Democracy & Corporate Power
All around the world there has been a flurry of protest in the last couple of years as a new generation of activists challenge the transnational corporations and the governments that represent them. Why is there this backlash against globalization, which was supposed to generate peace and prosperity? Why is this happening in Canada, designated by the United Nations as the most desirable country in the world in which to live?
The real issue for most of us is the loss of security. Our jobs have been put at risk, and at the same time the social safety net in this country is being systematically shredded. Access to adequate unemployment insurance, welfare assistance, health care and old age security is rapidly becoming a luxury rather than a right of citizenship in this country. Citizens are feeling abandoned by their governments.
Previous generations of Canadians had struggled to extend their economic, social, and environmental rights. But their efforts to democratically regulate the economic sphere and redistribute national income encountered increasing resistance from corporations anxious to improve their profits.
Over the past thirty years, a power shift has been taking place--out of the hands of citizens and nation states and into the hands of transnational corporations (TNCs).
In this new climate of global competitiveness, governments compromise when corporations threaten to leave the country. They offering lower labour costs, lower environmental standards, lower corporate taxes, and lower social spending. The state is thus effectively re-tooled to serve the interests of big business. Increasingly, the prime role of governments today is to guarantee security for profitable transnational investment.
Corporate power means
Giant corporations exercise more power than most nation states in the global economy.
Transnational corporations capture the public policy agenda and re-write the rules at local, national and international levels. People's values, attitudes and tastes are determined by a bombardment of corporate images and logos, beamed into their daily lives through satellite communications. Corporations trigger a sudden rise in stock prices by announcing a massive downsizing of their work-forces, paying lower corporate taxes while reaping the highest profit margins in history, and paying their chief executive officers 150 times more than what they pay their average worker.
Who's in charge?
Politicians are no longer the prime movers and shakers. Instead, those who own substantial assets are represented by a nexus of financial institutions – the International Monetary Fund, bond rating agencies on Wall Street, the Bank of Canada, national banks on Bay Street, and financial investment houses. Investors and their agents dictate the priorities that govern our economic system.
It's not hard to identify the most powerful among them. The Business Council on National Issues is the senior voice in the business community - composed of 150 chief executive officers (CEO's) from the major, transnational corporations with over $1.6 trillion in assets, $500 billion in revenues, and 11/2 million employees. The leading business association in Canada, it orchestrates a consensus among other business organizations and brought untold rewards for themselves. They have orchestrated, among other things the Canada-US free trade agreement, and NAFTA, and the adoption of the Goods and Services tax, the fight for deficit reduction and increasingly the fight for tax cuts. These policies, and more, create more profits for corporations and effectively curb the role and size of the state.
Shifting the Balance of Power
Low and moderate-income people, our communities and our civic institutions have lost power to large corporations and asset-owners in the top 5 percent of households. At the root of the problem is an imbalance of power. Given how economic power and political power are linked, we need a two-part solution: reforming the democratic process to reduce concentrated power, and changing the rules governing our economy to increase equity and reduce concentrated wealth.
1. Expanded democracy – We have to strengthen our democratic power in order tackle corporate power and reduce inequality. Or in simple terms, we need organized people power to counter the power of mega-corporations and their owners. This means:
- Strengthening movements that will increase the power of working people
- Reducing the influence of money in the democratic political process
- Introducing reforms that will curb corporate power
2. Economic fairness – We need to change the rules that govern our economy to reduce inequality and ensure that our prosperity is shared. This means:
- Stronger rules governing global trade and investment
- Re-regulating corporations in the public interest
- Improving the minimum wage and other labour standards
- Fairness in taxation
- Strengthening our social safety net
- Improving our public services
The corporations are calling on us to sacrifice our power, our wages and our quality of life to help them lower their costs and increase their profits. We must cease putting their interests above those of the majority. Their policies do not bring enough jobs that provide living wages. Avenues to control them include solutions that level the playing field, reduce corporate power and profits, and break up concentrated wealth and power. Despite the opposition they will pose, we can and must make the case that we can have economic security and greater equality, individual liberty and stronger communities.