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BIG IS SUBSIDISED
How our taxes contr ibute to social
and environmental breakdown
October 1998
Second printing July 2002
Pr incipal Author
Steven Gorelick
P
Contents
Introduction by Helena Norberg-Hodge – Page 2.
1. It’s Evolution, Isn’t It? – Page 5.
2. The Big Get Bigger – Page 8.
3. Growth Made Easy: Infrastructure and Scale – Page 12.
4. Subsidising Long-Distance Transport – Page 15.
5. Communicating Globalism – Page 19.
6. Finding the Energy – Page 23.
7. Learning to Serve the Global Market – Page 27.
8. Research: Who Pays, Who Profits? – Page 32.
9. Expanding Infrastructures: The Race to Nowhere – Page 36.
10. The Rules of the Game, Free Trade – Page 40.
11. Lots of Regulations, Little Effect – Page 45.
12. So why Do They Keep Doing It? – Page 50.
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 1
Small is B e a u ti f u l , B i g is S u bsi d is e d
INTRODUCTION
by Helena Norberg-Hodge
W
ith the demise of communism, it result is that all of our choices – from education, energy use,
is generally assumed that the world transport and communications – are being shaped and distorted
has only one option: an unregulat- to suit an ever more centralised, ever more globalised economy.
ed global market dominated by Combined, these costly subsidies and investments make for an
giant corporations. extremely inefficient system. Any appearance of efficiency is
maintained only because our taxes cover many of the costs at
Many people believe that deregulation frees large, transnational the expense of small, local producers who, left to their own
corporations to provide consumers with an unprecedented resources, are thereby made to seem comparatively inefficient.
variety of produce from every corner of the globe. Thanks to Large TNCs also benefit from their ability to pressurise
the global economy, we are able to fill our shopping baskets governments into passing regulations favouring large producers
with apples from Kenya, cheap butter from New Zealand and often in the deliberate attempt to destroy smaller competitors.
a whole range of exotic foods. If this produce is cheaper than An additional factor which paradoxically ends up favouring
locally-produced alternatives, then that is because suppliers are large over small is the fact that large scale, intensive production
operating on a larger, more efficient scale. Sophisticated PR is often inherently more polluting.
and advertising campaigns persuade us that the bigger the com- Consider the case of factory farming. Where large numbers
pany, the safer the food. of animals are made to live in close confinement, conditions are
In addition to these consumer benefits at home, many peo- ripe for the outbreak of virulent disease. In this situation, more
ple seem to think that the spread of Western-style economic controls and regulations are required than is the case for small-
development will be accompanied by Western-style democracy er producers. The latter, however, are forced to comply with
abroad. Globalisation has brought about cheap air travel and these same stringent – and, for them, unnecessary – safeguards,
closer communication between diverse cultures, and it is hoped
that this will herald the emergence of a peaceful ‘global village’ ‘As we have tried to show in this booklet,
and eliminate warring strife between nations. however, the truth of the matter is that
Similarly, because environmental crises – from climate
change to species depletion – clearly transcend national bound- ‘efficiencies of scale’ are a myth: big is not
aries, globalisation is also seen as a necessary step towards inter- necessarily ‘cheaper’ or more ‘efficient’.’
national collaboration to solve global problems.
Beyond these supposed beneficial effects, the global econo- at a cost that few can afford to bear.
my is declared inevitable – it will continue to grow whether we Government support for transport and high-tech commu-
like it or not. It’s the consequence of an insatiable consumer nications make it possible for multinational corporations to
culture. It’s what giant corporations want, or, more to the point, destroy smaller local competitors. A local shop in a village in
it’s what no one has the power to stop. In the final analysis, glo- England that buys most of its goods locally, does not need sat-
balisation is often portrayed as a kind of economic ‘manifest ellites, mainframe computers, large-scale transport infrastruc-
destiny’ dictated by ‘economic laws’ beyond the reach of human tures, container ships, heavily subsidied airplane fuel, and so on.
intervention. These laws are said to naturally favour large pro- In contrast, a large hypermarket could not exist without them.
ducers over small, centralised global production over dispersed From the point of view of the consumer, it can look as
local production. Big, it turns out, is cheap; big is efficient, big though goods from the other side of the world are cheaper,
is better! As we have tried to show in this booklet, however, the when all of these subsidies are invisible. But we need to start
truth of the matter is that ‘efficiencies of scale’ are a myth: big is looking, not only at the money in our pockets, but how our
not necessarily ‘cheaper’ or more ‘efficient’. taxes are used against us. More and more people are left little
If we allow ourselves to look beyond the assumptions and choice but to eat processed, long shelf-life food from far away,
narrow confines of this conventional wisdom, it becomes clear because it is cheaper. The tilted playing field means that they
that giant corporations are the product of government support cannot afford fresh local food.
through a range of both direct and indirect subsidies. At the heart of the modern industrial economy is the prin-
ciple of ‘comparative advantage’ according to which it is always
in a nation’s interest to specialise production for export rather
Tilting the Playing Field than promote diversified production for local and national
For generations now our tax money has been used to create an needs. As a consequence, economic policies encouraging trade
economic framework that favours the big over the small. The have supported trading institutions which have merged to
2 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
I n t r o d u c ti o n
become the giant transnational corporations that we know As people pour into the city in search of jobs, only a tiny
today. By now, each of the major commodities on the world fraction are successful – usually in a sweat shop, mass-producing
market – e.g.: coffee, cocoa, cotton – is controlled by a handful consumer goods for an unstable Western market. The Times of
of corporations. India (26.8.98) describes the process well:
This support for international trade has given global players “Women and children are emerging as the new ‘human
an unfair advantage over local producers and businesses. The cash crop’ in South Asia as rapid globalisation drives more and
result is a tilted playing field favouring monopolies which are more villagers to distant cities to make good. But most of them
growing larger and more powerful every day. In recent years, end up providing cheap labour or get caught in the sex trade.“
their power has been boosted dramatically by a series of ‘free- In addition to the human suffering, the shift of production
trade treaties’, such as NAFTA, Maastricht, GATT, and the from North to South has heralded a massive increase in local
Multilateral Agreement on Investment (or MAI). Known as the air pollution, toxic waste and other environmental hazards, in
“Multinationals’ Charter”, the MAI will elevate the rights of cities like New Delhi, Bangkok and Mexico City.
companies above those of nations and their citizens. This will Whatever the superficial attractions of a global economy
give companies the power to sue governments if domestic leg- dominated by giant corporations, the price is high: a deterio-
islation interferes with trade. These agreements are not about rating environment, increasing poverty, greater insecurity and
trade between countries but about the rights of transnational greater inequality. World-wide, globalisation also leads to a loss
corporations to move unimpeded into every domestic market. of both economic and political control. This disempowerment
Negotiated in secret, wrapped in highly complex and tech- inevitably leads to frustration and anger and an increase in eth-
nical language, these treaties are rarely read, much less under- nic conflict.
stood, by elected officials. In signing on to them, governments
are, often unwittingly, undermining their own power. In effect,
they are supporting highly mobile global corporations to the Why the Lack Of Political Initiative?
detriment of smaller national and local businesses and in so Why, in the face of political disempowerment, social and envi-
doing impoverish themselves. ronmental breakdown and growing opposition, do most poli-
Whilst smaller companies operating within the national cy-makers cling to the economic fatalism that surrounds glo-
arena continue to pay taxes, transnationals can shift their assets balisation?
at a moment’s notice to evade taxation. Government power is One answer is that they assume that technological change
thus diminishing as more and more revenue is lost in this way. is as beneficial as it is inevitable. They recognise that the crea-
Nation states are therefore getting poorer, forcing governments tion of the global casino economy has been made possible by
to reduce expenditures on health, welfare, education and other the development of high-speed communications. These devel-
public services. opments have helped to make that casino extremely difficult to
As economic policies force giant corporations to comb the control, monitor and regulate. Because technological change is
globe in search of cheaper labour and resources, social and assumed to be ‘evolutionary’, the political consensus is that we
environmental standards have been progressively lowered in an have no choice but to embrace it and its economic conse-
attempt to compete for capital investment. quences.
The result is that we are locked in a race to the bottom in This view of the world has many causes, but prime among
which everyone loses: jobs, social cohesion, the environment, them, as mentioned, is an education system which has itself
even the most basic standards of democracy and freedom, are been moulded to suit these same technological/economic
under threat. The irony is that, by paying our taxes, we are sup- developments and which provides us with an ever more frag-
porting the very forces that are responsible for eroding our mented, reductionist worldview.
communities, job security and environmental safeguards. As a result, it becomes difficult to step back and see the
People everywhere find that their jobs are much less secure, connections linking the whole. While it is true that technology
that they are being forced to make more rapid changes in does affect economic choices, it is economic policy that shapes
search of employment – in terms of both physical location and technology – through investments, for example in Research
skills retraining. Those in employment are increasingly stressed, and Development. These cyclical relationships are the product
with ever less time for themselves, their children, or enjoyment of human policy choices, and are not inevitable in some deter-
of life. Even in the wealthiest of Northern countries – Sweden, ministic way. Once these connections become obvious it
Norway and Canada – where homelessness and outright pov- becomes equally clear that nation states could regain control of
erty were previously all but unknown, there are signs of the economic juggernaut.
extreme social deprivation.
As part of the globalisation process, production is being
shifted to low-cost areas in the Third World and Eastern Seeds of Hope
Europe. The related surge of uncontrolled investment into One of the more hopeful signs today is the willingness of a
these areas has caused financial chaos and resulted in economic small but growing number of senior economic and political
meltdown, as happened in Mexico, the Far East, Latin America decision-makers to look at the big picture and to rethink some
and Russia. basic assumptions surrounding globalisation. Prompted by the
The resulting increase in poverty in the South is dramatic: growing instability and dramatic collapse of markets, financiers
millions of people are being pulled off the land into cities in such as the late Sir James Goldsmith, George Soros and even
the hope of a better life. TV, advertising, tourism – all portray Chair of the US Federal Reserve Bank, Alan Greenspan, have
urban Western life and consumer culture as superior. The warned of the dangers of unregulated and over-heated markets.
young are highly susceptible to these media images and are George Soros recently said before the US Congress that
persuaded to reject their own culture, in particular any type of “the global capitalist system is coming apart at the seams”.
work on the land – fishing and farming are now considered Similarly, politicians such as Paul Hellyer, Canada’s former
primitive and dirty. deputy Prime Minister, have powerfully argued that the global
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 3
Small is B e a u ti f u l , B i g is S u bsi d is e d
economy is not about free trade at all: concentrations of power in the hands of TNCs and supranation-
“Globalisation is not about trade. It is about power and con- al institutions. Thus many European Greens are happy to dis-
trol. It is the reshaping of the world into one without borders mantle the nation state in favour of Brussels in the mistaken
ruled by a dictatorship of the world’s most powerful central belief that power can simultaneously be decentralised to the
banks, commercial banks and multinational companies.” regions.
Equally, if not more encouraging, are recent signs of popular Nevertheless, increasing numbers of grassroots groups are
resistance. At the grassroots, there is growing interest in the local beginning to recognise that it would be virtually impossible to
economy as a counter-weight to globalisation. All over the return power to the local level without the aid of national gov-
world communities are taking steps to reclaim control over their ernments. They are raising awareness about the impact of ‘free-
lives. trade’ treaties and have succeeded in alerting the public to the
One of the key issues relates to food. Today, the average meal implications of a single European Currency, ‘fast track’ policies
we eat has travelled literally thousands of miles. By encouraging in the US and the MAI. As a consequence, all of these have been
local production for local consumption, communities are weak- vigourously opposed.
ening the stranglehold of the global economy. Local food means At the same time voters are becoming aware of the destruc-
not only better health and less wasteful packaging and transpor- tive impact of the global economy on their everyday lives and
tation; it means money staying in the community, an increase in of the failure of mainstream political groupings to respond to
biological diversity and the revitalisation of rural life. The grow- their problems. As a result a new political agenda is beginning to
ing trend towards Community Supported Agriculture around emerge.
the world provides a direct link between farmers and consum- This new agenda identifies the need for electing govern-
ers. More than 40,000 families in the UK now get a regular ment representatives who are willing to stand up to the power
‘vegetable box’ from a local farm. In the US, there are now of the finance markets and TNCs. It also recognises that political
2,400 registered farmers’ markets, with a combined turnover of leaders must return to the negotiating table to convince their
billions of dollars. counterparts in other nations of the need to formulate new
In a number of places, community banks and loan funds treaties that will enable them to cease subsidising corporate
have been set up, thereby increasing the capital available to local monopolies. A grouping of sovereign nation states can have the
residents and businesses and allowing people to invest in their power to create a global economic playing field that not only
neighbours and their community, rather than in distant corpo- prohibits monopolies, but protects both environmental and
rations. human rights internationally. The details of such a treaty would
At the same time, the creation of local currencies enables of course need to be formulated with the involvement of civic
communities to reduce their reliance on the national (and inter- society.
national) economy. In the small American town of Ithaca in As more “miracle” economies collapse, unemployment con-
New York, a local currency is accepted by more than 250 busi- tinues to mount and the impact on the biosphere becomes more
nesses. obvious, awareness is sure to grow. Before long, we can expect
Local Exchange Trading Systems (LETS), which have sprung to see a group of nations taking the first steps to create an alli-
up in more than a dozen countries, allow goods and services to ance based on protecting their respective economies, rather than
be marketed without the need for money.There are already over creating trade blocks to try to remain internationally competi-
400 LETS schemes in the UK alone. tive, as is currently the situation.
“Buy local” campaigns enable smaller businesses to survive Perhaps the changes that are required will be boosted by an
even when pitted against heavily subsidised corporate competi- understanding of what is happening on the other side of the
tors. These campaigns not only help keep money from “leaking” world.
out of the local economy, but also help educate people about the Fifty percent of the world’s population has not yet been
hidden costs – to the environment and to the community – in swallowed up by the industrial economy. This half of the human
purchasing cheaper but distantly produced products. race – most of whom live in the villages of the South – is often
Local and regional land use regulations are also being ignored by Northern policy-makers who tell us that slowing
amended to protect wild areas, open space and farmland from down or reversing the process of globalisation is ‘unrealistic’,
development. In the United States, land trusts have been created, ‘unthinkable’. According to them the global economy is a ‘done
protecting more than 2.7 million acres of land. In some cases, deal’.
local governments have used public money to buy development However, when we bear in mind that an equally large pro-
rights to farmland, thereby simultaneously protecting the land portion of humanity is free to choose a different infrastructure,
from suburban sprawl while reducing the financial pressure on a different economic model, then the decentralist solutions
farmers. proposed here seem more realistic. It is vital that when we con-
In addition, community-run schools encourage children and template options for the future, we do so from a less parochial,
their parents to feel more connected to the community of more global perspective. We can reject the centralisation of both
which they are a part, helping to strengthen small towns and state-run economies and corporate capitalism.
villages, while providing much-needed local employment. Decentralisation is about returning to a balance between the
local economy and dependence on international trade; a balance
between the rural and the urban, and a balance between the
Policy Steps power of communities and distant, anonymous institutions.
These local initiatives are not enough, however. It is vitally Shifting the way our tax moneys are spent in order to return
important that change occurs at the national and international economic, and therefore political power to communities and
level as well. Otherwise attempts to return to ‘the local’ in an age their elected governments will revive genuine democracy. This
of giant corporate monopolies could leave communities highly economic decentralisation may also be the only way to create
vulnerable and ultimately more disempowered. Unfortunately, structures capable of protecting cultural diversity and the rich-
many grassroots groups today are oblivious to the enormous ness of biological systems.
4 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
1
P
I T ’ S E VO L U T I O N , I S N ’ T I T ?
“‘Excuse me ... but what planet are you living on? You talk about participating
in globalization as if it were a choice you had. Globalization isn’t a choice. It’s
a reality.... I didn’t start it, I can’t stop it, and neither can you.’”
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 5
Small is B e a u ti f u l , B i g is S u bsi d is e d
6 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
I t ’ s E v o l u ti o n I s n ’ t I t ?
• the well-being of both individuals and societies is best measured ing detail how government has in general been captured by Big
in terms of their levels of consumption, and therefore healthy Business.11 The role of industry in manipulating public attitudes
societies require constant economic growth; through advertising and public relations is also well document-
ed.12 A number of activist organisations in both the US and
• advances in technology are either beneficial or at worst ‘neutral’, Europe have focused on ways in which ‘corporate welfare’ subsi-
and in any event the advance of technology is beyond social con- dies benefit various big businesses and industries.13 And the
trol; prominent features of the dominant economic and technological
ideology have been accurately described and critiqued.14
• whatever their costs, the technological and economic changes Less frequently discussed, however, is the way many seemingly
associated with ‘progress’ are an improvement on the past, which neutral government policies intrinsically favour large-scale enter-
was a time of unrelieved drudgery and deprivation. prises over those that are smaller in scale. This is particularly the
case with so-called ‘investments in infrastructure’. Even among
The notion that globalisation and corporate growth are inev- many critics of the status quo, such expenditures are considered
itable, natural processes is becoming part of this worldview as well. beneficial to society as a whole, so long as they are planned well
Like the belief system of any culture, the industrial worldview is and implemented fairly. These sorts of investment, however, have
tightly self-contained.The intrinsic value of technological advance played a key role in promoting the growth of economic scale in
and economic growth are its basic underpinnings, and simply general, and the rise of large corporations in particular. Similarly,
cannot be questioned: if problems arise because of technology, still many government regulations, whose avowed purpose is to pro-
tect the public and the environment from corporate abuse, instead
‘If problems arise because of systemically serve to support large-scale businesses at the expense
technology, still more advanced technologies of smaller ones.
must be relied upon to provide the solution; This emphasis on the role of government does not mean that
the trend towards a corporate-run global economy can be reversed
if economic growth gives rise to social and by tinkering with government rules or tightening some regula-
environmental breakdown, the cure is predicated tions. Far more fundamental change is required, and this will
require widespread grassroots efforts – not only to dismantle the
upon still more economic development.’ power of vested interests – but also to do the hands-on work of
building communities and economies that are smaller in scale and
more advanced technologies must be relied upon to provide the more localised, sustainable and equitable.
solution; if economic growth gives rise to social and environmen- But while it is unimaginable that fundamental change at the
tal breakdown, the cure is predicated upon still more economic top will ever occur without significant, widespread pressure from
development. In this way the stakes grow ever larger, in a global below, the fact remains that the policy choices made by virtually
game of gambler’s ruin. every government currently serve to further the corporate agenda,
Needless to say, these framing conditions are hardly independ- and it is vitally important that those policies be changed. Doing so
ent. Government decisions, for example, help determine whether would represent an important step towards stopping the corporate
the elite grows in economic power, or diminishes. The business juggernaut.
elite, in turn, has profound influence over government decisions What’s more, understanding the systemic roots of today’s crises
– for example through campaign donations that offer access to can be helpful even to the most local of grassroots efforts. The
elected officials, and via the ‘revolving door’ that links corporate drive towards a global economy has given rise to so many symp-
boardrooms and the government bureaucracies that supposedly toms of breakdown and inequity that focusing on one symptom
oversee them. or another can easily blind one to the common thread that binds
The business elite also has the ability to manipulate the main- them all. Recognising that thread can help activists forge other-
stream worldview. The billions of dollars spent on advertising, for wise unlikely alliances, making efforts to combat the corporate-in-
instance, consistently portray consumption as the answer to all life’s dustrial system stronger and more effective. From the clearcutting
problems. Through corporate control of the media, information of old-growth forests to the hazards of genetically engineered
contrary to a business-friendly ideology is consistently filtered out. foods, from sweatshop labour in the South to corporate downsiz-
Corporate-funded think-tanks, meanwhile, work to hone eco- ing in the North, from the erosion of democracy to the loss of
nomic theory favourable to corporate interests into established indigenous ways of life – all of these (and many more) seemingly
gospel. separate problems emanate from the same economic and techno-
Much of this territory is not new. Many writers have described logical system – one that is becoming ever more divorced from
how the ‘free trade’ agreements signed by governments have been real human and ecological needs.
designed by and for corporations; others have revealed in depress-
1 Walter Adams, “The Antitrust Alternative”, in Corporate Power in America, Ralph Economy, Jerry Mander and Edward Goldsmith, eds. (San Francisco: Sierra Club,
Nader and Mark J. Green, eds. (New York: Grossman Publishers, 1973), pp. 138-9. 1996), p. 309-322.
2 Thomas L. Friedman, “Excuse Me, Mohamad”, The New York Times, Sept 29, 1997, 11 See for example Who Will Tell the People?, by William Greider, and Who Rules America
sect. A, p. 25. Now?, by G. William Domhoff.
3 Times Argus (Montpelier,Vermont), Sept. 19, 1996, p. 8. 12 See for example Stuart Ewen’s Captains of Consciousness, and John Stauber’s Toxic Sludge is
4 “Too Big or Not Too Big”, Time, Oct. 2, 1995, p. 32. Good for You.
5 Thomas L. Friedman, “Roll Over Hawks and Doves”, The New York Times, Feb. 2, 1997. 13 In the US, Public Citizen is one of the leading NGOs looking at ‘corporate welfare’
6 International Fund Strategies, no. 1, June 1996, p. 4. issues.
7 Bill Gates, The Road Ahead (New York: Penguin Books, 1995), p. 11. 14 For the Common Good, by Herman Daly and John Cobb, effectively demolishes many of
8 Walter Truett Anderson, “There’s No Going Back to Nature”, Mother Jones, Sept-Oct the premises of conventional economic thinking; The Growth Illusion, by Richard
1996, pp. 78-9. Douthwaite, does the same for the whole notion of economic growth.
9 David Edwards, Free To Be Human (Totnes, UK: Green Books, 1995), p. 9. Langdon Winner’s The Whale and the Reactor and Jerry Mander’s In the Absence of
10 Jerry Mander, “The Rules of Corporate Behavior”, in The Case Against the Global the Sacred are excellent critiques of modern attitudes to technology.
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 7
2
THE BIG GET BIGGER
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“There seems only one cause behind all forms of social misery: bigness....
Wherever something is wrong, something is too big.”
