<nettime> Finding a publisher for The Power of the Giant Corporation

[Geert Lovink <geert@xs4all.nl>]

Dear nettimers,

a few months ago an interesting book appeared in Dutch. It is called “The Power of the Giant Corporation.” The three writers are working in field of cultural economics & copyright, philosophy and political economy. The aim of the book is to go beyond the critique of global finance and capitalism and to find out how large-scale corporations can be dismantled. Is anti-trust the only way to go? This is obviously also relevant in the internet context, think of Google, Amazon and Facebook. How can we get rid of monopolies in a times when nothing is done against this tendency? It is an urgent question as capitalism is generating more and more of such monopolies (think of Airbnb and Uber). Is the abolition of intellectual property rights the way to go? 

The writers are looking for partners in crime to translate their publication in a variety of languages, in particular English. If you know a publisher who could be interested, please contact Joost Smiers <joost.smiers@planet.nl>. Translation costs are not the main obstacle. There a translation fund in the Netherlands that could pay once a deal is made with a publisher. The goal right now is to find interested publishers. Please come on board and help out to translate this important strategic document!

Geert

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THE POWER OF THE GIANT CORPORATION

Towards a fair international economy

By Joost Smiers, Pieter Pekelharing, John Huige 

Economically, politicall and culturally, large corporations have come to dominate our societies. They exert tremendous influence over our lives and often control markets. Many of these companies have grown into large transnational corporations. For them the sky is the limit and they go even further than that. They make a mockery of the principle of  free competition and undermine political democracy. Meanwhile, the structure of these companies has become so complex that it has become nearly impossible to trace their activities in various parts of the world and get an adequate picture of what they are doing. Their power is so great that they can circumvent and even deter regulation. In order to safeguard their interests  they often join forces and  solicit the help of governments, thus creating powerful and deeply interwoven economic and political complexes.

In our book we describe how these companies dominate markets and explain what makes them so influential. We also describe  the damage they can do.  On the basis of our research we put the ax to the root of the evil. We propose to make these big corporations less powerful by breaking them up. This can be achieved through what we call a pro-active competition policy and through  diverse taxation-measures. Doing so creates a  level playing field for a  large number of smaller corporations, competing with each other on a regular basis, making it impossible for one of them to dictate the economic and political rules of the game. 

We also  believe that exercising a monopoly on  knowledge and creativity by means of intellectual property-rights is out of sync with modern times. We propose to bring these rights to an end. We find it  unacceptable that socially acquired knowledge is privatized and put behind lock and key. The knowledge that corporations possess has to a large extent been built on knowledge that exists in the public domain. Much of this was financed by the state. Still, as citizens we have no say in how and by whom this knowledge is to be applied. What is even more disturbing is that companies use a variety of strategies to prevent others from applying this knowledge, thus making it impossible for others to build on this knowledge and further develop it.

Our vision is different. There should be no further privatization of knowledge and creativity. We propose a stop to all patents, copyrights, sourcing rights and similar intellectual property rights. We want to dismantle the whole edifice of intellectual property rights. The research necessary for innovation and the development of new insights should,  in our view, be financed out of collective means. The results can then by freely used by all, companies included. As a matter of policy we propose that research and fabrication be separated from each other and assigned to different organizations. 

Our goal, is to create a more normally functioning economy in which the epistemological, social, economic, ecological and cultural interests of citizens are able to play a major role again. Instead of corporations dominating society we want corporations embedded in society. What we propose is a major paradigm-shift.

Among the issues we will deal with are the rise to dominance of the large corporations, the sheer infinite growth of their market power, and the ideological and political transformation necessary to put an end to this. It is clear that our proposals only make sense if they are applied at a supranational level. Our economies have become more connected and interdependent than ever. It follows that  the interventions we propose have to become part of a global agenda.

We will also deal extensively with efforts, starting after the Second World War, to put these issues to the fore. It began with the Charter of Havana in 1948. Since then, the struggle has been going on to this day, despite continuous attempts by the lobbies of large companies to sabotage the talks.  But this should not be a reason for despair. On the contrary. Since the Great Depression of 2008 many have become convinced that there is something deeply wrong with the system. They are looking for ways to make our economies sustainable and  transform globalization into a system that works for the many instead of the few..

