Controlling corporations and democratizing the
Once upon a time, people believed in the divine right of kings.
It was generally accepted that the son or daughter of the King
and Queen would be the next ruler.
When "radicals" started pushing the idea that the people
should select who governs them, these heretics were at first scorned.
But as mass education spread, more and more people realized that
it is far more sensible to have the people choose their leaders
than to leave it to heredity.
The history of democratic governance is a history of this principle
gradually spreading to more of the world's population. At first,
it was only wealthy males who were allowed to vote. Gradually
the franchise was extended to the excluded groups (e.g., women
and ex-slaves) as the principle of universal political rights
sunk its roots into civic culture.
Now we are in the early stages of a global revolution that could
make previous democratic revolutions look like mere warm-ups for
the real contest. All across the planet, people are beginning
to see through a big myth: that the world is divided neatly into
a political realm (where democracy is accept able) and an economic
realm (where dictatorship by the rich prevails). In various ways
and in many different cultures, people are expanding the definition
of democracy by asserting their rights to control the activity
The struggle to democratize the economy has grown more urgent
as global corporations have greatly expanded their power and shown
that they cannot be trusted to provide , decent jobs or protect
Within the movement to democratize the economy there is a key
problem: there are many fingers and no fist. Most groups working
to democratize corporations are employing a particular tactic
(e.g., boycotts, shareholder resolutions, challenging corporate
charters), or they focus on a particular corporation or industry,
or they are limited to a particular country or region. We need
to figure out how to unify these many efforts, so the power of
our numbers will be felt by those who own most of the wealth and
exert so much undue control over our lives and the life of the
Forget the Capitol, Get the Capital
Traditionally, citizens focused their political efforts on government,
demanding that elected representatives protect us from the power
of large corporations. But as decades went by and more and more
of us learned that most of the politicians are owned by those
same corporate interests, we realized that it could be more effective
to go straight to the corporations and pressure them directly
Take the case of apartheid in South Africa. For many years, human
rights activists in the United States lobbied our government for
less collaboration with and more pressure on the white minority
government in Pretoria. When this produced little more than cosmetic
changes to the strategic alliance between Washington and white
South Africa, activists gradually turned their attention to the
several hundred U.S. corporations that were directly profiting
The citizen pressure on capital took many forms: shareholder resolutions
calling for corporations to pull out of South Africa; divestment
campaigns to get universities, pension funds and other institutional
investors to swear off the stock of companies invested in apartheid;
and selective purchase ordinances that prohibited city and state
governments from purchasing products from companies doing business
in South Africa.
Although the defenders of white minority rule told us that these
measures were at best a waste of time and at worst detrimental
to the black majority, the pressure gradually built up and forced
hundreds of companies to either end or reduce their involvement
in South Africa. The Achilles heel of corporate behavior was revealed:
if a company is getting one percent of its global profits from
South Africa and thirty percent from city and state governments
in the United States, the choice is easy to make. And it was citizen
pressure that forced the choice on so many corporations.
Cross-Border Worker Solidarity
One of the oldest forms of resistance to global corporate power
has been waged by trade unionists with internationalist consciousness.
As more corporations have gone global, it has become more essential
for trade unions to also expand to the transnational level.
Workers here in the United States are increasingly realizing that
their fate is directly linked to the fate of workers in poor countries.
The debate over NAFTA (the North American Free Trade Agreement)
in the United States stirred up more worker interest in the global
economy than had ever been seen before.
Unions with colleagues in Mexico have been in the forefront of
cross-border organizing. For example, the Farm Labor Organizing
Committee (FLOC) has had a number of important successes because
it takes a more assertive approach to organizing workers across
borders and doesn't expect politicians to do the right thing.
According to FLOC's President, Baldemar Velasquez: "Internationalization
of the trade union movement is now an absolute necessity. Negotiating
and cooperating in these struggles with other unions and organizations
threatened by the same corporations and forces in power is the
only way we're going to gain better conditions."
"Instead of funding politicians, our unions ought to fund
and help organize community groups around the world that will
be part of the future organizing environment."
Workers in the United States have also been learning about the
need for international solidarity when they have conflicts with
foreign owners of companies based in the United States. A recent
case involved Local 7591 of the United Paperworkers International
Union (IJPTIJ) in Charleston, Illinois. When the management of
their employer, Trailmobile, tried to force them to accept a three-year
wage freeze, the workers demanded a better deal. When Trailmobile
responded by locking out 1,200 workers, the union decided to focus
on the Indonesian owners of Trailmobile's parent company, the
Gemala Group. The UPIU teamed up with activists protesting Indonesia's
murderous policies in East Timor and demonstrated at Indonesian
embassies in Australia and the United States. Eventually Trailmobile
caved in and gave the workers what they wanted.