Leopold Kohr, The Breakdown of Nations1
C onstant and rapid growth would be considered ‘national’ in the sense that their shareholders were mainly resi-
unhealthy – and in the long run impossible – in almost dents of the country in which they were registered. By 1990 the
any realm other than the economic. In that self-con- biggest firms were all international, their shares being held by
tained world, growth is considered the very measure of success. investors throughout the world and traded on several stock- mar-
Nowhere is this revealed more starkly than in the annual reports kets.
of corporations, which usually announce the prospects for future
growth even more loudly than they trumpet past success. Here,
for example, is the CEO of Campbell’s Soup Company breath- Merger Mania
lessly describing his company’s growth potential: As corporations grow in size, they often approach limits deter-
“As I look to the future, I shiver with business excitement. mined by the size of their market. One way to sustain further
That’s because Campbell Soup Company is engaged in a ‘Global growth is by taking over or merging with competitors. In the
Consumer Crusade’.... The aim is to convert millions of new United States, the first big wave of mergers and acquisitions
customers to Campbell brands occurred in the early 1900s, when
every year. We are moving across ‘Based on the conviction that bigger must approximately one-third of the
the oceans and into new nation-
states and blocs.The joy of it is that
be better when competing in global markets, entire nation’s manufacturing ass-
ests were consolidated into just
there is no speed limit on our corporations that are already huge by any 318 huge corporations.5 Mergers
progress. We can’t be fined for standard are seeking to grow still larger.’ and takeovers have remained a fact
speeding. Rather, the cheering of corporate life ever since.
will grow louder and stronger the Between 1956 and 1968, for
faster we go ... especially from our share-owners. ... The potential example, American oil companies took over more than 200 of
rewards of this Global Consumer Crusade are virtually limit- their smaller competitors.6 The deregulation fervour of the 1980s
less.”2 precipitated another frenzy of takeovers and acquisitions: in the
The Coca-Cola Company has the world’s most familiar food and beverage industry alone, the decade saw over 450 merg-
brand name; its products sell in 195 countries, generating annual ers in Europe, and another 400 in the US.7
revenues above $16 billion. But financial markets insist on con- Economic globalisation has now sparked yet another explo-
stant expansion, leaving the company no alternative but to grow sion of mergers and aquisitions. Based on the conviction that
still larger: bigger must be better when competing in global markets, corpo-
“All of us in the Coca-Cola family wake up each morning rations that are already huge by any standard are seeking to grow
knowing that every single one of the world’s 5.6 billion people still larger.
will get thirsty that day. ... If we make it impossible for these 5.6 In 1997, mergers involving American companies alone
billion people to escape Coca-Cola, ...,then we assure our future totalled a record $1 trillion.8 Among the mega-mergers that year
success for many years to come. Doing anything else is not an were Bell Atlantic and Nynex (at the time, the second largest
option.” 3 merger in US history), between Chase Manhattan and Chemical
If growth is what has been demanded of them, corporations Bank (creating America’s largest bank),9 and between the Swiss
have delivered, in part by expanding markets beyond the borders Bank Corporation and Union Bank of Switzerland (creating an
of the nation in which they were founded. While the scale of the even larger bank, and the second largest in the world).10 If MCI
world economy has grown significantly in the last half century, Communications had accepted British Telecom’s merger offer, it
international trade has increased even more rapidly. Between would have been the largest such deal in British history; instead,
1950 and 1992, the value of the goods and services the world MCI accepted nearly twice as much from Worldcom, making it
produced increased by a factor of five; but the value of interna- for a short while the biggest merger in American history.11,12
tional trade grew twice as fast, going up by a factor of more than By mid-1998, still larger mega-mergers – including four of
eleven.4 Reflecting this steady internationalisation of the econo- the five largest mergers in American corporate history – shattered
my, companies themselves have changed. In 1950, almost all even 1997’s record pace.13 Banking giant Citicorp announced a
companies, even those involved in international trade, were merger with the Travelers Financial Corporation, creating a
8 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
The Big Get Bigger
financial powerhouse with $700 billion in assets. Several car man- In this light it is ironic that the United States government has
ufacturers also combined: US-based Chrysler was taken over by expended so much self-righteous fury over the lingering surviv-
Germany’s Daimler-Benz, and British-based Rolls-Royce al of Cuba’s ‘planned economy’, when there are more than 50
merged with Volkswagen. Telecommunications giants SBC and other planned economies larger, in economic terms, than Cuba.
Ameritech merged, a deal worth over $62 billion; aircraft manu- Of course, all these others are transnational corporations.19
facturer Boeing combined with former competitor McDon-
nell-Douglas; NationsBank and Bank America merged, a $60
billion deal that created America’s first truly nationwide bank; Farewell to Small Businesses
We can also look at the other end of the scale, and see how small
‘When asked how the deal involving his businesses are faring. This is not so easy as it would seem: as the
company’s merger with another came about, the scale of the economy has grown, even the definition of ‘small
business’ has grown along with it. In the United States, for exam-
CEO of First Union Corporation replied, “I just ple, the self-proclaimed mission of the U.S. Small Business
kept stacking billion-dollar bills on the table.’ Administration (SBA) is to “aid, counsel, assist and protect the
interests of small business concerns.”20 When the agency was
founded in 1953, a small business was defined as a manufacturing
British Petroleum took over Amoco, forging a company worth plant that employed fewer than 100 persons, a wholesale estab-
more than $100 billion, the largest industrial combination lishment with annual sales of less than $200,000, or other business
ever.14 with sales or receipts of less than $50,000 per year. At the time,
The sums involved in such consolidations are so huge they fewer than 10% of US businesses were larger than this stand-
are difficult to comprehend. When asked how the deal involving ard.21
his company’s merger with another came about, the CEO of Today, however, what the SBA considers a ‘small business’ has
First Union Corporation replied, “I just kept stacking bil- grown considerably: for manufacturing, the maximum number of
lion-dollar bills on the table.”15 employees has quintupled to 500 – and in certain industries
(including ammunition manufacturers, telephone communica-
tions and air transport services) a business can have as many as
When Corporations Rule the Economy 1,500 employees and still be defined as ‘small’. For most retail and
Today there are some 40,000 transnational corporations, most of service businesses, the upper limit of annual sales has grown to $5
them based in the industrialised countries; among them, they million. But if the term ‘small business’ makes you think of the
generate three-quarters of all the world’s imports and exports, corner shop, you might be surprised to find that the SBA con-
and have sales of $5.5 trillion.16 Not all of these corporations are siders supermarkets with up to $20 million in annual sales ‘small’.
large (at least not by Ted Turner’s standards) but some are very Even a commercial bank with up to $100 million in assets qual-
large indeed. In his book When Corporations Rule the World, David ifies by today’s yardstick. In practice, the SBA umbrella covers any
Korten cites some sobering statistics: business that is “not dominant in its field”, which means that 99%
of all businesses – some of them quite large indeed – qualify.Yet
• the 500 largest corporations in the world now control 25%
of the entire world’s economic output; ‘Studies in the US have shown that five
years after the opening of a new Wal-Mart, stores
• the largest 300 corporations (not including financial insti- within a 20-mile radius have lost an average
tutions) own roughly 25% of the world’s productive assets;
of 19% in retail sales.’
• the 50 largest commercial banks and diversified financial
companies control nearly 60% of all global capital.
even the largest of these are minnows compared with the really
These numbers underscore Korten’s point that “The global big fish: the remaining 1% of businesses are so large that among
trend is clearly toward greater concentration of the control of them they employed over 40% of all US private sector workers
markets and productive assets in the hands of a few firms...” 17 in 1990.22
The big are getting bigger, much bigger. The growth of these very large businesses has been at least in
The control of so much wealth and power by a few transna- part at the expense of the very small. Studies in the US have
tional corporations is worrying to those who value democratic shown that five years after the opening of a new Wal-Mart, stores
principles. But while the corporate world is certainly not blind within a 20-mile radius have lost an average of 19% in retail sales.
to its unprecedented power, it is more inclined to gloat than fret For many local enterprises, survival is impossible in the wake of
over the implications for democracy. A two-page spread in the such losses. The typical result can be gauged from the experienc-
advertising trade publication Adweek, for example, showed photos es of a town in Iowa, where the opening of a Wal-Mart was fol-
of Hitler, Lenin, Napoleon ... and a Coke bottle. The caption lowed in quick succession by the closing of eight smaller busi-
proudly declared, “Only one launched a campaign that con- nesses – including a hardware store, three clothing stores, a drug
quered the world.”18 store, a shoe store, a department store, and a variety store.23
Another way to gauge the phenomenal size of the biggest Unfortunately, this trend is not limited to the United States.
transnational corporations is to compare their revenues with the In England a superstore that opened in 1989 cost the nearest
Gross National Products (GNP) of entire nations. By 1995, 48 of town centre 70% of its trade within four years; at least ten other
the 100 largest economies in the world were in fact corporations, towns in the vicinity also lost business.24 Since 1991, the coming
not countries. Within these corporate economies, there is an of superstores known as ipermarcati to Italy has resulted in the
immense gap between the richest and the poorest; there is no demise of 370,000 small, family-run businesses. In less than a
democracy, nor any goal more important than profit and growth. decade, half of the country’s corner groceries and a third of its
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 9
Small is B e a u ti f u l , B i g is S u bsi d is e d
other small stores have simply been driven out of business.25 ple, the British agricultural sector has shed some 88,000 jobs.
Small Farms vs. Agribusiness With their livelihoods gone, many rural people have little choice
The growth of large enterprises at the expense of smaller ones but to migrate to urban centres, leaving behind small towns and
has been particularly true in agriculture. In the United States, villages sapped of cultural and economic vitality. Rural econom-
small farms have been steadily disappearing for generations. ic health suffers further injury from the invasion of corporate
When they do, their land is usually swallowed up by larger farms, chains, which displace smaller, locally-owned retail shops. While
with the result that the average farm size in the US more than the latter recycle a high proportion of their revenues back into
tripled between 1935 and 1987.26 Large farms also need fewer the local economy, corporate chains and franchises merely siphon
people per acre: between 1950 and 1955 alone, America’s agri- wealth away and deliver it to corporate headquarters – where it
cultural sector shrank by more than a million workers.27 This fuels further corporate growth and adds to the portfolios of
trend has been going on so long that today less than 3% of the stockholders, but gives little back to the local economy it came
US workforce is directly engaged in farming; yet even with so from. Studies indicate that of the money spent at a typical
few farmers left, small farms have still been disappearing at the McDonald’s restaurant, nearly 75% leaves the local economy.31
Other studies have shown that Wal-Mart, which sites most of its
mammoth stores in rural areas, destroys three jobs for every two
it creates.32
10 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
The Big Get Bigger
overall population growth. In fact, cities like Karachi, Manila and dies and ignored costs mean that goods transported halfway
Lagos, which more than doubled in size between 1970 and 1990, around the world and passed through several corporate middle-
grew twice as fast as overall population growth in their respective men can easily be cheaper than goods produced right next-door,
countries.36 Thanks to the systematic undermining of rural life, making it hard for truly local producers to survive. Because of
there were 20 more cities with populations over 10 million at the hidden subsidies the cost of local garlic in Spain, for example, is
end of the century than there were in 1970. All these additional twice that of garlic imported from China; similar distortions
megalopolises are in the Third World.37 make local butter in Kenya more expensive than butter imported
all the way from Denmark. It is an absurd situation, none the less
so because it is justified by economic logic.
So What is Small and Local? In cases like these the distance between producers and con-
The trends described in this chapter all follow a similar pattern: sumers is enormous, with heavy costs to people and ecosystems
the growth of the large and global at the expense of the small and at both ends of the transaction. Yet government policies are
local. Populations are being drawn into huge urban agglomera- encouraging this gap to widen still further. Thus, the US govern-
tions, while rural communities are sapped of economic and cul- ment sponsors dozens of programmes to induce even small firms
tural vitality. Corporate businesses that have already reached an to “travel along the exciting and profitable road to overseas mar-
unimaginable scale are growing still larger and more powerful, kets.”38
while small, local businesses are struggling to survive. The scope In countless other ways, governments are actively promoting
and scale of the global economy continues to expand, while local trade among goods that could be produced locally, and are sys-
economies almost everywhere are in decline. tematically encouraging the growth of scale at every level. These
But what is small, and what is local? The definitions of these policies are costing people their jobs, and are breaking down the
terms may seem self-evident, but as the Small Business Adminis- community fabric that depends upon healthy local economies;
tration proves, there is much room for interpretation. Take, for they are eroding democracy and widening the gap between rich
example, an advertising or computer graphics business with just and poor; and they are irreparably damaging ecosystems and
two or three employees operating out of a tiny office in the human health across the planet.
countryside. On one level this is certainly a small business; but if Clearly, a fundamental change in direction is needed.The goal
it has clients on four different continents, to what degree is it a would not be to shrink the producer-consumer distance to some
‘local’ business? Or consider an owner-operated shop selling arbitrarily-defined number of miles, nor would it be to eliminate
fruits and vegetables – surely a small business. But if the produce all trade. Instead, the aim would be to offer support to the small
comes from dozens of different countries, is grown on industri- producer instead of the corporate giant, to local economies rath-
al-scale farms, and is delivered by large corporate wholesalers er than the global.
over international transport networks, is it really ‘small’, or is it Truly local economies – where the separation between pro-
just a tiny piece of a gigantic global-scale trading system? ducers and consumers is minimal – inherently promote small
Truly small, truly local businesses are becoming increasingly scale on many levels. Businesses and industries can be smaller, less
rare, especially in the industrialised world. Examples might centralised, and less taxing on the environment, and communities
include family farmers selling directly to their customers, or can be less populous but still culturally and economically vibrant.
craftsmen and artisans using nearby resources to produce wares In that sense, the terms ‘local’ and ‘small’ are intimately related.
for surrounding towns. One key feature of such enterprises is that Importantly, they define a vision of the future radically different
the distance between producer and consumer is fairly short – a from that being embraced in our name by governments every-
good rule of thumb for ‘local’. But today a wide range of subsi- where.
1 Leopold Kohr, The Breakdown of Nations (New York: E.P. Dutton, 1978), p. xviii. 22 Jeremy Rifkin, The End of Work (New York: G.P. Putnam, 1996), p. 10.
2 Campbell’s Soup Company, 1994 Annual Report, p. 1. 23 Kai Mander and Alex Boston, “Wal-Mart: Global Retailer”, in The Case Against the
3 Coca-Cola Corporation, 1993 Annual Report, p. 8. Global Economy (San Francisco: Sierra Club, 1996), p. 337.
4 David Korten, When Corporations Rule the World (East Hartford, CT: Kumarian, 1995), 24 Tim Lang and Hugh Raven, “Who Will Tame the Supermarkets?”, The Ecologist,
p. 18. vol. 24, no. 4, Jul./Aug. 1994, p. 123.
5 Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 36. 25 Vania Grandi, “Small Grocers Disappearing into History as Superstores Emerge in
6 Kirkpatrick Sale, Human Scale, pp. 67-8. Italy”, Burlington Free Press, Jan. 2, 1998, p. 6B.
7 A. Blackwood, unpublished manuscript. 26 Jeremy Rifkin, The End of Work, p.110.
8 PBS NewsHour, June 2, 1998. 27 Earl O. Heady, “The Agriculture of the U.S.”, Scientific American, September 1976, pp.
9 Nicholas Hildyard, Colin Hines and Tim Lang, “Who Competes: Changing 107-127. Cited in Wendell Berry, The Unsettling of America, p. 162.
Landscapes of Corporate Control”, The Ecologist, vol. 26, no. 4, Jul.-Aug. 1996, p. 131. 28 A. V. Krebs, “Farm Subsidies: Myth vs. Reality”, The Agribusiness Examiner, Apr.-May,
10 Peter Truell, “2 Swiss Executives Talk of Benefits of Bank Merger”, The New York 1995, p. 5.
Times, Dec 10,1997, section D, p. 5. 29 Graham Harvey, The Killing of the Countryside (London: Jonathan Cape, 1997), p. 9,
11 A. Blackwood, unpublished manuscript. 47, 70-71; Robin Page, “Havoc wrought by the drive for ‘efficiency’”, Daily Telegraph,
12 Jan M. Rosen, “Dial MCI for Money”, The New York Times, Nov. 16, 1997, sect. 3, p. June 15, 1996, p. 3.
2. 30 Graham Harvey, op. cit.29 , p. 9, 15, 40-1, 47.
13 PBS NewsHour, June 2, 1998. 31 Cited in Kirkpatrick Sale, Human Scale, pp. 88-9.
14 Peter Passell, “When Mega-Mergers Are Mega-Busts”, The New York Times, May 17, 32 Kai Mander and Alex Boston, op.cit. 23, p. 338.
1998, sect. 4, p. 16; Russell Mokhiber and Robert Weissman, “The Big Boys Unite”, 33 Barbara Crossette, “Dead Men Don’t Wear Bleeding Chennai”, New York Times, May
Aug. 25,1998, corp-focus@essential.org 25, 1997, Section E, p. 4.
15 “Multibillion-Dollar Deals”, The New York Times, July 27, 1997, section 3, p. 2. 34 The Guardian, Nov. 3, 1994, p. 13.
16 Chakravarthi Raghavan, “TNCs control two-thirds of the world economy”, Third 35 “Preserving Global Cropland”, State of the World, 1997 (New York: W.W. Norton,
World Resurgence, no. 65/66, pp. 31-32; also Blackwood, p. 3. 1997), p. 48.
17 David Korten, When Corporations Rule the World, p. 221. 36 World Urbanization Prospects: the 1992 Revision (New York: United Nations, 1993),
18 Cited in Alan Thein Durning, “Can’t Live Without It”, Worldwatch, table A.11.
May-June 1993, p. 10. 37 David Morris, “Unmanageable Megacities”, Utne Reader, Sept.-Oct. 1994, p. 80.
19 David Korten, When Corporations Rule the World, p. 221. 38 Breaking into the Trade Game: A Small Business Guide to Exporting (Washington, DC:
20 “SBA Profile: Who we are and what we do”, SBA, Washington DC, third Small Business Administration, 1995), p. i.
edition, 1996.
21 Encyclopedia Americana, 1991 edition, v. 25, p. 48.
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 11
3
G ROW T H M A D E E A S Y:
P
I N F R A S T RU C T U R E A N D S C A L E
Financial Times1
12 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
G r o wt h M a d e E a s y : I n f r a st r u c t u r e A n d S c a l e
the vast majority of whom drive their cars to the store, sometimes
from 50 or more miles away. Their journeys are made easier
thanks to Wal-Mart’s preferred location, adjacent to an artery of
the Interstate Highway System or other limited access highway.
Inside the store laser scanners at each cash register read computer
bar codes, speeding customers through the checkout lines while
computers track the supply of the 80,000 different items sold.
These computers are connected by satellite communication links
to Wal-Mart’s central headquarters in Arkansas, where sales and
inventory at each of the company’s more than 2,300 stores are
closely monitored. Further satellite links connect central head-
quarters with the company’s 43 distribution centres and with
Wal-Mart’s fleet of trucks – whose location can be pinpointed
using geo-positioning technology. With distribution warehouses
sited adjacent to Interstate highways, travel time is minimised for Corporate retailers (New York)
delivery trucks just as it is for customers. A growing number of
Wal-Mart’s products are manufactured overseas – including more
than 47,000 container shipments in 1995 alone.6 These shipments of Wal-Mart would be impossible without such an infrastructure.
arrive at coastal ports designed for unloading container cargoes, Not only large-scale retailers, but producers, as well, benefit
are transported by rail, and then transferred to trucks for the jour- from these public infrastructure investments: they move raw mate-
ney to distribution centres. The entire system enables the compa- rials and finished products over the same transport infrastructure,
ny to dispatch trucks loaded with precisely the right stock to co-ordinate their geographically-dispersed subsidiaries via similar
every store as needed, keeping the shelves full at all times.7 communications networks, and rely on a publicly-funded educa-
In sum, virtually every product Wal-Mart sells has been trans- tional establishment for personnel and for sources of technological
ported thousands of miles on superhighways paid for by the innovation. This dependence on public transport and communi-
public; the shipping terminals where foreign-produced goods cations networks was indirectly revealed in a Toyota advertisement
arrive have been built on public land and maintained by public that recently appeared in American magazines. The Japanese
agencies; the satellites the company relies upon to communicate transnational touted the ‘made-in-America’ content of its Camry
with and monitor its stores and trucks are the product of a pub- model by claiming, “We buy the best parts in the world, no mat-
licly-funded space programme, and the laser technology that ter which state they’re from.” The ad diagrammed the car, proud-
makes inventory tracking possible stems from government-fund- ly pointing to the different states where its various components
ed military research; the journey of virtually every customer has were manufactured: even though the assembly plant was in Ken-
been facilitated by a massive public highway system; even the tucky, the 40 manufacturers involved were scattered from one end
workforce that built, programmed, and maintains the company’s of the country to the other, from California to Vermont.8
computers is the product of an educational system, funded largely Toyota’s Camry is not unusual in this regard, and ‘free trade’
by the public, that focuses on training people for such high-tech rules mean that components for many goods are now transported
roles. even further before assembly. US-manufactured goods are so rou-
Such a list could go on and on, but it should already be clear tinely fabricated in several different countries that the Federal
that public funds have created the infrastructure Wal-Mart requires; more Trade Commission was heavily lobbied by industry to change the
to the point, even the concept of a corporate retailer on the scale definition of what it means to be locally produced. The proposed
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 13
Small is B e a u ti f u l , B i g is S u bsi d is e d
14 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
4
SUBSIDISING
L O N G - D I S TA N C E T R A N S P O RT
P
“If you’ve got it, a lorry delivered it.”
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 15
Small is B e a u ti f u l , B i g is S u bsi d is e d
promoted to unsuspecting settlers as home to the nation’s most Administration was first established, it consisted of just two peo-
desirable climate.14 ple with an annual budget of $10,000.21
The US government not only subsidised the building of As late as 1922 only one American in ten owned a car; most
railways, but also used its army to protect trains and settlers from people had no compelling need for one either, since electric
the native Americans whose lands were being taken. Thus, while streetcar lines were both extensive and reliable, and made travel
America’s industrial economy was expanding in scale and geo- possible virtually anywhere within most cities at very low
graphic scope, it was doing so at the expense of countless indig- cost.22 In some cases the ends of one town’s lines even linked
enous cultures, whose ways of life were, for the most part, up to that of another – enabling one to travel, albeit slowly, all
obliterated. the way from New York to Boston and other cities by streetcar.
Thanks to the railroad boom, a number of business interests Even so, the focus of these systems was local, not long-distance
grew enormously in both wealth and power. Railroads were travel.
America’s first Big Business, and many of the original railroad Starting in the mid-1920s, however, these local systems were
corporations are still in operation, including Union Pacific, bought up and systematically destroyed by a consortium of
today one of the world’s largest corporations. Financiers like J.P. automobile-related companies, including General Motors (GM),
Morgan – whose name survives in another Fortune 500 corpo- Standard Oil of California, Firestone Tire, and others. By 1946
ration, the Morgan Stanley Group – also profited handsomely.15 National City Lines, the front company for these corporations,
But more significant than the benefits accruing to individual controlled public transport systems in over 80 cities. In every
corporations was the overall expansion of the American market. case the local transport system was intentionally allowed to
Soon, a wide range of raw materials, manufactured goods and deteriorate. Service was slowed, then cut. Rails were torn up,
agricultural products would be travelling long distances relative- streetcars removed from service and burned. Many of these were
ly quickly by rail, making it possible for businesses to expand replaced by GM’s buses – with public relations campaigns por-
their scale in tandem with the geographical growth of the mar- traying the shift as ‘progress’. But public transport was systemat-
ket. ically being made inadequate; cars became no longer a luxury,
America’s railroad system was not designed to meet the but a necessity.
internal needs of localised economies – and in fact one of its The government may not have directly supported this pro-
primary goals was to absorb those economies into a single cess, but it certainly did little to stop it. By the time antitrust and
national one.Today, as in the past, this highly subsidised transport conspiracy charges were filed in 1946, it was already too late: the
infrastructure most directly benefits private interests involved in corporations had destroyed local transportation systems that, by
long-distance trade and huge markets. one estimate, would today cost as much as $300 billion to build.
