By Francis Lee for the Saker Blog
The men and women who run global corporations are the first in history with the organization, technology, money, and ideology who are attempting to structure the world as an integrated economic unit. (1)
THE RISE OF CORPORATE POWER.
Scroll down another six decades (or thereabouts) and this statement has hardened into an objective fact – and moreover has turned out worse than the above authors had ever imagined. In effect what has taken place, and is still taking place, is the massive shift of power, out of the hands of nation states and democratic governments and into the hands of Transnational Corporations (TNCs) banks, Investment banks, Commercial banks, and Central banks. It is now the coalition that effectively governs the lives of the vast majority of the people on earth; yet these new world realities are seldom reflected in the strategies of citizen movements for democratic change. All too often, strategies are aimed primarily at changing government policies, whilst the real power being exercised by TNCs behind the scenes is rarely challenged, let alone dismantled. When the operations of TNCs do become a prime target for citizen action campaigns, there is a tendency to employ a rather piecemeal and foot-dragging approach to such popular struggles to what is a deeply systemic problem – a problem for the lower orders that is.
Regardless of their nominal home bases these globe-trotting corporate Leviathans have become essentially ‘stateless’ (I use this term advisedly) juggling multiple national identities and loyalties in order to achieve their global competitive interests. Regardless of where they operate in the world these conglomerates can use their overseas subsidiaries, joint ventures, licensing agreements, and assume foreign identities and tax evasion on a huge scale – as for example in the practise of ‘transfer pricing’ – whenever it suits their purposes. In so doing, they develop chameleon-like abilities to change their identities to resemble insiders wherever they are operating. As one nameless CEO put it, When we go to Brussels, we are member states of the EU, when we go to Washington, we become an American Company. Whenever the need arises these gentlemen will wrap themselves up in the national flag of choice (or flags of convenience as in the shipping industry) to get support for tax breaks, research subsidies, or governmental representation in negotiations affecting corporate profit and marketing plans. Through this process stateless corporations are effectively transforming what were independent nation states to suit their interests.
CORPORATIONS AND STATES – PARTNERS IN CRIME
Having said this, however, I would add a qualifying disclaimer:
Namely, that nation states do not necessarily choose to prostrate themselves before their lords and masters of Finance and Industry, this was never – mirabile dictu – meant to be a one-way arrangement or an alternative to the liberal market economy. I have argued elsewhere that states and corporations are both conjoint and symmetrical. Both need each other. The state unquestionably remains the most significant force in shaping the national and world economies, despite the rhetoric of the state-denialist lobby. The state has played a fundamental role in the economic development of all countries, from the 19th century onwards, and my hunch is that it will continue to do so for the foreseeable future.
However, given the universality of the state-economy dualism it should be understood that a system of variegated capitalism is a feature of the contemporary state-economy partnership. In general terms this fragmentation breaks down into basic models of actually existing capitalism.
1. The liberal-market capitalism (LMC). This is generally understood to be associated with the Anglo-American economies. Rampant individualism has become the dominant characteristic, short-termist and based upon a weak industrial and a strong financial sector. Shareholder value has assumed a quasi-religious status. The banking system is oligopolistic and averse to industrial investment and fixated on the property sector. Financialization is the dominant economic form.
2. Social-market capitalism. (SMC) A premium is placed on collaboration between different actors in the economy with a broader definition of ‘stakeholders’ beyond that of solely the owners of capital. The concept of ‘social partnership’ is more prominent than the Anglo-American model, but somewhat weaker more recently. Capital markets – unlike the LMC – tend to be bank-centred and the banking industry tends to be more diffuse as instanced in the existence of the German Sparkassen. This model is characteristic of the German, Scandinavian, western European bloc.
3. Developmental Capitalism. This is a highly activist state-driven system (although not necessarily through public ownership of productive assets). The state sets substantial policies contained within an explicit industrial strategy. Capital markets tend also to be bank-centred and there is a strong emphasis on tight business networks – e.g., the Chaebol and Keiretsu. The model is exemplified by Japan, (south) Korea, Taiwan, Singapore, and more recently by China.
4. Russian Capitalism. This is difficult to categorize since it is given an unbelievably bad press – for geopolitical reasons – in the western media and academia.
