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Should corporate-led institutions be reformed or disempowered?
It's not off the wall to think of dismantling corporations
[Part II of The most crucial task facing the world's NGOs]
by Waldon Bello
The CCPA Monitor, February 2001, pp 14-16
The battle against the global corporate agenda will be largely decided by the
tactics adopted by the world's non-government organizations (NGOs). And these
tactics in turn depend not only on the balance of forces, but will turn even
more fundamentally on our answer to the key question: Should we seek to
transform or to disable the main institutions of corporate-led globalization?
Institutions should be saved and reformed they're functioning, while defective,
but nevertheless can be reoriented to promote the interests of society and the
environment. They should be abolished if they have become fundamentally
dysfunctional.
Can we really say that the International Monetary Fund can be reformed to bring
about global financial stability, the World Bank to reduce poverty, and the WTO
to bring about fair trade? Are they not, in fact, imprisoned within paradigms
and structures that create outcomes that contradict these objectives? Can we
truly say that these institutions can be re-engineered to handle the multiple
problems that have been thrown up by the process of corporate-led globalization?
The answer to all these questions, realistically, is NO. So, instead of trying
to reform these institutions, would it in fact be more realistic--and
"cost-effective," to use a horrid neoliberal term--to abolish or at least
disempower them, and create totally new institutions that do not have the
baggage of illegitimacy, institutional failure, and Jurassic mindsets that
attach to the IMF, the World Bank, and the WTO?
Disabling the corporation
Indeed, I would contend that the focus of our efforts these days is not to try
to reform the multilateral agencies, but to deepen the crisis of legitimacy of
the whole system. Gramsci once described the bureaucracy as but an "outer trench
behind which lay a powerful system of fortresses and earthworks." We must no
longer think simply in terms of neutralizing the multilateral agencies that form
the outer trenches of the system, but of disabling the transnational
corporations that are the fortresses and earthworks that constitute the core of
the global economic system.
I am talking about disabling not just the WTO, the IMF, and the World Bank, but
the transnational corporation itself. And I am not talking about a process of
"reregulating" the TNCs but of eventually dismantling them as fundamental
hazards to people, society, the environment, to everything we hold dear.
Is this off the wall? Only if we think that the shocking irresponsibility and
secrecy with which the Monsantos and Novartises have foisted biotechnology on
us is a departure from the corporate norm. Only if we also see as deviations
from the norm Shell's systematic devastation of Ogoniland in Nigeria, the Seven
Sisters' conspiracy to prevent the development of renewable energy sources in
order to keep us slaves to a petroleum civilization, Rio Tinto's and the mining
giants' practice of poisoning rivers and communities, and Mitsubishi's recently
exposed 20-year cover-up of a myriad of product-safety violations to prevent a
recall that would cut into profitability. Only if we think that it is acceptable
business practice to pull up stakes, lay off people, and destroy
long-established communities in order to pursue ever-cheaper labour around the
globe--a process that most TNCs now engage in.
NO, these are not departures from normal corporate behaviour. They are normal
corporate behaviour. And corporate crime against people and the environment
has, like the Mafia, become a way of life because, as the British philosopher
John Gray tells us, "Global market competition and technological innovation have
interacted to give us an anarchic world economy."
To such a world of anarchy, scarcity, and conflict created by global
laissez-faire, Gray continues, "Thomas Hobbes and Thomas Malthus are better
guides than Adam Smith or Friedrich von Hayek, with their Utopian vision of a
humanity united by "the benevolent harmonies of competition." Smith's world of
peacefully competing enterprises has, in the age of the TNC, degenerated into
Hobbes' "war of all against all."
Gray goes on to say that, "As it is presently organized, global capitalism is
supremely ill-suited to cope with the risks of geo-political conflict that are
endemic in a world of worsening scarcities. Yet a regulatory framework for
coexistence and cooperation among the world's diverse economies figures in no
historical or political agenda."
Recent events underline his point. When the ice cap on the North Pole is
melting at an unprecedented rate and the ozone layer above the South Pole has
declined by 30%, owing precisely to the dynamics of this corporate
civilization's insatiable desire for growth and profits, the need for
cooperation among peoples and societies is more stark than ever. We must do
better than entrust production and exchange to entities that systematically and
fundamentally work to erode solidarity, discourage cooperation, oppose
regulation except profit-enhancing and monopoly-creating regulation, all in the
name of "the market" and "efficiency.'
It is said that, in the age of globalization, nation states have become obsolete
forms of social organization. I disagree. It is the corporation that has become
obsolete. It is the corporation that serves as a fetter to humanity's movement
to new and necessary social arrangements to achieve the most quintessential
human values of justice, equity and democracy, and to achieve a new equilibrium
between our species and the rest of the planet.
Disabling, disempowering, or dismantling the transnational corporation should be
high on our agenda as a strategic end. And when we say this, we do not equate
the TNC with private enterprise, for there are benevolent and malevolent
expressions of private enterprise. We must seek to disable or eliminate the
malevolent ones, like the Mafia and the TNC.
Deglobalization
It is often said that we must not only know what we are against, but also what
we are for. I agree, though it is very important to know very clearly what we
want to terminate so that we do not end up unwittingly fortifying it, so that,
like a WTO fortified with social and environmental clauses, it is given a new
lease on life.
Let me end, therefore, by giving you my idea of an alternative. It is, however,
one that has been formulated for a Third World, and specifically Southeast
Asian, context. Let me call this alternative route to the future
"deglobalization."
