Corporate Power Since 1980

The United States Since 1980 (Cambridge University Press, 2007) is a superb short work from Dean Baker of the Center for Economic and Policy Research.

In a couple hundred pages, Baker covers enormous territory, reviewing the rightward shift in U.S. politics, the sharpening of inequality (and underlying causes), U.S. unilateralism in global affairs, and much more. He concludes by identifying the U.S. political system’s failure to address three overriding problems: provision of healthcare to all at an affordable cost, the spiking trade deficit, and global warming.

The distressing effects of corporate power and influence is interwoven into the narrative of The United States Since 1980, but corporate power is not analyzed in its own right.
There will be an opportunity to conduct that kind of analysis at an important conference to be held June 8-10 in Washington, DC. “Taming the Giant Corporation” will investigate the evolving sources and forms of corporate power, and how it can be subordinated to people’s control (including by displacing corporations altogether from certain segments of the economy and society). You can get information on the conference, and register, here.

What might be the key themes of a book titled, Corporate Power Since 1980?

Some interrelated concepts, not listed in order of importance, would include:

1. Corporate political organization. Big business has mobilized itself into a dominant political actor, with capacity through its various tentacles both to frame the contours of big picture policy debates, and to win narrow legislative battles, at all governmental levels. The proliferation and strengthening of corporate-backed think tanks, front groups, lobbyists, trade associations and more, are all evidence of corporations’ dramatically increased political power — in the United States and around the globe.

2. Corporate globalization. Big corporations now operate globally, both on the production and selling side. They leverage the threat of moving production to drive down labor and environmental standards. They and their allies have drafted international trade agreements that embed their power in law, and impinge on the ability of governments to control them. They have also created massive global trade imbalances, which threaten the future stability of the global economy. On the seller side, they are driving a homogenization of culture on a global scale.

3. Corporate concentration. Wal-Mart was an insignificant blip on the retail radar screen in 1980. It now dominates retail markets in the United States, with growing power overseas. Big box emulators have concentrated sales in retail market after retail market. Antitrust concepts in the United States have fallen by the wayside, evidenced perhaps most spectacularly in the permitted reunification of the two biggest components of the Standard Oil breakup, Exxon and Mobil. In sector after sector — food manufacturing, finance, pharmaceuticals, tobacco, aircraft, defense contracting, utilities, energy, insurance, hotels, mining, media — fewer companies are in control.

4. Union busting. The trend is sharpest in the United States, where there has been a perilous decline in union membership. The blue-collar unionization rate fell from 43.1 percent in 1978 to 19.2 percent in 2005 — a drop of well over half. Corporations’ vicious anti-unionism, offshoring and threats to close plants all contributed to plummeting union rates — and the undermining of wage scales and employment conditions for working people. Similar pressures are starting to be felt in Europe, though Europe has, so far, largely resisted the degraded standards of the United States. Meanwhile, the World Bank actually advises countries to cut back on labor rights in order to be more competitive.

5. Corporate subcontracting. Brand-name industrial firms increasingly don’t make what they sell. Instead, they subcontract the work, often on a global scale. What might be high-paying jobs turns instead into low-income or sweatshop work — and the identifiable company is able to swear off responsibility for how their subcontracted workers are treated, or for the pollution or other undesirable aspects of the production and services they subcontract. Subcontracting functions as a massive escape from accountability.

6. Deregulation. The election of Ronald Reagan gave corporations the opportunity to achieve the roll back of environmental, consumer and workplace safety regulations — and they’ve been rolling back ever since, often on a global scale. Equally important has been economic deregulation — removal of U.S. rules governing how finance, telecommunications and utility companies can operate, for example. This deregulation has facilitated massive consolidation, consumer rip-offs and serious threats to economic well-being — as evidenced by the Enron scandal and collapse, which was rooted in deregulation of energy and financial markets.

