Editorial

Reflections on 25 Years

It’s been 25 years since Multinational Monitor started regular publication in 1980 (we published a pilot issue in 1978). Ralph Nader and a small band of activist-reporters recognized that corporate power was undergoing a transformation, mutating into something more fundamentally global in scope and profoundly more dangerous. Together , they launched the magazine.

Many of the insights of that initial group are now received wisdom.

But things have not remained static. The multinational corporation has continued to evolve, into a creature with ever fewer accountabilities to communities, workers, consumers or the health of the planet.

This issue of Multinational Monitor contains essays by a variety of authors reflecting on trends in the evolution of corporate power. Most of these essays are focused primarily on the situation in the United States; a companion issue to be published later this year will be more internationally oriented.

With their broad sweep, the essays in this issue work to identify and expound on many of the key underpinnings and manifestations of expanding corporate power — the Big Business takeover of politics, Wall Street-intensified corporate ruthlessness, the rise of corporate global governance through international trade treaties, the commercialization of everything.

We hope both in our follow-up issue of commemorative essays and in other issues to continue to focus on some of the overarching trends that we may not clearly spell out in our regular reporting.

There is no single source of corporate power, no one reform that will negate corporate endangerment of people and the environment. Rather, the power flows from many and ever more wellsprings. To name a few examples in addition to those highlighted in the essays in this issue:

• The expansion of corporate immunities

The last quarter century has seen a sharp upsurge both in corporate risk-taking and the corporate demand for immunity from uncertainty and internalization of the costs of doing business. The demand for immunity is seen across sectors: in the industry emphasis on the importance of government-provided insurance for overseas investments; in industry demands for “tort deform,” taking away the right of victims to sue companies for wrongdoing; in the nuclear industry’s demand for government-provided insurance in case of serious accident; in the International Monetary Fund’s demands that countries in financial crisis pay creditors and bondholders (a de facto insurance scheme that is now weakening, thanks to Argentina’s refusal to cave to demands from private creditors). These immunities translate into socialization and externalization of costs.

• Mergers and corporate consolidation

Merger waves in the 1980s, 1990s and now starting again have left fewer and fewer companies in control of more and more of the economy. This is true both nationally in the United States, and globally, to an extent that was almost unimaginable 25 years ago. Whether you look to aircraft manufacturing or retail coffee sales, pharmaceutical sales or oil drilling, the rise in corporate concentration is staggering. This is a consumer issue — consumers pay more and get diminished choice with fewer competitors. But even more, it is a problem of political economy. These giant firms have reshaped both Main Street (goodbye to the local pharmacy) and global commerce (with the giant multinational telecom companies taking over phone services in developing countries the world over). Their size gives them the power to dictate to governments and dominate and distort supplier and seller markets, and frequently contains the seeds of institutional conflicts of interest (as in the case of the Wall Street brokerages that gave bad advice to shareholders in order to obtain investment banking business).

• Morphing of the corporate form

Simultaneous with the trend in consolidation has been the move to subcontracting and outsourcing. Nike doesn’t make its shoes, Ford doesn’t manufacture many of its auto parts. Subcontracting has become so pervasive that many business analysts speak of “networked” firms. Outsourcing offers some benefits to companies by enabling them to focus on core competencies, but it is driven in large part by the desire to escape accountability. The anonymous subcontractor can pay less, treat its workers worse, pollute the environment — without the marketplace or political penalties that the contracting company would have to face if it engaged in the same behaviors.

But not all of the news is bad. Along with the growth in global corporate power, there has arisen a global justice movement, consisting of many interconnected networks of social movements and public interest organizations.

The global justice movement is still no match for the multinational corporation, but it has scored some striking successes nonetheless. These include a very long list of company-specific or product-specific victories, like making the Gap more concerned about treatment of its subcontractors’ workers, holding Unocal responsible in U.S. courts for its harmful actions in Burma, and lowering the price of HIV/AIDS drugs in developing countries by more than 98 percent. Among the achievements also has been the creation of an expanding body of international law — including the Basel Convention, banning the trade in toxic waste; and the Framework Convention on Tobacco Control, requiring meaningful straitjackets for the tobacco industry — that, although imperfect, imposes consequential restraints on the exercise of corporate power.

The good guys are still mostly on the defensive, but we’re hopeful that we’ll have much more to report on these citizen victories in our next quarter century.