It is also under the cosh of western sanctions which makes development even more difficult. Moreover much of what is going on is conducted in the Russian language which makes reporting and analysis even more difficult. Both political and economic structures were liberalized after 1991 but the Russian state still exerts strong control over the economy. The jury is still out on Russia’s system and development.
Given a choice of which system works best it would seem to be the highly state-activist developmental model.
‘’We can safely predict that the Anglo-American model will become less influential … whilst … virtually all of the Asian models of capitalism involve a more active role for government. And the rise of these models is taking place as the US approach is discredited by abuse, shrivelling opportunities and a shrinking middle-class. Among listed alternatives, the US model is now the outlier.’’ (2)
Earlier, historical proponents of this activist, top-down state-capitalist model would characterise it as being a structure which is primarily capitalistic; although this is arguable. Unquestionably, however, there is a significant degree of government ownership/control of the system of production, distribution, exchange and consumption, and moreover being subject to long term and strategic planning. One such proponent included the US politician/statesman, Alexander Hamilton (1755-1804). As the first Secretary of the Treasury, Hamilton was the main author of the economic policies of George Washington‘s administration. He took the lead in the Federal government’s funding of the states’ debts, as well as establishing the nation’s first two de facto central banks, the Bank of North America and the First Bank of the United States, this combined with a system of tariffs, and friendly trade relations with Britain. His vision included a strong central government led by a vigorous executive branch, a strong commercial economy, government-controlled banks, support for manufacturing industry, and a strong military capable of future wars with Mexico.
These views on industrialisation and state-building could legitimately be described as a protectionist and strategic policy, this to the extent that his theories made a positive impression, and these were not lost on US President and ex-commander-in-chief of the Army of the Potomac, Ulysses S Grant. (1822-1885).
According to Grant:
‘’For centuries England has relied on protection, has carried it to extremes and has obtained satisfactory results from it. There is no doubt that it is to this system that it owes its present strength. After two centuries, England has found it convenient to adopt free trade because it thinks that protection can no longer offer it anything. Very well then, gentlemen, my knowledge of our country leads me to believe that within 200 years, when America has gotten out of protection all that it can offer, it too will adopt free trade.’’
Interestingly enough the United States did not become a great trading power and not recognisably be a free-trade nation until after WW2.
Similarly In Germany, Friedrich List (1789-1846) who also had scant regard for any ‘free-market’ nonsense along with the Ricardian corollary of comparative advantage, was instrumental in promoting a guided political economy; a system of political supervision from above as a policy for economic development. He argued that,
‘’…the first stage (of such a long-term policy) is one of adopting free-trade with more advanced nations as a means of raising themselves from a state of barbarism, and of making advances in agriculture; in the second stage, promoting the growth of manufactures, fisheries, navigation and foreign trade by means of commercial restrictions; and in the last stage, on after reaching the highest degree of wealth and power by gradually reverting to the principle of free-trade and of unrestricted competition in home and foreign markets.’’ (3)
As with Hamilton’s economic theories and their influence on Grant, so with List’s theories, on the leading figure in Germany at the time, the ‘Iron Chancellor’ and leading statesman of the day – Otto Von Bismarck (1771-1845).
These strategic, nation-building, and planned approaches were to give rise to the considerable success of the ‘mixed economies’ during the Bretton Woods era – 1944-1971 – and particularly so in the west. But this historical phase ended abruptly with the rise of the Thatcher-Reagan axis circa 1980, to the tune of TINA – there is no alternative, although such policies continued to be the chosen road to development in East Asia. If the TNC-State paradigm operates globally they do so only because the state allows and facilitates this. But the relationship between the two varies from one state’s political economy to another.
The present actually existing state-market archetype – which in its essence is neo-liberal – is such that business enterprises now seem fit to expect/demand more from their governments in order to secure markets for their products (these enterprises certainly have some chutzpah in this respect!)Trade follows the flag. This special pleading notwithstanding, the fashionable nostrums extolling the economic virtues of neo-liberalism – nostrums of an entirely theoretical nature, based upon a type of reasoning associated with the medieval schoolmen, or rolled out as if it were Immanuel Kant’s Categorical Imperative. In this respect also such economic theory, as postulated by the marginalist school (see below) takes place before any engagement with the material world, the theory precedes practice when it should be the other way around. I believe that it was Goethe who once said “All theory is grey, my friend. But forever green is the tree of life.”
