The Emergence of a Transnational State
The concept of "corporate governance" may have a slightly fantastic tinge to it, like something out of a science fiction movie. But we have lived with its unfolding since the early 1980s. Corporate governance does not refer to a form of nation-state, though it is born from that womb. Nor does it refer to a variation on the the Italian fascist experiment called the "corporate state." It refers, instead, to a global or transnational political structure that operates of, by, and for the corporations and corporate investment profitability.
And it is important at the outset to be clear on what we are speaking about. As will be described more fully below, the corporations themselves for which this transnational political structure would be a governing organization emerged from what were known as multinational corporations that is, corporations that had subsidiary operations in many nations. But to the extent that they have developed operations that transcend the realities of local economies, forming a community of corporations in a transnational sense that simply use national economies as ground and resource, they are more properly understood as transnational entities that form parts of a transnational economy. And it is primarily to this transnational economy and its form of organization that the term "corporate globalization" refers, and which will be the subject of this present discussion. (Thanks to Cliff DuRand for this insight.)
To compose a portrait of transnational corporate governance, the images of three structures and their histories will have to be coordinated. The first is that of the modern corporation itself. Second is its historical relation to the nation-state. The third will be a discussion of the way cultural norms, particularly those of the US, reflect both the corporation's inner structure and its relation to social organization.
To tell the story of this concept of transnational governance, as well as how a community of corporations is conceivable which can "think" for itself, and form a constituency for such a state, we must begin with a brief overview of its political landscape. For the US, the predominant political fact of the 1970s was the unwinnability of the war in Vietnam. The Vietnamese desire for autonomy and independence was unconquerable. For 35 years, they had fought for it, first against the Japanese at the outset of World War II, then against the French who attempted to reclaim their former colony at the end of the war, and finally against the US, which stepped in financially after the Korean War, and militarily in 1960. An anti-war movement formed in the US that also believed in the principle of national sovereignty and the right of peoples to self-determination. It sufficiently imparted this principle to the GIs in Vietnam to render a significant section of them non-combatant. The US military command sought to compensate for this deficit by shifting to endless air attacks with electronically guided bombing and artillary. While it succeeded in killing humans and animals indiscriminately, the raw criminality of those tactics constituted another part of the US defeat.
The overwhelming effect on the US of the Vietnam adventure was crisis. Though Vietnam was only one of many national liberation revolutions, and the US engaged itself in Vietnam to show all the others what the cost of their struggles for independence and sovereignty would be, the concomitant outcome was a recognition that the political and financial costs of militarily defending its empire were beyond US means or capability. In particular, its massive spending on war and military operations, including all its foreign bases built under the auspices of the Cold War, produced an outflow of gold reserves that threatened the domestic solvency of the dollar. [1] In 1971, the dollar was taken off the gold standard, and in 1973 it was allowed to float on currency exchange markets. This threw the multinational corporations that had formed and grown swollen on military largess into crisis. As a network of subsidiaries whose overall coordination depended on a stable international currency, the dollar was their very bloodstream. [2] When the dollar went into crisis, so did they. And in the long run, it was their response to this crisis that empowered the transformation of their multinational development toward the formation of a transnational community of entities.
In 1973, the Trilateral Commission, a thinktank of corporate directors, economists, and politicians from Europe, Japan , and the US., was organized to stem the crisis. In 1975, the US backed out of Vietnam, and watched the Vietnamese take back their country without bothering to admit to the massive criminality of its war policy. The Trilateral Commission rapidly developed a program to defend the empire by means other than traditional military counter-insurgency. [3] The first task was to restabilize the dollar, to sustain its role as international reserve currency. The second task was to establish the means of controlling local politics in any nation or region of the world through the global control of economic factors. For the trilateralists, this could be accomplished through centralized computerization and coordination of imports and exports, currency exchange rates, and interest rates, among other things. [4] The third was to build a transnational political structure by means of which the corporations, as they cohered transnationally, could oversee, control, and govern themselves as a community. The central purposes of this governance structure were to prevent undue competition among them, and facilitate how individual corporations could relate to overall (globalized) control of local politics and local economies in a coordinated way. It was a project of coloniality at a remove from the colonization traditionally associated with nation-states.
The first two tasks were essentially mechanical problems. EuroAmerican economic leaders originally sought a replacement currency for the dollar. They found none, and decided to use US Treasury bonds as a stop gap substitute for gold. Real restabilization of the dollar itself was possible only by giving it a different material backing. The natural substitute for gold was oil, since it was a substance in constant demand. And Kuwait lent itself to this project by agreeing in 1979 to the "financialization" of its oil reserves. It established a state bank and investment office that accumulated international dollars and invested them in industrial enterprises around the world, backing those dollars with its oil. The dollars that then accumulated in foreign state banks could be exchanged for oil through the Kuwaiti bank. Kuwait became the new Fort Knox. [5] This explains why, during the Iran-Iraq war of the 1980s, US President Reagan warned Iran that if it attacked any Kuwaiti oil tankers, the US would reflag them, making such attacks acts of war against the US itself. Reagan's focus wasn't the safety of a tiny emirate; his concern was the stability of the international currency.
The second Trilateral project was facilitated through shifts in the lending strategies of the World Bank and the IMF. Insofar as most major investment banks in Europe, Japan and the US had become multinational, they had simply to centralize or coordinate some of their operations through the World Bank. By manipulating the availability of import and export financing, the availability and the price of loans (interest rates) for economic development, local economies could be redirected, which meant their internal political affairs and issues could be partially determined by outside transnational entities. In addition, the IMF and World Bank adopted the strategy of attaching Structural Adjustment Programs (SAP) to their loans to developing countries. These programs required the loan recipients to privatize their social assets so they could be bought and sold by foreign corporate investors. Loan recipients were also directed to cut back on social welfare programs, reduce subsidies to local economic enterprises, and repeal any legal obstructions to corporate investment. [6] The use of economic sanctions, embargoes, loan restrictions, divestment, pricing discrimination, and the financial starvation of specific nations have become common elements of the international scene in the promulgation of this general economic program. The purpose of an embargo is not to punish recalcitrant leaders, but to create misery and starvation through derangement of a local economy to the point where economic desparation would force open an area to corporate investment and resource exploitation, free of any political restraint. It was this kind of economic aggression that derailed the socialist experiment in Mozambique, for instance. It is what is meant by free trade. The term "trade" does not just refer to markets for goods. It refers to investment (and the trading of corporate stock and securities) free from unwarranted disruption on the part of local political institutions, forces or events.
The Trilateral Commission's third project, a Transnational Political Structure (TPS), was more complex, and depended on the first two having achieved a certain success and stability. By the early 1980s, sufficient stability had been accomplished, And the outlines of the process of TPS construction begin to appear. They become most overt in a sequence of military assaults committed by the US (sometimes under the umbrella of NATO) against various sovereign nations. Though each member of the "sequence" appears as a separate event, there are a number of conceptual commonalities to be found in this attack sequence as it unfolded. Among these are the emergence of a new form of impunity on the part of the US, the use of that impunity to destroy the sovereignty of the target nation, the deranging and forceful transformation of the concept of international law, and the massive demonization of political figures or state structures that had insisted on national sovereignty. On the whole, the principle of sovereignty was subjected to economic assault through the demand for the privatization of social assets. Privatization became the condition for access to funding for international trade.
The ideological name for this mode of economic domination is "neo-liberalism." It marked the process by which corporate capital sought to reverse the advent of sovereignty that previously colonized countries had sought to win for themselves (under the label of "independence") during the decades following World War II. The process of privatization sought to turn that independence against itself.
The peculiarity (and horror) of the outline of a TPS that came into view as "neo-liberalism" was revealed by a strange commonalities to each moment in the "attack sequence." Each one contained an element of unintelligibility in the context of traditional political thinking.
