Corporate accountability in the era of globalization and global corporations is rather difficult to quantify. From a purely qualitative analysis, the trends of corporate behavior in corporations' positions as the dominant institutions of human civilization are quite concerning from the perspective of human rights, health, and welfare. This paper examines corporate behavior as it relates to globalization, international relations, and security affairs.
Globalization for Dummies
To summarize Thomas Friedman, the landscape of the global markets is flattening due to emerging technologies and outsourcing. Globalization, a powerhouse for the economy which greatly speeds its progress, also speeds up the dividing of economic classes (Isaac). This is why globalization could have devastating consequences in many Mid-Eastern nations where the economic classes are particularly polarized. However, globalization can have a positive impact on social and cultural aspects of society. People are becoming more similar due to the sharing of information (Ohmae). Yet, this cultural homogenization is viewed, by less developed segments of the world population, as the "Westernization" of the world and is being met with violent resistance.
In his neoliberal manifesto, The Choice: Global Domination or Global Leadership, Mr. Zbigniew Brzezinski rejects the Clintonian philosophy that globalization is a force of nature and an inevitability, and he candidly admits that Bill Clinton made policies conducive to the perpetuation of globalization. He also rejects the concept that globalization is a panacea, capable of evolving destitute nations into capable marketplaces through the activities of multinational corporations.
As for the rise of these multinationals, which later became global corporations, in the sixties and seventies:
American corporations were active all over the world on a scale never seen before. There were, by the early seventies, about three hundred U.S. corporations, including the seven largest banks, which earned 40 percent of their net profits outside the United States. They were called "multinationals," but actually 98 percent of their top executives were Americans. As a group, they now constituted the third-largest economy in the world... The relationship of these global corporations with the poorer countries had long been an exploiting one, it was clear from U.S. Department of Commerce figures. Whereas U.S. corporations in Europe between 1950 and 1965 invested $8.1 billion and made $5.5 billion in profits, in Latin America they invested $3.8 billion and made $11.2 billion in profits, and in Africa they invested $5.2 billion and made $14.3 billion in profits. It was the classic imperial situation, where the places with natural wealth became the victims of more powerful nations whose power came from that seized wealth. American corporations depended on the poorer countries for 100 percent of their diamonds, coffee, platinum, mercury, natural rubber, and cobalt. They got 98 percent of their manganese from abroad, 90 percent of their chrome and aluminum. And 20 to 40 percent of certain imports (platinum, mercury, cobalt, chrome, manganese) came from Africa. (Zinn 568-69)
The History of Corporate Influence in American Foreign Policy
There is actually a very long history of corporate influence in American foreign policy. For example, in 1952, when Jacobo Arbenz Guzman, commonly referred to as Arbenz, became the President of Guatemala, he attempted to make reforms that would serve the interest of a majority of his people and not a small ruling minority. Some of those reforms included land reforms that threatened the interests of the American United Fruit Co. So, the CIA planned and conducted terrorist actions that included sabotage and assassination plots that took many lives of poor Guatemalans. In 1954, Arbenz relinquished power and then a small insurgency developed. In response, Guatemala's US trained and equipped military conducted a campaign of repression that left thousands dead. Over four decades, this caused the death or disappearance of what is reported to be 250,000 human beings, not to mention the torture that occurred. US Marine Colonel and CIA operative Philip Roettinger had this to say:
"As a CIA operative, I trained Guatemalan exiles in Honduras (which had the largest CIA station in the world) to invade their own country and unseat the elected president... The coup I helped engineer in 1954 inaugurated an unprecedented era of intransigent military rule in Central America. Generals and colonels acted with impunity to wipe out dissent and garner wealth for themselves and their cronies... Later, I realized we weren't fighting communism at all, we were fighting the people."
Overview of High-Profile Corporate Scandals
Corporations have not proven to be a benign force in the world at large. And even on the domestic front there is a history of scandals that have hurt laborers and the economy. There have been many high-profile corporate scandals that have taken place in recent years that have received a surprising amount of media attention, given the fact that the mainstream media outlets are run by big business and could be said to have, at the very least, ideological connections.
Kenneth Lay of Enron "manipulate(d) energy markets, causing an energy crisis in California in an attempt to profit from it, or cash out his stock options while prodding others to buy."
Bernie Ebbers of WorldCom "borrow(ed) over $400 million from his company to cover personal stock losses" (Carville 222).
There was also the well-publicized insider-trading scandal involving Martha Stewart that resulted in Ms. Stewart serving a prison sentence.
In light of these high-profile scandals, it is reasonable for public trust in large corporate entities to wane considerably.
Corporate Accountability and Illegal Immigration
There is also the purported link between big business and the growing problem of illegal immigration in the U.S. Houston-based corporation, IFCO Systems, was found to have more than 1,100 illegal immigrant workers. "53% of the Social Security numbers on IFCO's payroll of 5,800 workers during 2005 were either bogus, did not match the name registered with the Social Security Administration for that number, or belonged to children or deceased people" (This report said by the author to have originally appeared in the Milwaukee Journal Sentinel).