Although the companies responsible were found guilty of con-
spiracy, they were each fined only $5,000. For his role in the
Roads, Roads, Roads crime, the Treasurer of GM was fined the princely sum of one
During the past 75 years, America’s long-distance transport dollar.23
infrastructure has expanded exponentially, largely because of the The destruction of public transportation was a boon for the
construction of an immense highway network. By 1994, there automobile and oil interests, but the continued growth of these
were over 175,000 miles of highways in the federal system alone, companies would be limited unless more roads and highways
including 45,000 miles of interstate highways; various state sys- were built. Lobbying groups were formed, including the
tems contributed an additional 97,000 miles of ‘principal arteri- National Highway Users Conference, headed by the President
al’ highways.16 This immense system has been built and main- of GM. Slick promotional films and advertising campaigns
tained almost exclusively at public expense. The sums involved pointed to the nation’s increasingly congested roads, and urged
are not insignificant: over $55 billion dollars in state and federal people to support the building of new ones. One GM film
funds were expended on roads in 1994 alone.17 showed people stuck in traffic honking their horns. “What’s a
As the last chapter indicated, major corporations rely heavi- citizen gonna do?” the narrator asks:
ly on this system: altogether, trucks travelled a total of 182 bil- “Don’t honk your horn; raise your voice. Ask for better
lion miles in 1994 just on the interstate highways.18 Total highways and more parking spaces. It’s your country. Give your-
intercity truck transport accounted for 900 billion ton-miles of self the green light.”24
freight that year. As with rail, the trend is upward: the ton-mile- These efforts had the desired effect: the nation’s highway
age of truck transport has grown more than three-fold since infrastructure, including a Federal Highway system composed of
1960.19 thousands of miles of two-lane roads, was continuously expand-
The present form of America’s highway transport infrastruc- ed at public expense. Separate state-funded highway systems also
ture is not only the product of massive public subsidies: it is also, grew rapidly.
to a large degree, the result of a conscious corporate plan. But highway building got its biggest boost when General
Motors’ President Charles Wilson was appointed Secretary of
Defense. During his confirmation hearing in 1953, Wilson
What’s Good for General Motors argued that since “what’s good for General Motors is good for
Although a federally-funded macadamised road between Wash- the United States”, there was no conflict between his loyalty to
ington and Ohio was built as early as 1817, most roads in the GM and his responsibilities to the nation. Wilson put this belief
US remained unpaved and suitable only for fairly short, local into practice by pushing for a nationwide system of motorways,
trips until well into the 1900s. In 1893, a headline in the Wash- on the grounds that it was crucial for national security. In 1956,
ington Post read, “Our System of Highways – It is the Worst on Congress authorised federal funds for a 41,000 mile Interstate
Earth and Should Be Reformed.”20 Highway System. At the time, it was described as “the greatest
Despite the Washington Post’s admonition, roads were public works programme in the history of the world.”25
not considered a high priority, even by the end of the century: It may seem that America today is already covered in tarmac,
when the office which later became the Federal Highway but road-building continues unabated. With the Interstate
16 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
S u bsi d isi n g L o n g - D ist a n c e T r a n sp o r t
Highway System nearly complete, a new National Highway control, safety inspections, and airport improvement, is well over
System has been proposed which would make “improvements” $8 billion.34
to 156,000 miles of existing highways and add 21 new “high Further subsidies for air transport are embedded in military
priority corridors”. The cost will be some $6.6 billion.26 Much research spending and government research and development
of the federal financing for these roads has come from a High- funding. These subsidies benefit American aerospace companies,
way Trust Fund into which petrol taxes and other user fees have which in turn provide planes to all major US airlines. The value
been directed. For many years these funds could only be used to of that assistance is estimated at $1 billion annually.35
build more roads, creating a positive feedback loop: more driv- Another form of hidden subsidy comes with the training of
ing led to more funding for roads, which inevitably led to still pilots for commercial air fleets. In 1996 for instance, most of the
more driving. 500 pilots that resigned from the US Air Force did so because
Just as the long-distance railroads served the interests of they were lured to commercial airlines, which pay trained pilots
large-scale business in general, the highway transport system has higher salaries than the military for work that is less demand-
benefited more than just the automotive, oil and road- building ing.36 The Air Force estimates that over a period of nine years,
corporations that most actively promoted it. Among their other the training it has provided each pilot who ‘defects’ to an airline
impacts, these public investments make it much easier to trans- costs the public $5.9 million.37
port goods to and from anywhere in the nation, offering advan-
tages to any business large enough to exploit huge markets. In
fact Charles Wilson might have more accurately said, “what’s Airport Subsidies
good for GM is good for all large corporations.” Each of America’s 400 or so major airports has received large
As Robert Reich notes, the potential repercussions of heav- public subsidies. Even today, airports pay no federal or state
ily subsidised highways were never part of the public debate: corporation taxes and are exempt from local property taxes; they
“The manifestly real possibility ... that [they] might also receive federal grants for capital improvements, and can borrow
generate sprawling suburbs and shopping malls, harm down- at subsidised rates.38 In the early days of aviation growth, start-
town retailers, fatten the construction industry, boost auto sales, up costs for new airports were often paid for by the city where
create an entire trucking industry, displace barges and railroads, the airport was located. These expenditures were usually justi-
and radically lower the cost of transporting and distributing fied on the grounds that an airport would be an economic boon
goods across America – was not openly discussed.”27 to the community. This was New York City mayor Fiorello La
One can be certain, however, that many of these effects were Guardia’s rationale for using the city’s tax money to build
discussed among the powerful corporate interests that benefited Idlewild (later Kennedy) Airport in 1945:
from them and consciously promoted them. “The greatest airport in the world is rising from the mead-
ows at Idlewild in New York City. It will cost $71 million. Fill-
ing grading, planting, drainage, field lighting utilities, runways,
Corporate-friendly Skies taxiways and aprons will cost about $35 million. The adminis-
America’s economy could expand only so far if its transport tration building, together with loading docks, apron and parking
infrastructure were limited to rail and highways. As internation- spaces will cover well over three hundred acres and cost about
al trade has increased, the importance of air transport has grown $10 million.... The airport will bring millions of dollars month-
apace. In 1994, over 11 billion ton-miles of freight were carried ly in commerce, business and traffic to the City of New York....
by air in the US – more than 20 times what was carried by air The airport is a costly undertaking, yet it will be one of the best
in 1960.28 Obviously geared towards long-distance transport, investments the City ever made.”39
the average length of haul by air is now over 1,300 miles.29 Even though $71 million was a huge sum – more than half
A global economy also requires people to travel more, and to a billion in today’s dollars – the final cost was over five times La
travel longer distances. For the US, the number of passen- Guardia’s estimate.
ger-miles flown in 1994 was more than 12 times what it was in Perhaps air travel today is easier and less expensive for every-
1960; in the 1990s alone, passenger-miles flown increased by one, but the subsidies for air transport have primarily benefited
almost 40 percent.30 Over half a billion passenger boardings in corporations, particularly those engaged in global trade. The
the US were expected in 1997, and the airline industry projects Washington-based Reason Foundation, for example, has esti-
that number to increase by half in the next decade.31 mated that business jets use about 20% of the capability of the
Many countries have built up their national airlines as indus- nation’s air traffic control systems, and well over half of the
tries wholly- or partly-owned by the state. This has been the FAA’s control tower services.40
case not only in the formerly-communist world – the Russian But nowhere is the air transport subsidy for Big Business
government, for example, still owns 51% of Aeroflot32 – but in more starkly exposed than in a rural corner of Arkansas, where
capitalist countries as well: the Dutch government owns 38% of an airport with runways long enough to handle fully-loaded
KLM airlines, and until recently Japan owned 50% of Japan Air cargo-carrying 747s has been built. The federal government
Lines; Germany was once a majority owner of Lufthansa, and picked up $90 million of the airport’s $145 million cost.
Britain owned British Airways until it was ‘privatised’ in 1987.33 According to investigative journalists Ken Silverstein and Alex-
Most airlines in the less-industrialised world were built up by ander Cockburn, the beneficiaries of this government subsidy
the state, and many are still state-run. include Arkansas’ giant poultry companies, Tyson Foods, Hud-
In the US, airlines have always been independent businesses. son Foods and Peterson Industries. According to the feasibility
Nonetheless, taxpayers have made – and continue to make – study approving the project, “If competitive air freight rates were
huge investments in the infrastructure on which air transport available, these companies estimate that Japan would become a
depends. For example, all major airlines rely on a govern- boom market for US fresh chicken products.” Another benefi-
ment-funded air traffic control network – a massive technolog- ciary is Wal-Mart, which, “Given dependable air service available
ical infrastructure employing 17,000 people. The annual budget at competitive rates, [can] import a number of electronics, men’s
for the Federal Aviation Agency, whose duties include air traffic and women’s fashion apparel product lines by air.” A third major
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 17
Small is B e a u ti f u l , B i g is S u bsi d is e d
beneficiary is the J. B. Hunt Transport Co., the largest overland growth, then support can still be redirected towards transport
cargo hauler in the United States.41 infrastructures that serve the needs of smaller enterprises oper-
As for local people living in the rural communities nearby, ating in more localised economies. It’s not too late to shift
this federally-subsidised airport certainly never had their needs course.
in mind: “Most of the people here have never been in a plane”, A simple exercise in Worldwatch magazine demonstrated
according to Jay Fulbright, who owns a farm near the site.42 how much less expensive such investments would be. The $300
Meanwhile, about 50 families were forced off their land to make million budgeted for a single interstate highway interchange in
way for the 2,700-acre airport.43 “Big business interests, that’s Virginia, for example, could instead provide each of twenty
the only reason this is coming about”, Fulbright concluded. different towns and cities with a 100-mile network of paved,
This project is just one of many funded by an Airport off-street bicycle paths. And the funds intended for a $10 million
Improvement Programme with an annual budget of over $1.3 highway expansion in Eugene, Oregon, could instead provide
billion.44 The subsidy involved seems especially outrageous every Eugene resident over the age of eleven – all 93,000 of
since it’s clear that the project benefits only a few big corpora- them – with a new bicycle, basket, lights, locks and raingear.46
tions. But even when it can be claimed that a given project will Some communities are rediscovering transport modes long
spur economic growth and help the ‘local economy’, virtually ago abandoned in the quest for modernity. Bristol,Vermont, for
every such project inherently subsidises long-distance transport, example, recently awarded its trash collection contract to a local
and the major corporations that depend on huge markets. citizen who makes the rounds with a horse-drawn wagon. His
Perhaps even La Guardia, were he alive today, would recon- bid was competitive with those from contractors using the latest
sider the wisdom of subsidising New York’s long-distance trans- mechanised equipment, but his horses have many advantages:
port network so heavily. Today New York is a centre for inter- they are far quieter on their early-morning rounds than large
national trade, but its local transport infrastructure is crumbling; trucks; they use local, renewable resources (hay and oats) for fuel,
it is home to numerous flourishing Fortune 500 corporations, rather than imported oil; and they are non-polluting, since the
but many of its citizens have no job and nowhere to live. In any only wastes they produce are biodegradeable – and a valuable
event, New York’s policymakers are having no such second source of organic fertiliser for nearby farms.47
thoughts: public agencies will be spending $4.8 billion to “mod- This is not necessarily an argument for the use of bicycles or
ernise” the city’s airports in the coming years.45 horses everywhere in the world. If priority is given to the needs
of local economies rather than to long-distance trade, and if
locally-available resources are used to their full potential, then
93,000 Missing Cyclists transport systems will tend to differ widely from place to place.
The advantage that a cheap and reliable long-distance transport This is only as it should be. It means communities are adapting
system gives to large-scale businesses is one reason why they to their local environment and their own internal needs, rather
have been able to supplant so many smaller enterprises; it also than conforming to the imperatives of a global economy – one
helps explain how the global economy is able to overrun so in which the same corporate plan is recklessly followed every-
many diverse local economies around the world. where.
If society has other goals in mind than promoting corporate
1 “Delivering the goods to you”, flyer promoting ‘The Good Lorry Code’, Hermes 26 Jane Holtz Kay, Asphalt Nation, pp. 118-9.
House, St. Johns Road, Tunbridge Wells, Kent TN4 9UZ, UK, undated. 27 Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), pp. 61-2.
2 A. Blackwood, unpublished manuscript. 28 “Ton-miles of Freight”, National Transportation Statistics, 1996, p. 74.
3 “Transportation in the United States: A Review”, National Transportation Library, p. 1. 29 “Average Length of Haul, Domestic Interstate Freight and Passenger Modes”, National
4 National Transportation Statistics, 1996, US Department of Transportation, Bureau of Transportation Statistics, 1996, p. 78.
Transportation Statistics, Washington, DC, p. 74. 30 National Transportation Statistics, 1996, p. 72.
5 Ibid., p. 53. 31 Matthew L. Wald, “Speed Hits the Wall”, The New York Times, Oct. 19, 1997, sect. 4, p. 6.
6 Stephanie Böge, “Freight Transport, Food Production and Consumption in the United 32 Alessandra Stanley, “Hold the Jokes, Please: Aeroflot Buffs its Image”, The New York
States of America and Europe”, Wuppertal Papers, no. 56, May 1996 (Wuppertal Institute, Times, June 29, 1997, section 3, p. 1.
Westfalen, Germany), p. 7. 33 Patrick J. Spain and James R. Talbot, eds., Hoover’s Handbook of World Business, 1995-
7 Encyclopedia of American History (New York: Harper & Row, 1961), p. 193. 1996 (Austin, Texas: Reference Press, 1995).
8 Many people today believe things would be far better if the nation were divided into 34 “Highlights of the FY 1997 Transport Budget”, Department of Transportation,
much smaller entities. See, for example, Downsizing the USA, by William Naylor, and Washington, DC, p. 15.
Dwellers in the Land, by Kirkpatrick Sale. 35 Mark Zepezauer and Arthur Naiman, Take the Rich Off Welfare (Tucson, AZ: Odonian
9 John Hoyt Williams, A Great and Shining Road (New York: Times Books, 1988), p. 19. Press, 1996), p. 94.
10 Marc Reisner, Cadillac Desert: The American West and Its Disappearing Water (New York: 36 Philip Shenon, “Top Guns Fleeing the Fold”, The New York Times, Oct. 26, 1997, sect.
Penguin, 1987), p. 39. 4, p. 2.
11 Op.cit.9, p. 286. 37 US Air Force, Background Briefing, “Air Force Pilot Retention”, Aug. 26, 1997.
12 Encyclopedia of American History, p. 280. 38 “Viewpoint: US Lags in Letting Airports Go Private”, Aviation Week & Space Technology,
13 Howard Zinn, A People’s History of the United States (New York: Harper Perennial, 1990), Sept. 23, 1996, p. 66.
pp. 248-9. 39 Cited in James Kaplan, The Airport (New York: William Morrow, 1994), p. 109.
14 Marc Reisner, op.cit. 10, pp. 41-2. 40 Stephanie Kraft, “Tax the Jet Set”, Springfield Advocate, (Springfield, Massachusetts), June
15 Howard Zinn, A People’s History of the United States, p. 249. 26, 1997, p. 7.
16 “Highway Profile”, National Transportation Statistics, 1996, pp. 29-30. 41 Cited in Ken Silverstein and Alexander Cockburn, CounterPunch, Mar. 1, 1995, vol. 2,
17 Ibid., p. 29. no. 5., p. 2-3.
18 “Truck Profile”, National Transportation Statistics, 1996, p. 41. 42 Susan Schmidt, “Out of Arkansas Chicken Farms, Airport Hopes to Find Its Wings”,
19 “Ton-Miles of Freight”, National Transportation Statistics, 1996, p. 74. The Washington Post, July 9, 1995.
20 FHWA By Day, Federal Highway Administration, June, 1996, p. 1. 43 Ken Silverstein and Alexander Cockburn, op.cit., p. 2-5.
21 Ibid., p. v. 44 “Highlights of the FY 1997 Transport Budget”, Department of Transportation,
22 From Taken For A Ride (video), Jim Klein and Martha Olson, 1996. Washington, DC, p. 16.
23 Researcher Bradford Snell, cited in Taken For A Ride (video). 45 Neil MacFarquhar, “La Guardia Airport Sees Its Future in Shops and Fast Food”, The
24 Cited in Taken For A Ride (video). New York Times, July 13, 1997, pp. 19-20.
25 FHWA By Day, p. v, and p. 57.; Robert B. Reich, The Work of Nations (New York: 46 Worldwatch, May-June, 1994, p. 39.
Alfred A. Knopf, 1991) pp. 61-2. 47 The New York Times, June 22, 1997.
18 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
5
C O M M U N I C AT I N G G L O B A L I S M
P
“[Merrill Lynch recently] signed a $400 million contract with the AT&T
Corporation to manage Merrill’s vast communications system. ... As it tries to
build networks to link its 54,200 employees in 870 locations around the world,
[Merrill Lynch] has become an archetype of the customers that are driving the
evolution of the high-technology industry.”
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 19
Small is B e a u ti f u l , B i g is S u bsi d is e d
By the end of 1996 there were already close to 200 commer- Public or Private?
cial satellites orbiting the Earth. But the world’s giant telecom- In the early years of radio a healthy public discussion ensued
munications corporations are planning to bring that number to about whether the airwaves should be used commercially or
over 1,000 in the next few years. US-based Teledesic plans to retained for use in the public interest. Clearly, the corporate
launch 840 satellites alone to make their mobile communications world emerged victorious. In the US, a 1996 Act of Congress
network possible. Motorola is planning to launch 66 satellites for sealed that victory by effectively deregulating all communica-
their ‘pocket telephone’ project.5 tions industries and allowing the market, not the public interest,
Public funding is also behind many of the computer technol- to determine how the communications infrastructure develops
ogies that make global communications possible, including the in the future. According to media expert Robert McChesney,
Internet, originally a US military project. As Nathan Newman of this law “is widely considered to be one of the most important
Progressive Communications points out: federal laws of this generation.” And yet,
“The Internet is in many ways the product of central plan- “the debate surrounding the 1996 Telecommunications Act
ning in its rawest form: planning over decades, large government was a farce. Some of the law was actually written by the lobbyists
subsidies directed from a national headquarters, and experts for the communication firms it affects. The only ‘debate’ was
designing and overseeing the project’s development. ...The com- whether broadcasters, long-distance companies, local telephone
parison has been at times to the interstate highway system, but providers, or cable companies would get the inside track in the
the analogy would hold only if employees of the federal govern- deregulatory race.”9
ment had first imagined the possibility of cars, subsidised the The possibility that the public, not corporations, should con-
invention of the auto industry, invented the technology of con- trol the airwaves was not even considered. One effect of the law
crete and tar, and built the whole system....”6 is to hand over to media corporations additional segments of the
broadcast spectrum. Estimates of the value of this giveaway range
from $11 billion to $70 billion.10
Regulating the Airwaves
in the Corporate Interest
Governments have also created a regulatory environment within Corporate Communications
which corporate-dominated communications enterprises thrive. The ability to communicate instantaneously across continents is
In the United States, for example, the Federal Communications hardly necessary in businesses that are small and local. But huge
Commission (FCC) co-ordinates and licenses thousands of com- transnational corporations need to maintain tight central control
mercial users of the airwaves, and allots segments of the electro- over their far-flung enterprises, and so a sophisticated worldwide
magnetic spectrum to private interests – from radio and televi- communications infrastructure is an absolute necessity. Manufac-
sion networks to cell phone and pager companies. turers from IBM and Daimler-Benz to Nike and Unilever must
Like most regulatory agencies, the FCC is heavily biased co-ordinate deliveries of raw materials and manufactured com-
towards the large and global. For example, FCC rules prohibit ponents from numerous subsidiaries and independent contrac-
any radio station with less than 100 watts of power from broad- tors, as well as arrange shipments of finished products to middle-
casting. Though such low-wattage ‘micro-radio’ stations are ideal men, distributors, and corporate sales outlets. Giant retailers like
for very localised, decentralised, and inexpensive broadcasting, Home Depot, Tesco, and Continente must monitor inventory at
the FCC has gone to great lengths to ensure that corpo- hundreds of locations, sometimes thousands of miles apart, and
rate-funded messages continue to dominate the airways. Accord- coordinate ship, rail, truck and aircraft deliveries from both
ing to a press release, micro-power broadcaster Jim Brewer’s sta- domestic and overseas suppliers. Every transnational corporation
tion in Tampa, Florida was shut down in no uncertain terms by needs to communicate decisions made at corporate headquarters
a 20-person Multi-Jurisdictional Task Force led by the FCC: to subsidiaries and branches in different countries, and quickly
“With automatic weapons trained on them [Brewer and his transfer capital back and forth.
wife] were ordered to the floor where they were handcuffed face High-speed computers linked to satellite communications
down with gun muzzles at their head. For the next 12 hours they networks also enable banks, financial service companies, curren-
were detained in their own home, not even allowed to go to the cy speculators, and others with global investments to shift vast
bathroom alone, while agents stripped their home of anything amounts of capital from continent to continent at the stroke of a
remotely related to radio transmission equipment. Police cor- computer key. David Korten describes how “... an individual at a
doned off the block around their home, the site of the micropo- computer terminal can maintain constant contact with price
20 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
C o m m u n i c a ti n g G l o b a l is m
movements in all major markets and execute trades in any or all differed widely. But advertising offered businesses the means to
of them. A computer can be programmed to do the same with- homogenise those tastes. Desires could now be mass-produced
out human intervention, automatically excecuting transactions along with the products to satisfy them.
involving billions of dollars in fractions of a second.”11 Advertising also enabled industry to make wholesale changes
Thanks to such technologies, currency valued at $1.3 in popular ideology and worldview. As Stuart Ewen has shown
trillion was exchanged each day in 1995 – 30 times more than in his important book Captains of Consciousness, advertising
the daily GDP of all the developed countries in the world com- altered long-standing American values stressing frugality and
bined.12 self-reliance, replacing them with a new cultural norm based on
Do small shopkeepers, small family farmers, or producers for conspicuous consumption and a preference for store-bought
local markets require such a highly developed communications over home-made products. Through increasingly sophisticated
advertising techniques, “Excessiveness replaced thrift as a social
‘Do small shopkeepers, small family farmers, or value”, and entire populations were invested with “a psychic
desire to consume.”13
producers for local markets require such a highly In less than a generation consumerism had been embraced by
developed communications infrastructure? Hardly virtually the entire country. This 1953 advertisement for Gim-
at all, and in fact their livelihoods are threatened bels, a New York department store, proclaimed the new ideology:
“Economic salvation, both national and personal, has nothing
by enterprises that can make use of it.’ to do with pinching pennies.... Economic survival depends upon
consumption. If you want to have more cake tomorrow, you have
infrastructure? Hardly at all, and in fact their livelihoods are to eat more cake today. The more you consume, the more you’ll
threatened by enterprises that can make use of it. While they slip have, quicker.”14
further and further behind, their taxes continue to help maintain The spread of this ideology was not limited to businesses and
the infrastructure that is in part responsible for their difficulties. their advertising allies. That same year, the chairman of President
And as usual, they are told that natural evolution is responsible. Eisenhower’s Council of Economic Advisers claimed that the
On another level, this is happening to entire cultures as well. American economy’s “ultimate purpose” was “to produce more
From Chiapas to China, small and local economies are being consumer goods.”15
pushed aside by governments seeking a more prominent place in Over the years, advertising has become more sophisticated,
the global economy, more uniformity among their populations, more effective, and more pervasive. It has been estimated that the
more land to devote to producing for global markets. All too average American is exposed to 16,000 commercial images daily
often, high-tech military technologies – which depend on mod- – not only in magazines and newspapers and on television and
ern communications networks for intelligence, planning, and radio, but plastered to walls, cars and trucks, food packaging,
execution – are employed to do so. The US victory in the Gulf windows, scoreboards, pens and pencils, sports arenas, supersonic
war, aimed at preserving the corporate-led New World Order, jets, and anywhere else a commercial message can be embed-
was also largely a product of such high-tech capabilities. ded.16 The trend has reached absurd levels. One of the sad mir-
acles of modern life is the way children, teenagers, and adults
attempt to express their ‘identity’ by wearing clothes conspicu-
Teaching the World to Sing ously emblazoned with corporate logos.The practice has become
(to a Corporate Tune) so commonplace in America that The New York Times Magazine
A worldwide communications web is crucial for corporations in recently ran a ‘style’ article featuring young children modelling
another way: it gives them the ability to transmit their commer- Tide sweatshirts. And while the idea of launching huge ‘bill-
cial messages to hundreds of millions of people, day and night, boards’ into Earth orbit was considered slightly mad when it was
from one end of the planet to the other. It has often been proposed a few years ago, the notion may prove to be more
observed that the real purpose of media like television is not to prophecy than lunacy: the Russian space station Mir and its crew
deliver entertainment to the public, but to deliver the public to have already been pressed into service promoting such products
advertisers. In the global economy, this is truer than ever. as Pepsi-cola and Israeli milk.17
Advertising is itself a product of industrial economic expan-
sion. When the first model-T rolled off the assembly line at
Henry Ford’s factory in Detroit in 1909, the event was a turning Tele-Consumerism
point not only for the automobile industry, but for virtually Today, television is the medium by which the manipulation of
every other industry as well. The assembly line made it possible individual desires is most effectively carried out. In America,
to mass produce virtually any item faster, more cheaply and in advertisers seek to influence children as young as two with their
greater quantities than ever before. American industrialists, who commercial messages. Children younger than five years old
had previously sought to expand production, now had to think watch an average of three and a half hours of television every day;
in terms of expanding consumption as well. After all, there would adults watch nearly five hours. In a year the average American
be no point in mass-producing millions of items that could only adult thus sees some 21,000 televised commercials.18
be sold in a market with a buying capacity measured in the thou- As technology critic Jerry Mander points out, television is
sands. being used by corporations to spread the gospel of consumption
Industrialists thus needed to expand significantly the markets to every corner of the planet:
for their goods. This could be accomplished in part by amalgam- “By its ability to implant identical images into the minds of
ating smaller local economies into much larger ones, something millions of people, TV can homogenise perspectives, knowledge,
the expanding transport infrastructure was already making possi- tastes, and desires, to make them resemble the tastes and interests
ble. Regional differences among those markets, however, had to of the people who transmit the imagery. In our world, the trans-
be overcome. America was a nation of immigrants and exhibited mitters of the images are corporations .... And satellite commu-
little uniformity: local, regional and ethnic tastes and preferences nications is the mechanism by which television is delivered into
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 21
Small is B e a u ti f u l , B i g is S u bsi d is e d
parts of the planet that have, until recently, been spared this Those who believe the Internet will be a global medium run
assault.”19 by and for the people should think again. As AT&T’s director of
It is not only the specifically commercial content of televi- Internet services points out, the Internet may become the best
sion that is so effective in assaulting these distant parts of the advertising medium yet: “If it’s done well, you won’t feel there’s
world. The consumer culture also invades the Third World any tension between the consumerism and the entertainment”,
through the way of life shown in between the commercials. As S. he says.26
M. Mohamed Idris of the Consumers’ Union of Penang has
written,
“The consumer culture of the North now pervades almost Free Speech for Sale
all aspects of life in the South. This culture is in reality a way of While today’s modern communication infrastructure is cus-
thinking and a way of life generated by advertisements, cinema tom-built for the needs of governments, the military, the finan-
shows, pop songs, magazines, comics, and other channels of the cial world and corporations, limits on its reach are often seen as
mass media.... As a result of this bombardment, the consumer is challenges to individual rights. By this twisted logic, advertising
made to feel insecure unless she smokes a cigarette, unless he becomes a form of ‘free speech’; bombarding the South with
buys a certain brand of haircream, unless she uses a certain brand distorted, culturally-homogenising images becomes the ‘free flow
of lipstick, unless they change motorcars once every two years, of information’; people chained to their computers, faxes,
unless the colour of the curtains at home matches the colour of modems, cellular phones and beepers become exemplars of the
the carpet.”20 ‘convenience of modern life’.