The post-Vietnam "attack sequence"
The "attack sequence" begins with an assault on Grenada in 1982, a tiny island nation no bigger than Boulder, Colorado. It then unfolds with the arming of a paramilitary force against the Sandinistas in Nicaragua (the Contras), the rearming and reorganizing (under US control) of the army of El Salvador to repress a multitude of popular movements and organizations in that country, the arming and supplying of UNITA in Angola (an African "contra" army), the emplacement of Marines in Lebanon, the assault on Panama (1989), the bombing of Iraq and the US takeover and occupation of Kuwait (1991), the invasion of Somalia (1992), the invasion of Haiti (1995), the bombing of Serbia (1999), the invasion of Afghanistan (2001), and the invasion of Iraq (2003). These last two continue as the people of those countries fight wars of liberation like the Vietnamese for their sovereignty and independence against US occupation forces.
The bombing of Iraq of 1991 was economically unintelligible. During the 1980s, under Reagan, the US had transformed itself from the largest creditor nation to the largest debtor nation in the world. [7] Yet to build an alliance to militarily evict Iraq from Kuwait, it was willing to spend five times as much money as it would have taken to buy Hussein out (judging by prior deals with him), in light of the fact that he was willing to negotiate Iraq's exit from Kuwait in the first place. [8] It was apparently of greater benefit to the US to demonize Hussein in order to organize an international mob against him. The effect was international complicity in the destruction of Iraq's social infrastructure through bombing. During six weeks of assault, Iraq was pounded with the conventional equivalent of six Hiroshima size bombs. Power plants, desalinization plants, sewage treatment plants, water systems, etc. were all destroyed. [9] Bombing does not liberate people; it weakens them and destroys their social cohesion. in other words, it strengthened Hussein with respect to the Iraqi people. World attention was thus misdirected at Iraq while the US military took over Kuwait.
The invasion of Somalia in 1992 was socially unintelligible. It occurred without preliminary events, prior disputes or conflicts, without reason or rationale. Claiming Somalia was in chaos and needed relief, the US invaders obstructed existing relief organizations and added to the political chaos. Promulgated by a lame-duck president (Bush), it seemed merely to be a parting shot to embarrass the one newly elected (Clinton). Only later was the discovery of oil reserves in east Africa revealed.
The bombing of Serbia in 1999 was unintelligible in terms of its wantonness and impunity. What brought the Yugoslav Federation to western governmental attention was its insistence on it sovereignty and the cohesiveness of its federated structure. Yugoslavia had rejected Structural Adjustment Programs proposed by the IMF in 1988. And then it simply refused to fall apart when the Soviet Union did. In 1997, a "Kosovo Liberation Army" (KLA) was fabricated by NATO and sent into Kosovo, a small Moslem area of Serbia that no one had ever cared about before, to attack Serbs there. At the time, negotiations between Serbia and a Kosovar independence movement had begun to arrive at some common political agreement and a peaceful resolution of their differences. The violent presence of the KLA was therefore not to advance the independence interests of the Kosovars, but to trouble the waters. When Serbia counter-attacked the KLA, it was charged (in the person of its president, Milosevich) with crimes against humanity. The US then presented an ultimatum to Serbia (at Rambouillet) that would have negated its sovereignty. As foreseen, Yugoslavia refused the ultimatum, and the US (under cover of NATO) bombed Serbia's social infrastructure for 72 days, rendering various areas uninhabitable through the use of depleted uranium, and the destruction of some chemical plants. While its stated purpose was to free Kosovo, in practice the attack established a NATO occupation of Kosovo to oversee the construction of an oil pipeline from the Black Sea through Bulgaria.
The invasion of Panama in 1989 was juridically unintelligible. It was ostensibly undertaken to arrest Panamanian ex-President Manuel Noriega for having violated US law. No Panamanians had been party to writing that law, whose jurisdiction constitutionally stopped at the US border. And Panamanians had their own law. Under the rule of sovereignty and democracy, that was the only law to which they could be held responsible. US actions implied that the US had taken it upon itself to extend the laws governing the US to individuals in other nations. To subject the citizens of Panama to two separate judicial systems effectively dissolves the foundation of the judicial (viz. jurisdiction), and undermines the concept of nationhood itself. [10]
Two threads weave themselves through these events. The first is a judicial thread, an appeal to law under cover of which a violent impunity is practiced, thereby rendering that appeal fallacious. Impunity signifies a dismissal of law because it always represents acting as a law unto oneself. That is, impunity actually reveals a criminal intention within the very rubric of law. In practice, what the impunity of this attack sequence produced was an internationalization of US law while nationalizing international law as the possession (under impunity) of the US. The second thread is the establishment of a military base or presence with respect to major planetary oil reserves. Military operations, which assume the existence of a political power or structure commanding them, always attempt to monopolize the control of energy resources so that those being fought do not have access to them.
Accompanying the US appeal to law, and its internationalization of its own law, was the astounding hypocrisy of the US refusal to recognize the World Court in the Hague. When, during its efforts to unseat the Sandinistas in Nicaragua, the US mined Nicaraguan harbors in violation of international law, Nicaragua sought to charge the US in the World Court. The US replied that it was not bound to the court, not having been a signatory to the treaty that established it.
The TPS and its Globalized Judiciality
Judicial activity, even of a criminal sort, points to an executive or administrative structure that deploys it, and gives it coherence as a political element common to a multiplicity of events. That is, this "attack sequence" had a meaning beyond the fact that the US was the force executing it. Each element of the attack sequence marked the establishment of a new juridico-political principle in the world that only later could be grasped as steps toward a transnational political structure. And if the political project that the Trilateral Commission had set for itself provides foresight, it is nevetheless only in silhouette. The actual organizational forms that institutionalized those principles were only slowly constructed, to appear later as the World Trade Organization and the structural adjustment programs of the IMF. While the strategies remained hidden, because their institutionalization had not yet occurred, the commonalities and paradoxes of the attack sequence provided a taste of what was to come.
In other words, the impunity exercised by the US in the attack sequence was not gratuitous, nor simply for its own economic aggrandizement. The attack sequence testified to the existence of an executive project that conceived of itself as having superseded nationhood and national sovereignty, and which expressed itself through US military and propagandistic power. Through its pretense to police functions (holding wrongdoers to the "law"), it held the citizens of many nations to a law they have not been party in forming. The demonization or criminalization of a national leader was but the cover for the invention of a law that the person in question was charged with violating, in order to charge that violation. When that leader's personhood (as criminalized) was grafted back onto that nation's body, the nation as a people could then be held responsible for what its nation-state, personified in its leader, could be charged with committing. It is necessary to criminalize the nation one wishes to invade in order to make one's aggression appear as an act of justice, since it is that entire people who suffer the aggression. What they think of the matter must cease to be a concern. And this holds true for the injustice of imposing an embargo, such as on Cuba or Zimbabwe, whose aim is simply to starve people. Though clothed in a pretense of protecting human rights, naked assault (whether economic or military) on a nation's sovereignty amounts to a blanket dehumanization of that nation's people. It is the criminalization of that nation (through the demonization of a leader: Hussein, Milosevich, Castro, Qadhafi, etc.) that then decriminalizes the impunity of the assault. And this too testifies to the existence of an administrative power that requires that self-decriminalization.
It is this administrative power that I am referring to as a Transnational Political Structure, as proposed by the Trilateral Commission in 1975. Let us examine its economic dimension first.
As mentioned earlier, the World Bank and the IMF took the position after 1975 of requiring structural changes to local economies in order to qualify for loans. At the same time, the World Bank had established a fair degree of control over the world's corporate (banking) sources of such loans. It thus had the power to withhold international funding, pending privatization of all social assets, from social welfare programs, health care and education, to water supplies, other utilities, and natural resources. All were to become commodities for purchase and investment by corporate capital. This was the major hoop through which a state had to jump, along with its removal of any labor or environmental obstructions to corporate investment. There could be no environmental protections that might hinder profit-making, and a general anti-union labor atmosphere was required. In effect, state subsidies in the recipient nation were to be shifted from the welfare of the citizenry to that of alien investors.
It is necessary to understand the historical context for this focus on privatization. Massive anti-colonialist movements had swept the formerly colonial countries after WWII. Many of the newly independent states that emerged from those struggles socialized facilities and assets in order to neutralize the inconscionable inequalities that former colonial hierarchies had produced. This included utilities, land reform, and the engineering of infrastructure development. By coordinating employment and giving subsidies to local producers, these new states began the construction of economies that would at least provide sustenance for their people. The socialization of economic and social assets was a natural avenue toward sustainability for a nation impoverished by former colonialism. Against this, the neo-liberal agenda proposed privatization as its primary counter-strategy. [11] Privatization would remove social assets from state protection, as the assets of the people, and lay them prostrate before the profit-making venality of foreign capital. It was an essential element of bringing those formerly colonized areas back under capitalist domination and EuroAmerican financial control.
In effect, the debt necessary for an underdeveloped nation to begin the process of economic development was accompanied by conditions that made autonomous economic development impossible. The structural distortions that the SAPs imposed both subordinated fiscal policies to debt service while subjecting the debtor nation's resources to foreign corporate control. In effect, for the World Bank and the IMF, "development" was a synonym for the development of corporate investment and profit-making. [12]
The World Bank's centralization of international funds for commerce and industrialization made it difficult if not impossible for small (post-colonial) nations to find alternative financing. They had either to accept the bank's terms or suffer destitution. And their destitution would then be blamed on bad leadership, on the state's exploitation of its own people, and used as a rationale for sanctions or embargo against the recalcitrant nation. For those that accepted the World Bank's terms, debt service, which in many third world countries has grown to the point of absorbing over 50% of their GDP, becomes a form of debt servitude, leaving no funds or resources for development. The neo-liberal program, through IMF loans and their SAPs, became a form of impoverishment machine.
A classic example of the devastation imposed by an SAP is Ruanda. The local economy in the 1980s was centered on truck farming, including livestock, with some economic surplus for international trade produced by fishing in Lake Kiva and Lake Tanganyika. The fisherman were small entrepreneurs, whose labor intensive activity supported much of Ruanda's employment profile. Gasoline was government subsidized to support the truck farms and markets. The nation was poor, but the economy sustainable. The SAP ended state protection of the lakes, opened them to corporate fishing, removed subsidies for gasoline, and permitted imports that outcompeted and undermined the markets for food crops on which local farmers depended. Farmers could no longer afford to take their produce to market. Corporate fishing pushed local fisherman aside, fished out the lakes, and left. The result was mass starvation, a generalized unemployment situation, and the desperation that led to the catastrophes of the early 1990s. [13]
The neo-liberal emphasis on international financing, endless debt, the prohibition of barriers to corporate investment, and the privatization of all resources and social assets, was designed to eliminate the social coherence of poorer nations, and substitute global administration and corporate investment for it. As Jonathan Cahn said in the Harvard Human Rights Journal, "The World Bank must be regarded as a governance institution, exercising power through its financial leverage to legislate entire legal regimens and even to alter the constitutional structure of borrowing nations." [14]
In general, the SAPs have created massive hardships and misery for the people of the target countries. The World Health Organization reported, during the late 1990s, that 33,000 children were dying every day from starvation or curable diseases because of the destruction of local sustainable economies. A second effect of these policies has been the enormous migration of people out of their devasted countries to the US and Europe, to nations that have grown fat on the wealth extracted through that devastation. While these industrial nations complain about their immigration problem, they use it to generate a racism against the alien immigrants that is useful for domestic control of their own people.
The creation of the World Trade Organization (WTO) in 1994 was the next step. It has been an attempt to constitute an actual legislative body to provide administrative form for governing this global impoverishment machine. The WTO was constructed by GATT, the General Agreement on Tariffs and Trade. GATT negotiations had been in process since the end of WWII. Their original purpose was the regulation of economic relations between industrial nations, to prevent competition (seen as one of the causes of world wars) and coordinate their economic control over unindustrial countries. In the late 1970s, GATT shifted its focus to the construction of a body with the power to oversee and govern the world that the SAPs and their neo-liberal demands would bring into existence. It would be a body that would meet periodically, with the power to make rules and policies in real time concerning relations between transnational corporations and signatory governments. As a treaty organization, the decisions and regulations it would make would be binding on its signatory nations. That is, its decisions would have the status of law in those nations. [15] In other words, the WTO would function as a rule-making assembly (a legislative branch) for its corporate constituency, with all of its signatories bound by treaty to carry out its decisions (see GATT, Article XVI, section 4). As Akio Morito, the head of SONY, put it, the WTO would "begin creating the nucleus of a new world economic order that would include a harmonized world business system with agreed rules and procedures that transcend national boundaries." (Korten,122)
In effect, the WTO would be a global legislature, made up of delegates not elected by people, nor representing the nations participating. Instead, they would represent the communities of corporations which constituted industries that were functioning on a multinational level. [16] The WTO was to be a global governance body wholly beyond any structural connection to the peoples of the world, but whose operations and decisions would then be binding on those peoples. In particular, its decisions, as a "treaty organizaton," would supersede local democratic enactments on such issues as labor conditions, environmental protections, and social welfare. Under its provisions, when local labor standards, polution controls or living wage provisions hindered transnational corporate investment, the nation in question would have to repeal those standards or face penalties. In other words, building the WTO was a wholly anti-democratic project. [17]
This is not strictly speaking new. Corporate investments in colonial or semi-colonial areas have always acted in concert. It is what Lenin referred to as the imperialist phase of capitalism carving up the world for itself. According to Juan Josi Arivalo (former president of Guatemala), corporate investment has historically given US financial institutions control of Latin American trade and production, and through that, control of their political structure. Traditionally, before the 1970s, such investment (typically in agricultural products and mining, both labor intensive), enjoyed a profit rate of around 20%, owing to low wage scales and non-union labor conditions enforced by military rule. That is, capital outlays were recuperated in a mere 5 years. The profit from resource extraction (including labor) was brought to the US. The resources brought to US were used to manufacture products, some of which were sold in Latin America at a profit, which was then brought to the US as well. [18] The concomitant control of hemispheric finances by US banks obstructed any autonomous local industrial development, preserving Latin America as a captive market. In short, the people and nations of Latin America weren't poor; they were actively impoverished by a relational process that enriched the US.
For the corporations, as they extended this impoverishment system to the entire globe and become multinational, a governance body was needed to regulate issues of property, to adjudicate the "border disputes" between industries and the conflicting interests that property rights often incurred, to maintain the stability of the currency, and to coordinate trade to prevent "trade wars." Rather than engage in trade wars for markets, groups of corporations had come to see each other as important markets for each other, which implied a different level of trade coordination. In short, common political desires to affect policy around the world brought them together. And their size and preponderance formed a matrix for a kind of economic hermeticism in which they functioned as significant elements of each other's spheres of activity. It is no longer a question of dividing the globe up among colonialist powers or investors, but of uniting that globe as a single resource under the auspices of a single community of entitites acting in concert. It is in this process that the multinational enterprises constructed a transnational economy for themselves, constituting themselves as transnational corporations (TNCs)
What the fluidity of capital investment permitted was a new level of atomization of the working classes. Manufacturing enterprises constructed transnational forms of factories for themselves, which became "international assembly lines." Different processes in the manufacture of a finished product are performed in different host countries, by subsidiaries of a parent corporation. Each subsidiary would import the materials it would work on (parts for assembly from a previous stage in a different country) duty free. It would use local labor and material resources, pay little tax, and export the factory's product duty free to another factory in another country for the next stage in production. The advanced technologies of transport, computerized accounting, and a low wage bill made this a highly profitable arrangement. These factories, known as maquiladoras in Latin America, are generally located in special areas called "Export Production Zones." These EPZs are an interface between the community of TNCs and the host nation. The host government has simply to keep the work force under control, in a low-wage condition. (Korten,125) And since each factory relates only to the extended production process of the parent corporation, it remains essentially out of context with the host economy, except as an employer. (Hood,143) This lack of connection to the host economy is a form of insurance against nationalization, should the government change to one more adamant about its economic sovereignty.
This reduction of economic relevance of corporate investment to the host country then induces a parallel reduction of political relevance of the state to the people of that country. In its agreements with the TNCs, it begins to function as an intermediary, a form of middle management (labor control) for the TNCs. The marks of this reduction of a nation-state to middle management for TNCs are precisely its debt servitude to the World Bank, it acceptance of IMF structural adjustment, and its entry into membership, more as a cypher than a participant, in the World Trade Organization. In other words, the sign of the transformation of the corporations into the "citizens" of the world is the reduction of real humans, in all nations, to irrelevancy, except insofar as they work.
