Sharon Beder, 14 June 2006
Recently the Sydney Morning Herald
reported on studies that show how "the aristocrats and capitalists of
the industrial age have been supplanted by the working rich,
particularly the superstar chief executive officer".
What is perhaps of more concern than
their super salaries is the way these same superstar executives are
increasingly supplanting the role of government policy-makers and
exerting political power by mobilising and organising business
coalitions.
CEOs and corporate executives, doubling as
directors of multiple companies, are providing the leadership for a new
corporate class that is changing not just the rules of trade and
investment, but also who can own public services and what social and
environmental protections are appropriate.
The business coalitions they form and join enable common goals and
strategies to be worked out; public relations campaigns to be
co-ordinated; and conducive government policies to be decided. But most
of all they seek to present a combined and powerful voice for business
in order to pressure governments to adopt those policies. Companies
that are theoretically competitors in the market, co-operate with each
other to protect business interests against democratic regulations and
restrictions.
The US Council for International Business (USCIB) noted that,
"Leading American companies increasingly recognise that, to succeed
abroad, they must join together with like-minded firms to influence
laws, rules and policies that may undermine US competitiveness,
wherever they may be". In this way "USCIB members can lower the costs
of doing business abroad and enhance their long-term profitability".
Not all business coalitions are nationally based. Several are
international and promote the interests of transnational corporations
on a global stage. This has been particularly evident in the push for
free trade and globalisation where the many corporate coalitions are
closely networked with overlapping memberships and shared leadership.
The corporate executives who co-ordinate these coalitions and
networks are powerful within the corporate community because of their
top-level management positions within large corporations, their board
membership of other large corporations, and their leadership positions
in various business associations. Because of these multiple positions
they are able to network with others in similar positions and mobilise
resources.
One of the earliest models for this grab for corporate power over
policy-making occurred in the area of free trade in services. The whole
idea of “trade in services” began with the CEO of American Express,
James D. Robinson III, in the 1980s. He and AmEx Vice President Harry
Freeman enlisted the CEOs of Citicorp and the American International
Group (AIG) in his campaign to get financial services included in the
General Agreement on Tariffs and Trade (GATT) negotiations.
These executives broadened their coalition by creating the idea of a
services sector which included fields as diverse as entertainment,
engineering, transportation and finance. They coined the term
"financial services", promoted the use of the term "goods and
services", and encouraged government statisticians to collect data on
the new concept of the services sector and its importance to national
economies.
Robinson later became chairman of the Advisory Committee on Trade
Policy and Negotiations, which oversaw the US GATT negotiations. He and
Freeman formed the Coalition of Service Industries (CSI) and the
Multilateral Trade Negotiations (MTN) Coalition, both of which were
headed by Freeman.
These coalitions played a major role in writing the General
Agreement on Trade in Services (GATS) and getting it included in the
World Trade Organisation (WTO). GATS aims to open up the provision of
all services, including water, electricity, education, waste disposal
and health care to foreign companies. Governments decide which service
sectors they will open up, often without any public consultation or
parliamentary vote, and the decision cannot be reversed, even if the
majority of voters in a nation want to do so.
The success of the CSI subsequently spawned like organisations
around the world including the Australian Services Roundtable and the
European Services Forum. Freeman and the CSI went on to form other
coalitions also, including the Financial Leaders Group and the Global
Services Network.
Today these powerful corporate coalitions continue to push for
nations to open up more of their service sectors to foreign companies.
Similar and overlapping corporate coalitions and networks, coordinated
by key corporate executives, are pushing for business-friendly trade
agreements on foreign investment and intellectual property.
Professor Sharon Beder is in the School of Social Sciences, Media
and Communication at the University of Wollongong. She is is author of
several books including Global Spin (Scribe) and recently published Suiting Themselves: How Corporations Drive the Global Agenda (Earthscan, London). |