One of the oldest strategies for pressuring corporations is to
mobilize consumers to stop buying the product or service being
sold by the targeted company. By reducing the company's revenue,
the boycott hits the company where it lives, on the bottom line.
In the early 1980s workers at a Coca-Cola bottling plant in Guatemala
went on strike for better wages and working conditions. The local
owners of the Coke plant took a hard line and probably would have
had the workers assassinated had it not been for an international
solidarity campaign that targeted Coca-Cola headquarters in Atlanta
and threatened to undermine Coke's profits worldwide.
One of the better known boycotts in recent history was the Nestle
boycott organized by INFACT, the Infant Formula Action Coalition.
In order to sell more of its infant formula in third world countries,
Nestle would hire women with no special training and dress them
up as nurses to give out free samples of Nestle formula. The free
samples lasted long enough for the mother's breast milk to dry
up from lack of use. Then mothers would be forced to purchase
the formula but, being poor, they would often mix the formula
with unsanitary water or 'stretch' the amount of formula by diluting
it with more water than recommended. The result was that babies
starved all over the Third World while Nestle made huge profits
from this question able marketing strategy. A boycott organized
by INFACT eventually forced Nestle to sign an international code
The mere threat of a consumer boycott in 1995 caused Starbucks
coffee company to release a "Framework for a Code of Conduct"
in which it pledged to improve working conditions for coffee growers
in Guatemala and elsewhere.
Challenging Corporate Charters
Corporations exist only because we the people allow them to exist
via charters issued by our state governments. If we could mobilize
enough people to pressure our state governments, we could revise
corporate chartering laws to impose codes of conduct or-in cases
of corporate wrongdoing-we could revoke the corporation's charter
and put them out of business. Some states already have this legislation
on the books but there is not enough public pressure to exercise
this restraint on corporate power. A group that is organizing
dynamic workshops across the U.S. to develop this strategy is
the Program on Corporations, Law & Democracy, (508) 487-3151.
Exposing Sweatshops & Child Labor
Recently, public attention has been focused on the factories where
our shoes and clothing are made. The issue was placed in the national
spotlight thanks to publicity generated when Kathie Lee Gifford
gave a tearful response on TV to charges by the National Labor
Committee that Kathie Lee was making millions off the exploitation
of young workers in Central America. The ensuing media coverage
made it evident that companies such as the GAP, Nike and Reebok
are vulnerable to charges of exploitation when the conditions
of their third world workers become known to the public here.
In 1995, the Child Labor Coalition (religious, labor and ,consumer
groups) launched a consumer boycott of Bangladeshi clothing exports
in opposition to widespread child labor in the industry. The threat
of a boycott convinced the Bangladesh Garment Manufacturers and
Exporters Association to sign an agreement with UNICEF and the
International Labor Organization to move some 25,000 children
out of the clothing industry and into schools.
Nearly $1 million from the three parties to the agreement will
go toward verifying the end of child labor, schooling for the
former child workers and a modest stipend to the families of the
children. One aspect of the agreement is that the Bangladeshi
garment companies agreed to let the ILO train independent monitors
to carry out spot checks on clothing factories.
The National Labor Committee has been a pioneer in exposing sweatshop
conditions and forcing change on those in power. In 1992, the
findings of an NLC report entitled Paying to Lose Our Jobs ripped
through the federal government. During its investigation, the
staff of NLC worked with the CBS-TV program "60 Minutes"
to film a show that aired to 50 million viewers three days before
the NLC released its report and only a week before Congress began
de bating the U.S. foreign aid budget. The Clinton/Gore presidential
campaign, discovering a popular issue, preached AID's evils at
every campaign stop.
Within 10 days of the report's release, both houses of Congress
passed bills prohibiting AID from spending money on export processing
zones, from funding projects that violate internationally recognized
workers' rights, and from inducing companies to move offshore.
Within two months the acting director of AID, Ronald Roskens,
"[The response to this report] proves that people care about
plant closings," said Charles Kernaghan, the NLC's executive
director. "They will care even more when you remove the veil
that hides government policy and the effect of worker's rights
violations offshore on jobs in this country."