Corporations looking to homogenise tastes in order to Similarly, the available options are often seen to depend on
expand their markets fully understand this power of global purely individual choices: simply turn off your TV, or choose to
media. Anthony J. F. Reilly, CEO of the H. J. Heinz corporation, ignore its messages, for example. On some levels, to be sure, per-
accurately declared that, “Once television is there, people of sonal decisions must be made; but at other levels public policies
whatever shade, culture, or origin want roughly the same are forcing changes on people in which they have no real choice
things.”21 According to a development analyst, “India’s markets at all. This is particularly true in the South, where long-standing
seem more accessible” now that corporate messages are arriving cultural traditions can be erased in a generation by a steady diet
via satellite: of Disney, Rambo, CNN, Star-TV, and corporate advertising.
“...half of the 35 million television sets now in India receive There are other questions to ask, questions whose answers
satellite or cable channels, providing a new window on the out- depend on how much faith we have in the industrial model. Do
side world for more than 60 million people and creating a mass corporations have an inalienable right of access to the broadcast
consumer market almost overnight.” (emphasis added).22 spectrum? Should they be allowed the unlimited right to posi-
As Robert McChesney puts it, “the corporate media are tion their communications satellites where they can reach every-
carpet-bombing people with advertising and commercialism.”23 one on Earth? Do cultures – and individuals – have the right to
MTV reaches more than a quarter of a billion households on five declare themselves offlimits to the commercial messages others
continents, enabling corporations to globalise the ‘youth market’ wish to send them? The answers to these and similar questions
for Nike sneakers, Pepsi-cola, and Levi’s jeans.24 American tele- have a significant bearing on the nature of the world we are
vision shows like “Dynasty” and “Baywatch” are broadcast to the making.
most remote corners of the planet, giving people a distorted
impression of modern urban life, and creating a whole new range
of desires for corporations to fill. And CNN, which reaches 145
countries from Bangladesh to Zimbabwe, ensures that every
culture now gets the corporate spin on world events.25
1 Seth Schiesel, “The No. 1 Customer: Sorry, It Isn’t You”, The New York Times, Nov. 23, Culture (New York: McGraw-Hill, 1976), p. 25.
1997, sect. 3, p. 1. 14 Fortune, Dec. 1953, p. 99. Cited in Robert B. Reich, The Work of Nations (New York:
2 Patrick J. Spain and James R. Talbot, Hoover’s Handbook of Business 1995-1996 (Austin, Alfred A. Knopf, 1991), p. 45.
Texas: Reference Press, 1995). 15 Ibid.
3 Historical tables of US budget, http://www.wais.access.gpo.gov; budget figures for 16 Leslie Savan, The Sponsored Life (Philadelphia: Temple University Press, 1994), p. 1
1962-1996, pp. 65-69. 17 Michael Specter, “Mir Bobbles Dim the Evil Empire’s Aura”, The New York Times,
4 Scott Lafee, “Sea Launch is Go”, New Scientist, vol. 152, no. 2052, Oct. 19, 1996, pp. Aug. 24, 1997, section E, p. 5; “Pepsi-cola is Filming the World’s First Commercial in
36-39. Space”, Pepsico news release, New York, May 21, 1996.
5 Ibid. 18 David Korten, op.cit. 11, p. 152.
6 Nathan Newman, “How Private Business Almost Derailed the Internet”, ENODE, 19 Jerry Mander, In the Absence of the Sacred (San Francisco: Sierra Club, 1991), pp. 97-8
Vol. 1, no. 6, Dec. 15, 1996, enodelist@garnet.berkeley.edu 20 S. M. Mohamed Idris, “The Third World: A Crisis of Development”, in The Future of
7 Thomas A. Fogarty, “Towering trouble: Laws and labor may delay transmission of Progress (Totnes, UK: Green Books, 1995), p. 110-111.
digital TV”, USA Today, Nov. 17, 1997, sect. E, p. 1. 21 Cited in Alan Thein Durning, “Can’t Live Without It”, Worldwatch, May-June 1993, p. 13.
8 Shay Totten, “A Towering Debate”, Vermont Times, Nov. 12, 1997, p. 1. 22 Taylor Moore, “Developing Countries on a Power Drive”, Electric Power Research
9 Robert W. McChesney, Corporate Media and the Threat to Democracy (New York: Seven Institute (EPRI), http://www.epri.com.
Stories Press, 1997), p. 42. 23 Robert W. McChesney, Corporate Media and the Threat to Democracy , p. 23,
10 Alexander Cockburn, “The Airwaves: Al Gore’s Amazing Gift”, The Nation, Mar. 10, 24 “MTV: Music Television Global Fact Sheet”, MTV Networks, Feb. 17, 1995.
1997, p. 9. 25 “CNN/CNN International Country and Territory Client List” revised June 1994,
11 David Korten, When Corporations Rule the World, pp. 187-8. CNN Public Relations, One CNN Center, Atlanta, GA 30348.
12 Bernard Lietaer (interview), “Beyond Greed and Scarcity”, Yes! Magazine, 26 Robert W. McChesney, op. cit. 23 , p. 34.
Spring 1997, p. 37.
13 Stuart Ewen, Captains of Consciousness: Advertising and the Social Roots of the Consumer
22 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
6
FINDING THE ENERGY
P
“Economic growth and increased energy use are inseparable....”
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 23
Small is B e a u ti f u l , B i g is S u bsi d is e d
24 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
Finding The Energy
participation in nuclear power development”, the AEC initiated a World Bank analyst,
programme whereby the government provided funding and other “it’s hard to imagine economic growth in much of the devel-
assistance, but industry would design, construct, and own the oping world without the use and availability of far more electric-
reactors.19 US government aid to the nuclear industry has con- ity than those countries now have”.25
tinued unabated, with almost $1 billion budgeted for nuclear Building the infrastructure to provide that electricity will cost
power research and development in 1992,20 and with additional an estimated one trillion dollars;26 even paying for a small por-
expenditures hidden in military budgets every year. tion of that sum will require the South to deliver even more of its
The US government is not alone in sponsoring nuclear resources to the North. Yet government leaders in the South are
research. Michael Renner of the Worldwatch Institute notes that busily signing World Bank loan documents for their splurges in
“Since 1974, OECD governments have invested a cumulative energy projects. For example:
$247 billion in energy R&D. The bulk of these funds went to
nuclear programmes – conventional reactors, breeders, and nucle- • China plans to add the equivalent of a medium-sized power
ar fusion.”21 plant to its electric generating capacity every week for the next
Subsidies for nuclear power are not always direct. Since the several years. Since coal is one of China’s most abundant indus-
potential costs of a major nuclear accident are so high, it would trial energy sources, plans include dozens of large coal-fired
be extraordinarily expensive to insure fully a nuclear utility’s power plants and a 500-mile-long coal slurry pipeline.27
potential liabilities. In the US, the 1959 Price-Anderson Act Construction also began on two nuclear power plants in 1996;
capped the responsibilities of nuclear utilities, thereby significant- plans call for four more in 1997.28
ly reducing their insurance premiums. Although the $560 million
• India’s government intends to spend $170 billion to triple
‘If nuclear utilities were forced to cover the country’s electric power infrastructure. The largest single
project is the Dhabol Power Project, a $2.8 billion gas-fired
potential losses by purchasing liability insurance – facility, using natural gas piped in from Qatar.29
instead of passing the bulk of cleanup bills to
taxpayers – it would add an estimated $3 billion • South Korea is currently the world leader in nuclear power
construction, with 9 plants now being built – adding to the 11
a year to the cost of nuclear power.’ already operating. Despite this commitment to the nuclear
energy path, the government has yet to find a suitable location
liability limit for damages due to one accident was raised in 1988 for a radioactive waste facility.30
to $7 billion, that amount is still only a small fraction of the
potential costs of a major nuclear accident: the meltdown of the • Brazil is undertaking a massive programme of hydroelectric
Chernobyl reactor, for example, cost an estimated $358 billion (as dam-building, including 18 planned for the Amazon basin
well as at least 125,000 lives).22 If nuclear utilities were forced to between 1990 and 2010, and 62 more in the 21st century.31
cover potential losses by purchasing liability insurance – instead of
passing the bulk of cleanup bills to taxpayers – it would add an • Vietnam, which currently gets most of its energy from hydro
estimated $3 billion a year to the cost of nuclear power.23 power, is building a gas-fired power plant in partnership with
The federal government has also taken on the responsibility two American corporations, and has also expressed interest in
for ensuring that radioactive wastes will be ‘safely’ disposed of, nuclear power.32
although no real solution has ever been devised. It is indeed amaz-
ing that some 460 grid-connected nuclear reactors have been • By the end of the century, Latin America will beinstalling
built around the world, yet there is no viable method to dispose 41,000 MW of capacity, mostly concentrated in Argentina,
of the many radioactive wastes they generate. Undeterred, gov- Brazil, Chile, Colombia, Mexico and Venezuela.33 And in
ernments have commissioned an additional 37 nuclear plants.24 Africa, the US Trade and Development Agency cites the
Government support worldwide for nuclear power stands in potential for $126 billion in energy projects.34
sharp contrast to the tiny subsidies given to renewable energy.
This is not surprising: nuclear power is an energy source that Such projects are disturbing in part because of the devastation
meets the needs of a large-scale industrial economy, while decen- they cause in the lives and livelihoods of nearby villagers, many of
tralised renewable energies – like rooftop solar water heaters – whom will be permanently displaced to become industrial refu-
inherently run against the grain of the centralised industrial gees in their own countries. Among China’s energy projects, for
model. An exception that proves the rule is US funding for a huge example, is the Three Gorges Dam, the world’s largest, which will
high-tech solar energy project in the American southwest, in flood nearly 100,000 hectares of China’s best farmland, dislocate
which hundreds of computerised and motorised mirrors track the over a million people from their homes, and threaten the rural
sun to focus light on a boiler for producing electricity. Hooked livelihoods of 75 million more.
into the national grid, the electricity can then be used to power The negative impact will be felt not only by villagers who are
a computer chip manufacturer, an aluminium smelter, or the neon relocated to make way for huge energy projects. Since it is far
lights of Las Vegas. easier to provide electricity to centralised, urban populations than
to dispersed rural villages, most projects serve large cities – which
Energy for “Development” makes them still more attractive as the locus of ‘modern’ life. For
If Southern countries are to develop along industrial lines, they example, a huge energy project in Nepal costing more than the
too will have to invest heavily in their energy infrastructures. country’s entire annual budget will only provide electricity for
Although oil refineries and natural gas pipelines are part of the Kathmandu, Nepal’s largest city. In this sense, rural villagers are
mix, electric power plants are the prime focus: they enable indus- being both pushed into the cities by development processes that
tries to expand and individual consumption to rise, and support dispossess them of their livelihoods, and pulled into the cities by
the vast cities that development is creating. Thus, according to a the psychological draw of urban life, full of the technological
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 25
Small is B e a u ti f u l , B i g is S u bsi d is e d
excitement for which electric power is a prerequisite. and is so centralising that the use of diverse, locally-available
These huge projects also do irreparable damage to surround- renewable energy forms is largely precluded.
ing ecosystems. Despite their own relatively short life expectan-
cies, large-scale dams permanently damage riverine ecosystems;
some are so large they may be responsible for earthquakes and Shifting Direction – the Soft Energy Path
even for shifting the earth’s axis. Nuclear power plants create It is difficult to imagine the current crop of government leaders
radioactive waste that will be hazardous for thousands of years; suddenly shifting support away from centralised energy supplies
the ‘accidents’ to which these plants are prone regularly release to embrace instead the full potential of decentralised renewable
radioactive particles into ecosystems worldwide. energies. Such a change in course would first require a shift in
But the environmental and social impacts are even more the vision those policymakers have of the future. In The Whale
far-reaching because these energy projects are among the first and the Reactor, Langdon Winner described the social and politi-
steps in a development process that has as its goal the replication cal structures inherent in the various energy options under con-
of Northern lifestyles around the world. That process is already sideration:
leading to family and community breakdown, increases in “Would it be nuclear power administered by a benign priest-
crime, violence, competition, and ethnic conflict. What’s more, hood of scientists? Would it be coal and oil brought to you by
the rising levels of consumption that are the measure of devel- large, multinational corporations? Would it be synthetic fuels
opment success are closely linked to increased fossil fuel con- subsidised and administered by the state? Or would it be the soft
sumption, and hence to global warming. energy path brought to you by you and your neighbours?”38
Some analysts argue that ‘techno-fixes’ will increase energy Only if there were intense pressure from below would lead-
efficiency so much that economic growth can be sustained ers be convinced to pursue the latter path. But as with all policy
while energy consumption slows.35 But even at current global choices, lasting solutions are not possible unless problems are
levels, energy consumption places an unsustainable burden on traced to their root causes. Following a ‘soft energy path’ towards
the biosphere. Even if the North’s energy efficiency were to diverse, decentralised renewable energy sources is not an option
increase substantially, it is likely that any gains made will be if every other policy choice tends towards centralisation, larger
negated by simultaneous efforts to industrialise the more popu- scale, and high technology.
lous South, where per capita emissions of CO2 are still only In the South today, where the energy infrastructure is still
one-tenth what they are in the most industrialised countries.36 largely undeveloped, there are tremendous possibilities for pro-
The promoters of development claim that their long-term moting and adopting renewable energy strategies. But such
goal is to raise Third World living standards to near those of the strategies will be most successful if they go hand-in-hand with
North. If this is to be accomplished while reducing greenhouse efforts to shift away from industrial ‘development’, and to seek a
emissions to levels that stabilise global climate, then the efficien- greater degree of self-reliance rather than greater global eco-
cy savings would need to be immense: the US, for example, nomic dependency.
would need to cut fossil fuel consumption by 93.5%, Britain by
87%, and the Netherlands by 90.5%.37 Techno-fixes alone, it
seems obvious, will fall far short of these targets. The reality is
that techno-fixes merely allow policymakers to apply an indus-
trial solution to a problem whose source is the industrial system
itself. By its nature, that system requires vast amounts of energy,
1 Richard Douthwaite, The Growth Illusion (Totnes, UK: Green Books, 1992), p. 200. 17 “Taking from the Taxpayer: Public Subsidies for Natural Resource Development”, op.
2 Ged R. Davis, “Energy for Planet Earth”, in Energy for Planet Earth, (New York: W. H. cit., pp. 28-39.
Freeman, 1991), p. 2. 18 Terrence R. Fehner and Jack M. Holl, “The United States Department of Energy,
3 Richard Douthwaite, “Energy Use by Sector”, op. cit. 1, p. 202. 1977-1994: A Summary History”.
4 Ged R. Davis, “Energy for Planet Earth”, op. cit. 2, p. 2. 19 Ibid., p. 10.
5 Christopher Flavin, “Fossil Fuel Use Surges to New High”, Vital Signs 1997, Lester 20 Michael Shelby et al, op. cit 13.
Brown, et al. eds., (New York: W. W. Norton, 1997), p. 46. 21 Michael Renner, “R&D Spending Levels Off ”, Vital Signs 1997, p. 113.
6 Nicholas Lenssen, “Nuclear Power Inches Up”, Vital Signs 1997, p. 48. 22 Mark Zepezauer and Arthur Naiman, Take The Rich Off Welfare (Tucson, AZ:
7 “New Québec River Diversions Threaten Wilderness, Indigenous Lands,” Temperate Odonian Press, 1996), p.86.
Forest Action Alert, Native Forest Network, Missoula, MT, no. 9, Aug. 1997. 23 J.A. Durbin and G.S. Rothwell, “Subsidies to Nuclear Power Through Price Anderson
8 Alliance to Save Energy, “Federal Energy Subsidies: Energy, Environmental and Fiscal Liability Limit”, Contemporary Policy Issues, vol. VII (1990), pp. 73-79, cited in Michael
Impacts”, cited in Michael Shelby, Robert Shackleton, Malcolm Shealy and Alexander Shelby et al., op. cit 13.
Cristofaro, “The Climate Change Implications of Eliminating US Energy (and 24 Nicholas Lenssen, “Nuclear Power Inches Up”, Vital Signs 1997, p. 48.
Related) Subsidies”, 1994, p. 4. 25 Taylor Moore, “Developing Countries on a Power Drive”, op. cit., p. 2.
9 Rothschild, “Oil Imports, Taxpayer Subsidies and the Petroleum Industry”, 26 Amulya K.N. Reddy and José Goldemberg, “Energy for the Developing World”, in
(Washington, DC: Citizen Action, May 1995), pp. 9-11. Energy for Planet Earth, op. cit.4, p. 61.
10 Ibid., p. 15. 27 Taylor Moore, “Developing Countries on a Power Drive”, op. cit.
11 Ibid., pp. 12-13. 28 Nicholas Lenssen, “Nuclear Power Inches Up”, op. cit., p. 48.
12 Michael Shelby et al., “The Climate Change Implications of Eliminating U.S. Energy 29 “Investing in India”, Financial Times, Mar. 10, 1997, p. 2.
(and Related) Subsidies”, 1994, p. 5; Terrence R. Fehner and Jack M. Holl, “The 30 Nicholas Lenssen, op. cit., p. 48.
United States Department of Energy, 1977-1994: A Summary History”, (Oak Ridge, 31 A. Blackwood, unpublished manuscript.
TN: US Department of Energy), p. 3. 32 Taylor Moore, op. cit., p. 4.
13 Michael Shelby et al., ibid., pp. 5-6. 33 Ibid., pp. 4-5
14 Gil Friend, “Stranded Assets: Why Can’t You Ever Find a Capitalist Around When You 34 Ibid., pp. 4-5
Need One?”, The New Bottom Line: Strategic perspectives on business and environment, vol. 35 Arnold P. Fickett, Clark W. Gellings, and Amory Lovins, “Efficient Use of Electricity”,
6, no. 17, Aug. 11, 1997, http://www.eco-ops.com/eco-ops. in Energy for Planet Earth, p. 23.
15 “Taking from the Taxpayer: Public Subsidies for Natural Resource Development”, 36 Ged R. Davis, “Energy for Planet Earth”, op. cit., p. 9.
Majority staff report of the subcommittee on oversight and investigations, Committee 37 Richard Douthwaite, The Growth Illusion, op. cit., pp. 194-6.
on Natural Resources, US House of Representatives, (Washington, DC: US Govt. 38 Langdon Winner, The Whale and the Reactor, (Chicago: University of Chicago Press,
Printing Office, 1994), pp. 21-28. 1986), p. 53.
16 Michael Shelby et al., op. cit 13.
26 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
7
L E A R N I N G T O S E RV E
THE GLOBAL MARKET
P
“Our schools are, in a sense, factories in which the raw materials are to be shaped
and fashioned into products to meet the various demands of life. The specifications
for manufacturing come from the demands of the twentieth century civilisation,
and it is the business of the school to build its pupils to the specifications laid
down.”
E. P. Cubberly, 19341
“There can be no doubt that the fantastic wealth of American big business is a
direct result of schools training a social mass to be needy, frightened, envious,
bored, talentless, incomplete. A successful mass production economy must have
such an audience. ... Just as the Amish small business/small farm economy
requires intelligence, competence, thoughtfulness, and compassion, ours needs a
well-managed mass. Levelled, spiritless, familyless, friendless, communityless,
godless and conforming people are best – people who can believe that the
difference between Coke and Pepsi is a subject worth fighting about.”
