Tuesday, February 16, 2010

Saving the World at Earth Summit 2012 (Part 2)

If the “Earth Summit” convened by the United Nations General Assembly in 2012 is to save the world from sliding into certain environmental disaster, it must address the rapacious ecological impact of giant corporations.

How to do that when corporations control the world economy and have enormous influence on the policies of governments?

To know what must be done we have to understand how corporations got so big and powerful – and why they are so vulnerable now to citizen action.

The joint stock corporations which now control world markets have only been around since the 17th century. The first of them was the East India Company, which was formed by a number of rich merchants in London and given a monopoly of the India trade by Queen Elizabeth. Soon other countries in Europe followed suit, and that first generation of corporations laid the foundations of a global economy.

They established colonies in Asia and the Americas, and the transatlantic slave trade out of Africa. They brought indentured workers from Asia to the Americas and Africa. They created a global trade in sugar, opium, tea, calico and silk. In the 18th century they also became the main vehicles for the industrial and technological revolutions in Europe.

In doing all this, corporations with the most resources had a natural advantage, and as smaller competitors fell by the wayside, the survivors became ever bigger. To manage their giant budgets and processes they needed huge bureaucracies with top-down systems of command and control. Such systems could not cope with volatility, so corporations sought to create stable economic and social conditions.

They did that in several ways. One was by getting involved in politics and ensuring business-friendly legislation. Another was through advertising (an industry pioneered by corporations to shape the social atitudes underlying mass demand). Perhaps the most important avenue of influence was the mass media, control of which came to be concentrated in a very few mega-corporations.

As long as the Cold War was in progress, many developing countries were suspicious of corporate power and did not allow them free entry into their economies. Such resistance ended in the 1990s, and as developing countries clamoured for corporate investments, it accelerated economic globalization. The trade patterns that emerged were insane. Investments flowed mainly to a handful of countries in East and South-East Asia where corporations could make the most profit. China became the “workshop of the world,” producing all matter of goods, including cheap plastic toys, and shipping them around the world.

This was of course, hugely wasteful of energy, for many commodities, including petroleum, had to be shipped in bulk to China to enable the reverse flow of manufactures. There was a dramtic growth of environmental pollution. Scientists noticed a "brown cloud" over all of Asia, a poisonous mix of chemicals, eroded top-soil and sand blown from rapidly expanding deserts. In the middle of the Pacific there grew a floating island of garbage, mainly discarded plastic items, as large as the continental United States.

How can the Earth Summit in 2012 change this awful reality?

It must base its action on three realities.

The first is the nature of the problem. Corporations are the principal cause of environmental degradation.

The second is that corporations create most of the wealth in the world; thus, any effort at change must be evolutionary and result in a reorientation rather than a destruction of corporate capacities.

The third reality is the irrelevance of factors that made mega corporations necessary and efficient in the heyday of heavy industrialization. The information and communications revolutions have made networks much more efficient than hierarchical bureaucracies.

What is the strategy for action that the Earth Summit must construct on these realities? That will be in the next post. Stay tuned.

1 comment:

FineWine said...

whew! interesting reading.

This is on a more superficial level: I have always been staunchly loyal to The Hindu, but its recent attempts at hitting its own headlines about its exclusive deal with WL, has made me wince.