borders no longer mattered to them, and as they moved factories at will all across the globe, free trade agreements that allowed uninhibited movement of jobs across borders also guaranteed that workers too would follow the jobs across the borders, legally or not. In many cases, instead of exporting jobs to Mexico or China, it was easier and cheaper for American business to import the Mexican or Chinese workers here instead—a form of “internal outsourcing”. It simply doesn't matter to the corporations whether the cheap workers move here, or whether the jobs move there to the cheap workers. Either way, the corporations get to pay people low wages for unregulated work, and make boatloads of money. Which is of course all they care about.
Support Manufacturing Industries
One argument that is often coupled with anti-immigration sentiments is that we need to “rebuild our high-wage manufacturing industries”, and reduce our dependence on low-paying service-sector jobs (the kind of jobs that are most often taken by immigrants). TV pundit Thom Hartmann says, “Since we moved from a manufacturing to a service economy under Reagan-Bush-Clinton-Bush we’ve seen manufacturing fall from about a quarter of our economy to only 11 percent of it. That means we no longer make anything of value here. Without making things, we don’t create true wealth—we just move money around.” The National Association of Manufacturers echoes, “A strong, efficient and innovative U.S. manufacturing base is essential to our country’s economic future in a competitive world environment. . . . America’s prosperity and strength are built on a foundation of manufacturing.” And the AFL-CIO concludes, “Companies are sending well-paying manufacturing and service jobs to countries with few, if any, protections for workers and the environment. And these jobs are probably not coming back. . . . Manufacturing jobs traditionally have provided high wages and good benefits that allow workers to care for their families. But 2.5 million manufacturing jobs have disappeared since President Bush took office in early 2001. Multinational corporations are transferring jobs to countries where workers earn low wages and have few or no protections. . . . Manufacturing job loss starts the downward spiral. The loss of good manufacturing jobs has ripped apart communities and permanently lowered living standards for families throughout the United States.”
Such arguments are in essence justifications for protectionist policies towards America’s declining heavy manufacturing, part of the alliance between declining industries and declining labor unions. They fail to acknowledge that the shrinking manufacturing sector is an inevitable fact of ordinary economic development, and it cannot be stopped or reversed.
In early human history, most people were farmers, because farming was so inefficient that it took huge amounts of resources to produce enough food for everyone. As machinery and chemical technology developed, however, farms became capable of producing more and more yield while utilizing fewer and fewer people. Today, therefore, farmers make up less than ten percent of our population, and because of technology and more efficient uses of labor, that ten percent produces more than enough to feed everybody.
The same process is now happening with manufacturing. Manufacturing used to take up a majority of our population, because it was so inefficient that it required that many people to produce everything. Now, however, that is no longer true. With technological progress and improved efficiency of labor, manufacturing, like farming, now requires only a tiny part of our population, which is able to produce several times as much output now as it did in the past with much larger workforces.
As soon as manufacturing (just like farming) required only a small portion of our population, the majority of us became service-sector employees instead (just as in the past the large portion of the labor force that was pushed off the farms by machinery became part of the manufacturing sector instead, by taking factory jobs). And the very same thing is now already happening to the service sector—automation and technological advances mean that the same amount of work can be done by continually fewer and fewer people, and as the service sector becomes more efficient in its use of labor, the number of people employed in that sector continually goes down. Soon, the service sector, like manufacturing and farming, will also require only a small part of the population.
Those who defend heavy industry as “providing good-paying jobs” are making a mistaken assumption. Manufacturing is, in reality, not inherently any more high-wage than any other industry—it is only high-wage in the US because in the past, when manufacturing was the largest part of the labor force, we had a strong union movement in that sector that made it high-wage, against the active opposition of the corporate bosses. In areas today where there is no such strong union movement (such as China), manufacturing positions are still low-wage bad-working-condition dead-end jobs, just like service-sector fast food jobs are here.
The low-wage service sector jobs here, of course, are not inherently low-wage either. They could be transformed into high-wage good-working-condition jobs in the very same way that manufacturing jobs were in the past—with a strong union movement.
