J.K. Gibson-Graham, Take Back the Economy
Reflections from Honours in Political Economy

The Political Power of Global Corporations

by John Mikler on June 21, 2018

We have long been told that corporations “rule the world”, their interests seemingly taking precedence over states and their citizens. Yet while states, civil society, and international organisations are well drawn in terms of their institutions, ideologies, and functions, the world’s global corporations are often more simply sketched as market actors which are mechanisms of profit maximisation.  In The Political Power of Global Corporations I seek to demonstrate why they should be seen as explicitly political actors with complex identities and strategies that should be more the focus of our analysis than is often the case.

According to Peter Nolan, Dylan Sutherland and Jin Zhang by the end of the twentieth century no more than five global corporations controlled each of the world’s major industries, with around a third of these having one corporation accounting for more than 40 per cent of global sales. Colin Crouch observes that there has been a “corporate takeover of the market” by these enormous entities. As such, the free market, not just ideologically but conceptually, is defunct for understanding them. They may have been aided in their growth and expansion by free market policies and the neoliberal ideology underpinning them, but by their nature and their actions, global corporations themselves give the lie to, and as such undermine the veracity of, this vision. With the evidence that markets are neither free nor competitive but controlled by global corporations, in identifying them as political actors we should also declare them anti-market actors.

If one of the ways in which their political power is hidden is in being cast in competitive market terms, another is in seeing them as truly ‘global’.  It makes them seem like one of the ‘forces’ of globalisation, when in reality they are not as global as is often claimed.  For example, Alan Rugman and Alain Verbeke demonstrate that only nine of the world’s top 500 global corporations have sales in so many regions of the world that they may be regarded as truly global, while 320 of them still derive 80 per cent of their sales from their home region.  The same may often be said of where their productive assets are located (for example, see Hinrich Voss). They may have global interests, but we need to re-territorialise global corporations because their home states and regions are the geographical source of their political power, just as their market control is its economic source. If it is high time to move on from the rather disembodied debates around free markets and neoliberalism to focus more on the embodiment of economic power in the hands of global corporations, then it is also time to focus more on the places where, and from which, they wield it because these are also the places where responsibility lies for how it is wielded.

Economic processes are increasingly produced by the economic control global corporations possess, the relationships they have, the leverage they employ, the strategic decisions they make, and the discourses they create to enhance acceptance of their interests. But we know their names, we know the states in which they are headquartered, and we know the states in which they invest and operate. We need to have a better idea of what they do, as well as how and why they do it, by more explicitly making them the subject of political analysis. In my book’s concluding chapter, I venture that there should be broad agreement on this across the political spectrum, in the following terms:

It seems reasonable to speculate that if Adam Smith and Karl Marx were alive today they would find much on which to agree. Given they were both focused on the emancipation of populations from those who controlled the means of production in their time (i.e., the state for Smith and the bourgeoisie for Marx), we may surmise that their attentions would have been turned to global corporations. Marx would have predicted a systemic failure and revolution to overthrow the transnational capitalist class that uses them as its vehicle for global economic domination. Smith would have preferred competitive markets made up of a multitude of business entities owned by those who ran them, entrepreneurially conducting their affairs on the basis of the market’s invisible hand. But while their viewpoints would have differed in terms of the ends they desired, both would have been concerned by global corporations’ control of world trade through their global supply chains, their ability to reduce weaker states’ self-determination via offering or withholding FDI, and their private authority to shape rather than respond to market forces. It is easy to imagine them disagreeing on the merits of global capitalism for ensuring individual well-being and freedom, while agreeing on the problematic nature of a world in which economic power and processes are held in so few hands.

John Mikler
John Mikler is an Associate Professor in the Department of Government and International Relations at the University of Sydney. He researches corporations’ relations with states, civil society and international organisations, as well as the ways in which they are political actors in their own right. His previous publications have contributed to theorising corporate power in respect of globalisation, private authority and state sovereignty, and on issues including climate change, online gambling and technological innovation. He has edited journal special issues for Global Policy and Policy and Society; published over 30 journal articles and book chapters in journals such as New Political Economy, Regulation and Governance and Business and Politics; and four books: Greening the Car Industry: Varieties of Capitalism and Climate Change (Edward Elgar 2009); The Handbook of Global Companies (editor, Wiley-Blackwell 2013); Climate Innovation: Liberal Capitalism and Climate Change (co-edited with Neil Harrison, Palgrave Macmillan 2014); and The Political Power of Global Corporations (Polity 2018).

Leave a Response

Developed by Cemal Burak Tansel // Powered by Wordpress