Corporate Power Since 1980

Published on

Corporate Power Since 1980

Robert Weissman

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 health care 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, at:

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 health care for all, the trade deficit, and global warming -- is overcoming entrenched corporate practices, privileges and prerogatives.

Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, and director of Essential Action.

© 2007 Robert Weissman

Share This Article

More in: