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Date sent: Wed, 15 Dec 1999 18:25:54 +0100
To: "English edition" <[EMAIL PROTECTED]>
From: Le Monde diplomatique <[EMAIL PROTECTED]>(r)
Subject: When the giants play with fire
Le Monde diplomatique
-----------------------------------------------------
December 1999
POWER OF THE WORLD'S TRUE MASTERS
When the giants play with fire
by FREDERIC F. CLAIRMONT *
So far as the concentration of capital is concerned, the century is
ending as it began. Back in 1906 in The Jungle, the novelist Upton
Sinclair (1878-1968) denounced the fiction of the "American
paradise" and the crimes of big business in the days of the "Robber
Barons". He wrote that "it is the grand climax of the century-long
battle of commercial competition - the final death grapple between
the Chiefs of the Beef Trust and Rockefeller's Standard Oil for the
prize of the mastery of the ownership of the United States." After
the Great Depression of 1873, the concentration of industry and
banks was proceeding at such a pace that two federal investigators,
the economists J. B. and J. M. Clark, could write in 1912 that "the
mere size of the consolidations which have recently emerged is
enough to startle those who saw them in the making. If the
carboniferous age had returned and the earth had repeopled itself
with dinosaurs, the change made in animal life would have scarcely
seemed greater than that which has been made in the business world
by these monster-like corporations" (1).
It was this change in the concentration of wealth and political
power that caused the leading German industrialist and founder of
AEG, Walter Rathenau, to say, at the start of the century, that
"300 men, who all know each other personally, control the economic
destinies of Europe and between them choose their own successors"
(2). What has changed since then is that in Europe those 300 have
become fewer than 150. Concentrations have reshaped capital not
only in the United States, but also in France, the United Kingdom,
Germany and Japan - that is in the five countries that dominated
the world economy at the start of the century and where the
headquarters of nearly 90% of the world's 200 biggest companies are
currently located.
These 200 megafirms, for which the North Atlantic Treaty
Organisation is the shield and sponsor, cover the whole of human
activity: from industry to banking, wholesaling to retailing,
extensive farming to every possible niche of financial services,
both lawful and unlawful. For the "big boys" of banking and
insurance, the distinctions between clean money and dirty money
have in fact long since disappeared. However, these 200 have
surgically restructured themselves, driven by voracious predatory
appetites looking for ever larger prey. For example, in the US in
1998 alone, Exxon took over Mobil for $86bn, Travelers Group
Citicorp for $73.6bn, SBC Communications Americatech for $72.3bn,
Bell Atlantic GTE for $71.3bn, and AT&T Media One for $63.1bn.
Together, these five mergers and acquisitions totalled more than
$366bn. Worldwide, they amounted to $2,500bn and will exceed
$3,000bn in 1999. Since the start of the decade, $20,000bn have
been spent in this way, two and a half times the gross domestic
product (GDP) of the US. This "concentrationist" universe is
illustrated by the three accompanying tables (see Top Companies'
Tables).
Table I shows the market capitalisations, that is the value in
dollars of the shares at any given time multiplied by the number of
shares in circulation. Table II uses figures for turnover and
profits to show the geographical distribution of transnational
power from two different, but related, points of view.
What the figures in Table I show is the overwhelming size of the
American colossi - 71.8% of the total world market capitalisations
of the 50 largest companies - and the massive inequalities between
the top six leading economies. Enough to put into their proper
perspective the fine words about a "market economy" bringing about
the best allocation of human and financial resources. It also
highlights the extent of the power wielded by the transnationals
under cover of the globalisation myth.
Table II reveals another dimension to international domination. In
terms of turnover and profits, the 200 megafirms are divided
geographically among the same six countries as the top 50 in terms
of market capitalisation: US (74), Japan (41), Germany (23), France
(19), UK (13) and Switzerland (6). Together, these countries are
home to 88% of all firms and have been gaining ground steadily for
six years. The US has advanced (from 60 to 74 firms), while Japan
has fallen back (from 60 to 41 firms). Since 1982 the turnover of
the 200 has risen from $3,000bn to $7,000bn and, despite the
contraction in the world economy, their annual growth in current
prices (as shown in Table III) was twice that of the 29 member
countries of the Organisation for Economic Cooperation and
Development (OECD). The same table shows that since 1992 the
turnover of the 200 has been higher than the combined GDP of all
the countries outside the OECD.
Although right-thinking theory presents the accumulation of capital
as saving and investment, it must nevertheless be remembered that
the colossal sums that drive up the stock markets and whet the
giant predators' appetites are derived from debt. Between 1997 and
1999 total world debt (of households, businesses and governments)
increased from $33,100bn to $37,100bn. That is an annual
exponential growth of 6.2%, three times that of world GDP.
But by pursuing these policies the giants are playing with fire.
Like the "rationalisation" of the 1920s and 1930s, in everyday
language "cost cutting" and "value creation" mean the loss of
hundreds of thousands of jobs. Hence the renewed fighting spirit
among the workforce. The hit men, those "killer capitalists" lying
in wait within those giant firms, like Al Capone's gangsters on the
lookout for their rivals at the corner of a clandestine distillery,
should ponder once in a while on the fate that awaited their
authentic predecessors.
______________________________________________________________
* Economist
(1) J. B. and J. M. Clark, The Control of Trusts, Macmillan, New
York, 1912.
(2) Walter Rathenau, quoted in "Neue Freie Presse", Berlin, Winter
1909.
Translated by Malcolm Greenwood
______________________________________________________________
ALL RIGHTS RESERVED � 1999 Le Monde diplomatique
<http://www.monde-diplomatique.fr/en/1999/12/?c=14clair>
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