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 27
Small is B e a u ti f u l , B i g is S u bsi d is e d
28 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
Learning to S e rv e the Global Market
Since its baseline is firmly drawn in the industrial era, mod- report concluding that Europe’s chemical industry would
ern education focuses far more on the workings of the techno- relocate to another part of the world unless research received
sphere than the biosphere. The implicit message is that life itself more government support. One of the report’s authors noted
ultimately depends on technology and human-made institu- that “industry is reliant on universities for its workforce, so
tions, not on the natural world. This delinking is a frequent we must ensure that academic institutions are properly fund-
feature of learned treatises on modern problems. A Yale Univer- ed”.19
sity economist thus dismissed the impact of the greenhouse Having grown wealthier than many governments, corpora-
effect on the US, since “climate has little economic impact upon tions are increasingly willing to pay for the right to tailor the
advanced industrial societies”: educational infrastructure to their specific needs. Corporations
“Cities are increasingly becoming climate-proofed by tech- endow university chairs, pay for the construction of buildings
nological changes like air-conditioning and shopping malls. ... and research facilities, and fund whole departments in fields
Studies of the impact of global warming on the United States useful to their commercial enterprises. England’s Loughborough
and other developed regions find that the most vulnerable areas University, for example, is now offering a Bachelor of Science
are those dependent on unman- degree in “Retail Automotive
aged ecosystems – on naturally ‘The second floor of the building Management” – the country’s first
occurring rainfall, run-off and is named after the Kresge Foundation, university-level degree in car-sell-
temperatures, and the extremes ing. Funding for the programme is
of these variables.... Most eco- a 350-seat lecture hall is named for the Ford being provided in part by the Ford
nomic activity in industrialised Motor Company, the fourth floor is named for Motor Company.20
countries, however, depends very Since corporations need a
little on the climate. Intensive a Toyota dealer, the fifth floor is named steady supply of MBAs, business
care units of hospitals, under- for the Chrysler Corporation, and the schools have little trouble attract-
ground mining, science laborato- MBA lounge is named for the ing corporate support. In Leasing
ries, communications, heavy the Ivory Tower, Lawrence Soley
manufacturing and microelec- First of Michigan Corp.’ describes how the funding sourc-
tronics are among the sectors es for a new building at Michigan
likely to be unaffected by climatic change. In selecting whether State’s business school are documented in the names of various
to set up in, say, Warsaw or Hongkong, few businesses will con- building components:
sider temperature a weighty factor.”13 “The second floor of the building is named after the Kresge
In this view, the world inhabited by industrialised peoples is Foundation, a 350-seat lecture hall is named for the Ford Motor
so divorced from nature that major disruptions to the biosphere Company, the fourth floor is named for a Toyota dealer, the fifth
would scarcely be noticed. Disruptions to the technosphere, on floor is named for the Chrysler Corporation, and the MBA
the other hand, would be catastrophic: “There is no life today lounge is named for the First of Michigan Corp.”21
without [computer] software”, an executive of a major US-based Corporate labels go on more than just building parts.Thanks
corporation claimed. Without computers, “the world would to Bank of America’s $3 million donation to the University of
probably just collapse.”14 California at Berkeley, the new dean of the University’s business
As David Orr has observed about modern schooling, faith school, Laura d’Andrea Tyson, is officially the ‘Bank of America
in technology “is built into nearly every part of the curriculum Dean’.
as a kind of blind acceptance of the notion of progress.”15 But Though their influence is not always this visible, corpora-
corporations also use the educational infrastructure to gain tions are quite clear about what they expect from the educa-
acceptance for the specific technologies they control. This is tional system. In Britain a Graduate Employability Test, which
particularly true in America, where corporations provide cash- “objectively measures and profiles the skills most often specified
starved schools with free study materials and teacher’s kits laden by employers”, focuses on just three areas: “business awareness”,
with corporate-friendly messages. Monsanto, the corporation “personal working style”, and “computer skills”.22 There is
responsible for biotechnologies ranging from Roundup-ready nothing location-specific about these skills, nor is there anything
soybeans to genetically-engineered bovine growth hormone, remotely connected with critical thinking, civic responsibility
recently conferred an ‘environmental’ award on company or moral understanding.
employees who devised a “student education project ... that Today’s well-trained workers can be ignorant about the local
worked to raise student awareness about environmental benefits ecosystem, but their computer training must be up to snuff.
from biotechnology.”16 Along with seed corporation Pioneer According to Bill Gates, failure to be computer-adept means
Hi-Bred International, Monsanto also underwrote Field of “you risk being ineffective in almost any kind of work you
Genes, a classroom curriculum for teachers that gives an indus- pursue”.23 US government leaders apparently agree, since they
try spin on genetics, biotechnology, and genetic engineering.17 are spending billions of dollars in public funds to equip schools
Similarly, the timber-industry giant Weyerhauser created a with computers and to wire them for Internet access, with the
teacher’s guide that suggests students discuss the “innovative goal of providing online access for every 12-year old. As Bill
practices”Weyerhauser has introduced to forest management.18 Clinton explained, “This can make all the difference for com-
munities struggling to make sure their students are ready for the
21st century.”24
Training for the Corporate Economy Thanks to thinking like that, children in the industrialised
A further function of the modern educational system is to pre- world are seated in front of computer terminals earlier and ear-
pare children and young adults for jobs in a corporate-dominat- lier in life. In Britain, parents can send their children to Whiz-
ed global economy. Even corporations readily admit that they kids, which teaches computer literacy to children under the age
depend on the educational infrastructure to churn out their of five. An organiser of these early-learning centres boasts that
labour force. Eminent European chemists recently issued a they are teaching ten-finger touch-typing to children as young
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 29
Small is B e a u ti f u l , B i g is S u bsi d is e d
as three.25 Meawhile, software ‘suitable’ for children nine Today, virtually every Fortune 500 company has a school project
months old is already being marketed. Manipulated by media of a similar nature.29
hype and their own workplace fears, parents are thus helping to Several companies have found a lucrative niche creating
mould their children to corporate specifications even before these classroom materials. Often the goal is simply to familiarise
they enter the formal educational system. impressionable children with commercial products – as when
Of course, not every child will graduate to a well-paid job, third graders learn to solve arithmetic problems by counting
tapping away at a computer keyboard or managing a business Tootsie Rolls, or learn to read using the corporate logos of
empire. But corporations also need low-paid service employees, Kmart, Coke, Pepsi, or Cap’n Crunch.
and modern educational systems are churning out these workers Other times, more sophisticated ideas are implanted. Procter
as well. In Australia, in fact, the McDonald’s Corporation has and Gamble’s teaching aid about labour issues, ‘Coping with
entered into discussions with the Minister for Education regard- Growth’, essentially encourages children to accept corporate
ing “accreditation” for the training workers receive in the res- rule as a benevolent part of the social order. Thus a role-playing
taurant. Under the plan, students working at McDonald’s would game within the curriculum asks students to see events from the
be given course credit for flipping burgers and dishing out fries point of view of corporate management during a series of
– excellent preparation for the only kinds of job many will find strikes against the company in 1886:
in the new global economy.26 “Whenever the employees start a walkout you feel there
ought to be some way of kindling among the workers a strong-
er feeling of respect for and loyalty to [the company]. ... How
Learning to Consume can they be convinced that their overall interests are truly insep-
The corporate economy not only needs to ensure that the slots arable from those of Procter and Gamble?”30
on organisational charts are filled, it also needs consumers for According to Michael Jacobson and Laurie Ann Mazur,
the dizzying array of products it churns out. An expanding role authors of Marketing Madness, similar materials have been creat-
for modern schooling today is thus to familiarise children with the ed for industry public relations arms ranging from the American
consumer world they will inhabit the rest of their lives. Nowhere Nuclear Society to the National Frozen Pizza Institute. They
is this more true than in the United States, where spending by also point out that the companies producing these materials are
school-age children, combined with the influence they wield clear about their purpose when soliticing business:
over parental buying habits, adds up to $485 billion annually.27 “‘Let Lifetime Learning Systems bring your message to the
In order to create and tap this market, corporations are insin- classroom, where young people are forming attitudes that will
uating themselves deeper into the educational system, where last a lifetime,’ purrs the company’s sales kit. ‘Whatever your
they have a captive audience for any commercial messages they objective, we can help you meet it. ... Coming from school ... all
can introduce. In many schools corporate advertising now these materials carry an extra measure of credibility that gives
adorns school hallways, cafeterias, school buses and computer your message added weight’. Another ad asks potential clients to
screens. ‘IMAGINE millions of students discussing your product in class.
Perhaps the most insidious example of this trend is Channel IMAGINE their teachers presenting your organisation’s point of
One, a commercial-laden television ‘news’ programme that view.’”31
nearly 40% of American secondary schools compel students to Not even pre-schoolers are safe from this corporate assault.
watch. Whittle Communications, the for-profit corporation that Lifetime Learning Systems notes that by the age of four children
dreamed up this scheme, provides schools with video equipment are making “brand decisions”, and – in an unintentionally pro-
and a satellite dish permanently tuned to Channel One in found statement – points out that “preschool prepares children
exchange for a contract guaranteeing that students will spend to become consumers”.32
twelve minutes each day watching the network’s programming In sum, modern education serves to turn children into adults
– including two minutes of commercials. In the course of a year, who are passive consumers and workers. John Taylor Gatto lists
students spend the equivalent of one whole day watching adver- some of the learning required of Americans:
tising. One study found that a majority of students thought the “The American economy depends on school teaching us
advertised products must be good for them, since they were that status is purchased and that others run our lives; we learn
promoted in school.28 there that the sources of joy and accomplishment are external,
The negative impact of commercial television in the class- that contentment comes with possessions, seldom from within.
room goes well beyond the advertising messages themselves: School cuts our ability to concentrate to a few minutes dura-
children are also taught that television is a reliable source of tion, creating a life-long craving for relief from boredom
information and a viable educational medium. Any parents through outside stimulation. In conjunction with television and
wanting to eliminate television from their children’s lives have computer games which employ the same teaching methodology,
to contend not only with peer pressure, but with the education- these lessons are permanently inscribed.”33
al establishment’s implicit endorsement as well. Educating children for roles in the corporate economy,
indoctrinating them with an industrial worldview and an
uncritical faith in technology, subjecting them to corporate
Corporate ‘Teaching Aids’ manipulation in the classroom – all these are considered reason-
Corporations today ‘generously’ offer teachers free study guides, able functions of the educational system. But even the fairly
magazines, posters, and other products for classroom use. As mild environmental programmes underway in many schools
educational materials their value may be dubious, but as vehicles have come under attack from an industry-led backlash. Turning
for corporate messages they are quite effective. Kellogg’s pro- reality on its head, critics claim that “unlike most schooling from
duces ‘nutrition’ posters that feature the company’s cereals; the kindergarten through 12th grade, environmental education
Hershey Food Corporation distributes a video on geography, often expressly encourages students to change their own behav-
nutrition and science prominently featuring Hershey’s choco- iour and that of their society.”34
late; Nike hands out free book covers plastered with its logo.
30 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
Learning to S e rv e the Global Market
1 E. P. Cubberly, Public Education in the United States (Boston: Houghton Mifflin, 1934), Westview Press, 1995), p. 33.
cited in Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 60. 19 “Farewell Europe”, New Scientist, Nov. 9, 1996, p. 11.
2 John Taylor Gatto, “On the Scientific Management of Children”, The Journal of 20 Reported on Today programme, Radio 4, England, May 30, 1997.
Alternative Education, vol. XV, no. 3, summer 1998, p. 42. 21 Lawrence C. Soley, Leasing the Ivory Tower: The Corporate Takeover of Academia (Boston:
3 Cited in Edward Goldsmith, The Way (Boston: Shambala, 1993), p. 282. South End, 1995), p. 71.
4 Wendell Berry, The Unsettling of America (San Francisco: Sierra Club, 1977), p. 147. 23 “Testing times for Britain’s Students”, London Times, Feb. 19, 1997, p. 15.
5 Helena Norberg-Hodge, Ancient Futures: Learning from Ladakh (San Francisco: Sierra 24 Bill Gates, The Road Ahead (Penguin: New York, 1996), p. 294.
Club, 1991), pp. 110-111. 25 “Clinton Hails Internet Use on Line and on Air”, The New York Times, April 20, 1996.
6 Ibid., pp. 110-111. 26 “Infant Programmers”, London Times, Oct. 25, 1996, p. 37.
7 John Taylor Gatto, “A Map, A Mirror, and A Wristwatch”, Challenging the Giant 26 Daniel Cass, spokesperson on international issues, democracy and environment,
(Albany, NY: Down to Earth Books, 1996), p. 321. Australian Greens Party, Victoria, Australia, dcass@mov.vic.gov.au
8 David Orr, Earth in Mind (Washington, DC: Island Press, 1994), p. 31. 27 Deborah Stead, “Corporations, Classrooms, and Commercialism”, in Education Life,
9 Cited in Rupert Sheldrake, The Rebirth of Nature (Rochester,VT: Park Street Press), p. 40. (supplement to The New York Times), Jan. 5, 1997, p. 31.
10 Scientific American, Sept. 1989. 28 Michael F. Jacobson and Laurie Ann Mazur, Marketing Madness, op. cit., pp. 29-31.
11 Edward Goldsmith, The Way, op. cit., p. xiv. 29 Deborah Stead, “Corporations, Classrooms, and Commercialism”, op. cit., p. 30.
12 Ibid., p. xv. 30 Michael F. Jacobson and Laurie Ann Mazur, op. cit., p. 34.
13 William Nordhaus, “Greenhouse Economics: Count Before You Leap”, The Economist, 31 Ibid., p. 31.
July 7, 1990, cited in Richard Douthwaite, The Growth Illusion, op. cit., p. 199. 32 Ibid., p. 32.
14 The New York Times Magazine, Dec. 1, 1996, p. 40. 33 John Taylor Gatto, op. cit., p. 24.
15 David Orr, Earth in Mind, op. cit. 8, pp. 32-3. 34 John Cushman, “Critics Rise up Against Environmental Education”, The New York
16 “Monsanto Environmental Annual Review, 1995”, Monsanto Environmental Public Times, Apr. 22, 1997.
Affairs (800 North Lindbergh Blvd., St. Louis, MO 63167), p. 20. 35 Michael F. Jacobson and Laurie Ann Mazur, op. cit. , p. 35.
17 Although underwritten by the Monsanto and Pioneer corporations, the book was 36 David Orr, Earth in Mind,, p. 50.
published under the auspices of the National 4-H Council, 7100 Connecticut Ave., 37 Ibid., p. 205.
Chevy Chase, MD 20815. 38 John Taylor Gatto, “On the Scientific Management of Children”, op. cit., pp. 40-41.
18 Michael F. Jacobson and Laurie Ann Mazur, Marketing Madness (Boulder, CO: 39 Ibid., p. 42.
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 31
8
P
R E S E A R C H : W H O PAY S ,
W H O P RO F I T S ?
“... the White House has approved a proposal to spend up to $1 billion to help
US companies compete with Japan in making sophisticated computer display
screens ... The plan builds on current research programmes paid for by the
Pentagon and the Energy Department, for which Congress already has authorised
$100 million.”
32 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
R e s e a r c h : W h o P a y s , W h o P r o f its ?
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 33
Small is B e a u ti f u l , B i g is S u bsi d is e d
its huge investment needs” .14 ducers and ultimately decimated rural life. In Vermont, for exam-
In other words, today’s technologies are so expensive they are ple, half the dairy farmers in the state were driven out of business
only viable in the context of a huge, globalised economy. when refrigerated bulk tanks replaced the old 40-quart milk cans
The main beneficiaries of technologies created by public- in the 1950s. The cost of adopting the new technology was too
ly-funded research are corporations. If individuals can be said to great for farms with less than 30 cows, and 20,000 small family
benefit at all from these innovations, it is only in their role as farm workers were driven off the land.18 The mechanical toma-
consumers of an expanding line of corporate products. The tech- to-picker had a similar impact in California. The machine
nologies themselves remain firmly in the hands of corporations, reduced the cost of harvesting tomatoes by $5-7 per ton, but the
adding to their power while furthering everyone else’s depend- $50,000 price tag meant that only the largest farms could use it
ence on the corporate world. profitably. This one technology, developed at public expense by
Some innovations help provide the infrastructure needed by researchers at the University of California, led to a decline in the
number of tomato farms from 4,000 in the early 1960s to about
‘The main beneficiaries of technologies created 600 in 1973.19
by publicly-funded research are corporations. If
individuals can be said to benefit at all from these
Land Grant Colleges
innovations, it is only in their role as consumers In the United States, much of the country’s agricultural research
of an expanding line of corporate products.’ takes place at land grant colleges, institutions that were created
specifically to strengthen and serve small farmers and rural life.
Looking at that infrastructure reveals much about the impact of
publicly-funded research.
large-scale economies: more efficient and higher speed transport, The land grant system – created by a series of legislative acts
faster and more reliable telecommunications networks, new in the late 19th and early 20th centuries – consists of agricultur-
means of extracting energy from the Earth. Research in other al colleges, experiment stations, and extension services. The lan-
areas – pharmaceuticals and biomedical products, agricultural guage of the acts setting up the system leaves little doubt that it
chemicals and machinery, building products, etc. – is giving cor- was intended to help maintain an agricultural way of life and a
porations tighter control over people’s everyday needs. rural economy. Reference was made to “a sound and prosperous
Some research merely enables corporations to encourage agriculture and rural life”, and the “development and improve-
consumers to buy new products – part of the ‘new and improved’ ment of the rural home”. The system was meant to “assure agri-
treadmill that keeps consumption high by creating new needs. culture a position in research equal to that of industry, which will
One heralded achievement of Rensselaer Polytechnic Institute’s aid in maintaining an equitable balance between agriculture and
Center for Product Innovation, for example, was a redesigned other segments of the economy.” It would also help disseminate
coffee-pot for the Norelco Corporation.15 And the US Jet Pro- “useful and practical information on subjects relating to agricul-
pulsion Laboratory (JPL) has teamed up in a “strategic alliance” ture and home economics.”20
with toymaker Mattell on a “Hot Wheels JPL Sojourner Mars If the land grant colleges had stayed true to these goals, they
Rover Action Pack Set” – described in a press release as “one might have helped small farmers survive. Instead, the system
example of how the Jet Propulsion Laboratory Technology Affil- ended up treating agriculture like any other industry, in which
iates Program works with industry”.16 Your tax dollars at work. the primary goal is to increase production in general and labour
productivity in particular. Most of the meaningful research and
teaching in the land grant system was eventually devoted to tech-
Undermining Small Scale nological innovations – primarily machinery and chemical inputs
Most new technologies inherently benefit larger-scale operators
at the expense of smaller ones. Nowhere has this been more true ‘Most of the meaningful research and teaching
than in agriculture. In his book The Growth Illusion, ecological
economist Richard Douthwaite describes how the introduction in the land grant system was eventually devoted
of diesel and electric irrigation pumps to a small village in India to technological innovations that improved
favoured the farmers who had the capital to invest in them, while
those who remained with traditional methods – based on oxen
‘efficiency’ so well that the vast majority of
– were irreparably harmed. The new pumps allowed more water farmers were made redundant.’
to be pumped, and raised the yields of the farmers that used them.
But the increased production ultimately led to a drop in crop
prices; the water table also fell, adding to the burden on farmers – that improved ‘efficiency’ so well that the vast majority of farm-
using traditional irrigation methods.17 ers were made redundant. In a description that sounds similar to
Thus, this one new technology increased the gap between the trends in universities today, Jim Hightower and Susan DeMarco
richest and poorest in the village, ultimately driving some farmers point out who this research has really helped:
off the land; it also undermined the long-term sustainability of “It is the largest-scale growers, the farm machinery and
the agricultural system by depleting ground water supplies; and it chemicals input companies and the processors who are the pri-
siphoned money from the village to industrial pump manufactur- mary beneficiaries. Machinery companies such as John Deere,
ers and energy firms.Yet the technology was no doubt introduced International Harvester, Massey-Ferguson, Allis-Chalmer and J.I.
to the village by the agents of ‘development’ as a great step for- Case almost continually engage in co-operative research efforts at
ward. land grant colleges. These corporations contribute money and
A similar pattern of events has unfolded in the industrialised some of their own research personnel to help land grant scientists
world as well, as new technologies centred on machinery and develop machinery. In return, they are able to incorporate tech-
chemical inputs increased labour productivity, but hurt small pro- nological advances in their own products. In some cases they
34 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
R e s e a r c h : W h o P a y s , W h o P r o f its ?
actually receive exclusive licenses to manufacture and sell the be devoted to such small-scale farming techniques as rotational
products of tax-paid research.”21 grazing of dairy herds, or gaining a better understanding of the
As a result of research conducted at the land grant colleges, structure of Amish farming. If, however, the primary goal is to
millions of farmworkers lost their jobs, hundreds of thousands of meet the growth requirements of corporations, then research
small farms went out of business, and the vitality of rural life was funding will go towards such technologies as genetic engineering,
decimated. which promises to give corporations an even tighter stranglehold
on the world’s food supply.23
A similar argument can be made for research in other areas of
Local Knowledge for Local Economies life: rather than pouring billions into nuclear power and fossil-fu-
None of this was inevitable at the time, nor is it now. There is el research, funding could go towards making diverse and decen-
no reason why these colleges — or any other research facility tralised renewables more readily available; rather than research
— must continue turning out a “technological arsenal suited to into high-speed rail and “intelligent transportation systems” that
a large-scale of operation”, in the words of Hightower and enable cars to drive themselves, money could be spent improving
DeMarco. Wendell Berry, for example, lists some of the roles the small-scale and locally-appropriate transport modes.
land grant colleges could fill that would be helpful for small farm- The choices made by governments clearly favour larger scale,
ers and their local, rural economies. These include developing and no significant funding has been available for small-scale
small-scale technologies and methods appropriate to the family technologies adapted to local environments. Emblematic of the
farm; promoting co-operatives and other means of protecting trend is a university in the US which provided $27 million for a
small farmers from corporate suppliers and purchasers; strength- new biotechnology centre, while housing its Family Farm Insti-
ening local markets for poultry, eggs, butter, cream, milk, and tute and other sustainable agriculture facilities in a tiny, remod-
other farm products; and working to overturn the regulations elled furnace building.24 And in Europe, the EEC praises bio-
that have destroyed such markets.22 technology as a field offering a “rich source of growth”, one
Agricultural researchers Jack Kloppenburg and Beth Burrows which should therefore be supported.25 About the future of
point out that if the goals are to feed people, to revitalise rural small-scale, truly sustainable farming and rural life in general,
communities and local economies, and to maintain the stability they are quite silent.
of ecosystems, then public money for agricultural research might
1 Keith Bradsher, “US to Spend $1 Billion to Aid Computer Firms”, San Francisco 14 Akio Morita, “Toward a New World Economic Order”, The Atlantic Monthly, June
Chronicle, Apr. 24, 1994, p. A13. 1993, p. 92.
2 “Study Finds Public Science Is Pillar Of Industry”, The New York Times, May 13, 15 Lawrence C. Soley, op. cit. 7, p. 13.
1997, Section C, p. 1. 16 James Gorman, “Mars Mission Separates the Men from the Toys”, The New York Times,
3 Michael Renner, “R&D Spending Levels Off ”, Vital Signs, 1997 (New York: W.W. July 13, 1997, sect. 4, p. 2.
Norton, 1997), pp. 112-113. 17 Cited in Richard Douthwaite, The Growth Illusion, p. 21.
4 Jack Kloppenburg, Jr. and Beth Burrows. “Biotechnology to the Rescue?”, The 18 Daniel Neary, Jr., “Silent Hillsides: How the Coming of the Bulk Tank Dispossessed
Ecologist, vol. 26, no. 2, Mar/Apr 1996, p. 64. Small Farmers”, Vermont Sunday Magazine, Feb. 25, 1996, pp. 4-13.
5 “United Kingdom Report to the Commission on Sustainable Development, 1995”, 19 Langdon Winner, The Whale and the Reactor (Chicago: University of Chicago, 1986),
section 2. p. 26.
6 “German Aerospace Research Establishment: Welcome to the DLR”, web page. 20 Cited in Wendell Berry, The Unsettling of America, (San Francisco: Sierra Club, 1977)
7 Lawrence C. Soley, Leasing the Ivory Tower: The Corporate Takeover of Academia (Boston: p. 144.
South End, 1995), p. 12. 21 Jim Hightower and Susan DeMarco, “The Land Grant College Complex”, in Peter
8 Ibid., p. 40. Barnes, ed., The People’s Land: A Reader on Land Reform in the United States (Emmaus,
11 Ibid., p. 42; and Jack Kloppenburg, Jr. and Beth Burrows, “Biotechnology to the PA: Rodale, 1975).
Rescue?”, op. cit., p. 64. 22 Wendell Berry, The Unsettling of America, p. 153.