7. Tax manipulation. Concludes Citizens for Tax Justice in a 2004 study: “Eighty-two of America’s largest and most profitable corporations paid no federal income tax in at least one year during the first three years of the George W. Bush administration — a period when federal corporate tax collections fell to their lowest sustained level in six decades.” Corporate political power has led to lowered tax rates and creation of endless tax loopholes and subsidies. And the spectacular rise of offshore tax havens has made the tax avoidance business into its own industry.

8. Commercialization. Commercialism has become ubiquitous, in ways barely imaginable a quarter century ago. Corporate marketers target small children in the most devious of ways, and advertising is pervasive in schools. A new speciality known as neuromarketing is doing brain scans to gain “unprecedented insight into the consumer mind,” as one neuromarketer put it. “Buzz marketers” are employing people to hawk corporations’ stuff, but not tell the friends, family and neighbors they are pitching. Results of corporate commercialism include an epidemic of marketing-related diseases such as obesity (rising now in developing countries as well as the United States), more materialistic values at the expense of civic ones, and consumption-driven challenges to the sustainability of the planet.

9. Financialization. Wall Street and the global finance sector now exert an extraordinary grip over the real economy, placing unprecedented pressure on producing and service companies, and interfering with the ability of countries to manage their economies. Speculation and hot money, fueled in equal parts by new technologies and deregulation, give Wall Street managers enormous power. Meanwhile, the invention of new financial instruments has injected enormous risk into the global economy — easily ignored in good times, and rarely borne by the wealthy in down times.

The recent rise of private equity — an updated version of the leveraged-buyout movement of the 1980s — threatens still further to destabilize shared social understandings. Private equity firms now pool vast sums from institutional players (such as pension funds), and then borrow still more, to buy out publicly traded companies. Hidden from public scrutiny, the private equity managers typically then seek to squeeze the companies (and especially their workers), before placing them back on the market.

10. Enclosing the knowledge commons. The value-added component of making things is embedded progressively less in the manufacturing process, and more in the development side — in the knowledge about how to design and make the thing. Corporations — especially in the pharmaceutical, software and entertainment industries — have responded by demanding heightened patent and copyright protections, to give them monopoly control over information and knowledge — even though that knowledge is typically extracted in significant measure from the public domain. One manifestation of this movement is the imposition of a global patent standard, leading to skyrocketing drug prices in developing countries.

11. Global environmental and public health treaties. Not every trend has seen corporate power deepened. With many problems globalized, citizen activists have managed to push successfully for some legally binding global solutions, often in issue-specific treaties, including ones to address the hazardous waste trade, pesticides and other pollutants, tobacco control, and protection of the ozone layer.

12. Popular movements to curtail corporate power. Beyond specific advocacy efforts around treaty-making, there have emerged robust advocacy and solidarity networks to counter corporate malfeasance, influence and demands. From winning improvements in working conditions to blocking bad trade deals, from lowering the prices of essential medicines to blocking biotech companies’ efforts to experiment on humans and the environment on a planetary scale, from supporting indigenous peoples’ rights to blocking destructive dam projects, these networks have scored important victories. Relatedly, a series of mass mobilizations have occurred to challenge corporate dominance, and popular movements have linked up and created growing countervailing power in national and international spheres.

But while an historical perspective on Corporate Power Since 1980 does not offer an unyielding picture of corporate supremacy, the predominant trend is toward dramatically heightened corporate power. Indeed, by far the most serious barrier to addressing each of the three overriding problems that Dean Baker highlights as challenges for the United States — affordable healthcare for all, the trade deficit, and global warming — is overcoming entrenched corporate practices, privileges and prerogatives.


Well, at least he’s not a war criminal.

George Bush’s new selection to head the World Bank, Robert Zoellick has that over his predecessor, Paul Wolfowitz.

But can’t the world demand a slightly higher standard?

The selection process for chief of the World Bank, which claims to be the world’s preeminent anti-poverty institution, is preposterous. By tradition, the post goes to a U.S. citizen, to be selected by the U.S. President. There is no pretense of democracy at this international institution. Nor is there any pretense of demanding relevant development experience. None of the past presidents of the Bank, including Wolfowitz and Zoellick, has had any meaningful experience in development policy. There have been longstanding calls by people who actually care about development, and do have relevant expertise, to reform the Bank’s archaic government structure.

