"The Political Power of Global Corporations"

From Progress in Political Economy, April 21:

We have long been told that corporations “rule the world”, their interests seemingly taking precedence over states and their citizens. Yet while states, civil society, and international organisations are well drawn in terms of their institutions, ideologies, and functions, the world’s global corporations are often more simply sketched as market actors which are mechanisms of profit maximisation.  In The Political Power of Global Corporations I seek to demonstrate why they should be seen as explicitly political actors with complex identities and strategies that should be more the focus of our analysis than is often the case.

According to Peter Nolan, Dylan Sutherland and Jin Zhang by the end of the twentieth century no more than five global corporations controlled each of the world’s major industries, with around a third of these having one corporation accounting for more than 40 per cent of global sales. Colin Crouch observes that there has been a “corporate takeover of the market” by these enormous entities. As such, the free market, not just ideologically but conceptually, is defunct for understanding them. They may have been aided in their growth and expansion by free market policies and the neoliberal ideology underpinning them, but by their nature and their actions, global corporations themselves give the lie to, and as such undermine the veracity of, this vision. With the evidence that markets are neither free nor competitive but controlled by global corporations, in identifying them as political actors we should also declare them anti-market actors.

If one of the ways in which their political power is hidden is in being cast in competitive market terms, another is in seeing them as truly ‘global’.  It makes them seem like one of the ‘forces’ of globalisation, when in reality they are not as global as is often claimed.  For example, Alan Rugman and Alain Verbeke demonstrate that only nine of the world’s top 500 global corporations have sales in so many regions of the world that they may be regarded as truly global, while 320 of them still derive 80 per cent of their sales from their home region. 

The same may often be said of where their productive assets are located (for example, see Hinrich Voss). They may have global interests, but we need to re-territorialise global corporations because their home states and regions are the geographical source of their political power, just as their market control is its economic source....MORE