ECONOMIC DEVELOPMENTAL DESIDERATA
However, in spite of the neo-classical economics theological school founded in 1870 (4) the fact of the matter is that the private sector requires at least 4 principles of support and services from governments.
1. Infrastructure support. That is to say state funding of high-risk and basic research. This involves funding of universities and of vocational training systems. Subsidizing of mechanisms for the dissemination of scientific and technological transfers.
2. Providing tax breaks. Incentives, necessary for investment in industrial R&D
3. Guarantees. That national enterprises from the given country have a sufficiently stable Home Base and privileged access to the home market via public contracts (defence, telecommunications, health, transport, education, social services). Industrial policy, particularly for those in the high technology strategic sector (defence, telecommunications, and data processing), also guarantee of a certain basic scientific and technical competence, as well as protecting designated sectors of the internal market on which local enterprises may depend.
4. Provision: that is the necessary support and assistance (regulatory and/or commercial, diplomatic, and political) to local enterprises in their activities and in their fight to better survive in international markets.
The above prescriptions would constitute the absolute sine qua non for economic growth and development. But it is no longer necessarily the case that these expectations will be met. Instead of the assessment (and presence) of past economic developmental strategies with measurable outcomes we have a religious, inflexible dogma of ‘market forces’ which is not to be gainsaid, gibberish in theory, but not even workable in practice. Herewith the record.
1. Capital/Labour relations.
Promise: Deregulation will allow for full employment.
Outcome: No clear impact.
2. Forms of Competition.
Promise: Deregulation will erode oligopolistic market power and will restore free competition
Outcome: Re-regulation, less producers, increased market concentration, from one oligopolistic form of competition to another.
3. Monetary Regime
Promise: Control of Monetary Base is possible.
Outcome: Monetary Innovation prevents this control and the rise of the shadow banking system.
Promise: Minimal state will enhance growth and productivity
Outcome: Poor levels of productivity due to lack of educational infrastructures. Finance is put before industry.
5. International Regime
Promise: Smooth currency adjustments.
Outcome: Large movements up and down of exchange rates
And so on and so forth. The state – if it so chooses – remains the most formidable institution to channel and tame the power of the markets. In the absence of powerful countervailing regulation any economic analysis shows that persisting unemployment, recurring financial crises, rising inequality, underinvestment in productive activities such as education and research, a cumulative asymmetry of information and power and overinvestment in financial activities are the outcomes of a complete reliance on market forces. This we already know, but the suffocating global impact of Anglo-American liberal globalism – in both theory and practice, and in its sphere of influence – has served to erect a seemingly insurmountable barrier, both political and ideological, to any exit from the dead-end of TINA.
DECLINE AND FALL
Sad to say, however, that the public authorities on both sides of the Atlantic have defaulted on their obligations to their electorates and to a large extent have merged with the corporate and banking sector. The US and EU remain in thrall to neo-liberal doctrine, the only ‘growth’ policy considered worthy of the name consists of eliminating organizations or institutions of any kind that are regarded as obstructing markets and competition, be they cartels, chambers of commerce and industry, trades unions or tax guilds, or minimum wages or employment protection. This is all that is meant when todays creditors expect debtor states to implement the dreaded ‘structural reforms’. The collapse of the Keynesian economics establishment and its political manifestation in both social-democratic theory and practice was unable (and even unwilling) to prevent the counter-revolutionary onrush of the neoliberal forces who now command the political and economic agenda.