This signifies the other necessity for a form of transnational state (TPS) from the perspective of TNCs. The central problem that lurks in any system that sustains itself through the massive impoverishment of people is resistance. Despite the dogmatic proclamation of prosperity through investment, foreign corporate investment in underdeveloped areas remains the motor of the neo-liberal impoverishment machine, And thus the enemy of a people's well-being. As in the past, EuroAmerican corporate investment in low wage areas has profited enormously, removing those profits along with the resources extracted or products produced and leaving destitution in its wake. Foreign investment becomes a vast economic vacuum, sucking up wealth in poor areas, and depositing it in the pockets and accounts of the rich. What neo-liberalism and the attempt to form a TPS have done is raise this operation of impoverishment to a level of global political structure, to be managed and enforced through the WTO and the US military. What the community of TNCs has understood is their need for an international structure of governance to protect them from the possibilities of resistance by the impoverished.
For unhindered investment, national sovereignty had to be undermined. To reduce the naked bodies of nations to the level of mere markets, to being simply resources for endless profit extraction, nation-states had to be emptied as arenas of political life, divested of political content for their citizenry. The nation-state as a structure was not to be allowed to become obsolete, because it was still needed for its management functions. But it would be reduced to policing and administrative services, and leave behind its existence as a political space for its own people. The state would not be any less political as an organization of power, but for whom that political power would be an instrumentality would be changed. Each nation would remain a class structure, with domestic capital and local working classes, but with the whole dominated economically by the interests of the TNCs.
A comparable process has actually occurred in the developed countries. In the US, for instance, political space has been severely reduced through consolidation of a monopoly over politics exercised by the two party system. Party leaderships decide what will become a political issue for policy debate or concern, and what will not. There may be demonstrations of protest to various policies, or calls for an end to corruption, but these have no weight if the two major parties decide to ignore them. Anti-war movements, for instance, have appeared throughout the west in opposition to each moment of the attack sequence. But the call to reaffirm the sovereignty of the nations subjected to the injustice of assault has had no effect either on policy nor on what the two parties have decided will be debated as policy in the halls of government. Wars proceed without debate. The deregulation of banking remains unregulated, even after having cause the greatest economic crash since the Depression. Military bases, norms of torture, police brutality, the size of the prison industry (the largest in the world), remain reduced to numbers and reputations, unexposed to ethical discussion or political referendum. And the privatization of education, prisons, utilities, and health care (which has priced it beyond the means of most people) has occurred in the US as well as in the third world.
Ironically, it is the very nature of the nation-state itself, its republican structure of representationism, its separation of powers, and its inherent shunting of democratic political participation into banal formal procedures, that has provided the fertile ground for processes of privatization and anti-democratic structure. Without the matrix of the republican nation-state, the corporations could not have grown to the point of inventing themselves as the world's primary citizenry.
The Nation-state and the Structure of the Corporation
Two anti-democratic aspects of the republican form of nation-state lie at the center of the corporate rise to structural prominence. The first is its fundamental guarantee of property rights (different from the personal right to own property), which strictly delimits the extent to which a legislature can represent the real interests of people to the extent they are exploited by those property rights. That guarantee prohibits subordinating the prerogatives of capital to majority rule. [19] A legislature cannot contest the exploitation of people by economic power regardless of the political needs of its constituency. The effect of this is to embed in governance a categorical separation between the economic and the political.
Because of that "immunity," corporations easily developed the power to threaten the economic stability of any electoral district, and thus to contest the interests of majority rule. For instance, at the present time, the insurance companies own more than 45% of all the outstanding corporate stock in the US economy, giving them the power to destabilize or bankrupt any corporation in the nation by dumping the stock, and thus disrupt any electoral district economically by doing so to the companies of that district. They control Congress in this manner, district by district, and have consistently used that control to defeat anything that would cut into their business operations, such as free health care.
This is, of course, simply an extension of the fundamental relation between the corporation and the state. Chartered by the state, the corporation was originally invented (in 17th century Europe) to be an extension of the state, as state functions became too complicated for a sovereign or even a parliament to direct. In the US, at first, they were chartered primarily for infrastructure development: canals, roads, bridges, etc. Other functions, such as banking, manufacturing, and other profit-oriented ventures, took precedence gradually, mostly after the Civil War.
The second aspect of the republican form of governance that yields to corporate dominance is the system of representation, which divides the social from the political. In the republican form of political representation, based on single delegate districts with winner-take-all elections, representation paralyses itself and become a fatuous exercise. Each electoral district contains a multiplicity of classes, communities, identities and ideologies, all with disparate and often conflicting interests. Single elected delegates are simply unable to represent that internally contradictory multiplicity. Two things happen. As a group, separated from their constituencies by their inability to represent, the members of a legislative assembly develop a form of hermeticism, an insular culture in which they offer support for each other on specific projects. In place of their real constituencies, it is the collection of delegates in such assemblies that become the constituency for each delegate. And their projects take on political meaning through a system of horse-trading support, part of which is action on issues that each delegate thinks will aid in reelection. The second thing that happens is that each representative is left to act in a discretionary manner, open to predominant influences, that is to say, to the highest bidder. And that "highest bidder" would tend to be the largest economic interest in each district.
These distortions of representation emerge from the multiplicity of interests in each electoral district, all squeezed into the person of a single delegate. If this system worked at all during the first 20 years of US existence, it was because late 18th century constituencies were more uniform, composed of white male property-owners. The political attractiveness of a candidate attached not to what could be promised to whom, but to how able the person seemed to maintain the social and political unity of the district. Later, as constituencies and the franchise diversified, representatives became increasingly unable to represent, or even to mediate between different interests, to the point where real economic differences could result only in Civil War. This occurred throughout South America during the early decades of the 19th century, in which internecine conflict appeared unavoidable between parties representing different economic groups. And it happened in the US between the industrial system in the north and the agrarian slave system in the south, two different forms of property that had no means of reconciling themselves in a republican legislature.
For these reasons, republican "representationism" can be neither democratic nor responsive to the people. Instead, the government acts, and the people, presented with the political decisions that the government makes, are then required to live according to them, under the false presumption that they express the popular will. In other words, real representation goes the other way. The people end up representing the policies of the government. War, for instance, or military spending, which has driven health care and education into the ground, are obvious examples of representationism obstructing real political representation. The US left, for instance, has never abandoned thinking that majority rule can be used against elite-defined national interests, which are property interests to end a criminal war, for instance. In so thinking, it is refusing to take into account this reversal of the representationist arrow. [20]
In the developing nations, this system had the effect of hamstringing the popular basis for independence. Insofar as the legislature, representing the independence process, may have sought to stop or control the influx and imposition of foreign investment, had no administrative power of its own, while being unable to give the executive the power to contest the prerogatives of property. And the executive, which represented the nation to those foreign interests, was left to deal with the highest bidder. The citizenry, and the independence movements, had no means of truly representing themselves in the government they had brought to power. Executive, legislature, and citizenry were all impotent, unable to defend themselves collectively because of the separation of branches of government against the new incursions of foreign capital.
What the corporation provided, in the US, in the shadow of these relations of non-representation, was the possibility of a new constituent uniformity. That is, over time, the community of corporations became a constituency of "highest bidders" for both state and federal legislatures, replacing the multiplicity of conflicting interests to be found among real people. Whether this was envisioned in granting personhood and citizenship to corporations or not is immaterial. These processes of granting and producing constituent uniformity went hand in hand. Corporate citizenship was written into law by Supreme Court decision in 1844, in the Letson case. [21] And after passage of the 14th Amendment, corporations were given full rights as persons in 1886, in Santa Clara vs. Southern Pacific Railroad.
What the corporate form does is separate property from ownership, preserving the primacy of property rights while eliminating the political conflicts attendant upon contradictory forms of ownership. Ownership gets defused into the securities markets, which constitute a different level of economy from enterprise ownership. Though the securities markets condition and determine the actual asset value of productive corporate property, stockholders have no power over corporate policy or its social or political activities. Instead, securities markets, as the locus of trading ownerships, became a separate mode of economic activity. Beyond being a meta-economic indicator of the productive economy, they could change the configuration and direction of production only through shifts of liquidity and the trading of ownerships, but not as the expression of investor intentions.
