Global Poverty: More Big Business Is Not the Solution
By most accounts, UK Prime Minister Gordon Brown is genuinely passionate about reducing global poverty.
But he is not willing to challenge the structures of the global economy that generate poverty, or the corporations that build, benefit from and maintain those structures.
Nor, apparently, is he immune to gimmicky notions of corporate leadership to support development, or the lure of high-profile summits to shed light on new plans to do -- very little.
Thus, earlier this week the UK was treated to the spectacle of the Business Call to Action summit, which Brown's office co-sponsored with the UN Development Program. More than 80 CEOs of large companies gathered with Brown and other luminaries to discuss how they could help meet the Millennium Development Goals, which aspire to reduce global poverty by half by 2015. Roughly two dozen of these CEOs -- from Anglo American, Bechtel, Citigroup, Coca-Cola, De Beers, Diageo, FedEx, Goldman Sachs, GE, Merck, Microsoft, SAB Miller, Wal-Mart and others -- have signed the Business Call to Action, which states, "as leaders from the private sector, we declare our commitment to meet this development emergency."
The premise of the event, as Gordon Brown said, was to advance "a new approach -- moving beyond minimum standards, beyond philanthropy and beyond traditional corporate social responsibility -- important though they are -- to develop long-term business initiatives that mobilize the resources and talents that are the central strengths of global business."
The mantra of the event was for corporations to "explore new business opportunities that use their core business expertise" and that also help spur development.
Taken at its face value, this was, um, not exactly inspiring. Says Peter Hardstaff of the UK-based World Development Movement, the CEOs "have all agreed -- to do more business."
But the problem goes way beyond the fact that business as usual -- or even a little bit of new business initiative with a development-conscious orientation -- is not going to do much to reduce global poverty. The real problem is that business as usual is a central part the problem.
"Instead of holding these companies to account for their actions," says John Hilary, executive director of War on Want, a UK-based anti-poverty group. "Gordon Brown has allowed them to portray themselves as allies in the fight against poverty. The prime minister should be working to address the poverty and human rights problems caused by business, not giving the companies a free ride."
War on Want focused attention on the harmful development impacts of many of the corporations signing the Business Call to Action. The group has campaigned against mining giant Anglo American. It has documented how Anglo American has benefited from human rights abuses associated with civil wars in Colombia and the Democratic Republic of Congo (DRC). Local mining communities in Ghana and Mali have seen little economic benefit from Anglo American's operations (or the spike in the price of gold); instead, says War on Want, the company's mines harm their environment, health and livelihoods.
Other corporate signatories to the Business Call to Action have directly hurt poor people through their "core business" more than can be offset by development-tinged ventures (even assuming such ventures succeed). Wal-Mart contracts with sweatshops. Bechtel tried to price-gouge and rip-off Bolivian consumers and the Bolivian state through control of the country's privatized water system. Merck refuses to license life-saving medicines for cheap generic production.
Simultaneous with Brown's business summit, Action Aid UK pointed to a major systemic abuse by multinational corporations that undermines development: They don't pay their taxes. The group released a report looking at tax payments of 14 corporate signers of the Business Call to Action. It found that these companies combined are underpaying taxes by more than $6 billion a year, as compared to what they would pay if they paid at the statutory rate in the United States and UK. The group did not suggest any illegal activities by the companies -- there are plenty enough legal tax avoidance strategies.
Money lost to developing countries through capital flight and tax avoidance is many times greater than aid flows into poor countries, says Jesse Griffith, the lead author of the Action Aid UK report.
Tax avoidance is a key issue because it strips money from national treasuries that would otherwise be available for social investment, and because it reflects structural problems that could and should be cured without any need for global philanthropy or aid.
But tax avoidance is only one of many ways that corporations exploit and perpetuate economic policies and institutional arrangements that contribute to poverty or inhibit authentic development.