10 Lawrence C. Soley, op. cit. 7, pp. 40-41. 23 Jack Kloppenburg, Jr. and Beth Burrows, “Biotechnology to the Rescue?”, op. cit., p. 63.
11 Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 124. 24 Ibid.
12 “White Paper on Growth, Competitiveness, and Employment”, Commission of the 25 “White Paper on Growth, Competitiveness and Employment”, Chapter 4, p. 5.
European Communities, Brussels, December 5, 1993, Chapter 4, pp. 2-3.
13 Cited in William Greider, One World, Ready or Not (New York: Simon and Schuster,
1997), p. 177.
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 35
9
P
E X PA N D I N G I N F R A S T RU C T U R E S :
T H E R A C E T O N OW H E R E
A
er ones.
s the preceding chapters have shown, governments
have for many years subsidised large-scale infrastructures
that benefit the largest enterprises at the expense of small-
36 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
E x pa n d i n g I n f r a st r u c t u r e s : T h e R a c e T o N o w h e r e
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 37
Small is B e a u ti f u l , B i g is S u bsi d is e d
* completed
ropean Network is that trade, and consequently long-distance evolution is being employed in the service of changes conscious-
transport, are necessary for economic growth. But that growth ly planned by and for corporations.
will be largely limited to those businesses whose scale is large Rather than ‘evolution’, a better analogy is an arms race. Euro-
enough to participate in trans-European trade. Small, local busi- pean nations and their citizens are being asked not only to aban-
nesses will reap no benefits; in fact, they may not be able to sur- don their sovereignty, but to pick up the tab for an immense
vive the further advantages given to their large-scale competitors. expansion of the industrial infrastructure so that European corpo-
The demise of such small, locally-owned businesses will further rations can “reach the scale necessary” to compete globally.
impoverish small towns, villages and rural life. Even the European The European Commission justifies this call for huge new
Commission is aware of this impact: the planned doubling of the investments because “countries such as the USA and Japan are
motorway system alone is expected to lead to the demise of 1,000 making significant, targeted efforts to renew their infrastructures.”
small villages throughout Europe. We have now come full circle: the citizens of both the US and
Valid concerns about the environment, about the further con- Europe are being asked to pay for infrastructure improvements,
centration of power in huge corporations, about the sapping of largely because the other is doing so. If that isn’t enough to gen-
local economic vitality – not to mention the erosion of national erate support, the EEC adds ominously that threats even lurk
sovereignty and identity – might convince people that their best from “new industrial powers such as Singapore, Taiwan, certain
interests are not served by these projects. Corporate planners are parts of China and Argentina [that] are creating networks which
well aware of this possibility, and are devoting considerable energy integrate the latest technological advances.”18
to “obtaining the consensus of citizens”. For the ERT, this means
sponsoring a centre to provide “authoritative views” that support
the corporate agenda. As for concerns about the jobs that would Infrastructure Everywhere
be lost to high-technologies, the European Commission finds that The infrastructure race is not limited to the US and Europe. One
“it is difficult to assess this factor precisely”, and so it is an issue of Japan’s recent transport improvements, for instance, is the $9.7
best ignored: billion Akashi Haikyo Bridge, the longest suspension bridge in
“In any event, it would be fruitless to become embroiled in a the world, that makes it possible to drive between Kobe and Awaji
fresh dispute about the ‘machine age’, as was the case with the first islands.19
industrial revolution. Worldwide dissemination of new technolo- Today, virtually every country is being pressed to expand its
gies is inevitable”.16 infrastructure in order to facilitate global trade. In the South, the
Likewise, people’s objections on environmental grounds “can- creation of an industrial infrastructure is seen as the route by
not simply be granted a power of veto”, according to the ERT: which Third World economies can emulate the rich consumer
“If Europe is to escape from the effects of the sterile veto, the cultures of the North. Chapter 6 described a few of the many
increasingly effective organisation of those arguing for environ- centralised energy installations being planned or built. In addition:
mental citizens’ rights must be matched by a more effective
organisation of the advocates of change, adaptation and growth.”17 • Five South American countries – Brazil, Argentina, Para-
“Change, adaptation and growth”: once again the language of guay, Uruguay and Bolivia – are investing $1 billion to
38 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
E x pa n d i n g I n f r a st r u c t u r e s : T h e R a c e T o N o w h e r e
widen, deepen and straighten 2,100 miles of river to accomo- • Nepal is getting help from the World Bank to build the huge
date convoys of barges carrying soybeans, iron ore and other Arun III hydroelectric dam project, which includes a 73-mile
global commodities. Known as the Hidrovia Paraguay-Parana, access road and 300 miles of transmission lines. The dam
the project will require dredging the equivalent of 4 million threatens one of the last virgin forests in the Himalayas, and
truckloads of material from sensitive ecological areas, thereby even the World Bank admits that the project would “bring rapid
threatening the Pantanal, the world’s largest wetland.20 and irreversible changes” to a remote region currently populat-
ed by indigenous tribal peoples.27
• Along with the many energy infrastructure projects men-
tioned earlier,China is also expanding its road infrastructure: the Almost every such large-scale project harms nearby commu-
World Bank, for example, is extending a $400 million loan for nities. People’s livelihoods are wiped out, local ecosystems are
construction of the Jinzhu highway, which, the Bank points damaged beyond repair, entire villages cease to exist. Although the
out, “will improve long-distance travel and promote trade ...”21 affected people often fight back, they are usually given little sup-
port. The mainstream view is that infrastructure projects benefit
• In clear violation of Indian law, the state of Maharashtra is society as a whole, and that only an unfortunate few are negative-
joining with P&O Australia to build a huge international port ly affected by them. But large-scale projects like these have sys-
in Dahanu Taluka, one of only three regions in India that have temic impacts that go far beyond their immediate vicinity: since
been set aside as ‘ecologically fragile’ zones. Funding is being their main purpose is to greatly expand economic scale, they
sought from the World Bank and the Asian Development Bank undermine every local economy and community they touch.
for the project, which is being opposed by an alliance of fish- Meanwhile, the expanded consumption they make possible adds
ermen and tribal and environmental organisations.22 to global environmental burdens.
Unfortunately, local elites, governments, corporations and the
• Despite many years of protests, the Indian government is still media have succeeded in convincing people that their basic needs
planning to build the huge Tehri Dam, which will flood 27,000 can only be met from within the global economy. Participating in
hectares of prime farmland and displace 100,000 people from that economy means entering a costly infrastructure race. More
their homes.23 The Dhabol Power Project, described earlier, is energy, faster and more extensive transport, more sophisticated
also at the top of the list. Among its other effects, effluent from communications, more technologically-based educational institu-
the Dhabol plant threatens to destroy fisheries and kill the tions, more high-tech research facilities – all become necessary to
coconut and mango trees on which nearby villagers depend. keep pace with competitors around the world. The great irony, of
But with Matsushita investing $14 million in new air-condi- course, is that the corporations dictating these infrastructure
tioning and washing-machine factories, and Fujitsu building a demands are now transnational, and owe no allegiance to the
new plant to manufacture telecommunication equipment, it is countries or people that pay for them.When rooted citizens must
apparent that the energy needs of TNCs are more important pay for the needs of unrooted corporations, they’ve entered a race
than the livelihoods of traditional villagers.24 only corporations can win.
• The Asian Development Bank has recently loaned the gov-
ernment of Laos funds to build a hydroelectric dam on the
Mun River, despite a study showing the dam “will result in
ecological, sociological, and economic damage to the region.”25
Not to be outdone, The World Bank also recently agreed to
provide Laos with $48 million in financing for a “highway
improvement project”.26
1 “Missing Networks: A European Challenge”, ERT, 113 avenue Henri Jaspar, 1060 15 “Ten Questions on TENs”, European Federation for Transport and Environment, Rue
Brussels, Belgium, 1991. p. 5. de la Victoire 26, 1060, Brussels, Belgium, pp. 3-6.
2 Rodney E. Slater, letter to Al Gore, March 12, 1997, p. 2. 16 “White Paper on Growth, Competitiveness and Employment” (Development Theme
3 “Highlights of the FY 1997 Transportation Budget”, US Department of I: Information Networks), op. cit., p. 2.
Transportation, Washington DC, 1997, pp. 3, 5, 12. 17 “Missing Networks: A European Challenge”, op. cit., pp. 14-16.
4 Ibid., pp. 5, 16. 18 “White Paper on Growth, Competitiveness and Employment”, op. cit.
5 Rodney E. Slater, op. cit., p. 2; “Highlights of the FY 1997 Transportation Budget”, op. 19 “First Day, and Traffic is Bumper to Bumper”, The New York Times, Apr. 6, 1998, p. A3.
cit., pp. 8-9 20 Blackwood, unpublished manuscript; Glenn Switkes, “Design Chosen for First Phase
6 “Highlights of the FY 1997 Transportation Budget”, op. cit. of Hidrovia”, World Rivers Review, June, 1996.
7 Simon Fairlie, “The Theory Behind Toll Roads: New Clothes for the Road Lobby”, 21 Taylor Moore, “Developing Countries on a Power Drive”, EPRI; “Loan & Credit
The Ecologist, vol. 24, no. 6, Nov/Dec 1994, p. 214; Nicholas Hildyard, Colin Hines and Summary” (projects approved at World Bank’s December 1996 board meeting.)
Tim Lang,”Who Competes: Changing Landscapes of Corporate Control”, The 22 dahanu@aol.com
Ecologist, vol. 26, no. 4, Jul/Aug 1996, p. 140. 23 Aleta Brown, “Tehri Stalled by Powerful Fast”, World Rivers Review, vol. 11, no. 3,
8 Maria Green Cowles, “Setting the Agenda for a New Europe: The ERT and EC July 1996.
1992”, Journal of Common Market Studies, vol. 33, no. 4, p. 506. 26 “Investing in India”, Financial Times, Mar. 10, 1997, p. 2.
9 Cited in Ibid., p. 505. 27 Alexis Dinno, “Funding for Laos Dam Approved Despite EIA Criticisms”, World Rivers
10 A. Blackwood, unpublished manuscript. Review, Sept., 1996.
11 “Missing Networks: A European Challenge”, ERT, 1991. p. 9. 28 “Loan & Credit Summary” (projects approved at World Bank’s Apr. 8, 1997 meeting).
12 A. Blackwood, unpublished manuscript. “Green Scissors Report, 1995”, Public Citizen, Washington, DC.
13 A. Blackwood, unpublished manuscript; “White Paper on Growth, Competitiveness
and Employment”, Commission of the European Communities, Brussels, Dec. 5, 1993.
14 “White Paper on Growth, Competitiveness and Employment”, op. cit., Chapter 3, p. 1.
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 39
10
P
T H E RU L E S O F T H E G A M E :
FREE TRADE
“Bigness is the condition of America ... because ever since World War II it has
been the function of the national government – fulfilling, it is presumed, the will
of the people – to foster and promote it.”
40 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
The Rules Of The Game: Free Trade
capital, allowing it to flow unimpeded to wherever it can get the by the state, governmental intervention on behalf of large-scale
highest return.4 industries has long been accepted practice – although such sup-
Recent economic meltdowns in Asia, Russia and Latin Amer- port runs counter to what are supposed to be the rules of the free
ica are a direct consequence of this hyper-mobility of capital. But enterprise game. John Kenneth Galbraith pointed this out a quar-
the architects of the global economy are pressing forward with ter of a century ago:
more of the same, using supra-national institutions like the Inter- “In the traditional image of the corporation, a conceptually
national Monetary Fund to override national efforts to insulate sharp, even immutable line divides the corporation from the state.
their currencies from global pressures. According to a 1998 IMF There is government; there is private enterprise; the two do not
communique, the Fund’s Board of Governors believes that “it is meet. ... Only someone with an instinct for inconvenience sug-
now time to add a new section to the Bretton Woods Agreement gests that firms such as Lockheed or General Dynamics, which do
by making the liberalisation of capital movements one of the most of their business with the government, make extensive use
purposes of the Fund and extend as needed the Fund’s jurisdic- of plants owned by the government, have their working capital
tion for this purpose.”5 supplied by the government, have their cost overruns socialised by
These institutions – and the WTO and MAI in particular – the government, ... are anything but the purest manifestation of
have the clear aim of eliminating people’s ability to define local private enterprise. And this being so of Lockheed, the question
needs and run their communities as they see fit. Once they are in certainly does not arise with American Telephone & Telegraph, or
place, local and even national laws will be increasingly subservient General Electric.”10 Galbraith’s point can be applied in numer-
to the needs of international commerce. The ‘rules of corporate ous other cases. For example:
behaviour’ will be the rules governing the entire planet.
• Germany routinely supports its largest industries through
direct subsidies and tax incentives. According to one govern-
Depending on Corporations ment official,Volkswagen is to Germany “what apple pie is to
For many years, governments have acted upon the belief that the Americans”, and so VW receives especially generous treat-
economic vitality depends upon the growth of large-scale indus- ment – such as the recent $62 million subsidy it received from
tries. Although this belief took most dramatic form in the com- the state of Saxony.11
munist world – where the state controlled and supported virtual-
ly all industries – ‘free-market’ nations have been similarly • Airbus, the world’s number two aircraft manufacturer, is a
convinced of the importance of supporting industry, even when European consortium jointly owned by British Aerospace,
the firms themselves remained largely in private hands. As Robert Daimler-Benz (Germany), Aerospatiale (France), and CASA
Reich notes, (Spain). The company pays no taxes, and it is estimated that
“In return for prosperity, American society accepted the legit- company has received $20 billion in government subsidies since
imacy and permanence of the core American corporation. ... 1970.12
Government officials took as one of their primary responsibilities
the continued profitability of [these] corporations”.6 • In France, the government bailed out the country’s largest
Many nations outside the communist world formalised this bank, Credit Lyonnais, after a series of bad loans – including an
marriage between government and industry by owning compa- investment in the Channel Tunnel – threatened it with insol-
nies in areas critical to industrial development – energy, transport, vency. The most recent infusion of taxpayers’ money brings the
communications and advanced technologies. Italy has long nur- total in state aid to £7 billion.13
tured its national holding companies, including IRI (Istituto per
la Ricostuzione Industriale), which was set up by Mussolini to • Overall, the European countries comprising the European
spur industrial growth. Its several hundred companies include the Union spend vast sums each year supporting various sectors of
the industrial economy. In the early 1990s, for example, the
‘Airbus, the world’s number two aircraft nations of the European Union were providing the manufac-
manufacturer, pays no taxes, and it is estimated turing sector with some 43 billion ecus annually in public
that company has received $20 billion in assistance.14
government subsidies since 1970.’ • Japan is famous for its ‘industrial policy’, a form of state-sup-
ported capitalism in which government and industry closely
co-ordinate their efforts. A similar “close, complex and produc-
telecommunications giant STET and the national airline, Alitalia. tive relationship between government and business” has been
Direct capital transfers from government to these industries cited as the reason for the rapid expansion of Asia’s so-called
totalled £17 billion in the 1980s alone, although many are now ‘Tiger’ economies – South Korea,Taiwan, Singapore and Hong
being privatised.7 France nurtured and only recently divested Kong.15
itself of dozens of industries – ranging from car manufacturer
Renault and oil company Elf Aquitane to chemical manufacturer • In the United States, the smallest businesses are forced to sink
Rhône-Poulenc and tobacco company Seita, maker of Gauloise or swim, while the biggest are often rescued from troubled
cigarettes.8 Groupe Bull, the third largest computer maker in waters by the government: the Chrysler Corporation, for
Europe, has been part-owned by the French government since instance, was able to avoid bankruptcy in 1979 thanks to gov-
1975, and recently received an additional $2.1 billion investment ernment-guaranteed loans of $1.2 billion.16 The US govern-
while being readied for privatisation.9 Only in recent years has ment also has a number of programmes aimed at helping those
Britain divested itself of its stake in industries like British Tele- corporations involved in international trade and investment.
communications and British Airways, sometimes putting them in The Market Access Programme, for example, provides about
private hands at a fraction of the cost it took to build them. $100 million annually to companies like Sunkist, Miller Beer,
Even when such companies are not owned in whole or part Campbell’s Soup, McDonald’s, and M&M Mars to advertise
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 41
Small is B e a u ti f u l , B i g is S u bsi d is e d
Greener Pastures
Corporations have grown fat through government support, but
the corporate form has no capacity for loyalty. Trade rules have
given them the ability to shift production from country to coun-
try at will, and corporations are no longer ‘national’ in any mean- Corporations invade Eastern Europe (Budapest, Hungary)
ingful sense. Instead they roam the world seeking low-wage
regimes, lax environmental rules and even bigger subsidies.
According to Dave Phillips of Earth Island Institute, the tuna-can- greater the profit opportunity they present to firms that are suffi-
ning industry in America cut labour costs by more than half by ciently large and nimble ... and the greater their competitive
shifting operations from California to Puerto Rico, where a advantage over smaller local firms that remain rooted in a particu-
labour force was available for $7 per hour. Puerto Rico was aban- lar community and play by its rules.”21
doned in turn for American Samoa, where $3.50 per hour was While massive subsidies are offered in the hopes of luring
the going wage. From there, companies shifted to Ecuador, where transnational corporations away from other countries, nowhere
are governments offering similar support for small shops, small-
‘While massive subsidies are offered in the scale farmers or local producers – even though such businesses
provide more jobs than large corporations per unit of output.
hopes of luring transnational corporations away Meanwhile, the subsidies and tax breaks given large businesses add
from other countries, nowhere are governments to the tax burden borne by everyone else. According to Richard
offering similar support for small shops, Barnet of the Institute for Policy Studies, corporations operating
in the US in the 1950s paid 23% of all federal income tax; by
small-scale farmers or local producers.’ 1991 the corporate share had dropped to 9.2%.22 Similarly, the
portion of local property tax revenues paid by corporations
workers were paid only $1 per hour, then to Thailand where dropped from 45% in 1957 to 16% in 1987.23 In both cases, the
wages were only about half that rate. Some companies are already difference has been made up by individuals, family farmers and
moving on to Indonesia to cut labour costs still further.20 small businesses.
The ‘race to the bottom’ provoked by free trade rules offers A recent UN study revealed that at least 59 of the 83 coun-
far greater advantages to large firms than smaller, more locally tries surveyed offered some form of incentive to transnational
rooted ones, as David Korten explains: corporations.24 An exhaustive list of such inducements would be
“The more readily a firm is able to move capital, goods, tech- impossible, but a few examples reveal the trend:
nology, and personnel freely among localities in search of such
advantage, the greater the competitive pressure on localities to • Apparently approving of the maxim that what’s good for
subsidise investors by absorbing their social, environmental, and automobile manufacturers is good for the country, govern-
other production costs.The larger and more open the markets, the ments seem to reserve the biggest subsidies for car factories.
42 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
The Rules Of The Game: Free Trade
Portugal invested over $483 million to lure a factory jointly ernments have a ready forum for raising objections to the laws of
operated by the Volkswagen and Ford corporations; the plant other nations, and they have not been shy about using it. While
only accounted for 1,900 new employees, a public cost of less than 200 trade complaints were handled by GATT in a
$245,000 per job. Mazda was given incentives worth $48.5 half-century, the WTO fielded 50 complaints in just its first 18
million by the state of Michigan for a new plant, while months.30 Its first ruling determined that the US Clean Air Act
Mercedes-Benz received $250 million in 1993 from Alabama
to set up shop there – a cost of $166,000 per new job created. ‘In Taiwan, not only was the market to imported
BMW received a subsidy package worth £45-50 million from
national and regional governments to build a new engine plant
cigarettes opened up, but a proposed law banning
in Britain; but since the corporation’s plans included closing an cigarette vending machines, restricting public
existing engine factory near Birmingham, no net jobs were smoking areas, prohibiting tobacco advertising,
even created. BMW did even better in the United States a few
years earlier, when South Carolina offered subsidies totalling and funding an anti-smoking campaign was
$130 million for siting a plant in that state.25 scuttled by threats of trade sanctions.’
• The Japanese electronics firm JVC received substantial local
subsidies to set up operations in Nancy, France, in 1995. In discriminated against foreign oil refiners: the US was ordered to
1996, the company picked up and moved everything to Scot- change the law or face sanctions.31
land, where labour costs were lower – and received a £300,000 Not only are environmental, food safety and labour laws
subsidy for the move from the European Union.26 threatened by the free trade dogma: the WTO will also be used
to ensure that nations don’t stray from the industrial-consumerist
• Local governments within the same country often compete fold. Thus the US and the European Union threatened to haul
with one another for corporate favours. In the United King- South Korea before the WTO because of its support for a ‘frugal-
dom both Scotland and Wales tried to convince Korean elec- ity’ campaign: the US and the EU argued that efforts to limit
tronics giant LG to build an electronics products factory in luxury consumption might reduce South Korea’s purchases of
their region. It appears Wales has won, thanks to subsidies total- imported goods, and would therefore be a barrier to trade.32 It is
ing £150 million.27 likely that the WTO will also be used to ensure that Third World
governments are powerless to protect their cultures from being
• The infamous maquiladoras on the Mexican side of the US bombarded by films, television broadcasts and other media with a
border prove that direct financial payouts are not always need- western, urban-consumer message.
ed to lure corporations. Manufacturing wages one-tenth of If, like Coca-Cola, the largest corporations in the world need
those in the US have been the major draw, along with restric- to “make it impossible for the Earth’s billions to escape” their
tions on labour rights and union activity, lax enforcement of products, national and international laws have become indispen-
environmental rules and exemption from property taxes. By sable tools.
1993 some 2,200 factories had been set up by such corpora-
tions as GE, General Motors, RCA,Westinghouse, Honey-well,
and hundreds of others.28 ‘Regulating’ the Corporations
The recent free trade agreements are probably the most egregious
example of the way national and international laws have been
Opening Markets rewritten to serve the interests of transnational corporations.
