Confronting the Corporation
review of the book
by Charles Derber
Multinational Monitor, May 1999
Three dominant tendencies characterize the present era, Charles
Derber argues. The first is the rise of giant corporate empires
as companies merge, enter joint ventures and align themselves
in integrated businesses. The second is the shrinkage of the federal
government and its diminishing role as a source of countervailing
power to business-and its concomitantly expanding role as an advocate
for corporations. The third trend is the erosion of labor unions.
In this climate, corporate power has rapidly consolidated
into a few hundred dominant global companies with, Derber argues,
an executive committee of 30 companies that effectively run the
United States. He groups the top 30 into four categories of economic
power: the robber barons of the information highway (Microsoft,
Intel, IBM, AT&T, Time Warner and a few other giants in the
computer, telecommunications and media sectors); the super-banks
and leaders of finance capitalism (among them Citigroup, Goldman
Sachs, Fidelity); the new robber baron retail railways (Wal-Mart,
Philip Morris, Coca-Cola, Merck and other leaders in the retail,
food and drug, and health care sectors); and the Blue Chip Robber
Barons (GE, Exxon, Ford, GM, Boeing, Shell, Toyota, Siemens and
other goliaths of the automotive, aerospace, airline, energy,
electronics, steel and other industrial sectors).
Derber elaborates the many ways that "corporations are
taking over our lives," as his subtitle says, but focuses
especially on the rise of job insecurity. With workers throughout
the economy fearing layoffs, even in profitable companies, what
Derber calls the anxious class is rapidly growing in numbers.
The rise of the "virtual corporation," mass layoffs,
the increase in temporary workers, contracting out - whether by
buildings contracting out janitorial work, or Nike using subcontractors
to manufacture its shoes and athletic wear-are all intertwined
processes feeding the growth of the anxious class.
Justifying the shift to contract work is a cramped legal and
political sociological school of thought known as contractarianism.
Workers and employers have no special bond, this school suggests-they
relate through a contract that is no more connecting than the
contract agreed at the time of sale of a bar of soap.
"Corporate virtual reality is more than just opportunism,"
Derber explains. "It systematically shifts risks borne by
the New Deal social corporation to contract workers, who now bear
all the brunt of business cycles and shifting markets." It
transfers income and wealth from workers to management and shareholders,
and it "frees the corporation to disregard its legal and
social responsibilities to employees, established through 50 years
of struggle by workers, unions and legislative reformers."
Corporation Nation aims at more than critique. It seeks to
outline solutions to the problems it documents. But it is here
that Derber abandons the soul of populism, which he says tends
"to confuse a critique of corporate ascendancy with an all-out
assault on business as a social enterprise."
He proposes instead a "positive populism" that seeks
not only to rein in corporate misbehavior but also emphasizes
the protection of the health of the business enterprise.
Here some of his impulses are at tension with one another.
For example, on the one hand he suggests the need for meaningful
controls on capital mobility; but on the other hand he wants to
craft global financial regulations that will enhance investor
predictability. Many Multinational Monitor readers may also find
cause to object to Derber's promotion of labor-management cooperation-as
modeled on GM's Saturn, where he strangely says that "managers
become partners rather than bosses, and the plant operates more
like a Quaker meeting than like a military command system."
Perhaps more important than Derber's specific recommendations
is his call to meld disparate social movements- labor, environmentalism,
the "third sector" (nonprofit and social service organizations)
and populist multiculturalism (race, gender, ethnic and sexual
orientation-based organizations)-into a populist struggle for
democracy. Combined each of these sectors should be able to pool
strengths and overcome weaknesses, and mount a serious effort
"to achieve their founding goals: the return of basic rights
from corporations to the citizens to whom they rightly belong."
Although it ends with many similar "what-can-you-do-now"
recommendations (e.g., join an advocacy group, use consumer power
to support socially responsible businesses), The Post-Corporate
World proposes a very different conceptual approach than Corporation
Nation, and it suggests the need for a more profound challenge
to corporate power.
In his follow-up to the highly successful When Corporations
Rule the World, David Korten argues that corporate capitalism
is morally, environmentally and economically bankrupt ( "the
mortal enemy" of "markets, democracy and universal prosperity")
and must be replaced.
His critique and proposals are framed by the use of a spiritual
metaphor of the economy and society as a life form. Relying \
heavily on the \ work of Mae Wan Ho and other biologists, Korten
~ strives to imagine a system of economic organization in line
with life-affirming precepts, to replace what he describes as
a current system in which the dominant metaphor is a lifeless
machine. Life is matter that chooses, Korten says, and he implores
readers to choose to work for an economic reorganization.
Irrespective of whether readers find this metaphoric frame
compelling, readers of Multinational Monitor are likely to be
interested in Korten's elaboration of the critique in When Corporations
Rule the World and his suggestions for overarching principles
and guideposts for a sustainable economy.
Based on principles derived from "life's wisdom,"
Korten suggests "design elements" for a post-corporate
world. He is not proposing a blueprint for a future society, but
trying to envision what features would define a sustainable future.
His design elements include: human-scale self-organization (i.e.,
small production facilities controlled by local workers and community
members); village and neighborhood clusters; town and regional
centers (with the idea that economic transactions should occur
in the smallest, most geographically compact area possible- with
each village, say, growing much of its own food, but computer
chips manufactured in regional centers); renewable energy self-reliance;
closed-cycle materials use; regional environmental balance; mindful
livelihoods (with workers producing goods for which there is real
need, and work a source of fulfillment); inter-regional electronic
communication; and wild spaces.
A believer in decentralization, Korten does not reject the
use of markets, but he does reject corporate-dominated capitalist
markets. Instead, he calls for ''mindful markets" in which
costs are internalized by sellers and buyers; information is freely
and fully disclosed; diversity, self-reliance and local production
and trade are favored; and government guards the condition for
proper market functioning without being overrun by private interests.
The Post-Corporate World is, again, intended as a visionary
book. These principles and guideposts should not be dismissed
as utopian; rather they should be evaluated and critiqued on the
basis of whether they are sensible, sufficient, realistic in their
context and so on. Do they set out the right direction for the
economy to move in order to become sustainable?
Korten does also pick up some of the strands from When Corporations
Rule the World to argue for an overarching six-point reform plan
to address unsustainable structures and practices in the existing
world. He calls for restoring political democracy (through campaign
finance reform and other means); ending the legal fiction of corporate
personhood; establishing an international agreement regulating
corporations and finance (by which he means a complete replacement
of the World Trade Organization and similar international arrangements);
eliminating corporate welfare; making financial speculation unprofitable;
and advancing economic democracy (through policies that promote
the growth of worker-owned and community-controlled businesses).