That sustains us in our attempt, from chapter 9 onwards, to outline a series of far-reaching proposals to reform the world-economy and the company-scheme of production. In chapter 12 we finish off these proposals by sketching the contours of a new legal order for the companies and banks that should serve them. We have tried to make our proposals as concrete as possible – convinced as we are that a comprehensive and detailed vision is sorely needed. We need a clear view as to how to re-embed the economy in a way that makes world-wide production and commerce socially, politically and ecologically sustainable.  For this a stricter legal regime has to be developed, on a global as well as regional level.

In conclusion, we have a double agenda. First we try to re-embed the corporation and make it less foot-loose. We take the interests of the wider population into account: not only their interests as customers, financiers, investors, or  laborers, but also their social, ecological and cultural concerns. Our second goal is creating a prospering and more just national and international society. This unavoidably implies transforming the WTO and similar organizations. The WTO has to put more effort into defending social, cultural and ecological values: commerce has to serve these values instead of the other way round. 

Of course we are not naïve. Our proposals – and they are very far reaching – cannot be realized from one moment on the other. It is of utmost importance to make the world safe for democracy – in a political as well as economic sense. For this we will have to reinvent markets, entrepreneurship, and the role of private enterprise all over again.

Our present system is failing us. We have to start work in the direction of a system that is more transparent, fairer, and more sustainable: a system that isn’t dominated by large companies and doesn’t follow a purely neoliberal agenda. With our book we hope to contribute to this debate.

We conclude each chapter with a short consideration - a ‘transit’ - which summarizes the argument and provides a link to  the next chapter. We finally round our analysis off by formulating a research-agenda on  what is to be done in the short, medium and long term. Our point of view in all this is very simple: we want companies that serve the public interest, that treat  their employees well, generate enough income for all, and generously reward those who  take risks 



Contents  (Extensive overview)

INTRODUCTION

 PART 1

THE GREAT COMPLEXITY

Chapter 1

Transnational corporations without borders

 Mega enterprises: too much

Markets less open than desirable

Quasi monopolies and oligopolies
Mergers and rejections
Explosive profits

In many sectors of the economy large corporations dominate the market. These monopolies have been defended by economists as either efficient or eminently contestable. Neither is  the case. Once they have become monopolies, mega-corporations hamper competition. This has happened in one sector after another – for example in finance, agriculture, energy, the music industry or the media. Worst of all, the ability of these mega-corporations to dominate markets has often lead to political rent-seeking. Economic inequality leads to political inequality. Instead of regulations that stabilize the economy and protect citizens, we get deregulations, promoting further instability and inequality, which in their turn have led to the creation of bubbles that further weaken already weak markets.

 

 Chapter 2

Concentrated market power

 The complex of accumulated  power

Spiders in their web

The top 147 and fossil energy

Too big or too much power?

The limited responsibility

Tax evasion
Mega-enterprises not at least static but vulnerable as well

The corpocratic complex: an oversight

 The turnover of mega companies exceeds the gross domestic product of many countries.  Their profits beggar belief. Making use of advanced communication technologies and smart transport systems, they operate in every corner of the world.  Through their links with affiliated companies they have created dense networks that enhance their power. At the moment some 150 corporations exert a decisive influence over the world economy: a complex of combined market power.

In the early period many of these corporations were, more or less, socially and politically embedded, and served not seldom the interests of many stakeholders. Now they have become footloose and only serve the interests of the CEO, and the stockholders. Later in the book we will propose to abolish their – irresponsible – limited liability. From rule-takers, they have often become rule-makers that are at the same huge tax evaders. State and society  now follow rules set by a network that has become too complex to control and whose effects systematically advance the few, not the many.

 Chapter 3

Zooming in on world markets

How invisible is the invisible hand?

Fixated on growth

The myth of comparative costs

Financial flows footloose of real economics

Prices of food and raw materials abruptly up and down

Competition law diluted

No market without a social state 

Outcomes in world markets are often justified by appeal to the invisible hand and the idea of comparative advantage. But things seldom work out in this way. And even when transparent and competitive markets do allocate goods in an economically efficient manner,  it is always possible to ask if the growth of GDP and the division of labour resulting from comparative costs is just. Growth of GDP does not have to be welfare-enhancing and doggedly pursuing comparative advantage has often lead economies into dead ends. 