The World Development Movement issued a 10-point challenge to corporations that claim an interest in promoting global development. It called on companies to stop using their political influence to promote policies that undermine development. It urged companies to: stop lobbying to open up developing country markets, and let developing countries "use the same trade policy tools industrialized countries used to get rich;" stop demanding rich country-style patent rules for the poor; support radical government action, starting in rich countries, to address climate change; support binding codes of conduct for multinationals, including respect for labor rights; end support for privatization and deregulation, including particularly financial deregulation; stop lobbying for and exploiting tax loopholes; and other measures.
This is not exactly an agenda that global business leaders are likely to take up soon.
On the other hand, it's not exactly likely that global business leaders are going to lead the way to end global poverty.
Among other things, that's going to take a global movement, led from the Global South, to implement the policies implicit in the World Development Movement call.
Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, and director of Essential Action.
(c) Robert Weissman
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12 Comments so far
Show AllSolutions flow from caring. That's where you start. Which of us is all knowing and perfectly wise? Exactly. Imperfect humans can't provide perfect prescriptions. But we can care. And that's where it starts anyway.
I have some questions for you all: If there was an alternative system...:
1. ...how would you know it was real?
2. ...how could/would you support it?
Money is an illusion excepting for those losing their homes. Wall Street manipulation for the rich more scams.
Profit is a tax.
More precisely, corporate profit is a tax. Individual "Profit" is an illusion.
"Aquisition beyond expenditure" is Webster's definition. Real people, in real life exchange things of equal value. Neither party profits in webster's sense of the word. It may appear so to both, but in fact, say... because they have different skills... they have actually lowered the total expenditure for their joint aquisition. They have demonstrated a different meaning of the word, "to gain by". They have gained by their mutual cooperation.
Corporate profit is a different beast entirely. Corporations are agents of the Soverign state. It may not be as obvious today as it was in the time of the East India Company, but it is none the less true. "Aquisition beyond expenditure" was never a right that early entrepaneurs expected, it was a privilege granted by the Soverign. The purpose was two fold, first to fill the coffers of the King, second to grow the company.
I'm sure Kings would have argued that the arrangement taken as a whole, was intended in the second sense of the word. Few however, I'll wager would agree that before the dawn of democratic social orders, it worked out that way in practice.
Modern free-market idiology holds that the first purpose, to fill the state's coffers, is more or less automatic. The rhetoric of a "Health economy" and "job creation" is all about the idea that society benifits from the very existance of corporations. Whatever "aquisition beyond expenditure" they can achieve is thought best left entirely in the hands of corporate administration.
This is patently untrue and you have to look no further than tobacco companies to prove it. Yet so persuasive is the idea, that we have allowed a system to develop in which taxation by the sovreign, a universally detested practice, has become enshrined as a fundamental right, and handed over to entities far more autocratic in nature, far more divorsed from the lives of the citizenry than medieval kings.
Global Poverty: More Big Business Is Not The Solution, by Robert Wiessman, is bang on. It's core. I'm telling people all the time about offshore tax havens, which I first learned about many years ago (in the pages of The Nation magazine, In These Times magazine and Mother Jones magazine).
Here we have corporate propaganda, gladly purveyed by all major media (among which you have a liberal section that some folks mistake for Leftwing), that tells us big business is overtaxed and needs non stop tax cuts etc.. And then you have, very unhelpfully, politicians everywhere who mostly go along with that, not to mention a public that has mostly swallowed that hogwash.
It turns out that the rich, and those on their way there, are not only not overtaxed, but they aren't pulling their weight. In fact, With taxes, When the well off don't pull their weight, it forces the economically weaker citizenry to pull more weight than they can bear to pull.
Elsewhere, I've said that China's ruling class isn't much different than ours. Now I want to repeat that and add that ruling classes in brutal regimes everywhere are similar in character, if not sophistication, to the ruling classes of the bigger, more powerful (benefactor/ business partner) nations who they align themselves with. Look at Burma, which mirrors it's Chinese benefactor's character. Upwards of 100,000 slave-citizens have died because of the recent killer Cyclone, named Nargis. The Burmese government, reportedly, didn't want to spend the money needed to put in place a monitoring system that would have taken advantage of the recent upgrades to the networked warning system put in place after previous killer Tsunamis ravaged the region. That's because Burmese elites, and their police/military supporters, can (to a degree) pay for their own safety in emergencies, just as our elites can ignore the badly needed regulatory reforms of our governments' financial systems before a serious blow can be struck against poverty in our developed nations.
