State of Power 2014 Exposing the Davos Class in collaboration with “Study the rich and powerful, not the poor and powerless...Let the poor study themselves. They already know what is wrong with their lives and if you truly want to help them, the best you can do is to give them a clearer idea of how their oppressors are working now and can be expected to work in the future.” (Susan George, How the Other Half Dies, 1974) 2 State of Power 2014 Contents Contents Introduction Nick Buxton Infographics of Corporate and Elite Power ■ State of Corporations – The rise of illegitimate power and the 8 threat to democracy. Susan George ■ State of Davos – The camel’s nose in the tents of global governance 16 David Sogge ■ State of Surveillance – the NSA Files and the global fightback 10 Ben Hayes ■ State of Empire: How failed foreign policy, new emerging economies, 30 and peoples’ movements are undermining US power Phyllis Bennis ■ State of the South – Emerging powers and the potential for 36 progressive change Achin Vanaik ■ State of the State – The state is dead! Long live the state! 45 Daniel Chavez ■ State of the Planet – The fateful triangle of big energy, finance 54 and complicit governments Steve Horn and Peter Rugh, occupy.com ■ State of Europe: How the European Round Table of Industrialists 61 came to wage class war on Europe Andrew Gavin Marshall, occupy.com ■ State of Extraction – The new scramble for Africa 67 David Fig ■ State of the Land – Reconfiguration of the power of state 75 and capital in the global land rush Saturnino M. Borras Jr. ■ State of Counter Power – How understanding neoliberalism’s 81 cultural underpinnings can equip movements to overthrow it Hilary Wainwright References 95 About the authors 99 The full report, infographics and chapters can be downloaded at http://www.tni.org/stateofpower2014 3 State of Power 2014 Introduction challenge following its losses in Iraq and elsewhere, The Transnational Institute is proud to launch its third yet its continued unparalleled military dominance and annual ‘State of Power’ report as the World Economic willingness to use violence without accountability may Forum meets in Davos. This anthology exposes and make it more dangerous than ever before. Achin Vanaik analyses the principal power-brokers, members of the focuses on the arrival of new powers which could “Davos class”, who have caused financial, economic, challenge US unipolarity, but in a wide-ranging essay on social and ecological crises worldwide. the arrival of BRICS and MICS poses crucial questions Unless we know which elites control our wealth as to the potential of these nations to offer progressive and resources, understand how they influence political alternatives to the collective crises humanity faces. and social processes, and can identify the systems, In different ways, Daniel Chavez, Jun Borras, Steve structures and policies by which they maintain their Horn and Peter examine how corporate and state power power, TNI believes our hopes for advancing social inter-relate and depend on each other to flourish. and environmental justice are slim. Justice demands Chavez notes that despite the wave of neoliberalism and a recalibration of power and that requires us to better privatisation that swept the world, public enterprises understand it. continue to make up 10% of the sales of the top 2000 This collection of essays and accompanying corporations and can still exercise vast financial power infographics draws attention to key dimensions of through Sovereign Wealth Funds in states as diverse as power and its exercise in our globalised world. These Qatar and Norway. However, they are not necessarily contributions first highlight how power is hidden and advocates for inclusive sustainable development: they concealed. The peasants who lose land or whose river are too embedded in financial markets and dominant is polluted by mining may not know the name of the in the extractive industries. As the financial crisis so owner or corporation threatening their livelihood. They blatantly demonstrated and as Jun Borras exposes in his certainly will not know which transnationals are buying examination of land grabbing; state and capital are an the minerals, the politicians who signed the trade deals to “inseparable duo”. They depend on each other both to facilitate its extraction, or the elusive corporate lobbying dispossess but also to build legitimacy for appropriation. groups that successfully pushed through those deals. Peter Rugh and Steve Horn bring the equation together Susan George takes an overarching global look to demonstrate how the “fateful triangle of big energy, at how corporations have systematically and silently finance and complicit governments” prevents a appropriated power and authority through lobbying, trade desperately needed radical response to climate change. and investment agreements, and through unaccountable Hilary Wainwright tells us that dissembling this expert groups and bodies. David Fig shows how they fateful triangle requires that we recognise power’s work in the new corporate scramble for Africa seizing transformative capacity and use our creative skills, its rich mineral resources, while Andrew Gavin Marshall alternative knowledge and values to overturn looks behind the political stage of the European Union to neoliberalism. She points to inspiring examples from expose how a single corporate group, the European Round anti-austerity movements in Greece and Spain that are Table of Industrialists has systematically influenced not only challenging neoliberalism, but building practical, and shaped the EU’s economic policies, including its productive alternatives that embody the values of disastrous austerity regime. This concealed corporate solidarity, social justice, co-operation and democracy to power threatens to become further entrenched, as David which we all aspire. Sogge makes clear in his analysis of the World Economic We hope this book will be a resource and tool that Forum’s Global Redesign Initiative that seeks to replace supports that critical transformation. nation-states and democracy with a corporate-led multi- stakeholderism—a term as ugly as the WEF’s intentions. Nick Buxton These essays expose a second key feature of power: Editor its dynamism and complexity. Ben Hayes shows why constant vigilance is needed as it morphs into new arenas and evaluates the significance of Edward Snowden’s We are very glad this year for the collaboration