AMERICANS UNEASY OVER CORPORATE INFLUENCE
Reflecting the increasing unease among the US public about corporate influence on their lives and communities, most of the respondents in a recent survey agreed that big companies have too much influence over ‘government policy, politicians and policy-makers in Washington’.
By Jim Lobe
Washington: Corporate power keeps growing and growing. That’s the message of a new report released here on 4 December by the left-wing Institute for Policy Studies, one year after the collapse of the Third Ministerial Conference of the World Trade Organisation (WTO) at Seattle, amidst serious differences among the members, and anti-corporate protests and some violent demonstrations by a few self-styled ‘anarchists’ that dominated TV screens around the world.
The report, the latest in a series of annual studies on corporate size produced by the Institute, notes that, of the world’s 100 largest economic entities, 51 are corporations and only 49 are countries, measured by annual corporate sales and annual gross domestic product (GDP).
Moreover, the world’s 200 largest corporations have combined sales greater than the combined GDP of all countries except the world’s 10 largest economies, and 18 times greater than the combined annual income of the roughly 25% of the world’s population living on less than $1 per day.
Nor does it appear that all of these economic activities necessarily provide proportional benefits to these companies’ workers. The profits of the 200 largest companies - 82 of which are US-based - grew 362.4% over the 16 years between 1983 and 1999, according to the Institute, while the number of people they employed grew by only 14.4%.
And while their sales amounted to the equivalent of about 27.5% of global GDP in 1999, the number of people employed by them directly amounted to only 14.4% of the global workforce, according to the report.
Its publication comes at a time of growing popular concern here about corporate power, illustrated most recently by a special feature appearing in the 11 September edition of the influential Business Week magazine. The article, entitled ‘Too Much Corporate Power?’, found that, despite the longest period of economic expansion in US history, the US public was increasingly uneasy about corporate influence on their lives and communities.
While almost half of respondents in a major poll sponsored by Business Week and conducted by the Louis Harris polling organisation agreed with the notion that what is good for business is good for most of the citizenry, two-thirds of those polled thought that large profits were more important to big companies than developing safe and reliable quality products for consumers.
It also found that the so-called ‘New Economy’ of hi-tech and information companies - which have recently suffered serious setbacks in the stock markets - are leaving workers and their families ‘feeling overworked and stressed out’. And about three out of four respondents agreed that big companies have too much infuence over ‘government policy, politicians and policy-makers in Washington’.
‘It’s no longer a youth or hippie thing,’ the article stated. ‘Today, those angry at business come from all parts of US society.’
That sense helps explain the decision by US Vice-President Al Gore to run a quasi-populist campaign - in which he strongly assailed tobacco, oil, health insurance and pharmaceutical companies - in the presidential elections, a decision which caught many by surprise given his own history of friendliness to both corporations and their political campaign contributions.
For this year’s campaign, according to the Institute, the 82 US companies on the Top 200 list made direct contributions to candidates through political action committees totalling more than $30 million, not counting many times more that amount made in so-called ‘soft-money’ donations to parties or interest groups directly involved in the campaign. Overall, according to the Centre for Responsive Politics, corporations outspent labour unions 15 to one during this year’s campaign.
‘The growing private power has enormous economic consequences,’ the report says. ‘However, the greatest impact may be political, as corporations transform economic clout into political power. As a result, democracy is undermined. This threat deserves to be one of the major issues on the political agenda.’
[An article on 3 December in the London Sunday paper, The Observer, by Ed Vulliamy about the Bush Transition Office in Washington outlines the likely shape of a Bush administration (if he takes over the White House) and the corporate interests behind that will wield influence.
Vulliamy cites a senior White House aide as saying that ‘major corporate interests, including oil and tobacco companies, are bringing business special interests into politics so they can take over the regulatory bodies of government and regulate themselves’ ... for example: the Environmental Protection Agency, the fair trade agencies, the health, safety and ‘human resources’ executives, the regulation of industry, education, guns, medicine and land use.]
At the same time that they wield enormous political power in Washington, companies have been successful in resisting government or public-interest efforts to make their foreign operations more transparent, according to the Institute. Among information that US firms which do business abroad are not required to make public are data about the number of workers they employ in each country, the amount of toxic gases their plants emit into the atmosphere, the location of their plants or contractors, and their wage rates.
Their influence is also illustrated by the extent to which they avoid paying taxes both here and abroad. One study by the Institute of Taxation and Economic Policy found that 44 of the 82 biggest US companies failed to pay the full standard 35% corporate tax rate during the period 1996-98, while seven - Texaco, Chevron, PepsiCo, Enron, Worldcom, McKesson and General Motors - of them actually received rebates that exceeded the amount of taxes they paid during that time.
The liberal use of tax havens abroad has also reduced US corporate tax liability for overseas operations far below the rates at which their foreign profits have grown, according to the report.
The 82 US firms among the world’s top 200, as determined by Fortune magazine, represent a substantial increase over 1995, when only 59 of the top 200 were US-based. At that time, Japan was a close second with 58, but, with the continuing effects of its long recession, Japanese firms now account for only 41 of the 200 largest.
The world’s six largest companies as defined by 1999 sales are General Motors, Wal-Mart, Exxon, Mobil, Ford Motor and the German company Daimler Chrysler, in that order. As economic entities, they rate 23, 25, 26, 27 and 28, respectively, behind the GDPs of the major Western industrialised powers, China, Brazil, Mexico, India, South Korea, Russia and Argentina.
The world’s biggest private employer in 1999 was Wal-Mart, whose global workforce skyrocketed from 62,000 in 1983 to 1,140,000 last year. The report notes that while the retail chain, which has been expanding aggressively in Latin America, has undoubtedly created new job opportunities for tens of thousands of workers, it remains ‘notorious’ for its anti-union efforts and heavy reliance on part-time employees to whom it is not required to pay health or other benefits. - Third World Network Features/IPS
About the writer: Jim Lobe is a correspondent for Inter Press Service, with whose permission the above article has been reprinted.