By Richard J. Barnet and John Cavanagh
A few hundred TNCs [transnational corporations] dominate the four intersecting webs of global commercial activity on which the fate of the world economy rests. Such TNCs exert a more profound influence on the lives of the people of the world than national governments who are increasingly finding it difficult to comprehend, still less control, these corporate giants.
The emerging global order is spearheaded by a few hundred corporate giants, many of them larger than most sovereign nations. Ford's economy is bigger than that of Saudi Arabia or Norway. Philip Morris' annual sales exceed New Zealand's gross domestic product.
The multinational corporation of 20 years ago carried on separate operations in many different countries and tailored its operations to local conditions. In the 1990s large business enterprises, even some smaller ones, have the technological means and strategic vision to burst old limits — of time, space, national boundaries, language, custom and ideology.
By acquiring earth-spanning technologies, by developing products that can be produced anywhere and sold everywhere, by spreading credit around the world, and by connecting global channels of communication that can penetrate any village or neighbourhood, these institutions we normally think of as economic rather than political, private rather than public, are becoming the world empires of the 21st century.
The architects and managers of these space-age business enterprises understand that the balance of power in world politics has shifted in recent years from territorially bound governments to companies that can roam the world. As the hopes and pretensions of government shrink almost everywhere, these imperial corporations are occupying public space and exerting a more profound influence over the lives of ever larger numbers of people.
Global corporations are the first secular institutions run by men (and a handful of women) who think and plan on a global scale. Things that managers of multinational companies dreamed of 20 years ago are becoming reality — Coca-Cola's ads that reach billions in the same instant, Citibank's credit cards for Asian yuppies, Nike's network for producing millions of sport shoes in factories others paid for. A relatively few companies with worldwide connections dominate the four intersecting webs of global commercial activity on which the new world economy largely rests: the Global Cultural Bazaar; the Global Shopping Mall; the Global Workplace; and the Global Financial Network.
These worldwide webs of economic activity have already achieved a degree of global integration never before achieved by any world empire or nation-state. The driving force behind each of them can be traced in large measure to the same few hundred corporate giants with headquarters in the United States, Japan, Germany, France, Switzerland, the Netherlands and the United Kingdom. The combined assets of the top 300 firms now make up roughly a quarter of the productive assets in the world.
The Global Cultural Bazaar is the newest of the global webs, and the most nearly universal in its reach. Films, television, radio, music, magazines, T-shirts, games, toys and theme parks are the media for disseminating global images and spreading global dreams. Rock stars and Hollywood blockbusters are truly global products.
All across the planet people are using the same electronic devices to watch or listen to the same commercially produced songs and stories. Thanks to satellite, cable and tape recorders, even autocratic governments are losing the tight control they once had over the flow of information and their hold on the fantasy lives of their subjects.
Even in culturally conservative societies in what we still call the Third World, the dinner hour is falling victim to the television. In bars, teahouses, and cafes and in living quarters around the world the same absence of conversation and human interaction is noticeable as family members, singly or together, sit riveted in front of a cathode tube. As in the United States, Europe and Japan, centuries-old ways of life are disappearing under the spell of advanced communication technologies.
The cultural products most widely distributed around the world bear the stamp "Made in the USA" and almost any Hollywood film or video is bound to offend traditional values somewhere. Scenes depicting independent women, amorous couples and kids talking back to parents upset all sorts of people across the globe as assaults on family, religion and order.
Because the steady streams of global commercial products in many places, including parts of the United States, are feared as barbarian intrusions, they are provoking local and nationalist backlashes, often carried out in the name of God.
The Global Shopping Mall is a planetary supermarket with a dazzling spread of things to eat, drink, wear and enjoy. Dreams of affluent living are communicated to the farthest reaches of the globe, but only a minority of the people in the world can afford to shop at the Mall. Of the 5.4 billion people on earth, almost 3.6 billion have neither cash nor credit to buy much of anything. A majority of people on the planet are at most window-shoppers.
The Global Workplace is a network of factories, workshops, law offices, hospitals, restaurants and all sorts of other places where goods are produced, information is processed and services of every description are rendered. Everything from cigarettes to cars contains materials from dozens of countries pieced together in a globally integrated assembly line driven by the logic of the bottom line. Data processors, law offices, advertising agencies and insurance companies have become global assembly lines of a different sort.
A worldwide labour market for creative merchandising ideas, computer knowledge, patient fingers, managerial know-how, and every other marketable skill co-exists with a global labour pool in which more and more of us, from the chief executive officer to the wastebasket emptier, are swimming. Hundreds of millions more of the world's uprooted and dispossessed are desperate to jump in.
The Global Financial Network is a constantly changing maze of currency transactions, global securities, MasterCards, euroyen, swaps, ruffs and an ever more innovative array of speculative devices for repackaging and reselling money.
This network is much closer to a chain of gambling casinos than to the dull gray banks of yesteryear. Twenty-four hours a day, trillions of dollars flow through the world's major foreign-exchange markets as bits of data travelling at split-second speed. No more than 10% of this staggering sum has anything to do with trade in goods and services. International traffic in money has become an end in itself, a highly profitable game.
John Maynard Keynes, who had intimations of how technology might one day be harnessed in the service of non-recreational gambling, predicted the rise of this "casino economy", as he called it. Yet as banking activities have become more global and more speculative, the credit needs of billions of people and millions of small businesses are not met.
Viewed together, these four webs offer a picture very different from that of a global village. The Global Cultural Bazaar is reaching the majority of households with its global dreams. Much smaller numbers are playing any role at all in the three networks that produce, market and finance the world's goods and services. In the new world economy, there is a huge gulf between the beneficiaries and the excluded and, as world population grows, it is widening.
The most disturbing aspect of this global system is that the formidable power and mobility of global corporations are undermining the effectiveness of national governments to carry out essential policies on behalf of their people. Leaders of nation-states are losing much of the control over their own territory they once had. More and more, they must conform to the demands of the outside world because the outsiders are already inside the gates.
Business enterprises that routinely operate across borders are linking far-flung pieces of territory into a new world economy that bypasses all sorts of established political arrangements and conventions. Tax laws intended for another age, traditional ways to control capital flows and interest rates, full-employment policies and old approaches to resource development and environmental protection are becoming obsolete, unenforceable or irrelevant.
National leaders no longer have the ability to comprehend, much less control, these giants because they are mobile, and like the mythic Greek figure Proteus they are constantly changing appearances to suit different circumstances. The shifting relationships between the managers of global corporations and political authorities are creating a new political reality almost everywhere. [Third World Network Features via Pegasus. Excerpted from a chapter in a book by the authors entitled Global Dreams: Imperial Corporations and the New World Order, to be published by Simon and Schuster in February.