‘’The historical significance of the transition from a Keynesian to a Hayekian political economy, which has been taking place since the 1970s, becomes clearer if we recall the situation at the beginning of the neoliberal turn. Whereas today with open borders, formerly sovereign states with independent central banks must pursue a rule-bound economic policy in accordance with a prescriptions of efficiency theory, the Keynesian mixed economy of the post-war decades had at its disposal a wide range of instruments for discretionary government intervention, especially in the distribution of the national product and the life-chances of national citizens … The neoliberal counter-revolution has left nothing of this. It’s objective was to trim the states of post-war capitalism as much as possible reducing them to providing for the functioning and expansion of markets and making them institutionally incapable of corrective intervention in the self-regulating enforcement of market justice.’’(5)
Returning to the global perspective of the opening passage the problems of under-development in the periphery is now being felt in the imperial centre as the centre becomes more and more like the periphery. A state cannot be emerging or developed if it is not inward rather than outward looking to the goal of creating a domestic market and thus reasserting a national economic sovereignty. This complex objective requires over all aspects of economic life. In particular, it demands policies that protects food security and sovereignty, and equally sovereignty over ones natural resources and access to others outside one’s territory. These multiple and complementary objectives are contrasted with those objectives of the internal comprador class, who are content to adapt to growth models that meet the requirements of the dominant global system (liberal globalization) and the possibilities that these latter alternatives offer. (6)
At the present time, the historical requirement for the establishment of an entirely new social and economic order based upon sound principles and respecting the environment with a goal of the fulfilment of human rights has become imperative. It hardly needs stating that this is a monumental task and the possibilities between success and failure are evenly balanced. Nonetheless it remains the greatest challenge in today’s world – moreover it is a challenge which spans both the developed and developing world and for tackling the issue of the survival of the human species and the Earth itself. Whether mankind is up for this challenge remains to be seen, but the world is running out of time and positive action needs to start very soon indeed. We shall wait and we shall see.
La Lotta Continua.
(1) Richard Barnet & Robert Mueller -Global Reach – 1974
(2) Rothkopf – Financial Times – 01/02/2012)
(3) Freidrich List. – National System of Political Economy. P.15
(4)The Marginalist ‘Revolution’ of 1870. The term ‘marginalist revolution’ is commonly utilised to indicate the abandonment of the classical liberalism – of Adam Smith, and John Stuart Mill – and posited a theoretical shift to a subjective theory of value and the analytical notion of marginal utility. The years between 1871 and 1874 saw publication of the major writings of the leaders of the Austrian marginalist school, Carl Menger (1840-1921); of the British school, William Stanley Jevons (1835-1882); and of the French (Lausanne) school, Leon Walras (1834-1910). For better or worse – pretty much the worse FL – this is the basis of the contemporary economics taught in schools and universities today. It is a toxic legacy.
(5) Wolfgang Streeck – Buying Time – pp.111/112
(6)Samir Amin – The Implosion of Capitalism – p.44
“Both political and economic structures were liberalized after 1991 but the Russian state still exerts strong control over the economy. ”
The Russian state lost the entire control during Eltsin era. To be directed to a slow and painful recovery route by Putin. Enormous national wealth was stolen during that period.
The unaccountable global (mostly western) cabal, that’s been ruining the lives of billions since decades (austerity, poverty, Rana Plaza, designer famines, wars etc.), plans nothing less than the complete removal of sovereign national states and of elected governments. One just has to read what’s been leaking out of Bilderberg conferences or from the annual meetings of the World Economic Forum in Davos to get an idea about their plans for the rest of us 7.800.000.000 …
… Susan George (Transnational Institute, Amsterdam) is by now in her mid 80s, but still sharp and spot-on in her political analyses. Here, she introduces her book “Shadow Sovereigns”, in which she talks about the subject:
I just found “Shadow Sovereigns” in the 2nd row of our massively overweight bookshelf. It begins with an interesting epigraph …
In the course of my life I have developed five little democratic questions. Ask a powerful person:
What power have you got?
Where did you get it from?
In whose interest do you exercise it?
To whom are you accountable?
And how can we get rid of you?
If you cannot get rid of the people who govern you, you don’t live in a democratic system.
Tony Benn (1925-2014)
Farewell speech to Parliament, 2001
The East India Company model of global economic organisation and management is coming to an end.
It started in earnest with the Opium Wars. The model offered by China was rejected then and the Company format was forced upon it.
150 years later it is again the same choice- the Company format or what China has to offer.
Only this time China is not so easy to subdue- except perhaps by using nuclear weapons.
Will it end with a whimper or a bang. The next four years will tell.
What do you mean by what today’s China has to offer? Communism? Is that a Chinese thing? I thought Communism was invented by Karl Marx the Jew.