Support Small Businesses
In the wake of the financial collapse in 2008 and the government bailouts of corporations that were famously dubbed “too big to fail”, many called for breaking up the corporations and returning the economy to small business, which, many claimed, were “the real engine of the economy”. Some of this action came from the Left—socialist Senator Bernie Sanders introduced a “Too Big to Fail, Too Big to Exist Act” that proposed dismantling the giant financial corporations. But most of the anti-corporate pro-small-business rhetoric came from the free-market-fundamentalist libertarians.
The libertarians have always had an ambivalence towards the supra-national corporations. On the one hand, they preach a doctrine of individual liberty, freedom from arbitrary authority, and unrestricted free market economics. On the other hand, they live in an economy that is dominated by huge supra-national corporations which are larger, richer, and more powerful than national governments, and which often have more direct power over people’s lives and livelihoods than any government—without being responsible or accountable in any way to those people.
That leaves the libertarians in a quandary, and those who do not simply ignore the matter entirely are led into one of two directions. One group openly advocates that the corporations be broken up into small businesses. The other group simply considers the mega-corporations as no different, in principle, than small businesses—in this view, the corporations are the same, economically, as a corner grocery store or family fruit stand, and they should all be free to operate equally in the market.
Both of these viewpoints, however, ultimately rest on an illusion—the pretense that we still can live in an Adam-Smithian world of small independent English shopkeepers. That world, of course, ended over a century ago—the corporations killed it. The inevitable effect of economic competition is to produce monopoly, and the very purpose of a corporation is to eliminate competition.
In the ideal world of the free-market libertarians, the economy consists of a large number of Lilliputian small businesses, none of which is large or strong enough to dominate the others—the theoretical basis of neoliberal classical economics. In this economy of small competitors, however, there are inevitably winners and losers. In the ideal Smithian world, the losers are quickly replaced by new competitors. In the real world, however, as the losers are absorbed by the winners, the winners get bigger and more powerful, and the number of players slowly shrinks. As the number of players gets smaller through competition, moreover, the winners continue to get bigger and bigger—particularly when large numbers of small players agree to improve their power by banding together into one player, the joint stock corporation. This not only greatly reduces the number of players, but the huge amount of money that is now necessary to allow newcomers to enter the field, limits and eventually eliminates the possibility of new players. Therefore, as competition between the small number of huge corporations carries on, the winners continue to absorb the losers and get even bigger, while the number of players continues to decline as they absorb each other. If the process is allowed to continue naturally, through the free market, the inevitable result is oligopoly, where a tiny number of players own everything—and then leading to monopoly, in which one ultimate winner stands supreme.
That is why the libertarian free-market philosophy fails. The inevitable result of competition is monopoly, and the only way to prevent that is to prevent economic winners from growing larger through absorbing losers—i.e., by massive government interference in the natural process of the “free market”. Which makes the free-market ideology itself utterly irrelevant. We simply do not live in an Adam Smithian economy. The free-market fundamentalists are defending a world that no longer exists—and indeed in their ideological fervor, most of them refuse to even acknowledge that it no longer exists.
In every industry, there are a small handful of huge supra-national corporations who run everything. What is new, however, is the internationalization of those oligarchs. Up until the 80’s, corporations tended to stay within their own national or regional areas, and each market area was dominated by a tiny number of huge companies. What has happened in the past 30 years, however, since the time of the Multinational Wars, is that those huge corporations began going international, invading each other's turf and setting off a global economic war that has still not yet ended. As the regional corporate powers killed each other off globally, instead of having four or five major companies dominating each region, now we have four or five huge companies dominating the entire world market. So now we have global oligopoly instead of regional. The globalized economic structure set up by the supra-nationals has not ended that competitive conflict; what it has done is impose an agreed-upon set of “rules of war” on everyone so that the warfare does not pull the entire system into collapse.
Economically, the whole philosophy of “free market” is a waste of breath. There simply is no “free market”, and there hasn’t been for decades. There is only oligopoly everywhere we look—whether it’s electronics, automobiles, energy, transportation, food distribution, retail, or any other industry. A tiny handful of supra-national mega-corporations owns everything. Worldwide.