with historic revelations in revealing the unprecedented reach Occupy.com which has been running a similar Global and power of the security state. Phyllis Bennis explains Power Project and who supported the essays by Andrew that US imperialism may be facing its biggest legitimacy Gavin Marshall, Steve Horn and Peter Rugh. 4 State of Power 2014 5 State of Power 2014 6 State of Power 2014 7 State of Power 2014 State of Corporations State of Corporations – The rise of illegitimate power and the threat to democracy Susan George Af ew years ago a book concerned with the “state of equal weight to the interests of each of those places. power” would probably have been mostly confined Furthermore, as we shall see, groups of companies from, to or at least centred on the State and its more dominant say, the United States and European countries or Europe attributes such as the military, its control over vital as a whole come together to obtain results they perceive resources or its currency. In the present context one as being in their collective interest. “Obtaining results” would doubtless want to add “its capacity to spy on includes political results and the capacity to obtain them other powers”– but this is not the sort of I intend to from governments is inexorably growing. This, to me, discuss here. implies a serious breakdown of democracy. Rather, I will focus on power unaccompanied by So I shall first make a few quick distinctions accountability of any kind; that which is not required to concerning what is legitimate and democratic on the one report to anyone concerning its activities and which, hand and, on the other, illegitimate and undemocratic in being difficult to understand, is equally difficult to counter. This is why the other half of the title is “the threat to democracy”. Legitimacy depends on democracy— otherwise all forms of power, where government is concerned, are merely variations on the theme of oppression whether called tyranny, dictatorship, or autocracy. The subtlety of illegitimate power makes it hard to identify. It does not have a name as such, does not stem from official decisions and is not often felt as oppression by those who submit to it, knowingly or not. Illegitimate power, in the sense I will use it here, excludes tyrannies, dictatorships, one-party authoritarian States, African satrapies et alia. It concerns the power of the largest corporations and here I prefer the United Nations formulation of “transnational” or TNC to “multinational” or MNC. When you arrive at the upper reaches of the corporation, the CEO, the COO or the CFO, the director of R&D, the Board of Directors, these companies far more often than not have an identifiable nationality and although they may have subsidiaries in dozens of places they do not by any means give 8 State of Power 2014 State of Power government, now often called—and for good reason-- Truly equal rights are not yet wholly achieved for “governance”. 1 women, for migrants, or sexual and racial minorities but Second, I’ll state my hypothesis : I believe the despite all the horrors of the past couple of centuries, evidence shows that illegitimate authority is on the the setbacks and the imperfections, democracy and rise and that democracy is gradually succumbing to the Enlightenment values still seem to me and to millions of disease of neoliberal ideology so that more and more others the best and most admirable form of government functions of legitimate government are being assumed by ever attempted. Proof of this is that other (not necessarily illegitimate, unelected, opaque agents and organisations. Western) people want the same things for themselves and This is the case at all levels, national, regional and are willing to fight and die to achieve democracy. international. Finally and most importantly, I will supply elements of proof and provide examples in support of this argument. Why defend this model? The list of examples is ever-growing and could be much longer than the one here but I hope to show nonetheless I believe we must preserve and improve the democratic, that illegitimate, corporate rule now occupies greater Enlightenment model and I’ll now try to explain why I and greater space at every level of government including believe it is in grave danger posed by illegitimate power. the international sphere, that it is gravely damaging Over the past three or four decades a new set of values democracy and that it has an impact on our countries has gradually taken front and centre stage, along with a and our lives, especially if we live in the Western great many changes for the worse in government. democracies. 2 Now standing against the Enlightenment model is a new ideology of selfishness and cruelty we can call the neoliberal model. It has been steadily gaining ground What makes power legitimate? despite overwhelming proof that it is harmful to nearly everyone, except for the extremely wealthy and for the top Here is a legitimacy checklist I think most people living people in the corporate sector. I honestly did not believe it in democratically run countries would accept. The could emerge even stronger after the financial earthquake hallmarks of legitimate power are free and fair elections, which struck in 2007-2008 and with whose aftermaths constitutional government, the rule of law, equality before we are still living. But this is what has happened. the law; separation of executive, legislative and judicial This model has been thoroughly discredited— powers, checks and balances to prevent any one part of discredited intellectually, practically and morally. Yet government from becoming too powerful, the separation neoliberalism has still triumphed and is continuing to of church and state. Coupled with such provisions is cause huge shifts of power in favour of the richest and the never-completed, always expanding list of individual most powerful classes and corporations. and collective rights and freedoms as first set out in the Inequalities have markedly increased. In Europe, the French Declaration of the Rights of Man and the Citizen of shares of economic value going to capital and labour 1789 and the Bill of Rights of 1791 made up of the first ten have shifted drastically. In the late 1970s, the share of Amendments to the Constitution of the United States of value going to labour in the form of wages and salaries America. was in Europe about 70 per cent of GDP. The remaining Freedom of opinion, speech, worship, the