NOTE FROM THE EDITOR:
Dear readers, Did you know that we are actually ruled by corporations, and that our country is a corporation, and that its officers (police, army, courts, etc) are actually agents of a corporation that are there to serve you or me?
In this following article, written by Richard Heinberg, sometime ago, you will discover a piece of history that probably you have never been exposed to during your lifetime and education. Due to the length of this piece, El Reportero will publish it in several parts. THIS IS PART 2 OF A SERIES.
GLOBAL PILLAGE
by Richard Heinberg
In the 1970s, capitalism faced yet another challenge as postwar growth subsided and profits fell. The US was losing its dominant position in world markets; the production of oil from its domestic wells was peaking and beginning to fall, thus making America increasingly dependent upon oil imports from Arab countries; the Vietnam War had weakened the American economy; and Third World countries were demanding a “North-South dialogue” leading towards greater self-reliance for poorer countries. President Nixon responded by doing away with fixed currency exchange rates and devaluing the dollar, largely erasing US war debts to other countries. Later, newly elected President Reagan, at the 1981 Cancún, Mexico, meeting of 22 heads of state, refused to discuss new financial arrangements with the Third World, thus effectively endorsing their further exploitation by corporations.
Meanwhile, the corporations themselves also responded with a new strategy. Increased capital mobility (made possible by floating exchange rates and new transportation, communication and production technologies) allowed US corporations to move production offshore to “export processing zones” in poorer countries. Corporations also undertook a restructuring process, moving toward “networked production”–in which big firms, while retaining and consolidating power, hired smaller firms to take over aspects of supply, manufacture, accounting and transport. (Economist Bennett Harrison defined networked production as “concentration of control combined with decentralization of production”.) This restructuring process is also known as “downsizing”, because it results in the shedding of higher-paid employees by large corporations and the hiring of low-wage contingent workers by smaller subcontractors.
Jeremy Brecher and Tim Costello write in Global Village or Global Pillage that: “As the economic crisis deepened, there gradually evolved.a ‘supra-national policy arena’ which included new organizations like the Group of Seven (G7) industrial nations and NAFTA and new roles for established international organisations like EU, IMF, World Bank, and GATT. The policies adopted by these international institutions allowed corporations to lower their costs in several ways. They reduced consumer, environmental, health, labor, and other standards. They reduced business taxes. They facilitated the move to lower wage areas and threat of such movement. And they encouraged the expansion of markets and the ‘economies of scale’ provided by larger-scale production.”
All of this has led to a globalised economy in which (again quoting Brecher and Costello): “All over the world, people are being pitted against each other to see who will offer global corporations the lowest labor, social, and environmental costs. Their jobs are being moved to places with inferior wages, lower business taxes, and more freedom to pollute. Their employers are using the threat of ‘foreign competition’ to hold down wages, salaries, taxes, and environmental protections and to replace high-quality jobs with temporary, part-time, insecure, and low-quality jobs. Their government officials are justifying cuts in education, health, and other services as necessary to reduce business taxes in order to keep or attract jobs.”
Corporations, no longer bound by national laws, prowl the world looking for the best deals on labor and raw materials. Of the world’s top 120 economies, nearly half are corporations, not countries. Thus the power of citizens in any nation to control corporations through whatever democratic processes are available to them is receding quickly.
In November 1999, tens of thousands of students, union members and indigenous peoples gathered in Seattle to protest a meeting of the World Trade Organization (WTO). This mass demonstration seemed to signal the birth of a new global populist uprising against corporate globalization. In the three years since then, more mass demonstrations–some larger, many smaller–have occurred in Genoa, Melbourne, Milan, Montreal, Philadelphia, Washington and other cities.
In January 2001, George W. Bush and Dick Cheney took office, following a deeply flawed US election. With strong ties to the oil industry and to the huge energy-trading corporation Enron, the new administration quickly proposed a national energy policy that focused on opening federally protected lands for oil exploration and on further subsidizing the oil industry.
Enron, George W. Bush’s largest campaign contributor, was the seventh largest corporation in the US and the 16th largest in the world. Despite its reported massive profits, it had paid no taxes in four out of the previous five years. The company had thousands of offshore partnerships, through which it had hidden over a billion dollars in debt. When this hidden debt was disclosed in October 2001, the company imploded. Its share price collapsed and its credit rating was slashed. Its executives resigned in disgrace, taking with them multimillion-dollar bonuses, while employees and stockholders shouldered the immense financial loss. Enron’s bankruptcy was the largest in corporate history up to that time, but its creative accounting practices appear to be far from unique, with dozens of other corporations poised for a similar collapse.
Following the outrageous and tragic attacks of September 11, Bush launched a “War on Terror”, raising the listed number of potential target countries from three to nearly 50, most having exportable energy resources. With Iraq (holder of the world’s second-largest proven petroleum reserves) high on the list of enemy regimes to be violently overthrown, the Bush administration’s Terror War appeared to be geared toward making the world safe for the expanded reach of US oil corporations. Meanwhile, new laws and executive orders curtailed constitutional rights and erected screens of secrecy around government actions and decision-making processes.
It remains to be seen how the American populace will react to these new developments. Here again, a little history may help us understand the options available.
