Mike Vickers' Blog

Corporate Power – Leader Guardian Weekly 19/12/14

‘Democracy can battle back

In this early 21st century, we are bedeviled by size. Economies of scale have allowed firms to grow until they straddle the globe like colossi, beneficiaries of the last century’s turbocharged capitalism. But it is the sheer expanse of those companies, how they consequently behave and how that affects the countries and continents in which they trade that cause disquiet. Of the top 175 economic entities in the world in 2011, whole nations included, 111 were giant corporates

Giant firms, reluctant to have their territo­rial ambitions or profit potential curbed, will deploy lobbying and sharp PR to persuade lawmakers to think otherwise. They make menacing virtue of their multinational struc­tures, threatening uncooperative states with taking their business elsewhere. The result is a source of power that has grown beyond democracy’s reach.

In the real-life face-off between the democratic David and the corporate Goliath, David can look puny indeed.

And yet – then as now – Goliath is not invincible. First, governments already possess many powers that they shrink from using. They could smash monopolies and force firms vying for public contracts to pay a living wage. They could, if they wanted, reform political funding and get a regulatory grip on the lobbying that leads to warped laws. Just as governments have imposed freedom of information on themselves, they could – in principle – shine a light behind the corporate veil. They could also, between them, agree that taxes will be calculated on where sales are made, not where profits are reported.

The status quo endures because there is, at present, too little incentive to assault a system that allows companies unquestioned freedom and unfettered prospects for enrichment. And then we come back to the intimidating scale and the accompanying complexity.

These forces for inaction may yet prevail, but let it no longer be said that alternatives do not exist.’

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I have picked up this Leader from the Guardian Weekly 19/12/14. It confirms my view that democracy is under threat from the Global Corporates. The Leader suggests that Countries may battle back. But as the Leader also suggests there has to be a will to do so. I attach a table of the top 10 global Corporates in the Fortune 500 and it is clear that half are petroleum companies; this does not auger well for cutting global emissions. Taking Royal Dutch Shell as an example; they spent $14m in 2011 and 2012 on lobbying although this has dropped to $6 m this year.

http://www.opensecrets.org/lobby/clientsum.php?id=D000042525&year=2014

I cannot comment on Walmart but ASDA is a very major player in the UK supermarket world and there are articles on the web referring to ASDA’s lobbying activities.

Likewise global Corporates are agile with moving their money around to minimize the tax they pay in any country; witness  the call to account by the UK Public Accounts Committee of Amazon, Google and Starbucks; not that any of their tax maneuvering were unlawful in the UK, rather there is still no agreed Global law sufficiently tight to constrain these Corporates from moving their revenue to countries where they pay less tax. Equally Apple affords itself of flexibility in the Eire business laws and funnels all its European revenue through a ‘cottage in Cork in the west of Ireland’

http://www.theguardian.com/technology/2013/may/29/apple-tax-profits-ireland-cork

For the Global revenue position of these Data Handling Corporates see the 2^nd table below; comparing these with the top 10 Corporates, Apple is the biggest and is ranked 15 in the overall Fortune 500ranking.

However what the article does not tackle is the sheer volume of personal information that such global Corporates hold about all of us. Zuckerberg of Facebook has announced that he will not be satisfied until every citizen in the globe is registered on Facebook (TIME, Dexcember 16 , 2014). Equally concerning is the scope of data on our lives, our habits and our foibles handled by Google, Amazon and Microsoft.   This data now goes under the name of ‘Big Data’ and is apparently being trawled by the US National Security Agency (as disclosed by Edward Snowden) and I would suspect by the UK GCHK. These Global data information handlers say they the data is ‘secure with us’ but what guaranty do we have? On a much more minor scale Tesco know precisely what products I buy and targets me with personal savings on these products. I also noted that when I surfed the web for a new PC, for several days afterwards the sides of my screen were plastered with PC adverts from the companies I had looked at – I have now bought a new PC and the adverts have now abated.

For me the key point here is that these large data repositories are in the hands of global commercial Corporates and what guaranty is there that the information stored about me is not sold to other companies who may have fewer scruples about making commercial use of my data to my detriment. The watch word of course is be very careful as to what I make available about myself and my thoughts on the web.

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Global Companies