Purpose:  To understand globalization as an historic corporate drive for global power using trade agreements, global social institutions, and a globalized military as the central mechanisms to enact corporate global governance, and to highlight the global popular pushback against the corporate global empire.

 

Materials

Readings: Justice Rising, Winter 2005-06, Global Corporate Empire or Popular Governance: The Next Millennium; Fall 2013, World Citizenry Takes On Corporate Global Rule

Handouts: Questions, Article Rankings, Talking Points

 

Paradigm: The nation-state system is unable to handle our most severe global problems, including climate change, resource depletion, global pollution, and human migration.  It must be replaced by a system of global governance based on subsidiarity, whereby decisions are made at the most local level possible while still being able to solve our threatening global problems.

 

Context: For 1700 years, Silk Road trade formed the basis of the Chinese, Persian, and Venetian Empires. When Mongol and Turkish control blocked the Silk Road in the 1400s, European merchants struck out in different directions. Portuguese explorers found a route around Africa to Asia, and Columbus sailed west from Spain to discover the Americas. Thus began globalization.

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Theft, military violence, and trade played a central role in the corporate take-over of the globalization process. It began with the British and Dutch merchants’ heist of the Portuguese trade routes around Africa in the late 1500s, which led to the formation of the first business corporations in the world, the British East India Company and Dutch Vereernigde Oost-Indische Compagnie. Their royal charters gave them the privilege to raise private armies and violently conquer all the territory necessary to exploit resources throughout Africa and Asia. At the same time, their founders were also pioneers in the money-laden democracy movement. Mayors of London revolved through the leadership of the British East India Company. Founders of the Vereernigde Oost-Indische served as the leaders of the Dutch Republic. Corporate elites, war and democratic elites have been close partners from the beginning of both modern democracy and corporations. Merchants took over almost all British public policy making in the mid-1600s and relegated the monarch to a figurehead by the 1680s.

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But, American revolutionaries rejected the power of corporations and England’s money-based governing structure. Patriots threw British East India Company tea into Boston Harbor. After the revolution, states limited the lifespan of corporations and required that they serve the common good. John Jacob Astor’s American Fur Company and the early railroad corporations slowly weakened state control of corporate power. Corporate elites exercised over arching power in the United States by the late 1800s in the era of the robber barons.

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Corporate lawyers took direct control of US foreign policy at the turn of the twentieth century. They launched America into the corporate globalization process with the Spanish American War, giving the tycoons of the American Sugar Trust colonial access to the best sugar cane-growing regions in the Philippines, Cuba, Hawaii and Puerto Rico. Wall Street lawyers took over the US War and State Departments in the first decade of the twentieth century. Elihu Root, legal counsel for steel baron Andrew Carnegie, served as US Secretary of War from 1899 to 1904 and Secretary of State from 1905 to 1909.  Banking mogul JP Morgan’s partner, Robert Bacon, followed Root as Secretary of State and Philander Knox, who helped establish the US Steel Trust, followed him, serving until 1913.

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When Democratic President Woodrow Wilson and his Secretary of State William Jennings Bryant shunned corporate interests in 1913, Elihu Root and Philander Knox created a private group to control US foreign policy and established the Council on Foreign Relations (CFR) to reinsert corporate interest into US foreign policy on a permanent basis. It has overseen US foreign policy for the last century by revolving its members through the US State Department. Since its founding, CFR has been managed by financial titans including David Rockefeller and Robert Rubin. CFR member Henry Kissinger, a primary protégé of the Rockefellers, served corporate interests as US Secretary of State and National Security advisor.

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Meanwhile, Elihu Root’s Wall Street legal protégé, Henry Stimson, served as Secretary of War from 1911 to 1913 and then went on to serve as Secretary of State from 1929-1933 and Secretary of War from 1940 to 1945 during World War II. All these corporate functionaries served as central policy makers in the establishment of the American Empire that opened up resources and markets to American corporations around the world.

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Corporate elites around the world have also come together in social institutions like the World Economic Forum, the Tri-lateral Commission, and the Bilderberg Group. Their gatherings operate to establish the social and economic ties necessary for them to establish their own global governance in alliance with global military leaders.

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Spurred by oil and money, corporate globalization of the Twentieth Century turned into the global corporatization of the Twenty-First Century. The trajectory of global corporatization began with the oil crisis of the 1970s when the Organization of Oil Exporting Countries (OPEC) brought the Western industrialized world to its knees by controlling the price and distribution of oil around the world. The resolution of the crisis came when the oil producing states — dominated by Saudi Arabia and other Middle Eastern nations — agreed to place their oil profits with big New York banks. Flush with cash, those banks identified the “underdeveloped” nations as prime targets for development loans. As told by John Perkins in his Confessions of an Economic Hit Man, they persuaded these countries to undertake loan obligations they could not afford. When those countries defaulted on their loans, the global financial community leaned on the International Monetary Fund (IMF) to bail those countries out.