The Burmese generals re-labelled the UN food aid it did let in to show it came from them, during a referendum they held to entrench their power. Their people are rather busy dying, or avoiding dying, as a result of Nargis and What do those monsters do?
The CEOs in Robert's article are not only part of the problem - as we all know if we pay attention and if we are honest about what we see - but they come out with this Call To Action soiree, approved of by that useless tit Gordon Brown, an attendee, in which discussions about doing more business include discussions about also reducing poverty - that their plan to do more business as usual will increase!
The ruling classes in our industrialized states might possess more sophistication than the thugs in China and Burma, but they are just as godless and loveless and dangerous. And to the extent that relatively better off North Americans are willing and able to put aside the mindless consumerism and assorted diversions provided by profiteers and actually take advantage of the glut of information at their fingertips (which others in places like Cuba, Sudan, Burma and China can only dream of having access to), they might be a force for positive change. Some positive change is possible now. Will they be enough of a force to change the world? I don't believe so. But you don't quit caring because things are bad. And for those who believe in a higher power, Caring always works.
This is the godless world we live in, while it remains.
A few books you can buy that tell the story that doesn't get told and talked about enough:
* TAKE THE RICH OFF WELFARE, by Mark Zepezauer
* CONFESSIONS OF AN ECONOMIC HIT MAN, by John Perkins
* A GAME AS OLD AS EMPIRE, edited by Steven Hiatt (about tax 'avoidance'/ a companion book to CONFESSIONS)
* NO LOGO, by Naomi Klein (a tour de force, with a good section looking at tax holiday schemes known as Export Processing Zones)
"Roughly two dozen of these CEOs .....have signed the Business Call to Action, which states, "as leaders from the private sector, we declare our commitment to meet this development emergency.""
It's easy to sign a piece of paper when you're not going to be held responsible for upholding your declaration of commitment. What a crock of BS! The only commitment Corporate CEOs have is to make money for their shareholders at the expense of the middle class and poor.
The elitist regimes are working over-time to destroy the middle class around the globe while creating their feudal world order. If you think you're paying homage to the lords now, watch what happens as the G7 governments and bankers continue to bail-out the corporate elite with tax-payers money.
Check out this article: http://www.financialsense.com/fsu/editorials/andros/2008/0509.html
And the following website is great for more reality-based governement and financial analysis, both here and in the UK: http://www.ft.com/home/us
Vera
One of the basic contradictions of corporate capitalism has been: 1. corporate governers rationally plan in order to acheive the greatest profit possible 2. however, the rational pursuit of the corporation's profit comes from efficiently externalizing costs.
These externalized costs are usually borne by society and nature.
And that is one of the great political struggles. Do we accept or fight these externalized costs which come in the form of environmental degradition, un/underemployment, working jobs that only use a small of our capabilities while letting the rest of our abilities to atrophy and go undeveloped, etc.
In other words, what is rational, profit-maximizing behavior within a corporation includes externalizing costs; these externalized costs come at the expense of the general society and the environment. Their rationality becomes our irrationality.
Our lives, our public services, our shared environment are all chewed up and regurgitated by these irrational, short-term, unplanned irrationalities.
What is rational for the single powerful economic actor is irrational for society as a whole. This is because we face these powerful economci actors as individual, powerless economic actors.
We are powerless because the powerful economic actors control investment decisions we don't.
They control political power because they invest in it.
They control our worldviews because they control the commercial mass media.
We don't.
And with global poverty on the rise, how does big business plan to come up with even more big business? Are these CEOs a bunch of thieving idiots? Instead of more big business, how about more social conscience.
Poverty is reduced through education which leads people away from dependence on far-flung corporations and other power centers and toward dependence only on themselves and their local communities, with land, water and food rights for all. This specifically omits access to the corporations' opiates. There cannot be any role for the corporations, and their pretense of compassion is only another reason to eliminate them. Individuals may do their part to accomplish this by shifting their exchange/association away from the power centers and toward their local communities.