A small number of libertarians have indeed acknowledged this, but their proposed solution—breaking up the mega-corporations and returning the economy to “small business” under the sway of the free market—is a non-solution. Not only is such a plan politically impossible (the libertarians are never very clear about how they intend to break up the largest and most powerful organizations on the planet, particularly without a massive and forcible government intervention in their sacred “free market”), but it is, in our modern world, economically impossible as well (mom-and-pop small businesses simply cannot build oil refineries or jet airliners or global communications networks, so breaking the mega-corporations into small businesses would only return economic conditions back to the 18th century—and begin the inevitable process all over again).
The cult of the small business that most free-market ideologues have is an irrelevancy. Small businesses are a nonentity. Nearly all of them die within their first three years of life. The ones that do survive, live only at the indulgence of the Big Boys, the corporations who really dominate the economy and who really matter—and who routinely stomp small businesses into the ground any time it’s convenient, by either buying them out or driving them under. WalMart kills dozens of small businesses every time it opens a new store.
Small businesses are like krill—they flash in and out of existence in a brief moment at the bottom of the food chain, and during their ephemeral lifetime their only purpose is to feed the bigger fish.
The primary (and most pernicious) effect of all the libertarian/conservative “free market” preaching, from the Reagan Revolution forward, has been to permeate our society with the misanthropic and pathological attitude of “every man for himself”. We have, as a society, lost sight of the fact that we are a society, that we are social animals, all in this together, and that the only way we survive in the world at all is by relying upon each other.
Repealing the “Citizens United” Ruling
In 2010, the Supreme Court, in its Citizens United v FEC ruling, lifted a number of restrictions that had been placed on corporate campaign contributions. The actual effect of the ruling was minimal—it simply removed a number of soft-money restrictions which had only been in effect for a short time. The effect of the Citizens United ruling on public opinion, however, was drastic. The ruling became a symbol of corporate domination of the entire governmental process and provoked a storm of protest, and all sorts of solutions were proposed, ranging from a Constitutional Amendment to new Federal laws.
Predictably, none of these proposed “fixes” ever went anywhere, and all were in fact doomed to failure from the start. The corporations dominated our elections before this court decision, and they will still dominate our elections after it, whether the decision stands or not. The corporations already own both parties, and since the political majority will always belong to the corporations who bankroll them, all of our alternatives can only consist of appealing to politicians’ patriotism or their civic duty—a losing fight.
We cannot try to use corporate-owned weapons and expect them to be effective against the very people who own them. The only way to potentially check the corporate domination of both parties is to remove corporate money entirely from the electoral system, by public financing of elections. Until we win effective campaign finance reform, progressives will not ever be able to win on any other issue—and of course neither political party wants effective campaign finance reform, since they both benefit from contributions by the same corporations.
But in the larger sense, we can no longer effectively fight corporate power at the national level. It’s not the corporate domination of national governments that is the source of their power over us anymore—it’s the formation of their own private unelected and unaccountable world government. The national level simply is no longer where they exercise their dominant power; they live at the supra-national level, and they are all alone there. The supra-national corporations no longer gain their power merely through their control of the national government. They have now moved far beyond that. And therefore so must we if we want to fight them.
The entire world, whether it’s the US, France, Poland, Swaziland, New Zealand, Pakistan, or Belize, is now fighting the very same mega-corporations and corporate interests. If we fight them together, we can win. If we fight them one nation at a time, we will lose. As Ben Franklin told the thirteen colonies in the face of the mighty British Empire, either we join to fight them together, or we all die.
Fair Trade Provisions
As we have seen, some sections of the progressive movement are already working to unify the anti-corporate forces at the international level—the “fair trade” movement seeks to form global alliances of environmental, human rights, and other grassroots citizen groups, in an effort to force the inclusion of provisions into trade agreements guaranteeing effective ecological and human protection. Such laws cannot be effectively won at the national level, however—in places where that has been attempted, the WTO has swiftly stepped in and vetoed the “restriction on free trade”. In response, progressive organizations have therefore been forced to focus on international efforts which seek to alter the global trade rules themselves.