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The International Monetary Fund came out of the Bretton Woods Conference at the lavish Mount Washington Hotel in 1944. It was openly acknowledged that attendees were there to make the world safe for investment capital. Along with the IMF, corporate and Western leaders launched the General Agreement on Trade and Tariffs (GATT) and the World Bank. They created the IMF to help countries deal with short-term balance of payments problems.

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When bankrupt countries were unable to repay the big banks in the 1980s, the IMF stepped in to bail those countries out. In return for the bail-out, the IMF forced them to privatize their public services, cut back their public benefits, and promote the growth of a cash economy dedicated to exporting commodities and importing industrialized goods. These actions devastated land-based, peasant cultures around the world. Banks benefitted because nations paid back the fraudulent loans. Privatization of state enterprises and expansion of their cash economies ensured the expansion of global corporate empire.

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Corporate-driven trade agreements joined this IMF effort to facilitate global corporate governance. The World Trade Organization (WTO) grew out of the GATT and advertised itself as the new global constitution under which nation-states would lose their sovereign right to protect the health and safety of their citizens and environment. Capital could flow freely around the world unrestrained by national laws. Corporate lawyers would settle disputes in secret. The WTO was not concerned with setting up a fair global trading system; it was set up to give capital ultimate power and bypass national regulatory laws. This same model was used to make regional trade deals like the North America Free Trade Agreement and others.

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This process came to a standstill when citizens rose up and shut down the World Trade Organization meetings in Seattle in November 1999. Activist organizers then formed the World Social Forum as a counterpoint to the World Economic Forum and the global civil war continues.

 

Activities: Present the historical narrative above to give a sense of the origins of corporate globalization. Here are links (PDF of our PowerPoint and notes on each slide) to the primary teaching tool we have used for this class, Ecuador: Globalization, Devastation and Hope,  a PowerPoint I put together that provides a classic example of what has happened to much of the world in the process of global corporatization. It depicts how multinational oil corporations penetrated the Amazon jungle to extract oil, leaving an environmental disaster, which led to one of the largest environmental lawsuits in history. The PowerPoint shows how the Ecuadorian elite leveraged future oil profits to borrow heavily from international financial markets for projects that never delivered the necessary returns to repay the loans. When Ecuador went broke, international bankers demanded that Ecuador get rid of its national currency and use the US dollar, destroying all the savings of the Ecuadorian middle class. The “Hope” comes from the response of the Ecuadorian indigenous and peasant communities that rose up in the face of globalization and devastation to throw out the elites and, for a short time, rule the country. This catalyzed a national movement to confront the devastation caused by globalization, including efforts to stop a second oil pipeline over the Andes Mountains and localized efforts like that of Junin, where the people burned down a copper mine twice in their 20-year effort to stop its development from devastating their town.

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In addition to the PowerPoint, there are many excellent videos about globalization. I have listed some here showing presentations by:

• Kevin Danaher, the co-founder of Global Exchange and one of the most dramatic speakers on the topic,

• Lori Wallach, long-time activist organizing protests against the international trade agreements,

• Ruth Caplan from the Alliance for Democracy,

• David Rothkopf, who operates inside corporate globalization,

• Nobel laureate Elinor Ostrom on global governance from the local level,

• Professor William Robinson on what the next systems might look like.

 

You may also be able to find a local speaker on these issues, particularly someone connected with Citizens Trade Campaign, which is connected with local groups across the country. You can get a list of their affiliated organizations here.

 

You could also concentrate on a current topic. One example is the story of the global corporatization of the Ukraine, which is an obvious case of the global corporate empire dragging a part of the old communist bloc into the imperial corporate sphere. Here are links to a couple of studies by the Oakland Institute The Corporate Takeover Of Ukrainian Agriculture and on Walking on the West Side: The World Bank and the IMF in the Ukraine Conflict.

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This should be enough material for the first part of this class. Take a break and in the second part of the class, discuss the questions for this class. Here is a link to notes on the answers. Remember to discuss the many books on globalization. Also be sure to pass out the questions, reading rankings and talking points for the next class on global military and the imperial media.

 

The day after the class, email the questions and rankings for the next class to everyone and include a current article on corporate globalization.

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The day before the next class, send a reminder email that the class is coming up and again attach the questions and ranking and maybe a piece on corporatization of the military.