press thirty per cent went to capital in dividends, rents and and so on…All these ideas were once considered profits. Now capital receives at least 40 per cent of GDP, revolutionary, even when they were woefully incomplete- in some countries more and labour gets only 60 per cent. -slavery still existed, women and minorities could not Corporate shareholders used to be content with dividends vote or exercise many rights and so on. But the notions of representing a return of 3 or 4 per cent a year; now individual rights and governments that guarantee them are they demand 12 per cent and more. The former goal of part of the movement of the Enlightenment. building a strong, healthy and lasting business enterprise In the 18th century, the ideas and the defenders of well integrated into the community has been replaced the enlightenment included not just the notion of rights by the single imperative of “shareholder value”. Nearly and freedoms but also duties and norms of conduct for all business decisions are directed to that end, which individual citizens. They defended rational and scientific encourages short-termism, asset stripping, mass layoffs thought against dogma and superstition and invented and many other negative phenomena. totally new concepts such as collective progress and If salaried people have lost ten points of GDP, this individual happiness. 3 is not small change! The GDP of Europe is about $13 9 State of Power 2014 State of Corporations trillion per annum, so European working people are now neoliberals, every aspect of the welfare State is abhorrent missing out on some $1.300 billion ($1.3 trillion) a year because it consists in taking resources from the rich— compared to the 1970s. When workers are paid, their those who supposedly created the wealth—and giving incomes go overwhelmingly into the purchase of goods that wealth to those who do not deserve it. The rich owe and services—which keeps the economy ticking over. nothing to the poor. Now we have high unemployment and the wages of those Nor do the rich owe anything to nature. In the who do have work are stagnant and sometimes falling, neoliberal canon, nature per se creates no value, nor does particularly in Southern Europe and even for a good part labour. Both are there to be exploited by corporate entities of the German working class. and only investors (i.e. “shareholders”) and the people at Capital on the other hand is reinvested, very often in the top are value creators. the purchase of financial products which create no social value, have little or nothing to do with the real economy and can, as we have all too recently seen, bring that real The corporate offensive from economy to its knees. A to – well – not quite Z Now for proof—or at least examples--of the increasing Neoliberal doctrine control of illegitimate power. It is exercised through corporate money, of course, but also through increasingly Just as I provided a “legitimacy checklist” for democracy, sophisticated organisation and professionalism. There here is one for the illegitimate governance of the are many levels of the expression of this power: we may neoliberal model and its defenders: start this quick overview with the simplest, the ancestor Markets are wise and efficient; they tell citizens, of corporate influence, i.e. common or garden lobbying. businesses and governments what the public wants and This practice takes its name from the lobby of the House needs; they should be allowed to function independently of Commons where men with special interests, and often and kept as free as possible (ideally entirely free) of stuffed envelopes, would wait to waylay and buttonhole government regulations and interventions. Markets the arriving or departing MPs. are by definition “self-regulating” and in the neoliberal After a couple of centuries of practice, these vocabulary, regulations are “job killers”, trade unionists non-elected people have become familiar, far more are “thugs” who want to prevent newcomers and of knowledgeable and quasi-legitimate actors on the course foreigners from finding work. Privatisation of fringes of government. Their offices occupy whole public services is desirable because private enterprise neighbourhoods in Washington (K Street) and the EU always out-performs public services on criteria of quarter in Brussels. Often they have come through the efficiency, quality, availability and price. Free trade may “revolving door” and after a career in politics know better have temporary drawbacks for some but will ultimately than anyone who to approach and how to change the serve the entire population well with more and better jobs minds of Commissioners or legislators. and greater wealth. Both tariff and non-tariff barriers to They’ve improved their techniques, are paid more trade and to foreign direct investment should be removed. than ever and they get results. Lobbying pays off. A Government spending is intrinsically bad (except for survey by the Sunlight Foundation in the US showed certain budgets such as defence and national security) that American corporations that had invested in lobbying and should be confined to a minimum. Government debt paid proportionally less in taxes than those that had not. and government budget deficits must be got rid of as soon In the US, they must at least declare themselves in a as possible, if necessary by imposing austerity measures Congressional register and report how much they’re paid on the population. and by whom. Austerity programmes are based on these beliefs. In In Brussels, however, there’s only a “voluntary” moral terms, neo-liberalism is selfish and cruel, even anti- register--a joke considering that fifteen to twenty human. In the US, a Tennessee Republican Congressman thousand lobbyists haunt the EU premises and are talking voted to eliminate food stamps with the words, “Those non-stop every day to Commission personnel and Euro- who refuse to work shall not eat”, ignoring the lack of parliamentarians. A few East European parliamentarians jobs available for those trying to find work. In the EU, were conned by British tabloid reporters into taking a fully developed offensive against the welfare State is bribes in exchange for votes and duly exposed to the underway with the goal of clawing back all the gains of reading public. They left under a cloud. working people over the past six or seven decades. For The Parliament, judiciously concerned to preserve 10 State of Power 2014