Open Borders for Capitalism

Why Multinational Corporations Aim to Deconstruct National Government

Photo by Stephen Weppler | CC BY-NC-ND

Image: Photo by Stephen Weppler | CC BY-NC-ND

“Are capitalism and communism not both in the process of converging into a neo-feudalism, led and manipulated by big, powerful bureaucracies in which the individual loses his humanity?” — Erich Fromm

For centuries, national governments, or nation-states, have pursued a business model of taxing their citizens’ productivity in exchange for the oft false promise of old age and security. Traditionally, such rent-seeking schemes benefit an inner circle of ruling families and their wealthy life styles, the nobility and royalty. But today, nation-states and their ruling elites find themselves in direct competition with multinational (and transnational) corporations. In order to increase profits, powerful multinationals not only seek to evade taxation from national governments, but also aim to expand their ‘market share’ by taxing and governing citizens themselves.

Multinationals want to govern their own affairs. With over-reaching transnational ‘partnerships’ such as TPP and TTIP in place, we are witnessing the advent of a global neo-feudalism that will trap the lives of the 99%.

Towards the Privately-Owned State

Some multinationals already wield the necessary financial power to compete with smaller nations. For example, Samsung Electronics spent about $14 billion on advertising and marketing in 2013 — more than Iceland’s gross domestic product (GDP). Yet to their frustration, national and international laws still bind global firms to local taxation. Thus, if a collective of powerful multinationals acted together in a successful push to deconstruct national government, and in the process create a so-called borderless world, such corporations could effectively replace the nation-state with a privately-owned corporate-state.

Note that while some political activists adopted the phrase “borderless world” to promote their idea of global citizenship, multinational firms merely embrace it as a first step towards submitting ordinary citizens to their rule. Multinationals aim to ensnare such citizens, robbed of their national identities, in commercial rent-seeking schemes provided by them. For example, your security, healthcare, pension plan and even your children’s education might one day come at a monthly subscription from the Republic of Wal-Mart.

A Market for Nations

This dystopian view of the near future will take some time to accustom to. But the idea of a political state owned by a commercial enterprise isn’t new. Founded in the year 1602, the Dutch East India Company quickly rose to power as the world’s first multinational firm, and also the first to be publicly traded on the first stock exchange. According to Wikipedia, “The [East India Company] was a powerful company, possessing quasi-governmental powers, including the ability to wage war, imprison and execute convicts, negotiate treaties, strike its own coins, and establish colonies.”

The East India Company was its own economy, while its private shareholders crowned themselves king. Today, we can observe a similar tug of war between ambitious multinationals and their traditional home-states. For example, in 2014, ING Bank co-authored a piece of Dutch legislation that awarded banks a fiscal benefit when issuing risky bonds. Samsung’s 2012 revenue equaled 17% of South Korea’s GDP, affording it a degree of ‘involvement’ in its home-nation’s politics. That year, Royal Dutch Shell raised over $555 billion in revenue, matching over 84% of Dutch GDP. And what about Super PACs taking money from billionaires to influence US presidential elections?

While one cannot compare national GDP with corporate revenue, it is evident that some of today’s multinationals can afford to maintain real armies, directing them to invade and usurp lesser nations. Would it really surprise anyone if a coalition of US oil companies and weapons manufacturers had pushed for the war in Iraq? Let us forever be done with nationalist naivety: there is now a market for peoples and nations. And among their prospective buyers we find such names as Shell, Samsung, BP, Glencore, Nestlé, Volkswagen and others.

Civil Disobedience

A key development driving the transition from public states to privately-owned corporate-states has been the historically recent rise of mega-cities. With over half of the world’s populations living in cities —in Europe nearly three-quarters — national governments have largely driven their political responsibilities in the hands of commercial enterprise. The privatization of housing, sanitation, transportation and even prisons and pensions has shifted the center of political gravity away from political representation to multinational bureaucracy.

But what was the purpose of establishing democracies only to sell them off to the highest bidder? How can we reverse this neo-feudal trend? Can individual men and women escape modern slavery? The answer may lie in a simple insight formulated by late social philosopher Erich Fromm, who proposed a humanistic socialism that puts human needs before anything else. In an essay bundle titled On Disobedience (1984), he reasons, “At this point in history the capacity to doubt, to criticize and to disobey may be all that stands between a future for mankind and the end of civilization.”

Fromm concludes:

“A person can become free through acts of disobedience by learning to say no to power. […] In order to disobey, one must have the courage to be alone, to err and to sin. But courage is not enough. The capacity for courage depends on a person’s state of development. Only if a person has emerged from mother’s lap and father’s commands, only if he has emerged as a fully developed individual and thus has acquired the capacity to think and feel for himself, only then can he have the courage to say “no” to power, and disobey.”

The greatest threat to a collective is a single individual demanding freedom. Just say “no”.

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Open Borders for Capitalism by Mathijs Koenraadt is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.