China’s line to the past was cut in WWII. Chinese civilization today is more precisely the Chinese Communist enactment of Western civilization, which is itself the European enactment of Mesopotamian civilization.
If true Chinese ideals had survived into the modern age, China would not be a sweatshop for Western companies today.
I recommend looking into the Emperor Qian Long’s rejection of European technology, for some insight regarding the antithetical nature of Chinese civilization to European technology. The same technology that the Chinese have been assembling now for Western companies for decades, for very little pay.
If I was running the globalist circus, I would set up a Capitalist consumer culture in the West, a Communist labor culture in the East, and take my place somewhere in-between, in the Middle East perhaps, and play the middle man, facilitating financial transactions between the two, while making sure the two never become friends, lest they go around me. But alas, the Zionists beat me to it.
China is not an independent country. There are no more independent countries. How can there be when global Zionism controls all international banking transactions?
And what China is offering today has nothing to do with ancient Chinese culture, unless Karl Marx the Zionist was secretly Chinese.
Worldviews are merely lenses. I encourage you to exchange your Zionist-Supremacy worldview for another worldview, now and then. To imply Marx was a Zionist who “invented” communism and modern China is hysterically ahistorical.
Remember, anti-semitism (which is obviously not the same as anti-Zionism) is the invention of the Zionist elite. It is controlled opposition at its finest; the West is obsessed with their David & Goliath. Thus, they work aggressively to conflate anti-semitism with anti-Zionism. Every time you make the comment, “but what about the Jews!”, you are playing *directly* into the Zionist agenda. At least be aware of this.
Do not let them control your thoughts. They *want* you to believe they are omnipotent. We can oppose genocidal Zionism materially without contributing to their cause rhetorically, as your comments often do.
Marx invented Communism, and he was a person of Jewish heritage.
Did he share the dream of returning to Zion, like the majority of his tribesmen over the centuries? I don’t know. Wouldn’t you, if you were in his place? But I do know that he thought long and hard about the question of a Jewish state.
You say the Zionists are not omnipotent, which is certainly true, as they are not God. But they wield enough power to make Russia, China, Europe and the US comply with their sanctions against Iran. Giants like China and Russia cannot perform the simplest financial transactions with Iran, because the Zionists not only forbid it, but they also control the exclusive means of international financial transactions.
So, not omnipotent, but who else can tell 190 countries to sanction one, and force them all to go along with it? God?
The only thing that unites the world right now is international sanctions against Iran, a deafening silence and lack of condemnation for Zionist atrocities in Occupied Palestine, and forced lockdowns. Put two and two together, mate, you seem pretty smart.
So, anti-Semitism, eh? May I respectfully suggest that you come back when your country is in the same situation as Iran, and then tell me to be politically correct, or to show respect for the people assassinating and starving my people, or whatever.
I trust Marx the same as I trust Ayn Rand. And not to mention the horrors of existence as slave labor under Marxist regimes, let’s see what Marx himself thought about Jews:
“Let us consider the actual, worldly Jew – not the Sabbath Jew, as Bauer does, but the everyday Jew. Let us not look for the secret of the Jew in his religion, but let us look for the secret of his religion in the real Jew. What is the secular basis of Judaism? Practical need, self-interest. What is the worldly religion of the Jew? Huckstering. What is his worldly God? Money. Money is the jealous god of Israel, in face of which no other god may exist. Money degrades all the gods of man – and turns them into commodities…. The bill of exchange is the real god of the Jew. His god is only an illusory bill of exchange…. The chimerical nationality of the Jew is the nationality of the merchant, of the man of money in general.[…] The Jew has emancipated himself in a Jewish manner, not only because he has acquired financial power, but also because, through him and also apart from him, money has become a world power and the practical Jewish spirit has become the practical spirit of the Christian nations. The Jews have emancipated themselves insofar as the Christians have become Jews. […] In the final analysis, the emancipation of the Jews is the emancipation of mankind from Judaism.”
Don’t get me wrong, I think Marx and I would have gotten along fabulously. But his ideology has only furthered the Zionist cause, and greatly so, in spite of his critical analysis of his fellows. And his ideology is antithetical to freedom, which is an ideal that I espouse above all others, together with truth.