The corporate form thus creates an economic category that supersedes an owning class. It rises above interpersonal and interclass conflicts, while preserving the priority to property rights. Corporate economic interests become the predominant political influences on legislatures, both as particular interests and through overall control of local economics. In other words, as the republican form of state developed, and the granting of personhood to corporations kept pace, it was logical that the corporations would then invert their original relation as an extension of the state and see the state as an extension of themselves. This a mutual extension of the state and the corporation in each other is itself a structure of political operations in which the corporations and the state achieve a new constituent homogeneity. And today, the TPS, as a project of the TNCs, simply represents the logical extension of this essential relation to the international arena. [22]
We have to recognize, however, that corporate personhood was not the only possible solution to the problem of representationist ineptness. One other solution would have been a strong executive that would reduce legislative power and obviate its endless betrayals of the electorate. That way lies autocracy or dictatorship. Still another possibility would have been proportional representation organized along party, class, ideological, and interest lines that is, eliminating the single delegate travesty of representionism. But even proportional represention, if it be true to its ability to represent, would have to eliminate all prohibition on contesting property rights. Parties that represented those exploited by property would have to have the ability to contest and regulate, if not eliminate, the right to exploit. But the elite of the US chose to move toward corporate hegemony rather than democracy in the face of ineptness of representationism.
Historically, the corporate structure has been the central form of political organization at all stages of US development. The Virginia and Massachesetts colonies were settled by a corporation. Cities, counties, political parties, universities, and administrative agencies (e.g. port or transit authorities) are established as corporations. Even labor unions incorporate, which has had a distinctly anti-democratic influence on them. In a labor union (and this is true for unions all the way back to 1800), there is an executive committee, for which business agents and shop stewards (or their equivalent) serve as different levels of middle management. The membership is called to meetings and open discussion, but policy is made by the executive committee. Under the current labor contract system, the executive committee has the responsibility to negotiate and enforce the contract, giving membership little more than ratification rights. In short, not only did the corporation rescue republican governance from its own inherent weakness, but it provided a cultural model for the entire society.
The Corporation as Cultural Template
The central ethical element institutionalized in the corporate structure and its relation to the world is its cancellation of personal responsibility for officers, members and employees For whatever the corporation does. Whatever injury or harm may result from corporate activity, its human component escapes liability. That is, there is an ontological disconnect between its structural and its societal operations. Thus, owing to its size and economic weight, the arrow of social responsibility actually gets reversed. Society finds itself holding itself responsible for the existence and stability of the corporation, in order to preserve its continued economic function. In the recent economic crisis of 2009, when a bank claimed that it was too big to fail, it was saying that it had so great a hold on economic activities that if it were allowed to go down, it would take the rest of the economy with it. If representationism reverses the arrow of political representation, and the corporation reverses the arrow of social responsibility, then the two easily find themselves in accord on the field of politics.
What characterizes the internal structure of a corporation is its internal lamination of layers of command, from the directors all the way down to unskilled production workers. Each level is responsible to the next higher level, and has only to insure that at the levels below it the work gets done. One is responsible to others but responsible for no one. In form, these levels are all essentially the same -- fulfilling higher level commands, and commanding those below. Employees is known not by their class, or relation to means of production, but by their level in the corporate structure. As Andre Gorz puts it, each person in this structure impersonates an impersonal power, and their task is to guarantee the continuance of that power without having any of their own. [23] While the prestige and salaries increase at higher levels of the hierarchy, each level is imprisoned in the same relation of stratification. The responsibility of the top levels is to insure the overall profitability (productively or financially) of the corporation, which means to maintain the stock market value of its assets. It is this need to maintain stock market values that dictates the directions of production or other operations.
As a structure of limited liability, it is the structure that molds the reasoning as well as the ethics of those it employs. It creates an ethos in which social responsibility is itself impersonal. The maintenance of hierarchy, the distinction of corporate levels within an industry or social function, take precedence over other social considerations. This is an ethos that has even infected the labor movement. In early craft unions, for instance, skilled workers actually withheld solidarity from the unskilled, even as the factory system began to equalize them. Their relative hierarchical position was more important than class unity.
What the ethos of impersonal power and limited social responsibility does foster, however, is a sense of allegiance, which substitutes itself for both solidarity (between humans) and the class consciousness to which class solidarity would attach. Allegiance is the primary relation between individual and institution, the primary nature of responsibility to the organization itself. It requires that all employees at all levels bury their own sense of social responsibility under the corporation's existential need to accomplish its task. The task in question may be that of insuring profitability, or it may be that of imposing military intervention on another sovereign nation. In either case, allegiance is primary over social justice or the commission of harm to others, as one's first responsibility. This ethos of allegiance has perfused this entire society. Indeed, the US is unique in the industrial world in insisting on pledges of allegiance in schools, as if nationality wasn't enough to insure responsibility to executive decisions.Many a labor strike has been lost because allied unions saw fit to prioritize jurisdictional authority, or allegiance to organizational sanctity, above class solidarity.
With respect to the attack sequence, the general acceptance by the citizenry of an unintelligible interventionism testifies to the reduction of ethics or justice to secondary importance with respect to allegiance. To call it "nationalism" leaves it unexplained behind a mere change of name. It comes from a much more profound aspect of social organization.
Allegiance is part and parcel of the US sense of impunity toward the world, the unquestionability of its violations of social responsibility. Impunity has always characterized US foreign policy, from Manifest Destiny to Hiroshima, from the genocidal elemination of indigenous cultures and languages to nuclear superpower status. It reflects the corporate ethic insofar as it means that the US can suspend all need for ethical approbation from the world, as its international "limited liability" condition. If the invasion of Iraq has killed a million and a half Iraqis, allegiance to the institutionality that did this is valorized in advance as part of the culture of organizational non-responsibility. [24] And this is of a piece with the government's refusal to provide universal health care for its citizens.
This corporate ethos has a further ramification with respect to the state. Insofar as securities markets are the arena in which corporate asset values are determined, securities trading becomes a primary economic activity, separated from the vicissitudes of actual human need and production. Production, as opposed to productivity, remains a secondary detail for the community of corporations. This implies that, because the community of corporations is an extension of the state, the securities markets themselves must be considered part of the state. Beyond the corporations being inherently active political agents, through the logic of their personhood and citizenship, the securities markets present themselves as a fourth branch of republican governance a branch for which representation has never been an issue. In their capacity as a citizenry, the corporations simply extend their state functions to a determination of local politics through stock market operations as a normative activity. The economic threats they hold over elected representatives, which amount to a form of blackmail called "lobbying," is simply an aspect of standard operating procedure.
From a human point of view, the political ramifications of this are catastrophic. In competition with corporations on the political field, humans lose in advance to corporate size, wealth, and control of real economic resources. Corporations supersede political representation through their real economic power in each electoral district. That is, they supplant humans in citizenship, and thus in political participation. Real people become increasingly irrelevant to the political process (remaining relevant only in their ability to work). Humans in the US are not only left with a degraded form of citizenship, but are rendered degraded entities, against the honor given the corporate institution as such for instance, during the financial crisis of 2009, where the government faithfully concerned itself with the losses by banks and insurance companies (through over-fictionalization of exotic securities), it provided no bailout money to alleviate the condition of the people.
It is this catastrophe that we have seen played out in the attempt to form a TPS.
The Class Nature of the World under the TPS
We have been discussing the foundations of a transnational corporate citizenship, within a transnational political structure, constituted by an anti-sovereignty neo-liberal ideology, and US military impunity. And we have seen it to be a logical extension of the ontology and ethics of corporations themselves.
Having raised their citizenship to a transnational level, the corporations have also transformed their relationship to the nation-state. The specific aspects of the nation-state -- its republican form, its representationism, the absolute sanctity it gives property rights, and the separation of powers are precisely what has made this corporate citizenship possible. Its separation of powers allowed the corporations to establish a new form of control over the post-colonial countries.