So far, only one international effort has been able to successfully take on the entire global WTO structure and beat it to a standstill—the G20+ bloc. From the point of view of progressivism, of course, the G20+ coalition’s successful derailing of the Dohan Process is but a hollow victory, since the members of that alliance are the wealthy elite of the developing nations who are merely defending their own selfish economic interests, and their interests often have little to do with the democratic interests of their own people. The G20+ delegates don’t want stronger labor or environmental regulations—they are just as eager as the corporations to maintain low-wage unregulated business climates. What the global fair trade movement must do is duplicate the ability of the G20+ group to unify globally around a common program, but towards democratic goals rather than in the interests of the economic elites. The collapse of the Dohan Process proved that the supra-nationals can be beaten. It is now up to the people of the world to beat them.
An International Labor Movement?
A necessarily crucial part of any effective global movement to beat the supra-national corporations must be the international labor union. The ultimate source of all corporate profits (from which they derive all their power) is the workplace—and every workplace has workers whose interests necessarily conflict with those of corporate profits. Workplace safety, the right to organize, better pay and conditions—all of these things can only be effectively fought for from inside the workplace. And that is the role of the labor union.
As we have seen, the American labor movement threw its lot in with an alliance with the corporations, to defend corporate profits through protectionism and hostile opposition to “foreigners”. The result has been utter disaster.
It is easy to see the root of the American labor movement’s mistake. The AFL-CIO is still wedded to its patriotic flag-waving for “American workers” at the expense of all the rest of the workers in the world, and has ignored a basic truth about the wage-based market economy—the owners are in business to make money for themselves, not for their workers. Boss will always go where it is cheapest. If workers in the United States are paid X for a job, and workers in Indonesia or China are paid one-tenth X, then Boss will move his factory there every time. Any wage gains we are able to make within the US will disappear promptly, as the corporations simply move those jobs to low-wage havens like China or Mexico. If we want to keep our jobs here, therefore, we are reduced to two choices—either we raise their wages to match ours, or we lower our wages to match theirs.
The American unions tried a third way—they wanted to use protectionist measures to both keep our wages high and keep foreign wages low. It was an abject (and predictable) failure.
The American labor movement forgot completely what the word “solidarity” means. Or at least what the word “whipsawing” means.
There is only one way to prevent whipsawing, and that is to organize the workers everywhere. The entire idea of a nation-based labor movement is now outmoded, ineffective and obsolete. In a corporate world, we must instead become company-based rather than geographically-based. In a world made up of multi-national companies who owe loyalty to no government and have no nation, there simply is no such thing anymore as an “American worker” or a “Chinese worker” or a “Somali worker”. There are only “Ford workers” or “Honda workers” or “British Petroleum workers”—and they all do the same work for the same employer and have the same interests, whether their factory happens to be located in Tennessee, Tibet or Timbuktu. And if a Ford worker in Detroit gets X dollars an hour to do a job, then a Ford worker in China or Thailand had better be getting the same X dollars an hour for doing the same job—because if he's not, then guess where the factory will be going?
It’s an elementary lesson that the American unions ignored. Instead of organizing all Ford or US Steel workers across the world to face their common employer, the unions have ignored foreign employees completely or even treated them as enemies; instead of raising the foreign wages to match ours, the AFL-CIO preferred to work with its corporate “partners” to pass protectionist laws to keep them away. So the American labor movement bears a large part of the blame for its current situation. By fighting for “American workers” and allowing workers in other countries to be reduced to virtual slavery, the AFL-CIO guaranteed that every boss in the US would move his factories overseas to the cheap labor.
What the labor movement must do instead is to follow the companies wherever they go, to any country, and organize all the workers there. One company, one union, one contract, one wage scale—no matter where you are. That cannot happen until American workers give up their attachment to outdated nationalism. The only way the corporate bosses can be beaten is if all their workers stick together, organize together, and fight together, no matter what country they happen to be located in. That is what “solidarity” means.