It just so happens that I myself am quite critical of Iranians. But under the current global atmosphere of total injustice and lack of common human decency, wherein Iran is denied medicine during a pandemic because of sanctions, I will champion the Iranian cause, which is only the “Iranian” cause on the surface. Scratch the surface, and we are all in the same boat.
The struggle against global Zionism is the cause of humanity, freedom and independence. If I have to malign a few Jews to raise awareness about the plight of humanity, then so be it.
Right now, the Zionist fifth column Rouhani is trying to pass a bill whereby Iran will sign up to the FATF. The FATF demands total access to all financial records from all Iranian banks, down to the last Iranian citizen, supposedly to sniff out money laundering. Russia and China are already members, together with everyone else in the world.
Not complying with the FATF’s demands is tantamount to total financial isolation. You know how sometimes a judge will sentence someone to multiple terms of life in prison? Well, Iran is under total financial isolation many times over, at this point.
The FATF, like the IMF and the WEF and the World Bank, is just another Zionist globalist organization. And they can just as easily exclude your country from all international trade and banking, which is why no one dares to even so much as breathe a critical word about global Zionism, including Putin and Xi.
The world has been all but fully conquered, buddy. And you are fixating on anti-semitism?
“Every time you make the comment, “but what about the Jews!””
And where did I say that?
What does China have to offer?
A multi-polar world order as they keep telling to anyone who wants to listen. It was what was offered then and it is what is on offer now.
A civilisation’s link to the past is not easily cut. Certainly not by a relatively minor event like WW2.
Emperor Qian Long’s “rejection” of European technology is a very good example of the West willfully or ignorantly misunderstanding what China has to say. It happened then, and it continues to happen now because it suits the West. It will only change when the world finally rejects the Company model which will happen sooner than later.
Read the Emperor’s letter again- this time without the occidental blinkers.
“A multi-polar world order as they keep telling to anyone who wants to listen. It was what was offered then and it is what is on offer now.”
And Erdogan says he wants peace. And the US says they want everyone to have democracy. I am not saying I don’t trust China, simply pointing out that people lie.
China was in no position to offer a multi-polar world 150 years ago anyway.
“A civilisation’s link to the past is not easily cut. Certainly not by a relatively minor event like WW2.”
And yet China’s link was cut, just like every other country in the world. There is no multiculturalism in the world today, just different flavors of the same.
World War II was not a minor event. It changed the world more than any historic event. And it certainly was not minor for China. To argue that is just plain inaccurate, in my opinion.
“Emperor Qian Long’s “rejection” of European technology is a very good example of the West willfully or ignorantly misunderstanding what China has to say. It happened then, and it continues to happen now because it suits the West. It will only change when the world finally rejects the Company model which will happen sooner than later.”
I am not from the West, and I would hardly call my perspective Western. From where I stand in the Middle East, it looks like China is about to become the new USA.
“Read the Emperor’s letter again- this time without the occidental blinkers.”
When the Europeans finally convinced the Chinese to buy their crap, one of the first things they did was to start setting up a railroad in China. When they shared the path the railway was to take with the Chinese, they kept hearing things like “the railroad cannot cut through that line of hills, because it is a dragon’s tail” or that “the rail cannot pass over the plain because it will ruin the flow of energy” over and over again.
The Europeans did not understand that the entire landscape of China had been shaped by ancient Chinese geomancers, practicioners of feng shui, over thousands of years This is what made China look so beautiful to the eye, and what made China a magical land.
Today, the Chinese follow European thought patterns. The Chinese landscape which was perfected over millenia, is being destroyed to make way for “European technology.”
Mate, I think you need to read the Emperor’s letter again.
“yet these new world realities are seldom reflected in the strategies of citizen movements for democratic change. All too often, strategies are aimed primarily at changing government policies, whilst the real power being exercised by TNCs behind the scenes is rarely challenged, let alone dismantled. When the operations of TNCs do become a prime target for citizen action campaigns, there is a tendency to employ a rather piecemeal and foot-dragging approach to such popular struggles to what is a deeply systemic problem ”
Since these new world realities contain an element of conspiracy it would take a conspiracy theorist to figure them out. Lots of people don’t like to be called conspiracy theorists so citizen action campaigns are hamstrung. You can’t struggle against social and political forces without struggle against the conspiracies those forces give rise to.