Mikler Morning Future
Guiding Interview 1 July Jul 2019 0800 1 July 2019

Big corporations? They are now political actors

In his latest book, The Political Power of Global Corporations, John Mikler, professor of international relations at the University of Sydney, investigates the political turnaround of large multinationals. We met him.

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Big corporations are political actors with complex identities and strategies”, explains John Mikler, associate professor at the University of Sydney, in the department of government and international relations. He thus dispels the idea that large corporations are exclusively profit-oriented, Mikler, in his latest book “The political power of global corporations” (2018), shows how they try not only to lead or change the agenda of states, but also to govern fully. “They do not compete with each other but control the markets and the people whose interests they serve”.

The analysis focuses mostly on large corporations and their relations with states, international organizations and civil society. Its fields of interest are also globalization, technological innovation, the global financial crisis, and climate change. In this book, his third, Mikler explains that the power of corporations and that of the state are closely connected. The 500 largest corporations in the world are based in no more than 10 countries, and are located mainly in North America, the Eu, and in East Asia. So what is the role of the state in offsetting the power of corporations? “Governments must do their duty, which is to act and legislate and govern in the interests of their citizens, and not in those of a small circle of large corporations”. “But that's not what they're doing," Mikler continues, “that's the problem, and it's dangerous.”

How did the idea for the book: The Political Power of Global Corporations come about?
There is little literature on corporate power at a political level. There are liberal approaches that examine the markets, Marxist approaches that consider the class struggle, or statists who examine the role of governments, and in all these different approaches the role of corporations as political actors seems to disappear. Moreover, when I tried to put forward the topic of corporations as political actors to my students and other interlocutors, everyone thought they did not know enough about economics or finance. People think they can talk about civil society, government and international organizations, but any discussion on multinationals that has to do with economy is perceived as too technical. So I thought it was time for someone to write a book about this, and to collect all the existing literature on the subject.

Can you explain your idea about the relationship between state power and the power of multinationals?
I think the two powers are closely connected. Looking at the power map of multinationals in the world we can see that it’s basically a map of geo-economic and geopolitical power. The 500 largest multinationals in the world come from no more than 10 countries, and around 40-50% of them come primarily from the United States, followed by Western Europe, and finally China or other countries in the East Asian area. Many discussions about the global economy and global markets ignore the fact that there is a definite pattern regarding economic power in the world, which is connected to political power and states. I do not accept the argument that multinationals are distinct and separate from states -a neoliberal approach- because the market and economic forces are more important than governments and politics. It is something that we have been told in order to give to large corporations, which don’t compete that much among themselves but rather control the markets and the people they should be serving, as much freedom and as much power they want to be able to do so. If we recognize that the power of corporations and the power of the state are closely connected, then we should ask our governments to do their job and to govern for their citizens, not for the interests of a narrow circle of large multinationals.

John Mikler

The power map of corporations in the world is like a map of geoeconomic and geopolitical power

John Mikler

So how should the relationship between the power of the state and that of the multinationals be structured?
My perspective is more liberal than Marxist, although I don’t consider the two to be necessarily distinct positions. I think that a Marxist analysis - to the extent to which it works - is probably better for seeing things as they are, but from a liberal point of view, I like the idea of competitive markets, the idea of governments regulating in the public interest , and again the idea of governments and regulators that are separate from those who are regulated. But what is happening now is that there are more blurred lines between private and public sector, and much self-regulation and private regulation. We have been told that the private sector has taken control, but in reality there has been a union of forces between the private and the public sector. I think this is very dangerous and that it constitutes much of the cause of what has been called, in my opinion improperly, populism. It is not about populism but about democracy, and people are not happy with the parties because they realize that they are no longer governing in their interest. And in fact they are governing in the interest of large multinationals, whatever party is voted. So I think that people want governments to represent them.

Can you give an example of what should be done to adjust this relationship more appropriately?
If we recognize that this corporate control exists in the world, at that point it is not appropriate to have commercial agreements and discussions within organizations, such as the World Trade Organization, that relate to the benefits of free trade and free movement of investments, goods and services, when in reality this movement is not free, but controlled. I would like these discussions to be more focused on environmental standards, workers' rights, and a worldwide right to taxation

What is the role of the state?
The State should do its duty, which is to act and legislate and, in democracies, to create policies in the interests of citizens. However, this is not what they are doing: this is the problem, and it is dangerous. In Europe and North America, but not only, nationalism, fascism, authoritarianism and racism are on the rise, and that is where they sprout from. It is not a matter of populism, but of a lack of representation, which has been going on for a long time. Governments do not act towards the activities of large multinationals, not because they cannot, but because they have chosen to and to not legislate or ask any questions about the way corporations operate. So it is not just about corporate power, because states still have legislative power, if they want it. And the question is: why don't they want to exercise that power? I think people have the right to ask this question, because we have been told so long that governments are increasingly powerless. I think we need to grow up and stop believing in this beautiful tale that has been told to us since the 1980s.

At the heart of what is improperly called "populism" there is a lack of representation. Parties govern in the interests of multinationals

John Mikler

What is the responsibility of public authorities in protecting workers' rights?
It is not just a matter of implementing new laws and regulations, but of applying existing ones. I think that in many cases the rules exist but are not properly applied. This is certainly a problem in the US and is a significant problem in Australia. Recently our government has repealed some rules that established that if someone works at the weekend or beyond working hours, they have the right to be paid more, and it was claimed that this matter had to be left to the markets. I do not agree with this decision. When it was taken, one of the cynical responses given by the government was: “There are many people who would be eligible for these extra payments, but they don't receive them anyway and often the laws are applied inappropriately, so whether or not you recognize this right by law, the situation is not going to change”.

What do you think of the role of consumer activism?
It is not enough. There are limits to the success that can be had through this type of activism and to its possibilities of driving a significant change, since, when someone wants to choose the products of a different brand, the choice is limitied to 2-3 products or to products of a few large corporations. Moreover, very often people suspect that something is not right in the supply chain of the company, but they are not aware of it. When they find out, then consumer campaigns are pop up. But we also have to wonder if these campaigns produce desirable changes in the supply chain. If, for example, as a result of a consumer action, some factories that were part of the supply chain close and the business moves elsewhere, the result of their action could be that workers lose their jobs. So I think their work should be supported by governance and regulations at the global level and in individual countries.

Opening photograph: John Mikler

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