Moreover, most businesspersons do not like to work in a competitive and transparent market. While CEO’s may preach transparency and competition for others they do what they can to limit it for themselves. Contrary to the myth of the invisible hand, governments must always weigh in on the other side to countervail these tendencies – something which won’t happen if government is captured  by the mega-corporation. Precisely because markets always tend to become imperfect, we plead for a form of reverse engineering: democratically conceive and decide what kind of economic outcomes you would want, then imagine how to create new market relations and enable forms of competition and cooperation that lead in the direction of the goals you have set. Only in that way can one create an economy in which the future matters, and a sustainable society in which prices reflect real costs.



PART 2

Knowledge, the only material that doesn’t diminish by using it

 Chapter 4

Intellectually improper property rights

Property rights without scarcity

Breaking with former cultures

Creating  monopolies

Not easy to demarcate

Stifling innovation

Endless proliferation

Strategic weapons

First to invent

Patens are values; values can be sold

Patent value hard to establish; a bubble coming

Lawsuits and other techniques to block innovations

What looks self-evident in the system of intellect property rights lost in this chapter a lot of its glamour. With a piece of land, for instance, one can imagine that it makes sense to establish an exclusive property right. However, knowledge and creativity do not diminish in value once more people use it. Establishing a monopoly right in those fields is a Fremdkörper. 

There are several reasons to get rid from the system of intellectual property rights:
+ While knowledge and creativity only can be developed by using what has been developed before by others, intellectual property rights establish a monopoly which hinders this ongoing process of discovery. For society this is a missed chance. 
+ At present, more and more knowledge and creativity has been protected by intellectual property rights. Thus, less is available for public use. 
+ For material goods it is quite well possible to determine what are its borders and what belongs to whom. However, knowledge and creativity are fluid, do not have fixed borders. This is a source of conflicts and legal procedures. 
+ For patent offices it is nearly impossible to determine what is new in, for instance, an invention. However, establishing such a certainty is one of the conditions for granting a patent.
+ Intellectual property rights are a non-ideal and non-efficient form of taxation.
+ More and more, corporations use intellectual property rights in order to prevent others to invent and come with new products. Companies try to protect their patents as well by taking as much patents as possible around the original patent in order to make sure that this will not be attacked. There are also  enterprises – patent trolls – that buy thousands of patents with as a sole purpose to accuse other enterprises that they have violated ‘their’ intellectual property rights. 
+ Where there is value, there is trade; thus, this is the case as well with intellectual property rights. Because it is a monopolistic right nobody can know exactly what is their real value. One must be afraid that hyper inflated prices of intellectual property rights may present us with the next bubble that may lead to a new financial crisis.
+ One may assume that in the next decades a lot of new knowledge and creativity may come from emerging countries. Thus, one may wonder whether it is wise for Western countries to make intellectual property rights any moment more strict, and thus elevate the price they must pay themselves later to others for the use of intellectual property rights.

The patent-system is modelled on the idea of private ownership. It is the wrong model. In many cases it has blocked the flow of knowledge. Discussing the many inefficiencies which the system has led to, we come to the conclusion that the current patent-system has fundamentally undermined the process of innovation. It is time to set the process of innovation free. 

 Chapter 5

The war against sharing knowledge and creativity

 Create a value and it can be stolen

TRIPS on the run

Can piracy be halted?

The Anti-Counterfeiting Trade Agreement rejected

Hadopi, Sinde-Wert, Sopa, Pipa, Cispa, Cisa

Illegal trade in abundance

The ‘illegal’ use of knowledge and creativity seems to be unstoppable. Therefore, within WTO, there has been established a treaty on Trade Related Intellectual Property Rights, TRIPS. However, once it became clear that its sanction mechanisms apparently are not sufficient to stop all different forms of illegal use the rich countries tried to establish more strict systems that should keep the system of intellectual property rights on track. One of them was ACTA, the Anti-Counterfeiting Agreement. However, through mass protests against the continuing privatization of our knowledge and creativity the plug was pulled.

Will trying harder make the ‘illegal’ use of knowledge stop? We do not think so. We argue that the whole concept of private ownership is misplaced. Instead of fighting the supposedly ‘illegal’ spread of knowledge it would be better if more effort were put into stopping the illegal trade of weapons, women, and children

Chapter 6

Bad for innovation, poor countries and most companies

Do intellectual property rights really promote innovation?