It used to be that “workers of the world, unite!” was just an idealistic political slogan. Today, it is our only survival strategy.
Conclusion: The Future of the
Supra-National Corporation
The most ironic thing about the 21st century mega-corporations is that they have accomplished nearly everything that the radical Socialist Party of the 1910’s wanted to do.
The Socialist Party wanted to eliminate the private ownership of capital and replace it with collective ownership; today the corporations are not owned by individual proprietors, but by a collective body of shareholders. The Socialist Party wanted to remove ownership from management and introduce managers who held their position by election, rather than by ownership; today the corporations are run by professional managers who are hired by a board of directors that is elected by the shareholders. The Socialist Party wanted to eliminate economic competition and replace it with economic cooperation; today the corporations have become vast interconnected networks who own parts of each other through cooperative joint projects and multilateral ventures. The Socialist Party wanted to replace what they called the “anarchy of the marketplace” with planned economic production over long-term goals; today corporations try in every way to eliminate the shocks of market uncertainty by long-term planning. The Socialist Party wanted to eliminate national borders and replace them with internationalism; today the corporations have become multinational, have built up a global economic framework, and have made national boundaries economically irrelevant.
In essence, the corporations have already socialized the entire process of production.
Another utopian goal of the Socialist Party was “world government”, and once again, the corporations are today moving along the same path. The corporations have already built international economic structures—the WTO, IMF and the various free trade agreements--and these already have control over national economic policies and legal veto power over national laws.
Along with the buildup of international economic power must inevitably follow the buildup of international political power. Just as the “nation” has become irrelevant economically and has been replaced by international economic structures, so too has the “nation-state” become irrelevant politically, and will inevitably be replaced by international political structures—and the corporations have already begun that process.
The seeds of that international political structure (the United Nations) are, of course, completely undemocratic and are dominated by the handful of wealthy powerful nations.
But the poor nations (and poor people) of the world are now no longer powerless. Globally, progressives must force the UN to democratize, by degrees, and turn it into a real international government. It is, in essence, the very same process we have already done in the process of democratizing various national governments, but this time we must repeat it on an international scale instead. Just as we once fought for national democracy, now we must fight for international democracy. It’s not a question of whether we should have a world government or not—we already have one. The only question now is whether it should be democratic, or continue to be dominated by the wealthy and powerful.
Fortunately for us, we do not have to start from scratch. There already are national organizations for democracy and for social justice, for fair trade and for control over corporate power, for labor rights, environmental protection, consumer safety, etc all over the world. What we need to do is unify those separate parts into one unified coordinated whole. Instead of Ford workers in Detroit and Ford workers in Shanghai being in different unions (or in no union at all), we need all of them in the same union, under the same contract. Instead of environmental groups focusing just on their own country, we need to unify them into a global environmental group which fights for the same environmental protections everywhere.
That is how we get the beginnings of a supra-national social justice movement—by unifying all the national ones that already exist. And “unify”, doesn’t just mean “give money or moral support to each other”, nor simply “we share the same goals”. It means unify into one global organization, just like the corporations already have. The corporations are already unified at the global level. They have already led the way. We must follow.
We must build up as much international power as the supra-nationals have, until we are strong enough to do what the national social justice movements have already done at the national level—democratize the government. We need to force the WTO and the UN to become democratic in reality rather than just democratic in name only.
How do we get the popular democratic vote in the UN or the WTO? The same way African-Americans got the vote in the US. How do we get a seat at the WTO table for labor representatives? The same way that unions won a seat at the corporate table in England and Germany. We must re-fight all of the old fights—for labor rights, for democracy, for consumer and environmental protections—but we must fight them at the international level this time, rather than at the mere national level.
Will any of these things be easy? No. The privileged nations (including the US) will fight them every step of the way. But it must be done. The only alternative is to simply allow the global corporate elite to run roughshod over the rest of us.
The era in which a handful of supra-national mega-corporations run the world at their whim, must end.