A dear friend of mine, who teaches accounting, told me the three essential elements of being successful in business. He assured me that all successful businesses operate this way:
1) you have to work very hard.
2) you have to get lucky.
3) you have to cheat.
When I looked at him incredulously to see if he was pulling my leg, I saw in fact that he was dead serious. After a moments thought, I said - that depends on how you define cheating. To which he replied "Yes it does".
How do you define cheating? I feel as if most people are being cheated every day.
I always get the feelings these summits are just PR stunts so the company can go on record with some PROOF that it cares about poor citizens or other nations' development. It reminds me of all the councils on climate change that just push paper decade after decade while REAL change and the leadership necessary to implement it seems on an extended for-profit lunch break.
Yes, the multinationals are destroying humanity it doesn't matter what the issue it is done with the complicity of government, media, and wall street!
The public rarely enjoins the true issues or the politicians the reasons are clear. Special interests and "free enterprise" capitalism it is what this country has devised as worth living and dying for. The basis for the consumer ideology is energy and its association with an auto centered economy closes the circle. It uses the media to direct the public flow of the so-called truth and we have a perfect example of it in this political campaign. It is why Exxon Mobile is out of control and the public is given platitudes rather than help.
The media is out of control this election has shown us just how far it has gone to dumb-down the public. The recent move by ABC to remove candidates from the debates was outrageous. They are trying to determine the fate of the country and the world being mouthpiece for special interests and the government and to silence dissent.
Media censure is unheard, the FCC should rule for the public but like the EPA its teeth are continually drawn. The media has no right to exclude any politician who is running for office as happened recently with the ABC debate. The only exclusion under the rules used by ABC should apply to a candidate not sitting in public office. The license of ABC would be lifted if the rules were changed but the congress, with the exception of a few pushes for more media conglomeration supported by special interests. I hope that someone picks up on this thought. We have seen the obsession by FOX and CNN, particularly in the form of Wolf Blitzer, and the FOX rabid journalists constantly referring to the Rev. Wright controversy.
Blitzer's bias is clear. He is quick to use every possible negative he can against Obama from the Flag Pin to anything else he could get his mouth around. His support for Clinton has been clear and inappropriate, for CNN to call itself a "fair and balanced" news network. I quote Mr. Nichols: 
" The media pretense of being a fly on the wall has often been preposterous. In the real world of politics — where power brokers and manipulators proceed with the cynical axiom that perception is reality — the fly on the wall is the wall. The political press corps is not observing reality as much as redefining it while obstructing outlooks and constraining public perceptions."
As usual, few are able to see the stampede of the public sheep created by media. I support the change that Obama represents! He is intelligent and wants America once again to be looked upon as a great nation that it could still be and once was. The present "lack of experience" cry of Clinton is preposterous. Could anyone having been near the White house as long as Bush done as badly for the USA? There is experience! However, the discovery of a job approval rating for him at about 28% of the American people speaks volumes about experience. No one could have been as bad as the Bush team! There is experience!
A flight from entrenched American politics is necessary . . .it has ruined this country and made greed the single value of importance. The young people once again embrace hope as a result of the Obama campaign. The Hillary political group and entrenched politics have virtually destroyed America with its policies and exclusive power clubs. She has believed this form government is America.
Clinton recently morphed to the Obama populist message, it was called, "finding her voice" while at the beginning of her stump showing her Madeline Albright, bomb the children image. 
Can anyone truly think that change is unnecessary? I guess not since all the politicos have adopted his message including McCain? The mistakes that Obama may make as president cannot be greater than those of the past seven years. It is also necessary to give him a democratic congress to make certain that the programs that Americans want can be enacted.
Mr. Gore Vidal, has pointedly criticized mainstream media as one of the major problems, and what is wrong with the USA. The corporate media conglomerates control the message and that message is perversely distorted and panders to its advertising portfolio! Wolf Blitzer one of the glaring examples of this criticism and shows clearly those distorted ideas with his reporting, which is nothing more than partially factual opinion dictated by his bosses.