Some innovations less desirable

Poor and less poor countries

Protection of traditional knowledge and cultural expression on a dead end street

Not in the interest of medium and small sized companies

The magic word, nowadays, is innovation. As we made clear here before, patens do not stimulate innovation, they block it. In this chapter we make clear that this has more or less always been the case. We show on a case by case basis that knowledge-creation never has been by patents, copyrights, plant rights and suchlike. It turns out that  those who claim to have been measuring the positive effects of patents for innovation more often than not have measured their beliefs in the value of patents. Those who deem knowledge and innovation important do best to give up these beliefs.

We point out that:
+ small and midsized companies are especially disadvantaged by the patent-system, 
+ that the same goes for most artists in the sphere of the arts
+ that poor countries in the catch-up phase of their development are especially hampered by the patent-system
+ that the only ones who have derived any advantage from the patent-system are large companies –and that they did so through rent-seeking rather than knowledge-creation.  
It is our firm belief that certainly after the digital revolution, the case for the defence of  intellectual property rights has become  hopeless. Hence we propose to radically get rid of the system. It is time to start imagining  a world without it. Such a world would most likely also be a world without mega-corporations - for the simple reason that intellectual property rights form one of their most important power-bases.

The great question then becomes: which parties will now become the drivers of knowledge-creation and innovation? Can we pry the concept of knowledge loose from the concept of ownership? Can we have knowledge that is neither privately nor publicly owned? In the final part of this book we will attempt to answer that question.

 

PART 3

THE GLOBAL CONTEXT

 

Chapter 7

Attempt after attempt to restrain global trade

The Havana charter 1948 and the International Trade Organisation

Nipped in the bud

The bancor eliminated as well

The New International Economic Order

Global competition law actively opposed; so it doesn’t exist

New World Information and Communication Order
Many Voices, One World

What is our capacity to steer the (economic) globalization, sharing the proceeds of it in a justifiable manner, without the risk of a new crises like the one that destroyed economies in the thirties of the twentieth century and that contributed to World War Two? After this war the need was felt that countries would not lock up themselves in isolationism, while at the same time they should have enough possibilities to protect their economies against domination by too strong forces. The 1948 Charter of Havana was the first attempt by national states to lift political decision-making to this higher order. An International Trade Organization was proposed, under supervision of the United Nations. However, at the end it was not to the liking of the United States which torpedoed this project. The General Agreement on Tariffs and Trade (GATT) was called into action. It operated outside the boundaries of the United Nations. In successive Trade Rounds it succeeded in bringing down a lot of trade barriers. The complaint however was that rich countries nearly always were the rule makers, while poor countries usually ended up as rule-takers.

In the sixties and seventies a group of independent countries undertook initiatives to develop a more balanced view. This resulted in the proposals for a New International Economic Order and, for the sectors of culture and information, a New World Information and Communication Order. Both proposals experienced a sudden death with the rise of neoliberalism  and the establishment of the so called Washington Consensus. The report Many Voices, One World was for the US the last straw. Both the US and GB resigned from UNESCO. The UN Code for transnational corporations didn’t survive the year 1992.

 

Chapter 8

Change to a neoliberal global trade system

 

Political initiative regained by big business

Investor-state-dispute-settlement 
Dying for growth
Trade is war

World Trade Organization

MAI, the most extensive protection of investments, and its failure

From  the collapse of Seatle to Doha, a mark in the desert

Doha in shambles, Bali

Objections against WTO

TTIP, TPP, CETA

Deregulation service sectors, goodbye to the precautionary principle, rein in the unions

Our laws shattered, our rights dismantled

Remarkable is that, in the seventies of the twentieth century, big business successfully fought back against the loss of popularity and support in the sixties, by spending billions of dollars in order to convince public opinion that huge corporations are essential for welfare and national security. In the UN, the huge corporations signed a so called Global Compact, in which big business promised it would respect human rights. However, no official agent was set up to monitor their activities.

The offensive to forge the world to the needs of big business culminated in 1995 in WTO, the World Trade Organization. In itself it is useful that an international mechanism exists that put rules for international trade. However, it is an extremely problematic organization: WTO has not been embedded in the United Nations. Thus, there is no connection to other urgent global issues, like health, labour conditions, rights of trade unions, energy, environment, transport, safety, food, stable prices for natural resources, fair tax policies and maintenance without fiscal races to the bottom. Issues like competition and antitrust policy are missing as well in WTO.