I am not talking about withdrawing from the international economy. I am speaking
about--
reorienting our economies from production for export to production for the local
market;
drawing most of our financial resources for development from within rather than
becoming dependent on foreign investment and foreign financial markets;
carrying out the long-postponed measures of income redistribution and land
redistribution to create a vibrant internal market that would be the anchor of
the economy;
de-emphasizing growth and maximizing equity in order to radically reduce
environmental disequilibrium;
not leaving strategic economic decisions to the market, but making them subject
to democratic choice;
subjecting the private sector and the state to constant monitoring by civil
society;
creating a new production and exchange complex that includes community
cooperatives, private enterprises, and state enterprises, and excludes TNCs; and
enshrining the principle of subsidiarity in economic life by encouraging the
production of goods to take place at the community and national level if it
can be done so at reasonable cost in order to preserve community.
We are talking, moreover, about a strategy that consciously subordinates the
logic of the market and the pursuit of cost efficiency to the values of
security, equity, and social solidarity. We are speaking, in short, about
re-embedding the economy in society, rather than having society driven by the
economy.
A plural world
Deglobalization, or the re-empowerment of the local and national, however, can
only succeed if it takes place within an alternative system of global economic
governance. What are the contours of such a world economic order? The answer to
this is contained in our critique of the Bretton Woods-cum-WTO system as a
monolithic system of universal rules imposed by highly centralized institutions
to further the interests of corporations and, in particular, U.S. corporations.
To try to supplant this with another centralized global system of rules and
institutions, though these may be premised on different principles, is likely to
reproduce the same Jurassic trap that ensnared organizations as different as
IBM, the IMF, and the Soviet state--and this is the inability to tolerate and
profit from diversity.
Today's need is not another centralized global institution, but the
de-concentration and de-centralization of institutional power and the creation
of a pluralistic system of institutions and organizations interacting with one
another, guided by broad and flexible agreements and understandings.
We are not talking about something completely new. For it was under such a more
pluralistic system of global economic governance, where hegemonic power was
still far from institutionalized in a set of all-encompassing and powerful
multilateral organizations and institutions, that a number of Latin American and
Asian countries were able to achieve a modicum of industrial development in the
period from 1950 to 1970.
It was under such a pluralistic system, under a General Agreement on Tariffs and
Trade (GATT) that was limited in its power, flexible, and more sympathetic to
the special status of developing countries, that the East and Southeast Asian
countries were able to become newly industrializing countries through activist
state trade and industrial policies that departed significantly from the
free-market biases enshrined in the WTO.
Of course, economic relations among countries prior to the attempt to
institutionalize one global free market system beginning in the early 1980s were
not ideal, nor were the Third World economies that resulted ideal. But these
conditions and structures underline the fact that the alternative to an economic
Pax Romana built around the World Bank-IMF-WTO system is not a Hobbesian state
of nature. The reality of international relations in a world marked by a
multiplicity of international and regional institutions that check one another
is a far cry from the propaganda image of a "nasty" and "brutish" world.
Admittedly, the threat of unilateral action by the powerful is ever present in
such a system, but it is one that even the most powerful hesitate to take for
fear of its consequences on their legitimacy, as well as the reaction it would
provoke in the form of opposing coalitions.
In other words, what developing countries and international civil society should
aim at is not to reform the TNC-driven WTO and Bretton Woods institutions, but,
through a combination of passive and active measures, to radically reduce their
powers and to turn them into just another set of actors coexisting with and
being checked by other international organizations, agreements, and regional
groupings. These would include such diverse actors and institutions as UNCTAD,
multilateral environmental agreements, the International Labour Organization,
the European Union, and evolving trade blocs such as Mercosur in Latin America,
SAARC in South Asia, SADCC in Southern Africa, and a revitalized ASEAN in
Southeast Asia.
More space, more flexibility, more compromise: these should be the goals of the
civil society effort to build a new system of global economic governance. It is
in such a more fluid, less structured, more pluralistic world, with multiple
checks and balances, that the nations and communities of both the South and the
North will be able to carve out the space to develop based on their values,
their rhythms, and the strategies of their choice.
Let me quote John Gray one last time: "It is legitimate and indeed imperative,"
he says, "that we seek a form of rootedness which is sheltered from overthrow by
technologies and market processes, which, in achieving a global reach that is
disembedded from any community or culture, cannot avoid desolating the Earth's
human settlements and its non-human environments.
"The role of international arrangements in a world where toleration of
diversity is a central principle of economic organization would be to express
and protect local and national cultures by embodying and sheltering their
distinctive practices."
Let us put an end to this arrogant globalist project of making the world a
synthetic unity of individual atoms shorn of culture and community. Let us
herald, instead, an internationalism that is built on, tolerates, respects, and
enhances the diversity of human communities and the diversity of life.
(During the 1970s, Waldon Bello earned a doctorate in political sociology from
Princeton University, taught at the University of California and worked as a
lobbyist in Washington DC for democratic rights in the Philippines. He is
currently co-director of Focus on the Global South, a project of Chulalongkorn
University's Social Research Institute in Bangkok. He is also Professor of
Public Administration and Sociology at the University of the Philippines. He has
served on the International Board of Greenpeace and currently serves on the
Board of Oxfam and on the Program Board of the International Centre for Trade
and SustainabIe Development (ICTSD) in Geneva, which supplies information to
NGOs on the operations of the World Trade Organization.)
