Rise of Corporations

By: Bikal Dhungel

Left and right wing sympathizers and critics of globalisation have one thing in common, their views about the Corporations and the capitalistic behaviours of these corporations. In some points, they are right, especially the growing power and their global character. When we look at the top 100 economic entities of the world, the 2012 figure shows that, only 49 are countries, and 51 are corporations. Many corporations are richer than nation states. For example, Exxon Mobil is richer than South Africa or Austria, British Petroleum (BP) is richer than United Arab Emirates, Volkswagen, one of the thousands of companies in Germany is richer than another EU state Czech Republic, General Motors is richer than New Zealand and Siemens is richer than over 100 countries of the world. The story goes on. As corporations grow, their political weight grows as well, either in the form of indirect influence or direct lobbyism. Also their impact in the economy grows. However, this is broadly seen as positive because corporations also generate large number of jobs, are a major source of tax income for the governments in terms of income tax of its employees or corporate tax. Corporations like Walmart, Tesco or UPS have millions of employees. But also public bodies come in front on the list of largest employers, like the United States Department of Defense, which is the largest employer of the world with 3.2 million employees including the US Army, and the People's liberation army of China, which hires 2.3 million people according to 2008 data.

The current form of corporations is a phenomenon that started in the beginning of twentieth century or slightly before that. The early corporations grew massively. The Standard Oil Corporation of the US, which belonged to John D Rockefeller made him the richest man in human history who possessed 292 billion dollars in today's money. He was almost 6 times richer than Bill Gates. Similarly, Ford Motors is another example which grew ever after it was established. The Great Depression and World War II largely reduced the number of corporations, however, after that, many other joined. After the growth of BRIC states, yet others arrived and recently since the internet boom, IT giants came to dominate the world. Companies like Apple and Google are among the top corporations with highest revenues. But in general, Oil Corporations fully dominate the list, probably because oil are connected with other types of corporations. Automobile Industries, Production etc directly depend on oil, so any price turbulence will directly impact them. Where the future of oil industries is heading to is going be an issue in the future as the amount of available oil is decreasing and the investment in green energy is gaining popularity.

Coming back to the issue to anti-corporatism, the left and right wing sympathizers base their argument on history. Most of them are true might these arguments might not be valid today globally. Going back to the history, it was not the United Kingdom that colonized India in the first hand. It was British East India company that involved in peaceful trade with India, which included both Pakistan and Bangladesh that time. In the time of 150 years, it gained popularity and established itself as a rich company that also influenced local policy. The British East India Company got a right to collect tax and other facilities given by the Mughals. Slowly, it started to help the fall of mughals and soon after found itself as a main force in Indian politics. With many such issues, the East India Company was dissolved fully in the mid 19^th century and then the United Kingdom took direct control of India. Similar practices could be seen elsewhere, for example in South Africa. In the twentieth century, corporations continually intervene in local policies according to their wants and demands. In 1951 Iran, there was a democratically elected president Mohammad Mossadegh, who wanted to nationalize the Iranian oil. The Anglo Iranian Oil Corporation ( today British Petroleum, BP ) toppled him and installed the monarchy under Mohammad Reza Pallavi who ruled until the Islamic Revolution under Ayatollah Khomeni. During this period of Pallavi's rule, the Anglo Iranian Oil Company made billions of dollars in profit. Elsewhere, for example in Nigeria, The Royal Dutch Shell and other Oil Companies are responsible for the bad governance in Niger Delta. The government is extremely rich whereas the oil revenues never come to the public, as a result, the inequality is extremely high. Developing Countries where there are huge natural resources, there is bad governance, who are believed to get funds from corporations to stay in Power. Like Democratic Republic of Congo, which is rich in resources, like Coltan, the material used to make Laptop Computers. One exception is Botswana. Despite having large amount of Diamonds, the UK educated head of government helped to retain an accountable government which divided the wealth of nation in a fair way. Due to this reason, Botswana has the highest per capita income in Africa and is seen as an example worldwide. Unfortunately, the story is quite opposite in most of other countries.

The story can go on but what I would like to mention here is, corporations are not bad everywhere. There are also good corporations. Corporations are the major investors in research and technology that improves our life. The appliances we have today were all made by corporations. With an exception of internet, which was made for the US Army, almost no innovation comes from the side of the government. But even in internet, it was refined and made better by private corporations. Also most weapons technology come from government side but the development of weapons should not be received as a positive development because at the end of the day, they are made to destroy human lives. Only a very small portion of them are used for providing security.

The recent developments in IT sector already gives a signal that large scale corporations will grow. As the ones in the past which involved in mal practice, corporations these days are mostly good. Today's age is information age, every single action will reach the corners within a matter of seconds and also for the corporations, being green, being ethical, being social will generate more profits because people tend to prefer them in comparison with firms that do otherwise. Corporate social responsibility has grown to be an integral part of many big firms. So, firms are adjusting to a new role as a player in a society that cares for social well being along with profit motive. Hence, the criticism of right and left wing people might not be valid anymore but sooner or later they should realise that they are themselves dependent on the technologies invented by corporations and can hardly live without it. What they should also understand is that corporations will continue to grow and this time, the most of this growth is likely to be for positive cause.