Although almost all countries are members of the WTO, there is still a clear division between rule-takers and rule-makers. Most outcomes in the decision making process tilt to the views of the rich countries. This became painfully clear during the Doha Development Round, in which many trade-issues remained unsolved. To avoid stale mate the rich countries took recourse  to proposed treaties like TTIP, TPP and CETA – regional partnerships between, respectively, the US and Europe, the US and the Pacific counties and between the EU and Canada. All of these ‘partnership’ deals are brokered behind closed doors. There is little transparency and no democratic control. Policies for food safety, banking rules, environmental rules are all up for grabs, with the outcomes usually slanted towards the interests of big business.  

 

 

INTERMEZZO

Looking ahead: globally radical interventions

 

In the first three parts of our book we analysed the complex give and take between, transnational corporations, states and international organizations. We have tried to show how the system usually works in favour of big business. In the course of the seventies they have won the ideological battle and acquired a solid powerbase in intellectual property rights.

Given this political constellation, how can we create a more just and sustainable society? How to run an economy as if the future matters? In the remainder of the book we identify several crucial issues that have to be tackled before we can create such a society.

 

 

PART 4
Completely different economic relations

 

 

Chapter 9

Reinventing the market: no more dominant corporations

 

Regulations in order to prevent market-capture

Charters

Profits tend to become zero with full competition

Amazed

Competition law, anti-trust revisited: pro-active policies

Do we need  big banks? Not if companies are smaller

Continuously restricting corporate size

No more  limited liability

The odd misunderstanding about shareholders

 No more tax-evasions and  the restriction of high frequency trading

Redefining the idea of the enterprise: partnerships

New companies: hybrid, trust, contract law, social security?

Jobless growth. Ample employment in making the economy sustainable?

A new calibration of industry and agriculture

At the end of the third part of our book we concluded that the mega corporations still holds the reigns. The 2008 crisis brought little change. One way or the other we will have to rewrite the rules of the global economic and financial order. This is a pressing matter. How to get back to markets that Adam Smith and the economists following in his wake would have recognized as true markets, rather than meagre forms of competition dominated by a few giant corporations?  Markets work because they are embedded in social institutions. It is a misconception to believe that they function according to the American business model, the so called ‘Washington Consensus’.

+ We accordingly propose that every corporation entering a market should underwrite a charter as to what it precisely may and may not do. Even, it can be mentioned how big such a corporation may grow ultimately, thus what are the limits to its growth. Such chartering should be taken seriously: establishing a corporation should be seen as a privilege that society offers to private entrepreneurs/ risk takers. 
+ When a corporation has become more of a price-maker than a price-taker, it should be split, no matter whether it acquired its economic power by legal means. Therefore we propose to energize present competition and antitrust policies and make them pro-active. Competition authorities should not only react on complaints from out the market, they themselves should investigate whether a corporation has become too big and too powerful, and accordingly they should pro-actively decide to split up such a corporation in many different entities, and keep them also in the years after such an action midsized or small. 
+ Such procedures should go as well for banks and shadow banks in the financial sector
+ Money-creation has to be taken out of the hands of private  banks. Only the central bank should have the right to create money.
+ A good corporation is not solely responsible to its shareholders. This business model, which is based on the idea that the best way to economic growth and prosperity is to stimulate greedy individualism and impose as few restrictions as possible, does not work. 
+ Those who run the corporation should have a clear idea of the multiple objectives that have to be achieved by a successful business. The idea that it is about shareholder value maximization is, at its best, empty rhetoric and at its worst can do a good deal more damage than that. Corporations not only owe responsibilities to share-holders, but as well, on an equal footing, to  investors, employees, customers, suppliers, and the community at large. For this reason we believe that the idea of the ‘limited liability’ of shareholders sets a company on the wrong foot and should be abolished. Risk taking should not go without being responsible. 
+ Corporations should pay taxes in the countries where they make their profits. In this field a whole series of measures needs to be taken to avoid tax evasion and high frequency trading. 
+ All in all we believe that footloose companies operating in dis-embedded markets can only lead to disaster. We should devise a better idea of the good company and work back from that to the rules and incentives which might lead a corporation in the right direction. In this, we follow the principles of reverse engineering.
+ Concerning many times hybrid new enterprises social, legal, contractual and organizational questions should be completely rethought and re-regulated. 