Free trade rules not only enable corporations to site their produc- Without a doubt, one of the most significant positive shifts in
tion facilities wherever it is most advantageous, they also allow public policy would be to renegotiate these agreements, this time
them to market their products anywhere in the world. In the putting the interests of people and the environment – rather than
name of “breaking down the barriers to trade”, for instance, US corporations – at the forefront.
government officials have been actively working for more than a But even though many activists from the local to the interna-
decade to pry open Asian markets for the benefit of American tional level are aware of the corporate motives behind the trade
tobacco companies – even while many of those same officials agreements, their strategies often fail to aim at fundamentally
have piously supported anti-smoking campaigns at home. shifting course; instead they attempt to ‘regulate’ corporate behav-
Those efforts were highly successful.Within a year after Japan’s iour even while granting them the expanded power a globally
market was forced open, cigarettes had become the sec- integrated economic system provides. Unfortunately, this approach
ond-most-advertised product on Tokyo television. South Korea actually helps to promote the corporate agenda: it lulls people
had also closed its market to imported tobacco products and had into believing that nothing can be done about the ‘inevitable’
outlawed all cigarette advertising. But ‘free trade’ complaints trend toward corporate hegemony, while falsely assuring them
forced open the market – and reversed the advertising ban as well. that communities and the environment will nonetheless be pro-
In Taiwan, not only was the market to imported cigarettes opened tected.
up, but a proposed law banning cigarette vending machines, This was clearly the case with NAFTA. Looked at broadly, the
restricting public smoking areas, prohibiting tobacco advertising, goals of NAFTA were to bring still more of North America’s
and funding an anti-smoking campaign was scuttled by threats of population into the industrial-consumer fold, and thereby expand
trade sanctions. Similar efforts forced open markets in Thailand the markets of corporations large enough to engage in interna-
and China. By 1991, a Boston-based research institute reported, tional trade. Nonetheless, many environmental organisations
sales of American cigarettes were 600% higher in those countries supported the treaty once a few ‘side agreements’ to monitor and
thanks to US government intervention in the name of ‘free regulate corporate environmental behaviour were appended.
trade’.29 Unlike the environmental groups that supported NAFTA, the
With the WTO in place, corporations and their patron gov- CEO of Campbell Soup Company – last seen shivering with
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 43
Small is B e a u ti f u l , B i g is S u bsi d is e d
business excitement – knew precisely what this trade agreement habitat degradation that humans have caused worldwide. A world
was all about: full of consumer societies is an ecological impossibility.”34
“In Mexico, our opportunities have been significantly NAFTA’s side agreements no more address the treaty’s sys-
broadened with the passage of NAFTA. With doors open wider temic impacts than picking up trash along highways addresses the
to international trade, Mexico’s 85 million people beckon as a systemic impact of cars. But these side agreements duped many
highly attractive market, where nearly 9 billion servings of soup environmental organisations into supporting NAFTA, and their
are consumed each year.... Mexican consumers are also showing seal of approval ultimately paved the way for its passage.
preference for our convenient dry soup varieties to replace tradi- Corporations have worked successfully for decades to rewrite
tional homemade soup”.33 the rules of trade for their own benefit. Rather than accepting the
The shift from “traditional homemade soup” to Campbell’s premise of economic globalisation and working to mitigate its
“convenient dry soup” speaks volumes about the deeper impacts worst impacts – through ‘retraining’ programmes for displaced
of NAFTA. Whether or not Campbell’s facilities in the US, Can- workers, through environmental ‘side agreements’, or through
ada or Mexico adhere to various environmental regulations is of outside ‘monitors’ of conditions in transnational factories – it is
minuscule consequence compared with the environmental time to rewrite the laws themselves. This time, they should be
impact of pulling 85 million people further along the path of written for the benefit of people in their diverse cultures, and for
American-style consumption. As Alan Thein Durning has pointed the sake of the planet itself.
out:
“Citizens of [the industrial] nations typically consume 10
times as much energy as their developing country counterparts,
along with 10 times the timber, 13 times the iron and steel, 14
times the paper, 18 times the synthetic chemicals, and 19 times
the aluminium.The consumer societies take the lion’s share of the
output of the world’s mines, logging operations, petroleum refin-
eries, metal smelters, paper mills, and other high-impact industri-
al plants.These enterprises, in turn, account for a disproportionate
share of the resource depletion, environmental pollution, and
1 Kirkpatrick Sale. Human Scale, p. 66. 16 Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 126.
2 Maria Green Cowles, “Setting the Agenda for a New Europe: The ERT and EC 17 David E. Rosenbaum, “Corporate Welfare’s New Enemies”, The New York Times,
1992”, Journal of Common Market Studies, vol. 33, no. 4, Dec. 1995. Feb. 2, 1997; Leslie Wayne, “Spreading Global Risk to American Taxpayers”, The New
3 “Big Biz to Run Small Countries?”, Earth Island Journal, Winter 96-97, p. 12. York Times, Sept. 20, 1998, sect. 3, p. 1.
3 David Korten, When Corporations Rule the World, p. 176. 18 Martin Walker, “Air-raid warning for Europe”, Guardian Weekly, July 13, 1997, p. 6.
4 “Friends of the Earth-USA Fact Sheet on the OECD Multilateral Agreement on 19 “The Hidden Entitlements”, Citizens for Tax Justice, cited by Corporate Welfare
Investment”. Project, Center for Study of Responsive Law, P.O. Box 19367, Washington, DC 20036.
5 Cited in Walden Bello, “IMF’s Role in Asian Crisis”, IFG News, no. 3, summer 1998 20 Chris Brazier, “State of the World Report”, New Internationalist, Jan.-Feb. 1997, p. 7.
(International Forum on Globalization, 1555 Pacific Ave, San Francisco, CA 94109.) 21 David Korten, When Corporations Rule the World, p. 126.
6 Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 51. 22 Richard Barnet, “Lords of the Global Economy”, The Nation, Dec. 19, 1994.
7 Patrick J. Spain and James R. Talbot, eds., Hoover’s Handbook of World Business 1995- 23 David Korten, When Corporations Rule the World, p. 126.
1996 (Austin, TX: Reference Press, 1995), p. 276; Lucy Kellaway, “Brittan on the trail 24 A. Blackwood, unpublished manuscript.
of aid to state companies”, Daily Telegraph, Nov. 19, 1990. 25 David Korten, When Corporations Rule the World, p. 130; A. Blackwood, unpublished
8 Lucy Kellaway, “Britain on the trail of aid to state companies”, Daily Telegraph, manuscript.
Nov. 19, 1990; Roger Chen, “France’s Allegiance: To Things French, Like Hypocrisy”, 26 A. Blackwood, unpublished manuscript.
The New York Times, Aug. 24, 1997, section E, p. 5. 27 Antony Barnett, “The Government’s regional industrial policy has led to agencies
9 Patrick J. Spain and James R. Talbot, eds., Hoover’s Handbook of World Business spending too much time and money wooing foreign firms”, The Observer,
1995-1996, p. 322. June 16, 1996.
10 John Kenneth, Galbraith, “On the Economic Image of Corporate Enterprise”, in 28 David Korten, When Corporations Rule the World, p. 129.
Ralph Nader and Mark J. Green, eds., Corporate Power in America (New York: 29 David Korten, When Corporations Rule the World, pp. 175-6; National Bureau of
Grossman, 1973), pp. 3-4. Economic Research, cited in Glenn Frankel, “US Aided Tobacco Firms in Asia
11 Michael Lindermann, “Germany warned on subsidy culture”, Financial Times, Sept. 6, Conquest”, Guardian Weekly, Dec. 1, 1996, p. 15 (article originally appeared in
1996, p. 2; Wolfgang Münchau, “VW aid fight part of wider battle”, Financial Times, Washington Post).
Sept. 6, 1996, p. 2. 30 A. Blackwood, unpublished manuscript.
12 Patrick J. Spain and James R. Talbot, eds., Hoover’s Handbook of World Business 31 David E. Sanger, “World Trade Group Orders US to Alter Clean Air Act”,
1995-1996, p. 98. The New York Times, Jan. 18, 1996, p. C1.
13 Charles Gresser, “Banking on another bailout”, Daily Telegraph, Sept. 28, 1996. 32 John Burton, “‘Unpatriotic’ buyers lie low”, Financial Times, Mar. 10, 1997, p. 7.
14 Fifth Survey on State Aid, European Commission, cited in “State Aid: Worried 33 Campbell Soup Company 1994 annual report, p. 6.
Commission Proposes Stricter Rules”, www.cc.cec/rapid/cgi/rapcgi.ksh?reslist 34 Alan Thein Durning, “All Consuming Passion”, Worldwatch, May-June 1993, p. 12.
15 Peter Montagnon, “Government action ‘key to Tiger success’”, Financial Times, Mar. 10,
1997, p. 4.
44 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
11
L O T S O F R E G U L AT I O N S ,
LITTLE EFFECT
P
“Most of us sit idly by, watching the planet’s ecosystems being shredded by
unnecessary ‘developments’ and unneeded products, its species genetically
engineered, poisoned and displaced, the vast majority of the world’s peoples
deracinated, impoverished and enslaved. Most of us sit idly by, dreaming of new
regulations that never worked and never could work.”
Peter Montague1
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 45
Small is B e a u ti f u l , B i g is S u bsi d is e d
46 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
L o ts of R e g u l a ti o n s , L itt l e E f f e c t
351; Hoechst Celanese corporation submitted 200. ... Clearly, any vast monocultural tracts for growing animal feed on the other.
taxpayer, or any member of the public hoping their government The first of these produces tonnes upon tonnes of manure that
is going to protect them from toxic chemicals, will be greatly becomes a serious pollution problem (requiring regulatory over-
disheartened by these revelations.”8 sight); the other requires factory-produced chemical fertilisers and
Although the ‘revolving door’ between industry and regulato- pesticides that are hazardous to the health of factory workers and
ry agencies calls into question the validity of many regulatory can poison soil, groundwater, and food itself (and so also require
decisions, simple malfeasance on the part of the EPA is not the regulatory oversight). As Wendell Berry aptly remarks,
reason for its shortcomings in this instance: “The genius of American farm experts is very well demon-
“the EPA ... is powerless against the chemical corporations, strated here: they can take a solution and divide it neatly into two
who have bigger staffs, much bigger budgets, and many many more problems.”10
lawyers than EPA will ever have.”9 Far from hampering corporate interests, regulatory agencies
This is another demonstration of the absurdity of public pol- provide corporations with valuable benefits. Though these agen-
cies are often ‘captured’ by the corporations they are meant to
‘This is another demonstration of the regulate – and in the best of circumstances have only a limited
ability to enforce their own rules – they nonetheless serve to
absurdity of public policy today: even as convince the public that their interests are being protected. The
corporations outstrip governments in wealth and stamp of approval given by agencies like the EPA and the FDA is
power, those same governments continue to like a public sedative, calming nerves that might be jittery over
corporate involvement in nuclear technologies, pesticides, food
support further corporate growth.’ additives, genetic engineering, and more. In this way, the Ameri-
can public’s widespread opposition to biotech foods was largely
defused by the FDA’s endorsement of rBST – Monsanto’s genet-
icy today: even as corporations outstrip governments in wealth ically engineered hormone that increases milk production in
and power, those same governments continue to support further cows – despite lingering questions about its impact on human
corporate growth; and while governments spend billions of dol- and animal health.
lars ‘regulating’ the products churned out in corporate laborato- Many years of government agency oversight of industrial
ries, additional billions in government funds are spent to help practices have had a remarkably soporific effect on the American
corporations develop still more new products. The public, which public. When a researcher in New Hampshire went into a coma
pays for both, must suffer the health and environmental conse-
quences as well. ‘While many regulations are needed because
Biotechnology will no doubt provide major new opportuni-
ties for creating regulatory mechanisms at public expense. After
of large-scale production, they burden small
many years of support for genetic engineering from governments producers disproportionately.’
around the world, the technology reached a new level with the
cloning of the first mammal by scientists in Scotland. The cloned
sheep set off a wave of public hand-wringing, and US President and died several months after spilling a single drop of a highly
Clinton was sufficiently moved to form a US Ethics Commission toxic mercury compound on her gloved hand, newspaper reports
to consider the moral implications of this latest advance. Mean- implied that the public was safe simply because the compound is
while, his government continued to funnel billions of tax dollars in the hands of industry:
into further biotechnology research, and the US patent office “The general public doesn’t have to worry about encounter-
busily doled out commercial patents on new life forms. ing dimethylmercury, [a chemistry professor] said. While small
amounts of it do occur naturally in rare cases, usually it has to be
manufactured by a chemical company”.
Bigger Scale, More Regulations Despite this odd disclaimer, the article later notes that dimeth-
A commonly heard complaint from Big Business is that regula- ylmercury was responsible for the death of two secretaries who
tions are costly and meddlesome, interfering with the ability of worked near a warehouse where this compound was “improper-
companies to function and even hampering the smooth operation ly” stored.11
of an otherwise perfect free market. What is never acknowledged,
however, is that most regulations and the agencies that administer
them would be unnecessary if the scale of industry and its tech- At the Expense of Small Scale
nological manipulations of nature were not so large. A National As Helena Norberg-Hodge has argued, government regulations
Toxicology Program, for example, would not be required if 1,000 not only indirectly benefit the largest enterprises, they also penal-
new chemicals weren’t being developed each year; nor would a ise smaller ones.12 The cost of complying with mounting layers
Nuclear Regulatory Agency be necessary if nuclear power were of regulations often becomes so onerous that it can represent a
banned outright. In that sense, funds spent on regulatory agencies barrier to entry for all but the largest and most highly capitalised
are actually a form of indirect subsidy to large-scale industry. companies. It is therefore not surprising that biotech giant Mon-
Many other large-scale activities create problems – and then santo opposed a bill in the US Congress that would have eased
require government regulation - simply because of their scale. EPA regulations on genetically engineered plants. According to
When small farmers raise animals, for instance, the manure pro- Henry Miller of the Hoover Institution, “Monsanto has had a
duced is beneficial, since it can be used to replenish the fertility policy of trying to keep regulatory barriers high” so other com-
of fields and pastures. But the industrialisation of agriculture sep- panies – even large seed companies – will find compliance too
arates animal husbandry and feed production into two large-scale, expensive to enter the market.13
intensive activities: huge feedlots with hundreds, thousands, or While many regulations are needed because of large-scale
even millions of caged and penned animals on the one hand, and production, they burden small producers disproportionately.
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 47
Small is B e a u ti f u l , B i g is S u bsi d is e d
Large-scale food-processing, for example, takes place in facto- into our ‘foods’, but I’m a food safety risk.”16
ry-like facilities; the foods usually contain numerous artificial All the processes she describes are needed in order to produce
preservatives, flavourings and colourings, and even traces of pesti- food on an industrial scale; it is likely that they are inherently
cides; they are transported long distances, and often stored for unhealthy, and many layers of regulatory oversight are needed to
weeks, months or even years before consumption. Such foods do ensure that they are not even more so. When small-scale produc-
require substantial monitoring and regulating to ensure public ers selling in a local market must abide by the same regulations, it
health. One consequence of America’s increasingly mass-pro- can easily make it impossible for them to survive.
duced food supply, for example, is that salmonella cases have more Wendell Berry, among others, is aware of the role such regu-
than doubled in the past 20 years, and the Center for Disease lations have played in the decline of rural economies. As he points
Control warns that “industry consolidation and mass distribution out, “Sanitation laws have almost invariably worked against the
of foods may lead to large outbreaks of food-borne disease.”14 small producer, destroying his markets or prohibitively increasing
But when the regulations imposed because of the hazards of the cost of production.”17 As a result,
mass-produced foods are applied to small-scale producers, it can “... nowhere now is there a market for minor produce: a buck-
be financially ruinous for them – even though their products are et of cream, a hen, a few dozen eggs. One cannot sell milk from
often far safer, and are sold in face-to-face transactions unseparat- a few cows anymore; the law-required equipment is too expen-
ed by layers of corporate anonymity. Because of European Com- sive. Those markets were done away with in the name of sanita-
mission food-processing regulations, for instance, countless small- tion – but, of course, to the enrichment of the large producers.
scale cheese producers – whose traditional varieties have for We have always had to have ‘a good reason’ for doing away with
centuries been made in home kitchens or cheese rooms attached small operators, and in modern times the good reason has often
to barns – have been forced to give up their livelihoods rather been sanitation, for which there is apparently no small or cheap
than meet the exorbitant costs of installing stainless steel kitchens, technology. Future historians will no doubt remark upon the
tile floors, industrial pasteurisers, and other requirements for mar- inevitable association, with us, between sanitation and filthy lucre.
keting according to EC rules. And it is one of the miracles of science and hygiene that the
In the US, similar health rules hurt small producers while germs that used to be in our food have been replaced by poi-
benefiting larger ones. For example, the FDA is proposing that all sons.”18
apple cider be pasteurised, or else carry a label that warns con- Ironically, even America’s grassroots organic foods movement
– which aims to remove the poisons in food – is threatened by a
‘Nowhere now is there a market for regulatory system biased towards large scale. Over the years,
numerous standards have been adopted in different regions to
minor produce: a bucket of cream, a hen, define what practices are allowable on certified organic farms. In
a few dozen eggs. One cannot sell milk from a the name of harmonising these varying local standards, the US
Department of Agriculture (USDA) has released a 600-page pro-
few cows anymore; the law-required posed national organic foods standard. Largely because the pro-
equipment is too expensive.’ posal would allow the organic label to go on foods that had been
genetically engineered, irradiated, or grown with sewage sludge as
sumers that the product “might contain harmful bacteria known fertiliser, the record 200,000 comments the USDA received were
to cause serious illness.” In the state of Vermont, where cider has overwhelmingly negative.
never been linked to any illness, such a warning label would turn Although this firestorm has caused the USDA to back off
away so many consumers that most of the state’s small cider-mak- temporarily, it is clear that the goal of a national organics standard
ers would be put out of business. The two largest cider producers served the needs of large-scale agribusinesses, which are seeking
– which account for 80% of production – already pasteurise their to tap into the rapidly growing demand for organic products, and
product and would benefit from the losses of their 45 smaller which hope to market those products in the global economy. If
competitors.15 the organic standard in the US ever includes practices – like
Laini Fondiller, an organic goat cheese maker in Vermont, has genetic engineering and irradiation – that are banned in other
been fighting the state Agriculture Department over similar rules. parts of the world, the ‘race to the bottom’ will begin, as Ronnie
Since no commercial pasteurisers are available for small-scale Cummins of the Pure Food Campaign points out: “if the USDA
producers like her nine-goat operation, she pasteurises the milk gets away with this in the United States, their eventual strategy
by hand on a stove-top. Although her methods are more than will be to use the legal hammer of the GATT World Trade
adequate, the department argued that she was a “food safety risk”, Organization (WTO) to force European and other nations to
and threatened to prohibit her from selling her cheeses unless she lower their organic standards as well.”19
installed an industrial pasteuriser – one costing more than her
annual income from selling cheese. Her angry response is worth
quoting at length: Redefining Corporate Limits
“You say I’m a food safety risk, when there are large mega- Corporations have steadily colonised more and more spheres of
farms dumping pesticides, herbicides, fungicides, in untold life.Through advertising and media control they manipulate indi-
amounts, not only on their fields, but also on the workers in the vidual tastes, desires and opinions.They own a large portion of the
fields. I’m a food safety risk, when farmers can inject hormones planet’s resources, including the seeds on which much of the
to make the animals grow faster or make them milk more. I’m a world’s food supply depends. They have patented new life forms,
food safety risk, and large industrial food processors slosh chemi- and claim ownership to segments of the electromagnetic spec-
cals and germicides all over their equipment and then pump food trum. They dominate agriculture, healthcare, education, commu-
through this equipment. I’m a food safety risk, when some farms nication and entertainment throughout much of the world.
have to change antibiotics every couple of months because of Attempting to regulate each of those realms in turn has been
resistance. We allow the production of genetically altered vegeta- a failing endeavour. This is especially so because corporations –
bles. ... We can sterilise, irradiate, and pour tons of preservatives with their lobbyists, campaign contributions, think-tanks, and the
48 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
L o ts of R e g u l a ti o n s , L itt l e E f f e c t
‘revolving door’ – exert tremendous influence over the govern- Since corporate power extends out of the boardrooms and
ment bodies that would regulate them. into the offices of elected officials, heavy grassroots pressure will
Corporations – many of which are larger and more powerful also be needed to compel officials to look after the interests of all
than national governments – cannot be expected to wield respon- their constituents, not just those who make the largest campaign
sibly the tremendous power they now have: no matter how contributions or employ the slickest lobbyists. Strict laws prohib-
well-intentioned the people working within them may be, cor- iting any corporate involvement in electoral processes would go
porations themselves are inherently without conscience, and have a long way towards whittling down the power corporations now
no loyalty to anything beyond their own survival and growth. wield.
Civil society cannot much longer survive ever wider corpo- As Grossman points out, few people will initially agree that
rate intrusion into social and economic life, nor will nature toler- “exercising sovereign authority over all the institutions we cre-
ate continued industrial assaults on the biosphere. Put simply, ate”, including corporations, is “a practical way to think and act”:
corporations have far exceeded what ought to be their limits. It is “Why? Because corporations will take away our jobs? Our
time to define those limits and enforce them, with a clear under- food? ... Our hospitals? Because we don’t know how to run our
towns and cities and nations without global corporations?
‘Corporations have far exceeded what Because they will run away to another state, to another country?
ought to be their limits. It is time to define ... Because it’s too late to learn to act as sovereign people? ... How
long shall we the people, the sovereign people, stand hat in hand
those limits and enforce them. The right and outside corporate boardrooms waiting to be told our fate?”21
responsibility for doing so rests with Without steps to dramatically limit the power of the corpo-
rate world, attempts to regulate their products and practices will
citizens, not with the invisible hand of a be largely doomed to failure.
supposedly infallible market.’ In his book Earth in Mind, David Orr retells the story of an
eighteenth-century “protopsychiatrist” who developed a means
of distinguishing the sane from the insane:
standing that the right and responsibility for doing so rests with “Those to be diagnosed he locked in a room with water taps
citizens, not with the invisible hand of a supposedly infallible on one side and a supply of mops and buckets on the other. He
market. then turned on the taps and watched: Those he considered mad
As Richard Grossman of the Program on Corporations, Law, ran for the mops and buckets; the sane walked over and turned
and Democracy argues, “If we do not redefine corporations ... we off the taps.”22
will continue to struggle against every corporate intrusion one at The taps have been running too long, and the mops and
a time, just as we have been struggling against every industrial buckets can’t keep up with the rising waters. It’s time to demon-
poison, toxic dump and lethal product one battle at a time.”20 strate our sanity, and turn off the taps.
Grossman is right in arguing that citizens must stand up and
reclaim the rights that corporations have taken as their own. But
corporations have become so powerful and so mobile and have
garnered so many legal protections that this path will not be easy.
Stripping corporations of the advantages mobility confers, for
example, will require cross-border alliances among activists; only
if pressure is simultaneously placed on governments everywhere
will they be forced back to the negotiating table to rewrite the
trade treaties that now give corporations such free rein.
1 Peter Montague, “Is Regulation Possible?”, The Ecologist, vol. 28, no. 2, Mar.-Apr. 1998, 13 Cited in Rachel Burnstein, “Paid Protection”, Mother Jones, Jan.- Feb. 1997, p. 42
pp. 59-61. 14 “Report: Mass production promotes food poisoning”, Burlington Free Press, Dec. 10,
2 Cited in Rachel’s Environment & Health Weekly, No. 613, Aug. 27, 1998. 1997, p. 1.
3 Cited in David Korten, When Corporations Rule the World, p. 159. 15 Helen J. Simon, “Cider Pasteurization Urged: Regulations could hurt small Vt. firms”,
4 Reuters wire service, “Occidental Offers to Meet with Indians”, Apr. 26, 1997. Burlington Free Press, Aug. 27, p. 1.
5 Lester Brown, et al, eds., State of the World 1997, p. 47. 16 Laini Fondiller, “Laini and the Vermont Ag Department”, Rural Vermont Report,
6 Steven F. Arnold, et al, “Synergistic Activation of Estrogen Receptor with Summer 1996, pp. 19-20.
Combinations of Environmental Chemicals,” Science, vol. 272, June 7, 1996, pp. 1489- 17 Wendell Berry, The Unsettling of America, p. 221.
1492; cited in Howard, Dr. C.V. “Chemical Mixtures and Synergism... The End of 18 Ibid., p. 41.
Traditional Toxicology”, University of Liverpool. 19 Ronnie Cummins, “Whose Organic Standards? USDA Prepares for an ‘Unfriendly
7 Ibid. Takeover’ of the Natural Foods Industry”, Pure Food Campaign, Little Marais, MN,
8 Peter Montague, Rachel’s Environment & Health Weekly, Environmental Research July 9, 1997, alliance@MR.Net
Foundation, No. 538, Mar. 20, 1997. 20 Richard Grossman, “Corporate Security: Monsanto’s ‘First Amendment’ Right to Lie”,
9 Ibid. Earth Island Journal, Winter 1996-7, p. 25.
10 Wendell Berry, The Unsettling of America, p. 62. 21 Richard Grossman, “The Relationship of Humans to Corporations”, Program on
11 Olivia F. Gentile, “Chemist Dies of Mercury Poisoning”, Rutland Herald, June 10, 1997. Corporations, Law, and Democracy, Feb. 27, 1997.
