Study Finds Rise in Corporate Power

Not since the Gilded Age when John D. Rockefeller dominated the oil industry and J. P. Morgan served as America's unofficial central banker has there been so much talk about how big corporations threaten democracy. Al Gore got on the bandwagon this summer; wherever the vice president went he talked about the powerful -- "big tobacco, big oil, big polluters" -- versus the powerless of the people. And of course corporate power and its discontents were at the center of Ralph Nader's run for the presidency.

A critic of corporate power will probably not occupy the White House in January. But whoever the 43rd president of the United States is, it is doubtful he will see the issue go away. According to a September 2000 Business Week/Harris Poll, between 72 and 82 percent of Americans believe that "business has gained too much power over too many aspects of American life" and 74 to 82 percent believe that big companies have too much influence over "government policy, politicians, and policy-makers in Washington."

Now, to add to this growing consensus is a new study, published by the Institute for Policy Studies, a think tank in Washington, DC. "Top 200: The Rise of Corporate Global Power" argues that the leading economic story of the last five years is one of rapid growth of the world's top 200 corporations and diminishment of government and citizen control.

Perhaps the most important finding of IPS's study is that of the 100 largest economies in the world, 51 are corporations, whereas 49 are countries. In other words, General Motors has greater economic power than the majority of the world's nation-states, as does Wal-Mart and Exxon Mobil.

The report also provides statistical evidence that combined sales of the top 200 corporations are bigger than the combined economies of all countries minus the biggest 10, and that such sales are 18 times the size of the combined annual income of the 1.2 billion people (or 24 percent of the world population) living in "severe" poverty.

"Growing private power has enormous economic consequences," concludes the study. "However, the greatest impact may be political, as corporations transform economic clout into political power."

To learn more about IPS' study, AlterNet spoke with Sarah Anderson, co-author of "Top 200" and director of the Global Economy Project of Institute for Policy Studies.

AlterNet: How does the 2000 report on global corporate power differ from the one IPS published in 1996?

Anderson: One disturbing change is evident in the largest employers on the top 200 list. In 1995, General Motors was the biggest, with 709,000 workers. By 1999, GM's employment had dropped to only 388,000, largely because of outsourcing. The firm that took GM's place as the No. 1 employer is Wal-Mart, with a staggering 1,140,000 employees, up from 648,500 in 1995. Whereas a good share of GM's jobs were unionized and decently paid, Wal-Mart is a notorious union-buster that employs armies of workers on a part-time basis to avoid paying benefits. These changes reflect the overall trend towards fewer and fewer union manufacturing jobs and the rise in poorly paid, non-union service-sector work.

Another dramatic development over the past five years is the surge in economic power of U.S. firms over those in other countries. Largely because of economic stagnation in Japan and mega-mergers among U.S. firms, the United States dominates the top 200. U.S. corporations hold 82 slots, followed by Japan, with only 41. In 1995, these countries were virtually tied, with 59 and 58 firms in the top 200, respectively.

AlterNet: What do you consider to be the most surprising results of your research?

Anderson: What surprises most people is not that these firms have tremendous power, but that their power is so out of whack with the contributions they make in terms of jobs and taxes. When I tell people that their sales are the equivalent of more than a quarter of world economic activity, they assume that they must provide somewhere near an equal amount of the world's jobs or taxes. The reality is that they employ less than 1 percent of the world's workforce and many of the top corporations don't pay any U.S. federal taxes at all.