He is a person who has no right to shape public opinion far from being the "fly on the wall" he espouses to be. We must remember flies morph from maggots. He displays ignorance as a virtue for the entire world to see, an example of what is considered, by many in America to be news reporting. If Blitzer were billed as a CNN commentator, at least the public would not be hoodwinked to believe his reporting to be the truth, while it is lack of concern for accuracy, rectitude and fairness to be considered to be news rather than opinion.
The people of the USA have been so ill informed as to what a change would really do and mean to this country and the change in leadership that is necessary, they have forgotten that no one could be worse than George Bush . . . No one, not even a dogcatcher, at least the dog catcher has compassion for
Animals!
The future leaders, Obama or McCain, should discuss the problems America and the world faces. The problem of public ignorance of the issues caused by the media is serious. In the heat of elections the media panders to voter ignorance. The emphasis, as we see on nightly, so-called news, is constant repetition of candidate's miscues. The result of the media sensationalism becomes, the wrong problem and the wrong message at a crucial time in world history. The emphasis on having the politicians address a credible platform of ideas based on an American and global interaction in the world is critical.
There is not enough time left for civilization to focus on rubbish. The energy and environmental issues for example or food and health care are the problems the media should be focusing upon. But to use the Rev, Wright issue for one week, to try and hurt the candidacy of Obama is a travesty. The issues most pressing are once again avoided, those really important issues that must be put before the congress; the environment, continued funding of Iraq, energy issues, education, health care and so many others not dealt with, all impacting upon the economy, the failure of public dialog is outrageous!
The issue of this election will impact on the environment, economy and the future of the USA as no others. Still, if more than 50% of eligible voters cast their votes it will be a miracle, as a result of regressive US election laws and media obfuscation. It is compulsory for everyone to vote in Australia it should be so in the USA as well. Few of the candidates are really talking about the major points, even those who are the most erudite. The environment in association with the economy or health care and elections reform, to name some, are kept out of public dialog as a result of the nonsense punditry hours on end. The world looks at America and its "star struck reality" in wonder.
The political discussion rests on the complete lack of talking points in isolation, such as, Clinton's health package or the nonsense gasoline tax rebate and it's cost, rather than what is really at stake with energy issues, human survival. The candidates for the US presidency rarely talk about the complete interrelated package of the issues combined. Obama alludes to this deficiency in the media and public issues. When he asks for this to occur it lands on deaf ears because the media and special interests do not want this to occur.
The media reduces the public debate to its most simplistic level with pundits arguing about one inconsequential issue or another rather than the truly important issues of our time. The American people are kept from hearing and understanding the relationship of the entire package of issues, which a true leader must address and deal with for the very survival of America in the world within a global economy. The costs for the war would pay for every single need from health care to American infrastructure repair and education, as well as the alleviation of world hunger and energy research this is what is what is at stake.
The media deals with Rev. Wright and American Flag lapel pins instead.
The media keeps the public dumbed down for obvious reasons they represent the moneyed people. As a result the public becomes unable to talk about moving radically toward change and the related issues affecting their very life and the future. The issues of climate change, energy issues and the global economy not only American economy is the part of the mortgage crisis created by the "free market" system. All the other issues like people losing their homes as a result of Wall Street manipulation are tied to these fundamental problems. These is the first and major issue which affects all other issues and is completely related to the economic changes which must take place.
The media board rooms instruct their so-called journalists (news/opinion readers) to stay clear of those subjects that would attack advertising, consumption, tied together in the media collusion with special interests to maintain the consumer system killing the world. Media in collusion with government does not want the change that would result in the decline of their hundreds of millions of dollars in profits.
All environmental problems are in one way or another associated with the Western world's consumption based lifestyle led by the USA. These issues are affected by consumer advertising much of it coming from the millions spent on advertising of irrelevant product and campaign advertising. The media should be dealing with true American and global issues in this campaign affecting the very basis of the so-called American Dream, fast becoming the global nightmare. This is what the next president of the USA must address!