But more important than the Bank’s governing process are its policies.

The World Bank’s great failings over the last decades are rooted in its commitment to the market fundamentalism known as “the Washington consensus.” This is a set of maniacal market-oriented policies including: deregulation of the economy, opening countries up to capital inflows and outflows, removing all trade barriers and orienting economies to support exports, massive privatization (including even of such traditional government functions as customs collection), eliminating subsidies for basic necessities, rolling back legally guaranteed labor rights, cutting back on government services and restricting government spending. The Bank has also maintained a penchant for environmentally and socially destructive mega-development projects: big dams, oil and gas projects, road-building. The result has been a literal human disaster: the developing countries that have most closely hued to policies imposed by the World Bank (and its sister institution, the International Monetary Fund) have found themselves much poorer, less healthy and less educated than countries that have resisted Bank recommendations.

In one notable example, the Bank’s historic support for user fees for education and healthcare has denied millions of children the right to schooling, and deprived millions of people access to healthcare.

The Wolfowitz controversy obscured the bigger issues at the Bank, and the questions now facing Zoellick:

Will Zoellick oppose user fees for healthcare?

Will he support robust public health systems that rely on public providers — not wishful thinking about HMO-style schemes delivering health care in developing countries?

Will he abandon support for water privatization, which delivers profits to multinationals but raises costs to consumers and decreases quality of service?

Will he end the Bank’s heinous opposition to labor rights in its influential Doing Business report?

Will he insist that countries be able to expand healthcare and education budgets, despite pressure from the International Monetary Fund?

Will he support the recommendations of Bank-supported expert investigations, and end support for mega-development projects?

As the U.S. Trade Representative, Robert Zoellick pushed market extremist policies akin to those of the Bank, in World Trade Organization negotiations, and especially in bilateral and regional trade agreement negotiations.

His very aggressive agenda as USTR included advocating for increased monopoly rights for drug companies, eliminating precautionary health measures, removing protections for small farmers and eliminating protective industrial tariffs in developing countries (a key element of the misnamed “Doha Development Round” of World Trade Organization talks that Zoellick helped kick off).

To be fair to Zoellick, every recent person in his post, Republican or Democrat, has pushed the same Big Business agenda that he did. And on pharmaceutical and patent issues — some of the key considerations at USTR — he did not do everything Big Pharma wanted, and sometimes really pushed against the industry’s interests (until overridden by the White House.)

On the other hand, the fact that other former U.S. Trade Representatives pushed a broad Big Business agenda is hardly an argument for why Zoellick should be rewarded with the World Bank post. It is a better argument for why no former USTRs should be given the job.

And even though Zoellick had major conflicts with Big Pharma, he did at the end of the day deliver on almost everything the companies wanted. As my colleague Asia Russell of the AIDS activist organization Health GAP says, “It’s very difficult to imagine the same Bob Zoellick who carried water for Big Pharma being the kind of advocate ministers of health need in order to expand their investments in salaries for doctors and nurses to address 6,000 preventable AIDS deaths each day in Africa alone.”

The same point could be echoed about the rest of Zoellick’s performance as USTR.

Unless Zoellick makes a break from market fundamentalism, expect the World Bank to continue to generate rather than reduce poverty.

And yes, the world should demand better. For the immediate term, Zoellick should be pressed to make specific commitments to abandon key components of the Bank’s failed preferred policy set. The longer term agenda must involve achieving not just better governance at the Bank, but a completely refashioned orientation.


* Zoellick does not seem to have been an active part of the Cheney-Rumsfeld cabal that concocted the case for the Iraq war and then carried it out, but he was (along with Paul Wolfowitz and others) a signer of the 1998 letter from the Project for a New American Century to Bill Clinton, urging Clinton “to turn your Administration’s attention to implementing a strategy for removing Saddam’s regime from power. This will require a full complement of diplomatic, political and military efforts.”