 

Chapter 10

Reinventing the market: no intellectual property

 

No more intellectual properties

Buy-outs, compulsory licenses, patent pools, wisdom of the crowd, secrecy

In offering prizes you don’t build a new research practice

Preventing the privatization of knowledge

Taxation: far from ideal and not efficient
Stealing?

Trademarks rightly protect a name

Trademark not a guarantee for trust

Tracing the chain from investment decision to consumers

 

After having scaled down the corporation to civil proportions we take up the issue of intellectual property rights. Our guiding idea is that a resource like knowledge should be no-one’s property. In search for a new policy we discuss various possible solutions like: pricing, pooling, compulsory licenses, buy outs, wisdom of the crowd and secrecy. All of these solutions fail. The reason for this is that they are still indebted to the idea that knowledge should be privatized. They fail to understand that knowledge is an infinite resource that is best mined when it is no-one’s property. The chapter discusses extensively the need and merits of the abolishment of intellectual property rights.

A special problem was: how to deal with trademarks? They definitely are an intellectual property right, but we decided not to do away with it. It is wrong to steal another’s name. That goes for the authorship of a book as well as a shop or any business. The person(s) who started it gave it a name. You can write a similar book or open the same kind of business but you can’t steal the name. This doesn’t mean however that by protecting one’s trademark one protects all forms of styling, branding and other related items that go with the name. That forms part of a copyright that in our view should be abolished.

At the other side, we should get rid of the naïve idea that the trademark gives the enterprise the aureole of: trust me, concerning quality of the product and under what conditions it has been produced and transported. This trust looks not seldom undeserved. In fact, the legal instrument of the trademark makes us aware how little we know about what happens in the chain from idea, to creation, production, transport, intermediation, financing, marketing, sale, consumption and waste storage and removal. Globally there is a world to win concerning control on all those stages in the so called global value chain.

 

Chapter 11

Separate research and production

 

A solid financial foundation for independent research

Research regularly  paid out of the state budget

Under-investments, over-investments

The state pro-active towards research

The intellectual commons

How should the state finance research?

Procedures

The accumulation of knowledge, a learning society
Free riders

The  peculiar position of the news media

 

Once we have brought back the company to scale and abolished intellectual property rights, a question arises: how then should we organize research? How to mine the resource of knowledge to maximum effect? This is the task we undertake in this chapter.

Most of the research done in societies is financed out of public means. This is certainly the case at the frontiers of knowledge where investments are most at risk and the chance of failure is many times larger than success. When it comes to thinking big and taking great  risks, large corporations usually are a failure. They tend not to invest in fundamental research. They seldom work at the frontier of knowledge-creation. Their short term focus does not allow for this. 

Hence we propose to radically separate the production of goods and services from issues of research. Fundamental research should be done in separate research institutes. These can be public or private, but they should be financed out of public means and special taxes. These research institutes will compete on the basis of tenders formulated by independent committees, manned by personnel on a temporary basis, representing a diversity of interests.

It may still be useful for companies to have a research institute inside the company but then only as part of the ongoing process of production. In all cases the results will freely obtainable. They should be no-one’s property. However, such corporations have, by doing their own research and implying its results, a competitive advantage on markets.

We acknowledge that in the case of the news media it is hardly possible to separate research and production. We also acknowledge that newspapers and most other news media are in financial problems. High quality journalism is under threat. For a vital democracy independent newspapers and other news media are of utmost importance. So we support the idea of Robert McChesney. In this proposal the government grants each citizen a voucher of say € or $ 200. Citizens can use this voucher to vote for a newspaper of his or her choice. Such a newspaper can operate with the collected voucher money during, say, the next 5 years – until the new voucher elections -, without being dependent from advertisements. Online, those newspapers are for free; the paper price is only what it cost to print and distribute the newspaper. It should be regulated that no newspaper may get more voucher money than, for instance ten percent of the total amount of voucher money, in order to avoid dominant market positions.

 

 

Chapter 12

Contours of justifiable rules for global trade

 

Economic democracy

Benchmarks

United Nations

International court for civil lawsuits against transnational corporations

Ever more power, ever higher profits, and  very little  space for morality

Possible crimes by corporations

Who is responsible?

Hell of a job for prosecutors in different countries

From self-regulating to soft law and on to hard law?