With the "trans-national" removal of investment barriers, the formation of international assembly lines, and the denaturing of the nation-state to an administrative adjunct of corporate hegemony (a form of "outsourced" middle management), a form of global homogeneity has been bestowed on capitalist economics. This unifying process has generally left the internal class structure of each country intact, and in some cases vestiges of local capitalist classes still struggle against foreign corporate domination (e.g. Brazil). But each country has also become a productive unit in the globalized economy, rather than a participant. More to the point, a structural relation to the community of transnational corporations accrues to each nation-state that is analogical to the condition of workers to the capitalist class. Nations are held to the decisions and rules that the WTO makes, as employees are held to the labor law and the rules of their employer. They are tied by debt to IMF directives, the way workers are tied to the debt incurred through their credit cards and mortgages. They host the performance of productive operations on international assembly lines that have no real relevance or meaning for their own domestic economies, just as the tasks industrial or bureaucratic workers perform for the sake of an income have little or no meaning for their lives other than as jobs. In sum, nation-states and the societies they govern take on the aura of globalized productive workers in the scheme of corporate globalization.
This sense of a nation-state as a "worker" in a transnational economic system is further revealed by the way war itself has been transformed. The TNCs are no more interested in international conflict than a factory owner is in fistfights among his workers. On the other hand, racialized or ethnicized civil wars, internal to a nation-state, are of considerable benefit to the corporate community insofar as it destroys not only assets but the social coherence of nations. Such civil wars render whole area a new market for goods and construction, with very few defenses left against renewed exploitation. The wars in Bosnia, in Rwanda, in East Timor, in Congo and in Sudan, have been exacerbated or simply allowed to go on to unspecified destructive ends, for these reasons. They mark the production of death on which corporate institutions live and profit, leaving nations prostrate, like workers reduced to starvation and begging for a job.
Under this globalized duality of class relations, traditional class approaches derived from European experience, during its period of industrial development, no longer provide insight. The changes in the nature of war (iconized by the bombing of nations and the use of civil war to destroy social infrastructures) signify a generalized political murderousness toward which simple class interest, ignoring the nature of corporate structure, would be seriously shortrsighted. In addition, corporate globalization has radically changed the landscape for oppositional and anti-capitalist movements. For people of one country to fight their own state for political power will leave them open to being blindsided by an economic power that is elsewhere. Similarly, the effort to organize a multinational struggle against the multinational character of an industry will be fragmented into atomized economic skirmishes because the absence of political space at the local level can only provide the ability to contest local managerial power whose real political power is elsewhere.
It is as if there were two levels of class relations overlaid upon each other. Each nation's class systems persists, but without an independent capitalist class because held under the global hegemony of the TNCs, that is, without the investment rights and privileges that the WTO bestows on the latter. And each nation, in its capacity as "worker," is enmeshed in a single global capitalist system whose ruling class is the TPS itself. At least, that is the portrait that the process of constructing the TPS has suggested. There is evidence, however, that the project for a TPS, as originally envisioned, has not succeeded, and is today in a process of erosion.
The Failure of Global Corporate Governance
Structurally, the TPS was both logical and consistent with corporate history. To sustain the exploitation of labor (to prevent cooperativism or economic democratization), and to politically unify society around the exploitation of resources were the two common goals of the nation-state and the corporations it chartered. Both ideas had but to be extended to a globalized politics, to produce a neo-colonialism that spoke the language of political independence, democracy, and human rights while burying the first under debt servitude, the second under corporate domination, and the third under super-power impunity. By 1998, it looked like this plan was working.
The last ten years, however, have shown it perhaps to be failing. The most tangible sign of that failure might be the general economic crisis of 2009, brought about by the deregulation of banking and real estate speculation in the developed economies, both being elements of privatization deployed domestically. But a more substantial list of events presents itself. The principle thread that weaves through this list has been the rise and reconstitution of national, communal, and organizational sovereignty, the construction of local autonomies which have eroded globalized control and subverted the corporate project.
At the top of the list, without a doubt, has been the ability of Cuba to remain uncompromising on its national sovereignty, and to survive the assaults and crimes committed against it since 1959 for that very reason. Cuba provides a beacon of the anti-colonialism and opposition to neo-liberalism that illuminates the second half of the 20th century. [25] Second on the list, then, is the ability of the Iraqi and Afghani people to resist US occupation one of the most significant facts of the 21st century's first decade. The invasion of Iraq, like the invasion of Afghanistan, was a wholly criminal act, an unprovoked aggression against a sovereign nation. If it represented a geo-political project for ultimate corporate and TPS control of Middle Eastern, Caspian, and east African oil reserves, the resistance of the people over whom this project ran roughshod has provided a massive roadblock to the consummation of that project. [26] Just as a failed war (the US failure to defeat the Vietnamese liberation effort) created the necessity to form a TPS in the first place, so it has been a failed war that has begun to derail the TPS project itself. What neo-liberal thinkers have not been able to fathom is the ability of peoples to resist impunity and corporate domination.
In the context of this resistence, precisely because it absorbed the political and military resources of the US, and thus of the TPS project, a second wave for the retrieval of sovereignty has swept South America. That is, with the US bogged down in Iraq, the political space was opened for the people of South America to begin to take back control of their own resources. Venezuela's Bolivarian revolution has begun the process of resocializing its social assets, the politics of communities, its social safety nets, its major factories, its education and health systems. And it has done this by taking back greater revenues from the exploitation of its oil reserves. In Bolivia, beginning with massive upheavals against the privatization of water, and the exploitation of Bolivia's natural gas resources with no return for the Bolivian people, a movement of the indigenous has transformed the structure of political power, and reaffirmed sovereign control over Bolivian society, as the bedrock upon which a new democracy could be built. Argentina has definitively broken with the IMF, settling the debt that formerly prostrated its economy, produced mass starvation and total political chaos, for ten cents on the dollar. What powered this process was a massive wave of factory takeovers by workers, throughout Argentina after 2003, asserting their local community sovereignty over the economic entities that should rightfully belong to those who built and worked them anyway. A similar retrieval of resources, with the buildling of new forms of internal political cooperation, also characterizes the situations in Ecuador and Nicaragua. And key to this process has been the rewriting of constitutions (in Venezuela, Bolivia, Ecuador), as an important step away from the neo-colonial trap into which the republican representationist form of nation-state had thrown the people. On a continental level, Latin America has begun to construct a unity based on sovereignty, no longer tied to or dominated by the US. If Cuba pointed the direction, the Iraqi and Afghani people provided the space. [27]
A third form of opposition to the TPS has emerged, in response to US military impunity. New economic and political alliances have begun to form whose purpose is to strengthen the sovereignty of the post-colonial nations. These include the Shanghai Cooperative Organization, the development of the BRIC alliance (Brazil, Russia, India, China) as a new center of trade financing, and ALBA (the Bolivarian Alternative for the Americas). [28] These cooperative organizations have formed for the purpose of fostering development of the underdeveloped countries without the anti-development strings that the neo-liberal programs had imposed on them. They represent directly countervailing forces to a transnational state at the nation-state level.
Finally, in the industrialized countries themselves, the blatant atrocity of a global government of TNCs, its clear negation of local democracy, the growth of massive starvation and deprivation imposed on the world's people by the IMF's structural adjustment programs, and the murderousness of the "attack sequence" and its impunity, have produced a massive anti-corporate movement in both Europe and the US. [29] It was this movement that organized the historical demonstrations that rocked Seattle, Genoa, Miami, Cancun, Davos, Geneva, and other cities, wherever the TPS builders attempted to meet. It was that movement which brought knowledge of the MAI (Multilateral Agreement on Investment, whose horrendous autocratic conditions would make local democracy impossible) out of the secrecy in which the WTO sought to hide it. The focus of the anti-corporate movement has been the popular sovereignty that remains the indispensible basis for local democracy. Those demonstrations, and the movements they represented, provided a political context in which other nations inside the WTO could gather strength and organize themselves to resist EuroAmerican domination. By presenting demands inside the WTO (on issues of agriculture, labor, tariffs, state subsidies, etc.) to which EuroAmerican corporate capital was unwilling to accede, they derailed its neo-liberal agenda.