The idea is simple: shareholders of publicly traded corporations
get to vote on some company policies. Through the purchase of
stock, individuals and institutions can voice their opinion 'inside'
the corporation. The problem is that you need relatively large
blocks of stock to be more than an irritant and actually change
The group that has done the most to develop the techniques of
share holder activism is the Interfaith Center for Corporate Responsibility
in New York. For a quarter of century, the nearly 250 religious
denominations belonging to ICCR have been pooling their resources
and clout to pressure corporations on issues such as apartheid,
equal opportunity here at home, alcohol and tobacco, the environment,
militarism, U.S. maquiladora factories in Mexico, and other issues.
Some think shareholder activism is a tame form of opposition.
But consider the potential power of workers' savings if the investments
were used to support progressive shareholder resolutions. As Jeremy
Rifkin reports, "... pension funds, now worth more than $5
trillion in the United States alone, have served as a forced savings
pool that has financed capital investments for more than forty
years. In 1992, pension funds accounted for ... more than one-third
of all corporate equities and nearly 40 percent of all corporate
bonds. Pension assets exceed the assets of commercial banks and
make up nearly one-third of the total financial assets of the
A good way to reach out to mainstream audiences is to focus on
the way corporations are willing to destroy our environment in
the interest of making more profits. Groups we have worked with
who are able to link practical action with a larger understanding
of the need for system-wide change include: Rainforest Action
Network, (415) 398-4404, which has many campaigns, including one
to pressure Mitsubishi Corporation to stop clearcutting tropical
rainforests; the Student Environmental Action Coalition which
organizes college students on many global issues (919) 967-4600;
and Greenpeace which still ranks as one of the more creative and
militant organizations working on environmental issues. Contact
their Washington office at (202) 462-1177.
The ultimate goal of all this activity is not just better behavior
by those in power. We want to change the rules of the game so
the system will equalize wealth globally, rather than creating
greater inequality as is currently the case. If we can unify the
movement and increase the size and sophistication of our efforts,
we will be able to democratize the economy and bring corporations
under control. See the back side of this page for specific ways
you can get involved.
What can be done?
There are many good organizations working to democratize aspects
of the global economy. Here are some areas of reform and groups
that deserve your support.
We must develop ways to control
the behavior of corporations. There is already an international
movement to create and enforce codes of conduct for transnational
corporations. Government and citizens' movements have been pushing
on many fronts to codify rules on how corporations can treat their
workers, customers and the environment. A good group working to
make transnational corporations more accountable is the National
Labor Committee in New York (212) 242 - 0700. In 1995 they succeeded
in forcing the Gap to reform the horrible working conditions in
factories in El Salvador that produce clothing for the Gap. The
Interfaith Center on Corporate Responsibility represents numerous
church groups and uses shareholder activism to pressure corporations
for change. Their newsletter, The Corporate Examiner, has useful
information. Contact them at (212) 870-2936.
We must put the issue of inequality
on the political agenda. Most Americans are aware that inequality
is getting worse but they lack specifics on just how bad the problem
is and what we can do to fix it. For information on this central
issue and what we can do about it, contact Share the Wealth (617)
423-2148 and ask for a sample copy of their quarterly newsletter,
Reform international economic
in situations. The World Bank and the International Monetary Fund
(IMF) were originally chartered as part of the United Nations
and were supposed to be under the control of the General Assembly
(the more representative branch of the UN). But the global bankers
now have complete control of these powerful bodies and they function
to transfer wealth from the poor of the world to large banks and
corporations. The 50 Years Is Enough Network has a detailed plan
for restructuring these institutions to promote sustainable and
participatory development. Contact them at (202) IMF-BANK.
We need to have the interests
of average citizens represented in U.S. trade policy. Whether
it's the struggle over NAFTA or efforts by big corporations to
get Most Favored Nation (MFN) trading status for China, one of
the best groups researching and organizing on these issues is
Public Citizen. Its Global Trade Watch program can be reached
at Public Citizen, 215 Pennsylvania Ave., SE, Washington, DC 20003,
Grassroots development organizations
are building alternative economic institutions to provide jobs
and include workers in decision-making. The Fair Trade Federation
helps third world producer groups market their products in rich-country
markets so they can work their way out of poverty rather than
be dependent on charity. Contact them at (508) 355 0284. Transfair
International is developing fair trade labels and links up progressive
producer groups around the world. Call them at (612) 379-3892.
Adapted from the Conclusion of Kevin Danaher, ed., Corporations
Are Gonna Get Your Mama: Globalization and the Downsizing of the
American Dream (San Francisco: Global Exchange, 1996).
this article is from the Global Exchange newsletter - Fall 1996
2017 Mission Street Room 303
San Francisco, CA 94110
Corporations & the Third World