The Business Roundtable, a major business lobbying group comprised of CEOs from some of the nation's largest corporations, "lobbied for provisions in the Senate bill that would increase the number of skilled worker's H-1B visas from 65,000 to 115,000 by 2007 (Brass 9-10).
The Rise of the Corporation as the Dominant Institution of Human Civilization
There has also been much concern over the rise of private security firms or private military corporations (PMCs), but along with private security service-providing for military operations "corporations have begun financing a good portion of their security needs..." The "system-level competition" that was once solely the arena of nation-states is now economic in nature and among large global corporations.
These global corporations are primarily regulated at the international level by "faceless international bodies" such as the "World Trade Organization, the World Bank, and the International Monetary Fund"and controversial free-trade agreements such as NAFTA and CAFTA (Barnett 86-87).
Corporations and WMDs
Corporations are also engaged in war using weapons of mass destruction (WMDs), mainly chemical warfare. This chemical warfare is called "fumigation" and has been conducted in Columbia, among other places, "under the guise of a drug war." This "fumigation" campaign is concerning from the respective perspectives of both humans rights and environmental protection. It is destroying areas with "some of the richest biodiversity in the world," and forcing "Campesinos, indigenous people, and Afro-Colombians" into "rotting slums and camps." "And with the people gone, multinational (corporations) can strip the mountains for coal, extract oil and other resources, and probably convert what is left of the land to ranching by the rich" (Chomsky 59-60).
The Future of Military-Corporate Governance
Not only have corporations begun to increasingly conduct operations that were once primarily within the realm of national militaries, military operations have become designed to support the interests of corporations and their investors. Thomas Barnett, a senior strategic researcher and professor at the U.S. Naval War College, argues for the development of a more non-kinetic military force for Sys Admin operations to provide defense contractors (who will have to shift focus to infrastructure building) with an opportunity to make money in nation development operations.
Barnett also advocates the establishment of something analogous to ISO 9000 Series Analysis standards for building factories and establishing business-centric infrastructure. The idea is to have a packet already in place, a kind of nation building product portfolio, so that this process can be easily force-integrated into underdeveloped locales. These are standards for finance and commerce to speed up the process of capital exploitation by having market-ready models prepared to be forced into place quickly and efficiently, before people on the home front begin calling for withdrawal.
Income Taxes and Economic Concentration
As evidenced from the myriad examples that have been provided, corporate accountability in the era of globalization is essentially non-existent. Corporations, particularly American corporations, have virtually limitless resources and have been given free-reign to continue the concentration of economic resources and power. This is done with the assistance of government. In 2005, the income tax on labor collected $927.2 billion, while the income tax on corporate revenue collected only $278.3 billion. Meanwhile, the wealthy actually benefit disproportionately from taxes.
When social security was designed, the goal was to have people contribute so that 90 percent of all national earnings would be subject to contributions. Right now, people pay Social Security tax (FICA) on their salary up to $87,000--which means that someone making $86,000 pays the same into social security as someone making $860,000. Because wages have grown so much for people at the top, rather than collecting Social Security tax on 90 percent of all wages, it's actually only being collected on 84 percent of all wages. (Carville 271)
The examples outlined in this paper are a small segment of the growing mountain of evidence to justify the assertion that global corporations with limited or no accountability are becoming the dominant institutions of the post-industrial age, and are concentrating economic resources and exercising their power to such a degree as to cause humanitarian crises around the world. The alternative, the de-concentration and redistribution of wealth, could quite feasibly usher in an era of health and welfare for the citizen of median income that would be unprecedented in human history. However, given the solidity of the current power arrangement it is unlikely that the concentration of wealth into the hands of a small group of aristocratic corporate elite will stop in the foreseeable future.
Selected References
Barnett, Thomas P.M. 2004. The Pentagon's New Map: War and Peace in the Twenty-First Century. New York, New York. Berkley Publishing Group.
Brass, Martin. 2006. Editorial reply. Soldier of Fortune 31(4).
Brzezinski, Zbigniew. 2004. The Choice: Global Domination or Global Leadership. New York, New York: Basic Books.
Carville, James. 2003. Had Enough? A Handbook for Fighting Back. New York, New York: Simon & Schuster.
Chomsky, Noam. 2003. Hegemony or Survival: America's Quest for Global Dominance. New York, New York: Metropolitan/Owl Books.
Friedman, Thomas L. 2005. MIT OpenCourseWare, MIT WorldTM.
Isaak, Robert A. 2004. The Globalization Gap How the Rich Get Richer and the Poor Get Left Further Behind. Financial Times Prentice Hall.
Ohmae, K. 1995. Globalization in Theory. BBC Worldwide, Films for the Humanities and Sciences.
Zinn, Howard. 2003. A People's History of the United States. New York, New York: Harper Collins.