On Sovereignty and Democracy
The term "sovereignty" has come to differ from its historical meaning. It has passed through many mutations, from the sovereignty of a monarch to the popular sovereignty of a constitutional republic and the national sovereignty of the anti-colonialist struggle. It has come to include the concept of both "local sovereignty" and "cultural sovereignty," signifying autonomy at the level of community, of organization, and of popular movements to collectively address their condition and choose for themselves how to determine their destiny. When the Farmer's Alliances of the 1880s sought to build their own purchasing and marketing cooperatives, their goal was a class sovereignty free from the debt servitude to which commercial and financial interests were increasingly condemning farmers through crop liens and usurious loans. When the National Organization of Women decided not to take grant money or corporate money, but rather to finance all their activities internally from their own membership, they were insuring a level of organizational sovereignty for themselves.
Sovereignty is really the critical foundation for any concept of democracy. If democracy means the ability of people to determine their own destiny, they have first to be sovereign in that destiny to determine it. It has to be entirely in their own hands. Any intervention in a nation, a movement or an organization, because it violates sovereignty, makes democracy impossible. To intervene militarily in another country in order to "bring democracy" is a contradiction in terms.
Against the coloniality of corporate power, the concept of the sovereignty of a people, of their organizations, of their movements, and of their nations, stands in direct opposition, and forms the predominant avenue for alternate political structures, for an alternate political culture to that of the nation-state and its anti-democratic representationism. For the nation-state, organizational or community autonomy is clearly a threat. After Carey was elected president of the Teamsters by a powerful rank and file movement, the US government intervened in the internal affairs of the union to remove him as president for some minor corruption charge, sidestepping the union's internal processes for dealing with such matters, in order to impose James Hoffa Jr. on the union as president. Thus, the US government, as a nation-state, abrogated the democracy for which that rank and file movement had fought; its autonomy was clearly a threat to the state. Even "The Garden," in South Central LA. was a threat. "The Garden" grew and flourished on two large fallow blocks of land in an industrial section of the city, farmed by people of the neighborhood, and providing food and flowers for some 350 families. It was destroyed by police bulldozers, pursuant to a reclamation order by the owner, who then did nothing with the land.
The urgent political question for the people of the world has become how to form autonomous organization and community, how to create an institutionality of autonomy, an alternate political culture, based on a motif of human autonomy in contestation to the impunity of property rights at the core of corporate coloniality. Democracy means that the people who will be affected by a policy are the ones who participate in both formulating as well as deciding what that policy will be. That is, policy must be made, discussed and formulated by the people who will be affected by it.
In the corporate model of representationism, people elect representatives without having first decided on issues, leaving it to those "representatives" to discuss politics for them, which the people as a constituency then "represent." In the corporate model, the top of the pyramid makes policy, and the lower levels represent it through obedience to its rule. This has been the structure of representationism as well. The structural question is how to invert the pyramid that characterizes the corporate model. In the pro-democracy model, policy is first discussed among the people, in their most local assemblies and meetings, from which they then elect representatives who will represent the discussions that have occurred. That is, elected representatives would already know what it is they are to represent (with recall being the recourse to their failure to do so).
It is the imperative to develop a political culture based upon a pro-democracy model that is thrust upon us by the corporate community's attempt to develop a transnational political structure for itself.
NOTES
1-- Under the Bretton Woods Agreement at the end of WWII, US gold reserves were to be used to establish the dollar as the international currency of reserve. This meant that dollars accumulating in foreign banks could be exchanged for gold at a fixed rate, thus preserving their value for international commerce. But oil imports, the hundreds of military bases the US built around the world, and the Vietnam war altogether brought the international accumulation of dollars to a critical point. Their repatriation threatened to deplete US gold reserves below the statutory level needed to back the domestic currency.
2-- Thierry de Montbrial, Foreign Affairs, vol 54(1), Oct. 1975. Montbrial was a French economic theorist for the Trilateral Commission, one of its charter members. See also Nobuhiko Ushiba, with Graham Allison, and Thierry de Montbrial, Sharing International Responsibilities Among Trilateral Countries (New York: Trilateral Commission, 1983). Also C. Fred Bergsten, The Future of International Economic Order (Lexington: Lexington Books, 1973).
3-- Two major descriptive works on the multinationals, and the Trilateral Commission, are: Holly Sklar (ed); Trilateralism: The Trilateral Commission and Elite Planning for World Management; South End Press, Boston, 1980; and Richard Barnet and Ronald Muller; Global Reach: the Power of the Multinational Corporations; Simon and Schuster, New York, 1974. See also, Helga Hernes, Multinational Corporations (Detroit: Gale Research, 1977); and Lewis D. Solomon, Multinational Corporations and the Emerging World Order (Port Washington: Kennikat Press, 1984).
4-- Laura D'Andrea Tyson, The Impact of External Economic Disturbances on Yugoslavia: Theoretical and Empirical Explorations, with Egon Neuberger (Washington, D.C.: Kennan Institute for Advanced Russian Studies, 1978); and The U.S. and the World Economy in Transition (Berkeley Roundtable on the International Economy, University of California, 1986).
5-- Peter Dale Scott, San Francisco Chronicle, 1/2/91, p. C1. The effect of this arrangement was that Kuwait became a "spoiler" in OPEC, voting for lower oil prices against the oil exporting nations that wished to raise them, because industrial revenues generally vary inversely with the price of oil, meaning Kuwaiti industrial investments gained from lower oil prices where oil export itself lost.
6-- C. Fred Bergsten, Conditions for Partnership; with Etienne Davignon, and Isamu Miyazaki (New York: Trilateral Commission.,1986). Neil Hood and Stephen Young; The Economics of Multinational Enterprises (London: Longman, 1979).
7-- The Reagan administration decided to make the US a debtor nation (mainly through increased military spending), (Bergsten, 1986) in order to free it from the threat of concerted default by its own debtors (principally Latin America). Foreign default could be passing through to US creditors. Ultimately, the 1991 bombing of Iraq was not a war but a technological massacre launched from an anti-septic distance whose purpose was to destroy Iraqis social infrastructure, yet leave Hussein in power. Thousands died. See The Gulf War Reader; Mikah Sifry and Chris Cerf, eds. (New York: Random House, 1991). Also, Ahmad Chalabi (when still a London banker); Wall Street Journal, April 8, 1991.
8-- The most general estimate of the cost of the war is $100 billion, including funds used to build the alliance, such as $7 billion of Egyptian debt forgiven for their allegiance, and another $7 billion in foreign aid to Russia. (SF Chronicle, 4/26/91) A fraction of the money spent building the alliance against Iraq, either directly or through cancelling debts, added to the military expense of the assault, would have been more than enough to pay off Iraq's war debt from its war with Iran, and buy Iraqi compliance with western policy. Clearly, the destruction of Iraq was the primary planned purpose for which this money was spent.
9-- The Jourdanian Press Agency, and the Red Crescent (the Islamic counterpart to the Red Cross), both estimated in March, 1991, immediately after the bombing, that at least 125,000 civilians were killed, 60% of whom were children. The US has estimated 150,000 Iraqi troops were killed. All urban water purification and sewage disposal systems in Iraq were destroyed, as was 95% of Iraq's electric power; medical care became, and remained practically nonexistent. UNICEF, WHO, and the Red Cross all issued reports in April and May, 1991, warning that the lives of millions of Iraqis, mostly children, were in immediate jeapordy from famine, epidemic, and collapse of the social infrastructure. A report on child mortality in documentary film form was released in March, 1992 (A Just War?, dir. and prod. by Maj Wechselmann and Stefan Hedqvist, 1992).
10- Law professor Anthony D'Amato of Northwestern Univ. Law School argued that "sovereignty," in the case of Panama, was of no legal consequence in the face of the human right of "Panamanian citizens to be free from oppression by a gang of ruling thugs." The Panamanians being shot at by invading helicopters from a US carrier perhaps more clearly understood what the term "thugs" referred to then did D'Amato. He goes on to say that treaty arguments "are far less important to international law than the actual customary-law-generating behavior of states." "The U.S. interventions in Panama and, previously, in Grenada are milestones along the path to a new nonstatist conception of international law." To substitute the "behavior of states" for treaty agreements as law openly espouses the reduction of law to power, to military might pure and simple. Anthony D'Amato, "The Invasion of Panama was a Lawful Response to Tyranny" 84 American Journal of International Law 516 (1990). Against this, Congressman Steve Chabot, speaking at a Congressional hearing on the "Military Extraterritorial Jurisdiction Act" of 1999, Thursday, March 30, 2000, House of Representatives, Subcommittee on Crime, Committee on the Judiciary, stated that "American civilians who commit crimes abroad are also not subject to the criminal laws of the United States, because the jurisdiction for those laws ends at our national borders."