12 Helena Norberg-Hodge, “Localization Steps”, memo to the International Forum on 22 David Orr, Earth in Mind (Washington, DC: Island Press, 1994) p. 49.
Globalisation, Feb. 15, 1995; also “From Global Dependence to Local
Interdependence”, International Society for Ecology and Culture (ISEC), July 1995.
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 49
12
SO WHY DO THEY KEEP
DOING IT?
P
“Senators, if your vision of our agricultural future is one of corporate agribusinesses
with no family farms, you must vote to give the Commissioner another term in
office. If on the other hand you envision a community of productive rural people
and the beauty of place which is its natural offshoot, you cannot in good
conscience confirm him. You need to urge the governor to appoint someone with
a basic concept of sustainability, who values the local economy, and who will
encourage us to enrich the land rather than the corporations.”
50 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
So Why Do They Keep Doing It?
Television advertising is now a prerequisite for victory at the tion board contributed $30,000 to the governor’s re-election
polls in many countries, a development that not only limits polit- campaign. Failing to understand the ‘wink-and-a-nod’ subtleties
ical debate to simplistic soundbites and narrowly compartmen- of modern corruption, he asked for his money back when he
talised themes, but makes the electoral process so expensive that was passed by for a seat on the board. Among his gripes was that
only those with access to vast sums of money can compete. As a someone else on the board “only gave $19,000”.11
result the principle of ‘one man, one vote’ is rapidly giving way In another case, a legislative bill that would have scrapped
to ‘one dollar, one vote’. American oil entrepreneur Roger Tam- major provisions of the Endangered Species Act turned out to
raz, who contributed $300,000 to the Democratic National have been written by an organisation representing timber, min-
Committee in the hopes of getting Administration support for ing, ranching and utility interests, including such companies as
an oil project, succinctly expressed the new reality of mon- Chevron and the Kaiser Aluminum and Chemical Corporation.
ey-driven democracy: in testimony before Congress, he admitted The industry-backed group provided the senator sponsoring the
that he doesn’t bother to vote, since elections are not decided by bill $34,000 in campaign contributions the previous year.
the voters anyway.8 Even where cash contributions are not involved, large and
global firms now wield so much economic clout that political
‘Congressional candidates received more leaders ignore them at their own peril. This lesson was ruthlessly
driven home to the leaders of Asian economies following the
than $89 million in contributions from various region’s late-1997 economic meltdown. For a number of years
polluting industries between 1991 and 1996; South Korea, for example, resisted opening up its financial mar-
kets to foreign-based TNCs. Once the economic crisis hit and
Congress in turn bestowed $19 billion in the nation needed billions of dollars to stave off collapse, Korea
subsidies on those same industries over the same was ripe for blackmail. Within days of the won’s collapse, South
period – a return of $213 for every dollar Korea agreed to let transnational banks like Citibank buy up
local banks, and huge insurance corporations like New York Life
‘invested’ in campaign donations.’ to exploit their insurance markets.
According to US Trade Representative Charlene Barshefsky,
who negotiated the deal under the auspices of the WTO,
While large corporations and their business elite are able to “These negotiations have been going on for years, and we’ve
funnel the necessary funds to candidates friendly to their cause, had to try to wear down governments one at a time. ... In the
representatives of the small and local are unable to match them. end, they knew that they would compound their own problems
It is no surprise, then, that even ‘democratically-elected’ govern- if they ... continue to close off parts of their markets to foreign
ments are so biased towards concentrated wealth. investors.”12
This trend has been growing for years in the United States, This is not simply a North-South issue: the influence of huge,
as demonstrated in the way campaign contributions go hand in global corporations on sovereign governments is no less perva-
hand with subsidies to the contributing corporations. The US sive within the North. In Europe, for example, the corporate
Public Interest Research Group, for example, reported that Con- CEOs that make up the ERT have almost unlimited access to the
gressional candidates received more than $89 million in contri- corridors of national and European power. ERT Secretary-Gen-
butions from various polluting industries between 1991 and eral Keith Richardson defined ‘access’ this way:
1996; Congress in turn bestowed $19 billion in subsidies on those “Access means being able to phone Helmut Kohl and rec-
same industries over the same period – a return of $213 for every ommend that he read a report. ... Access also means John Major
dollar ‘invested’ in campaign donations.9 phoning ... to thank the ERT for its viewpoints, or having lunch
The elected officials that are the recipients of corporate lar- with [the] Swedish Prime Minister just prior to the Swedish
gesse are quick to point out that there is no quid pro quo: in other decision to apply for EC membership”.13
words, the granting of campaign contributions is not out-and- While those advancing the corporate agenda have the ear of
out bribery. What is admitted, however, is that campaign dona- policy-makers, those who speak for small businesses, small farm-
tions give donors ‘access’ to public officials. If an ordinary citizen ers or the environment are not so fortunate. As Ann Doherty and
telephones or writes an elected representative to offer an opinion Olivier Hoedeman of ASEED have reported:
on a critical issue, the message is unlikely to reach the official “Eurogroup, a lobby group representing small businesses...
directly, and the response will probably be a computer-generated has to wait weeks for an appointment with a civil servant, and
form letter. On the other hand, a major campaign contributor is the highly-regarded, Brussels-based European Environmental
all but guaranteed a personal reply, and can often arrange face- Bureau has managed to meet only once in two decades with the
to-face meetings with the official. The difference is significant, Commission President.”14
and is a measure of the way money is dividing the citizenry into In the United States, access is similarly skewed towards mon-
two distinct and politically unequal classes. eyed interests. President Clinton’s practice of ‘renting’ White
The wealthier of those two classes regularly use ‘access’ to House bedrooms in exchange for campaign contributions made
bend public policy. In the wake of US Senate committee hear- tabloid headlines, but the connection between big money and
ings on campaign finance abuse, Elizabeth Drew, author of What- government policy is far more systemic.When a large proportion
ever It Takes, a book about the role of money in the 1996 elec- of the economy depends on a few key industries, the principals
tions, pointed out that who control those industries do not require a night in the Lin-
“money can buy access, but the transaction doesn’t stop coln bedroom to make their needs known. For instance, the arms
there.... Access can lead to influence, which can lead to a policy industry still accounts for 2.5% of the US economy – even after
result. This can be an amendment that is pushed, a regulatory the end of the Cold War arms race – giving the CEOs of Boeing
ruling, a contract, or special attention from a Cabinet officer.”10 and Lockheed significant leverage over government policy.15
It can also buy even more. In North Carolina, a contractor Similarly, car-related industries account for an estimated 20% of
seeking an appointment to the state Department of Transporta- the American economy, giving oil companies and car manufac-
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 51
Small is B e a u ti f u l , B i g is S u bsi d is e d
52 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
So Why Do They Keep Doing It?
This is true in other fields as well. As Wendell Berry points In a similar way even overpopulation must have a solution
out with regard to agriculture, that emanates from the industrial model – despite the fact that
“To turn an agricultural problem over to the developers, industrialisation is itself a root cause of the problem. Almost every
promoters, and salesmen of industrial technology is not to ask for policy-maker believes that further industrial development (often
a solution; it is to ask for more industrial technology and for a sugar-coated with western-style ‘education’ for women) will end
bigger bureaucracy to handle the resulting problems of social the Third World’s population explosion, based on the observation
upset, unemployment, ill health, urban sprawl, and overcrowding. that population growth in industrialised countries slowed or
Whatever their claims to ‘objectivity’, these people will not stopped once certain levels of affluence were reached. The South
examine the problem and apply the most fitting solution; they is therefore being encouraged to continue developing along the
will reverse that procedure and define the problem to fit the industrial-consumerist track, in the belief that population growth
solution in which their ambitions and their livelihoods have been will stabilise when consumption levels rise sufficiently.
invested. They are thriving on the problem and so can have little Since this theory takes the industrial era as the baseline, the
interest in solving it.”21 role of modernisation in initiating population explosions in the
first place is completely ignored. As Edward Goldsmith points
out, “the experience has been the same everywhere. As soon as a
Industrial Solutions Only traditional society embarks on the path of economic develop-
As Berry suggests, the industrial worldview – combined with ment, its population simply explodes. It happened in Britain,
training in the compartmentalised thinking that is a hallmark of where the population was under 8 million when the Industrial
modern education – effectively limits choices to those that fur- Revolution began, and where it increased by more than seven
ther the expansion of the industrial model. This process is at times before it eventually stabilised. It is happening today wher-
work everywhere. For instance in the United States, rates of ever economic development occurs...”26
teenage suicide have tripled since the 1950s; severe depression Wedded to the notion that viable societies must be based on
affects an estimated 5% of children between the ages of five and the industrial model, policy-makers have no qualms about hook-
twelve, and 10% of adolescents22; still more have been diagnosed ing the planet’s few remaining traditional societies into the glob-
with such emotional disturbances as hyperactivity and Attention al industrial system. If such cultures survive the transition, their
Deficit Disorder. If such problems are really so common among populations, too, will explode, but policymakers will have a ready
American children, something must be fundamentally amiss: solution: more development.
perhaps the sea of industrial chemicals in which they have spent The ‘development-as-solution’ theory also ignores the fact
their lives has disrupted vital foetal or childhood development that overpopulation is primarily a problem because the planet
processes; perhaps the breakdown of the extended (and even the has a limited capacity to absorb the impact of human activities
nuclear) family has left an emotional void that television and – an impact that multiplies exponentially with rising levels of
computer games cannot fill; perhaps the flesh-and-blood role consumption. One might ask which is the bigger problem: that
models that communities once provided have been supplanted the world population has doubled since 1950, or that the number
by idealised media images that no child can live up to. of cars – and everything that goes with them – has increased
tenfold in the same period?27 Stabilising the world’s population
‘Many such explanations come to mind, by encouraging more industrial development is like ‘solving’ the
problem of overfishing by building more and bigger trawlers.
but these lines of enquiry might call into question This absurd population policy can only seem rational when
the industrial system itself, and so they are viewed through the fragmented lens of the industrial worldview.
rarely pursued with vigor.’
Times Have Changed
Many such explanations come to mind, but these lines of When government leaders promote the large and global, they
enquiry might call into question the industrial system itself, and have the dominant economic ideology on their side. Within that
so they are rarely pursued with vigor. Instead an industrial solu- ideological framework, economic growth and increasing levels of
tion – in this case behaviour-altering drugs – is sought, promot- consumption are the sine qua non of societal success, and increased
ed and widely applied. Ritalin is now taken by an estimated 1.25 ‘efficiency’ is the means of achieving it. If a reason is needed to
million school-age boys to ‘control’ their hyperactivity.23 Selec- promote larger scale and higher technology, Adam Smith and his
tive serotonin reuptake inhibitors like Prozac, Zoloft and Paxil famous pin factory are always available. Smith’s The Wealth of
have been prescribed for 600,000 more children to ‘combat’ their Nations extolled the virtues of the division of labour at the dawn
depression.24 of the industrial era, and posited that the bigger the production
Pharmaceutical corporations are now seeking to formalise unit, the more specialised – and therefore more efficient – its
the government’s tacit approval for the childhood use of such labour could become. Since large production units required large
anti-depressants, though they have never been fully tested on markets, they too became synonymous with increased efficiency.
children; this would pave the way for direct marketing campaigns However valid Smith’s theories may have been, they break
to expand their use even further. down when the scale at which they are applied is as large as it is
All this is quite alarming when seen from the perspective of today. There are limits past which ‘efficiency’ no longer means
overall societal health. But when viewed from the industrial providing needed goods with less effort, but means replacing
model’s narrow focus on the health of the corporations that millions of people with automated machines to produce goods
dominate economic life, it is seen as “a positive”, in the words of for which there is so little real need that a vast brainwashing
one market analyst: “The [pharmaceutical] companies are look- apparatus – the advertising industry – is required. Smith also
ing for expanded markets”, he explained, revealing how com- undervalued the importance of meaningful work, which is often
pletely the industrial system has reduced children to just another as important to people as the products the industrial machine
marketing niche.25 churns out, and which many of today’s specialised and numbing-
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 53
Small is B e a u ti f u l , B i g is S u bsi d is e d
ly repetitive jobs fail to provide. For Smith, ‘efficiency’ largely between nations. Ideas, knowledge, art, hospitality, travel – these
meant economising on human labour, but he could not have are the things which should of their nature be international. But
foreseen that 200 years later the industrial system would have let goods be homespun whenever it is reasonably and conven-
consumed so much of the Earth’s resources and regenerative iently possible; and, above all, let finance be primarily nation-
capacities that the need would be to slow production and con- al.”30
sumption, not to increase it indefinitely. This warning is faithfully ignored by mainstream economists,
even when the real world invades the rarefied atmosphere of
54 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
So Why Do They Keep Doing It?
Not only environmental costs are excluded from the eco- the addition as a sign of progress.
nomic reckoning, but social costs as well. While wealth, narrow-
ly measured and unevenly distributed, has increased in the indus-
trialised world, the social price has been high. Robert Reich Dissolving Democracy
observes that, Classical economics also has no means to measure the undermin-
“For all its riches, the United States now has a greater per- ing of democratic processes, another symptom of the growing
centage of its citizens in prison or on the streets, and more scale of the economy. In many small-scale societies – even those
neglected children, than any other advanced nation.”33 whose systems of governance are not ‘democratic’ in the narrow
As further measures of social breakdown, Reich could have sense of regular, secret-ballot elections – people had a significant
mentioned the proportion of older people whose final years are degree of control over their own lives and their own communi-
spent useless and neglected in nursing facilities or ‘retirement ty. Helena Norberg-Hodge described this traditional pattern in
homes’ rather than with their families; the rates of bulemia and Ladakh, and the changes brought when the region was hooked
anorexia among young women; the number of families that are into much larger economies:
headed by a single-parent; the rising rates of teenage suicide; and “In the decentralised village-scale economy, individuals had a
dozens more. real influence on the important decisions affecting them. They
The US may be worst among ‘advanced nations’, but it is not depended on people they knew, and on local resources they
alone. In Japan’s highly competitive society, businessmen are so controlled themselves. Nowadays, as they are drawn ever more
renowned for their over-dedication to work that certain tightly into the socio-economic structure of India, each individ-
stress-related illnesses have been named after them. In England ual becomes just one of 800 million; as part of the global econ-
and Finland, countries whose cities were until recently relatively omy, one of over 5 billion. Their influence over the political and
crime-free and non-violent, children under the age of ten were economic forces that affect them is being so reduced that they
recently charged with killing other children. Even in remote are essentially powerless.”36
Greenland, where the standard of living has risen to a par with Today, even those modern systems of governance described
the industrialised world in the past 40 years, the price has been as ‘democratic’ are being subverted by the increased scale of
high: alcoholism and drug abuse are now rampant, and frequent economies and the businesses that dominate them. When the
waves of violence strike the island’s villages; one in seven males campaign contributions and lobbying arms of huge businesses
commit suicide, usually in their teens or twenties. determine public policy, is this really democracy? When the
As the Third World ‘develops’, people there, too, are falling WTO – comprised of unelected bureaucrats meeting secretly in
Brussels – can overturn national and local environmental, health
‘When the services provided by the biosphere and labour standards, is the will of sovereign people really being
are excluded from the accounts, it becomes easier represented?
Adam Smith, contemplating the efficiency of an early pin
to see why corporate arguments against vigorous factory, could not have foreseen a world in which businesses like
action on global climate change are accepted’ General Motors and Mitsubishi dwarf the economies of entire
nations. But the impact of large businesses on political processes
victim to the same forces: according to health activists in India is not the province of classical economics. In that discipline, over-
and Africa, there is a direct link between the arrival of MTV and large businesses are primarily a problem because they can exert
other satellite stations that spread Western culture, and accelerat- too much influence on markets, which require perfect competi-
ing rates of depression, suicide, violence, and drug abuse among tion to function properly. Thus, the only ‘acceptable’ reason for
young people. intervening in the growing scale of businesses is to limit their
Such problems were quite rare in traditional cultures, as monopoly power, not their impact on democratic processes.
anthropologists have consistently noted. After spending several While anti-trust statutes were occasionally used to limit the scale
years in Ladakh’s pre-development culture, for example, Helena of certain businesses, economic globalisation has largely removed
Norberg-Hodge concluded that she “had never met people who even that limited rationale: today the assumption is that large
seem so healthy emotionally, so secure.”34. Another researcher scale is required of businesses competing globally.
tried to study depression among pre-industrial peoples in New The rapid expansion and spread of the industrial model has
Guinea, but found no sign of it. many other costs as well. But the only way any of these enters
The appearance of serious emotional problems among peo- the economic calculus is when the industrial system finds a com-
ple within or suddenly exposed to the industrial model can be mercially viable ‘solution’. The widespread pollution of air and
explained in part by the psychological pressures to live up to water, for example, appears as lucrative niches for companies
idealised standards of wealth, beauty and lifestyle. There may be selling air filters and bottled water. If crime is up, so are revenues
even deeper reasons. As biologist Hugh Iltis has pointed out, for prison construction, private security firms and companies
“Corn and cows, concrete and cars are not enough to sustain selling burglar alarms and anti-theft devices - all of which add
and empower a human psyche that until only a few generations to economic growth. Depression in the United States may be an
ago lived in daily contact with a variety of plants and animals, a increasing problem, but the Prozac ‘solution’ adds $1.7 billion to
psyche that, winnowed and sifted by natural selection, is geneti- the nation’s GDP.37 The cancer industry is such a large part of
cally programmed to respond positively to nature and its patterns. the economy of industrialised countries – providing commercial
By destroying so much of the natural environment, we humans niches in research, drug development and marketing, hospitals
are now destroying crucial parts of our own psychological as well and clinics, self-help books, non-profit agencies, and more – that
as physical habitat. ... It is a gloomy picture indeed.”35 preventing it could be economically disastrous; ‘cures’, on the
Needless to say, classical economics has no meaningful way to other hand, would generate immense sales and create an entire
account for such psychological costs. Instead, it will add to GDP new profit centre for the drug industry, and would be a boon to
the money spent on mood-enhancing prescription drugs, thera- the economy.
peutic counselling and drug abuse rehabilitation, and will count Given the way economic accounting is everywhere conduct-
T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e 55
Small is B e a u ti f u l , B i g is S u bsi d is e d
1 Karen Shaw, testimony before the Senate Agriculture Committee, State of Vermont, 21 Wendell Berry, The Unsettling of America, p. 219.
Apr. 25, 1996 22 Mary Crowley, “Do Kids Need Prozac?”, Newsweek, Oct. 20, 1997, pp. 73-4.
2 Jeffrey Good, “After Criticism, Panel OKs Graves’ Term”, Burlington Free Press, May 1, 23 Kristen Leutwyler, “Paying Attention”, Scientific American, Aug., 1996, p. 12; “Resident
1997, p. 1. Populations by Age and State, 1995”, Statistical Abstract of the United States, (Washington,
3 Barbara Crossette, “The 21st Century Belongs to ...”, The New York Times, Oct. 19, DC: Bureau of the Census, 1996), p. 33.
1997, sect. 4, p. 3. 24 Barbara Strauch, “Use of Antidepression Medicine for Young Patients Has Soared: To
4 George Aditjondro, “Dictators United: The Suharto-SLOEC Business Connection”, Bolster Market, Makers Seek FDA Sanction”, The New York Times, Aug. 10, 1997,
Multinational Monitor, vol. 18, no. 9, Sept. 1997, p. 11. section A, p. 1, 24.
5 Seth Faison, “One Korean Certainty: No more Business as Usual”, The New York 25 Ibid. , section A, p. 1.
Times, Jan. 4, 1998, sect. 4, p. 4. 26 Edward Goldsmith, “Development Fallacies”, in The Future of Progress, Norberg-Hodge
6 Geri Smith, “Catching Up with Carlos Salinas”, Business Week, July 15, 1996, pp. 44- et al., eds. (Totnes, UK: Green Books, 1995), p. 74.
46; Geri Smith “New Revelations – And New Pressure on Zedillo”, Business Week, 27 Lester Brown et al., eds., Vital Signs 1997, (New York: W.W. Norton, 1997), p. 74.
July 15, 1996, p. 46. 28 Herman Daly, “The Perils of Free Trade”, Scientific American, Nov. 1993, p. 51.
7 Stephen Labaton, “Agriculture Chief in ‘93-’94 Cabinet is Indicted by US”, The New 29 Ibid., p. 51.
York Times, Aug. 28, 1997, sect. A, p. 1. 30 Ibid., p. 50.
8 Christopher Hitchens, “In the Pipeline”, The Nation, Oct. 13, 1997, p. 9. 31 David E. Sanger, “New World Audit: Fail-Safe Stategies in a Market Era”, The New
9 “Feeding at the Trough”, US PIRG, Apr. 15, 1997. York Times, Jan. 4, 1998, sect. 4, p. 1.
10 Jill Abramson, “Money Buys a Lot More Than Access”, The New York Times, Nov. 9, 32 Clifford Cobb, Ted Halstead, and Jonathan Rowe, “If the GDP Is Up, Why Is America
1997, sect. 4, p. 4. Down?”, Atlantic Monthly, Oct. 95, pp. 60-62.
11 Pat Arnow, “No Money Back Guarantee”, In These Times, Nov. 23, 1997, p. 6. 33 Robert Reich, “For Richer, for Poorer”, The New York Times Book Review, July 6,
12 David E. Sanger, “Asia’s Surrender”, The New York Times, Dec. 14, 1997, pp. 1, 12. 1997, p. 11.
13 Cited in Ann Doherty and Olivier Hoedeman, “Misshapen Europe: The European 34 Helena Norberg-Hodge, Ancient Futures: Learning from Ladakh (San Francisco: Sierra
Round Table of Industrialists”, The Ecologist, vol. 24, no. 4, July/Aug. 1994, p. 135. Club, 1991), p. 85.
14 Ibid., p. 136. 35 Hugh H. Iltis, “Serendipity in the Exploration of Biodiversity: What Good Are Weedy
15 Martin Walker, “Air-raid warning for Europe”, Guardian Weekly, July 13, 1997, p. 6. Tomatoes”, in E.O. Wilson, ed., Biodiversity (Washington, DC: National Academy Press,
16 Jane Holtz Kay, Asphalt Nation, (New York: Crown, 1997), p. 123. 1988), p. 99.
17 Letter to President Clinton, signed by Lee F. Raymond, CEO of Exxon, et al. 36 Helena Norberg-Hodge, “Ancient Futures”, in D. Chiras, ed. Voices for the Earth: Vital
18 Ibid. Ideas from America’s Best Environmental Books, (Boulder, CO: Johnson Books, 1995).
19 Al Kamens, “Clinton Assistant Going Private”, Washington Post, Apr. 21, 1997. 37 Barbara Strauch, “Use of Antidepression Medicine for Young Patients Has Soared: To
20 Beth Burrows, personal communication. Bolster Market, Makers Seek FDA Sanction”, op. cit., section A, pp. 1, 24.
56 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e
Small is B e a u ti f u l , B i g is S u bsi d is e d
L o c a l Fu t u r e s is an in t e r n a t i o n a l no n - p r o f i t or g a n i z a t i o n de d i c a t e d to
r e n e w i n g ec o l o g i c a l an d so c i a l we l l b e i n g by st r e n g t h e n i n g co m m u n i t i e s
a n d lo c a l ec o n o m i e s wo r l d w i d e .
Fo r mo r e in f o r m a t i o n , vi s i t : ww w . l o c a l f u t u r e s . o r g
C o n t a c t us : in f o @ l o c a l f u t u r e s . o r g
00 T h e I n t e r n a ti o n a l S o c i e t y for E c o l o g y & C u lt u r e