Guiding Principles: Protect, Respect and Remedy , Due Diligence
Country-by-country reporting, BEPS, Corporate Social Responsibility, Inspection Panels
Bribing restricts fair trade, however is not a part of WTO

International Criminal Court

International Criminal Court for Corporations and Responsible Persons in Corporations

Resolution Ecuador: transnational corporations and human rights

 

The regime of world trade needs a thorough make over. We start with a principle question: when does free trade add to the prosperity of society and work back from there. We believe the WTO rules should be fundamentally rewritten.

First of all WTO needs to become part of the UN and so that the coordination of trade and its consequences can be reviewed with a broader set of questions in mind than is currently the case in WTO. The effects of trade on the environment, health, food, energy, and the split between rich and poor countries should be taken more into account.

For our second finding we quote Sara Sun Beale, professor at Duke law School: ‘Because of their size, complexity, and control of vast resources corporations have the ability to engage in misconduct that dwarfs that which could be accomplished by individuals.’ Because this nearly is no subject of, criminal, investigations, mostly it in stays in the dark. Possible crimes can be found in the field of violation of human rights, financial malversations, harm on the environment, safety, workers’ rights, theft. Because huge enterprises see the whole world as their field of exploration and tax evasion, it is nearly impossible to start criminal procedures against their possible misbehaviour. An extra complexity is that an enterprise as a company is a legal entity, but at the same there are persons from flesh and blood that deal in name of the corporation. It is our opinion that both should be brought before a court in the same criminal procedure.

The worldwide connection of (transnational) corporations in the global value chain and their specific liability does lead us to the conclusion that there should be made a new International Treaty for the establishment of an International Criminal Court for Corporations and Persons Responsible in Corporations.

Meanwhile, it is encouraging that globally operating corporations more and more become obliged to sign declarations that they will avoid violations of human rights and so on. We mention, among many others, the so called Guiding Principles. This does not take away the fact that in no civilized society we make an agreement with potential criminals that they promise to behave decently! There should come a moment that they will be brought before the court, if there would be an obvious cause to do so. Why should this not be the case for extremely powerful corporations that operate on a global level? Why should they stay unimpeachable? To prevent that they will not be prosecuted in any national jurisdiction, our unavoidable conclusion is that there should be established an International Criminal Court for Corporations and Persons Responsible in Corporations indeed. For sure, it should not be easy to get that far, but it should happen, once.

 

PART 5

TO CONCLUDE IS TO BEGIN

Putting an end to neoliberalism

The present economic power relations are very much a reason for concern

Derailing the neoliberal philosophy

Creating a level playing field for companies

Yes, there is an alternative!

 

Our situation is grave. The urgent questions, we raised in our book, is how to free ourselves from the yoke of large companies and their inclination to short term thinking? How to run the economy as if the future matters? It is not unlikely that climate change will turn out to have catastrophic consequences. The degradation of biodiversity is worrisome. How to mobilize citizens and collectively set steps toward a better society?

All over the world, people are realizing that neoliberalism has led us into a dead-end street. We urgently need a new agenda, constantly informed by further debate and research. We believe the following guidelines have to be taken into account:

+ Governments should not only correct market-failures, they should also create and shape new, better socially embedded markets.
+ There should be clearer limits on the use of scarce goods and resources (water, energy), and there should be better ways of monitoring and enforcing those limits.
+ We should have better and more pro-active competition policies
+ We should heed the fact that wealth-creation needs patient finance and long term thinking. In that respect neoliberalism’s imagery of wealth-creation, in which the CEO’s of big companies are the true and only wealth-creators, is hopelessly false. Wealth-creation is the result of a complex interplay between the public and private sector, in which both sides, along with the working population, have to be seen as part of the collective process of wealth creation. 
+ We should make a clearer distinction between companies that extract value, and companies that create value. The first should be discouraged, the second encouraged. 
+ The current patent-system is broke. Knowledge is an infinite resource and we have to create forms of knowledge production and circulation that take that fact more into account. Accordingly we should institutionalize research in a different manner. 
+ We have to put an end to the discrepancy between political decision-making, which primarily takes place on a national level, and economic decision-making, which takes place on a global scale. Large companies should be brought to law by an international criminal court operating on the same scale as they do.

No order has lasted forever. We have lived too long under the belief that ‘there is no alternative’. We hope to have shown that the contrary is the case. There is a way towards a more just, fair and sustainable future. And it is urgent that we start moving in that direction right now. 


 



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