Louisville Refuses To Turn On The BusRadio

Marketers can’t seem to stop thinking about the spectacular marketing opportunity afforded by schools.

It’s easy to imagine the conversation in the business meeting room: Kids are bored in school — we can grab their attention with ads! Compulsory schooling creates a captive audience for us — if we can just get in the door! Schools are perfectly age-segmented — just what we need!

That’s the kind of thinking that led to the creation of Channel One, which wraps 10 minutes of pap news and entertainment around two minutes of ads broadcast into classrooms. It is the mindset behind billboards at school athletic fields. It explains student book covers that sport corporate ads.

And it is the thinking behind the hideous new enterprise known as BusRadio.

This is the Needham, Massachusetts-based BusRadio’s offer: The company will provide school districts with custom-designed and installed equipment at no charge. BusRadio will pipe in its own network (the company has separate programming for elementary students and for middle school and high school kids), playing pop music, public service advertisements and “age-appropriate” commercials. Not only that, but the company will share some of its ad revenues with the school district.

All the school district has to do is offer up its kids as a captive listening audience.

BusRadio is off to a slow start. It lurched into operation at the beginning of the 2006-2007 school year, and claims to have managed to lure schools with just 100,000 students into accepting its deal.

Its stated target is 1 million kids for the coming school year.

Earlier this week, it hoped to increase its captive audience base by more than half by tricking the Jefferson County, Kentucky school board to sign on the dotted line. Louisville is in Jefferson County. The school district has 60,000 bused students.

Happily, parents — who know all too well how their kids are saturated with commercial messages — are getting wise to the marketers’ efforts to invade schools.

As soon as they learned of the BusRadio proposal, parents and activists scrambled to mobilize opposition. Parents and advocacy groups wrote to the school board. The PTA lodged objections. And parents went to the school board meeting prepared to protest.

There was no need. Their message had already been delivered.

The Jefferson County school board rejected the proposal without even taking a vote.

“The board received a lot of input from the community, and based on what we heard, we decided this was not a contract we wanted to consider,” board chair Joe Hardesty announced at the start of the school board meeting, according to a report in the Louisville Courier-Journal.

In a follow-up note to parents and others expressing concern about the BusRadio proposal, school board member Debbie Wesslund wrote, “I certainly share your views about allowing commercial advertising on buses. As most of you said, we spend plenty of time already trying to limit our children’s exposure to advertising, inappropriate music and pop culture in general.”

Advertising in schools and school property like buses is such a bad idea that even a majority of marketing professionals believe it is wrong. A 2004 Harris poll of youth advertising and marketing professionals found that only 45 percent “feel that today’s young people can handle advertising in schools.” Forty-seven percent believe that “schools should be a protected area” and that “there should not be advertising to students on school grounds.”

Schools should be a place for education — to gain knowledge, to acquire a love of learning, to develop and discover one’s own unique personality, to learn how to build friendships and solve conflicts, to internalize community and civic values. Commercial intrusions — already all too present in kids’ lives — undermine virtually every aspect of the educational enterprise.

There is a growing revolt underway against commercialization of the classroom. Channel One was just about driven out of business, before recently being acquired by a new company that will likely keep it going for a short while before throwing in the towel. There is a groundswell to kick soda and junk food companies out of schools. And ridiculous ventures like BusRadio are now finding it is harder to trick parents and schools than they might have expected, or than they might have found five or 10 years ago.

Protecting children from the commercial onslaught is a worthy and vitally important objective in its own right. But it is also is an opportunity to begin, ever so slowly, to address a broader ill.

Marketing madness has overrun our society. It imposes on our time, debases our culture, poisons community ties and even relations among friends (who may duped into becoming company representatives through “buzz marketing” arrangements) and threatens our planet with its hyper-consumerist message.

Jefferson County and many other places are taking the first strides to recovery from this lunacy, by asserting the importance of non-commercial spaces and times, and of protecting children from the corporate predators.

Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, and managing director of Commercial Alert , which joined the protest against BusRadio.

(c) Robert Weissman

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