The Costs of Admission to the Club

1. Privatization. The new trade system requires states to divest themselves of any public resources. Privatization is the rule. Around the world states put up their utilities, national resources, land, and labor to the highest bidder regardless of origin. Transnational corporations bought up national electric companies, public transportation, forest reserves, and resorts. The ownership of the earth shifted hands dramatically. Indigenous people were pushed off their reserves, out of their cultures, and recruited as a cheap labor force by the new landlords. In the US, public hospitals closed their doors, government financial and research institutions relinquished their control to private corporations, public transport has almost disappeared. Prisons were turned over to private enterprise and even the social security system is under pressure to divest control to private citizens who can then be expected to invest in the stock market and turn control over their retirement to private corporations.

2. De-regulation. Governments are forced under these agreements to remove any legislative or administrative regulation that can be seen as a restraint on free trade. This means that any barrier to the pursuit of profit must be removed. Thus several corporations have sued the US for legislation prohibiting the import of shrimp caught in trawler nets, legislation which was intended to protect the green sea turtle. In Massachusetts a ruling by the state to prohibit state agencies from purchasing goods from corporations doing business in Burma has been challenged as well.

Regardless of popular wishes, the European Union's ban on the import of hormone-treated beef was overturned by the WTO. Canada banned the import of MMT-a toxic fuel additive. But the US manufacturer objected. Under NAFTA, an international panel ruled the Canadian government had to accept MMT and pay a fine of $300,000. In both instances proceedings are secret, no records are available, and there is no appeal.

(For details of these and other examples see Marjorie Kelly, "Look Out Below: MAI is about to Fly," Business Ethics, Nov-Dec 1997, p4.)

3. Industrialization. Since the 1960s, Japan, South Korean, Taiwan-the first Asian countries to take the leap to become industrialized-have given up a total of 40% of their cultivable grain land to build thousands of factories, housing estates, and highways. In Indonesia, 20,000 hectares of arable land are destroyed every year on Java alone-an area that could be used to feed 360,000 inhabitants.

4. End of the Welfare States. Government is to do as little as possible in the way of social welfare and turnover its role to private corporations. In Hartford CT, the public schools are being turned over to a private corporation. In Louisiana the prisons are to be sold to a private company. In the US the state's responsibility for social justice, never as extensive as the Western European experience, has been dramatically reduced over the last few years. Germany, which has had one of the best and most comprehensive welfare systems in the world, is now under pressure to dismantle unemployment and health benefits. Reunification and the increase in unemployment have raised the cost of these services. The Kohl government clearly aimed at cutting; the electorate's response was to replace him with a Social Democrat. This was the largest vote swing in German history. Still the Seattle WTO meeting is scheduled to force through changes that will open all public services to privatization. This is a clear policy goal of the US health care insurance companies as they seek to take over the health care systems of Europe.

5. Inequality. Protection for unequal distribution of resources is fundamental. Globally, a total of 358 people own as much wealth as 2.5 billion people own all together. The global pattern of resource use has remained the same since the UN conference on the environment and development held at Rio in 1992. The most affluent 20% of the countries use up 85% of the world's timber. 75% of processed metals, and 70% of energy.

6. Consolidations-Mergers-Monopolies. Governments must allow industry-wide consolidations. Increasingly, international markets are controlled by a handful of firms with a net worth greater than many countries.

Economists consider any industry in which five firms control 50% or more of the market to be highly monopolistic. The Economist reported two years ago that five firms control more than 50% of the global market in the following industries: consumer durables, automotive, airlines, aerospace, electronic components, electricity and electronics, steel. Five firms control 40% of the global market in oil, personal computers, and-especially alarming in its consequences for public debate on these very issues-media. Since then, mergers in all fields have reduced the number of players even further.

Forty-seven of the top one hundred economies in the world are actually transnational corporations. Just 500 corporations control 70% of global trade and 1% of the transnational corporations on the planet own half the total stock of foreign direct investment.

Most of the world's largest corporations are larger than many national economies and these (about 200) now control well over one-quarter of the world's economic activity. According Rafi Communique Nov/Dec 1997 in 1997 "Global mergers and acquisitions topped 1 trillion dollars-almost ten times the value of all takeovers in the outset of this decade." The value of mergers and acquisitions globally is shattering all records. Nearly 80% of the foreign direct investment in the South is in the form of corporate acquisitions and 40-45% of all manufacturing sales are between parent multinationals and their subsidiaries.

The Financial Times reported on March 1, 1999, that "the top 20 investment banks increased their share of global capital markets business from 80% in 1990 to 97% last year. They have doubled their business. The top ten banks have 77% of the market now, worth $4,000 billion.

In May, 1998, Citicorp and Traveler's Insurance announced a merger, which is ostensibly illegal, but which they clearly believed would force the federal government to change its laws. Insurance and financial institutions previously prevented from encroaching on each other's territory, are now set to move swiftly to consolidate.

On June 23, 1998, Merrill Lynch announced it was buying Canada's biggest independent brokerage house, Middland Walwyn Inc., for $855 million. More such mergers between Wall Street and financial markets around the world are expected.

A handful of corporations dominate commercial agriculture, food, and health. According to 1997 Rafi report: "The world's top 10 agrochemical corporations accounted for 82% of the global agrochemical sales in 1996. The top 10 seed corporations control approximately 40% of the commercial seed market, valued at approximately US $15 billion. The world pharmaceutical market is an estimated $251 billion, the top 10 enterprises control approximately 36% of the global market. The top 20 drug companies control 57%. Rafi reported that the world's top 10 agrochemical corporations in 1997 accounted for $26.2 billion or 85% of the agrochemical market worldwide. "By the end of 1997, the top 10 veterinary medicine corporations are expected to hold 63% of the total worldwide market."

William Greider, author of One World, Ready or Not, who describes in great detail the global productive over-capacity of major industrial products, has termed the "endless technological combat and enduring over-capacity problems as pushing for consolidation." According to Greider, "rival corporations are driven together, not by arrogance, but by mutual fear. Global capitalism has entered a crucial new stage in the industrial revolution-the search for more national organizational structures that will reduce uncertainties, enhance profit, and deliver some stability for the long term."

Whatever the reasons, the emergent monopolies are frightening. They threaten to consign the non-industrialized nations to permanent subordination, and they wield far more power than any single national government. In such a world, where is the role of the private citizen? Only as a consumer of products under the control of a handful of profit-driven corporations.