11- The two central themes of the neo-liberal project were to make all lands salable, and to remove all obstructions to corporate investment. In Mexico, for instance, this meant changing the constitution, which provided that cooperatively held indigenous land could not be sold. In general, in the third world, it meant leaving corporate operations unhindered by tariffs, taxes, permits or licenses to terrains or resources, and suppressing unions. When applied to the US, these same principles deregulated securities markets, opening them to highly exotic invented securities (collateralized debt obligations, loan swaps, etc.) and mortgage scams (false low-interest appearances) that together became the engine of the crash.
12- The strategy of the multinational corporations, embodied in the Trilateral Commission, is suggested in many articles of the mid-70s. See, for instance, Peter Drucker; "The Multinational Corporations in World Politics;" Foreign Affairs, vol 53(1), Oct. 1974. C. Fred Bergsten; "The Threat from the Third World;" Foreign Policy, no. 11, Sum. 1973. Raymond Vernon; "Does Society Also Profit?" Foreign Policy, no. 13, Win. 1974. Vernon claims, in fact, that one benefit of the multinational corporations as a phenomenon is precisely the "undermining of the nation state system." Mysteriously, this does not contradict the notion of sovereignty for him.
13- Joseph Stiglitz, Globalization and its Discontents, New York: Norton, 2003.
14- David Korten, When Corporations Rule the World, p. 165.
15- C. Fred Bergsten; Toward an New International Economic Order (Lexington: Lexington Books, 1975); Managing International Economic Interdependence (Lexington: Lexington Books, 1977); Joan Edelman Spero, The Politics of International Economic Relations (New York: St. Martin's, 1990).
16- The idea that a governance body might be possible for the corporations is what permits us to conceive of the TNCs as a "community of corporations." Corporations meet through the discussions of personel who speak together as elements of a corporate structure, while their respective needs form the matrix for each in what they say. For example, when the Business Roundtable was first organized in 1972, it was "in the belief that business executives should take an increased role in the continuing debates about public policy." (Korten,144) Its 200 members included the heads of 42 of the largest (Fortune 500) corporations. In its meetings, the heads of GM, Ford, and Chrysler (for instance) would come together to talk business, as would the heads of DuPont, Dow, and Monsanto. They "put aside their competitive differences to reach a consensus on issues of social and economic policy." And indeed, as the community of corporations has grown, they have become important consumers for each other, irrespective of actual human-oriented markets.
17- Herein lies the true nature of the relation between the "free market" of neo-liberal ideology and democracy in its local reality. They are antithetical. The neo-liberal ideology proclaims that the free market is the essence of democracy, its necessary precondition. But the free market for them is the free stock market, and the markets of securities by which they can profit from and determine the value of capital assets anywhere in the world. But that determination comes from above, leaving real people impoverished, with no democratic connection to these operations, nor their results. (DK,66)
18- Juan Josi Arivalo, The Shark and the Sardines, trans. June Cobb and Raul Osegueda (New York: L. Stuart, 1961). See also, Carleton Beals, Latin America: World in Revolution (New York: Abelard-Schuman, 1963); and John Gerassi, The Great Fear in Latin America (New York: Collier Books, 1965).
19- Property and property rights were the ostensible stumbling block in abolishing slavery. The guarantee of property right was considered to require compensation for the "owner" of the emancipated man or woman for his loss. Few people thought to assert that it would not have hindered proclaiming humans not property as such, and thus emancipation not a loss of anything but the injustice of forced labor.
20- In the US, the majority of the people have supported the government's wars of intervention and aggression. Though the US is signatory to the Nuremberg principle, that no citizen should obey or support a criminal action or command on the part of the government, few people attempt to live that principle, and those who have attempted to stop the US war machine have been barred from making a Nuremberg argument in court. When a movement succeeds in electing representatives to oppose a war effort as unjust or colonailist (as happened during the Vietnam war), those representatives are impotent because Congress has no power to stop a war. It cannot order the withdrawal of troops. It can cut appropriations to the Pentagon, but it cannot direct the military where to deploy those cuts in funds.
21- The case emerged from the problem that corporations needed standing in federal courts. Corporations were chartered in particular states, but engaged in commerce in all. Being involved in interstate trade, they were often required to answer civil suits across state lines. The jurisdiction for such cases was the federal court system. Thus, corporations had to have federal standing in order to appear in federal court. This implied a form of citizenship. Corporate personhood in the US is thus an artifact of the division of powers between the states and the federal government. The question was decided by Justice Story in 1805, and further by Justice Taney in 1844. Corporations were then given personhood, with all the rights and guarantees of the citizen under the 14th Amendment, in 1886 in the Santa Clara case, which enabled them to function fully as political entities.
22- Michael Taylor and Nigel Thrift, in The Multinational Corporations and the Restructuring of the World Economy (London: Croom Helm, 1986), point out that as the multinational corporations get larger, they cease to view the world as an environment of objects whose aggregate they can control, but rather as a population of organizations (nations, corporations, state-owned emterprises, unions, blocs, cultures, etc.) to effect. They call this a "structural contingency model", in which efficiency in production is replaced by effectiveness of organization, and profit maximization is no longer of primary concern.
23- Andre Gorz, Farewell to the Working Class, p. 57.
24- Like the identity one gains from employment in a corporation, national allegiance, however devoid of ethics that nation may be, is a question of identity. A social or national identity produces itself through a social process of identification, which is a consciousness, a way of imagining a connection to others (as Benedict Anderson described for nations as "imagined communities"). The imagined community coheres because it imagines others cohering to the identification, and watching to see if one is doing so as well. It is the institutedness of that structure of watching across the multitude of identifications that erases the difference between the imaginary and social identity. In some cases, this institutedness is provided by the state, and in others by a para-political process, such as racial segregation and the violence that enforces it.
25- Cuba's uncompromising insistence on its sovereignty is the real reason for US hatred and opposition to the Cuban revolution, not ideology nor its former Soviet alliance autonomy. The US has never stopped charging dictatorship, but could do so only by hiding the fact that the revolution armed the people, and has carefully evolved a political system that is the closest thing in this world, besides perhaps the Zapatista municipalities, to direct democracy. It was the people of Cuba, not the revolutionary leadership, that early on rejected the corruption of a two party system. Embued with that corruption, on the other hand, the US has never had any difficulty supporting dictators.
26- While the Afghanistan invasion seemed only to be about a pipeline, it had an additional focus. If one regards how these two invasions together with the 2005 attempt by US agencies to install a government in the Ukraine (the so-called "orange revolution" financed by the NED) relate to each other geographically, one can see that they were an attempt to surround the Caspian oil fields. The Ukraine adventure drowned in chaos and corruption, however, leaving the Caspian region out of reach.
27- As testimony to the extent South American autonomy and sovereignty has disrupted the neo-liberal agenda, the US has reorganized its military presence in that area. It has refurbished the 4th fleet, stationing it in Aruba, a few miles off the coast of Venezuela. It has reinvolved itself in military coups, in both Venezuela and Honduras. And it has created several large military bases in Colombia, while attempting to instigate border conflicts between Colombia and Venezuela.
28- Indeed, it was the execrable gratuitousness of the bombing of Serbia in 1999 that convinced many nations that the US had crossed all lines of civilized behavior and had to be stopped. This could not be done militarily, however. The US accounts for 56 % of the world's military spending, meaning that it spends more on military than the rest of the world put together. The purpose of these cooperative organizations has been to form alternate centers of economic and political unity, from which the US is excluded.
29- Lori Wallach and Michelle Sforza, Whose Trade Organization: Corporate Globalization and the Erosion of Democracy (Public Citizen, 1999). See also, Richard Peet, The Unholy Trinity: the IMF, World Bank, and WTO (London: Zed Books, 2003).