Introduction—How This Book

Was Written Democratically

The origin of this book is quite unusual. Most books have one author, sometimes two, but this book is the product of collaboration by a large number of people in many countries participating in an Internet forum.

Defying the adage that the only piece of good writing by committee was the King James Version of the Bible, the members of this forum set out to create a guide for reform of government at all levels from global down to local communities. They aimed especially to counter global control by financial interests at the expense of democratic self-rule.

It all started in August 2000 when the Internet forum “FixGov” was set up for collaborative writing on reform of government and continued for over two years, ending with publication early in 2003. Many of the participants came from another forum called Alternate Culture, and quite a few had responded to an invitation at Blue Ear Forum, largely composed of journalists and writers from around the world.

The purpose was stated on the FixGov home page as follows:

Fixing Government: FixGov aims to promote economic, ecological, and social justice. We are working on a book about government reform and we hope for ideas from many areas of the world.

The FixGov group exists because all the efforts individuals make for sustainable living can be offset by corporate and government decisions. How can local, national, and international governments be made answerable to the people they govern instead of just the power elites? When major polluters of the atmosphere use political muscle to escape environmental controls, what can be done by the people who have to breathe the polluted air? When municipal sewage dumping or industrial waste fouls water that is vital to human health, how can people protect themselves? When large-scale corporate agriculture and food processing distribute contaminated food and make consumers unknowing guinea pigs for genetic modification, radiation, and dangerous substances, how can they be subjected to effective control?

Join a discussion seeking ways to overcome the corruption that undermines public interest throughout the world, overthrowing or blocking democracy in some countries, making voting seem futile to many in the US, and secretly controlling such UN agencies as WTO, IMF, and the World Bank.

Please make a strong effort to base your comments on facts and remember to respect the comments of others, as your postings will go straight through without screening by a moderator.

Some 70 people joined in this project, including members from the United States, Canada, Mexico, United Kingdom, Netherlands, Poland, Sweden, India, Pakistan, Bangladesh, Mali, Australia, New Zealand, and possibly other countries (because email addresses do not always indicate the country). Messages were exchanged in English.

As members contributed their thoughts, a volunteer editor was sought. When nobody offered to take on the task, the founders inquired whether one of the particularly articulate participants, Adriaan Boiten, would be willing to assume the responsibility. He agreed, and in addition created a web site displaying the results of the discussion and links to appropriate sources. That web site can now be found at www.fixgov.com or www.fixgov.org and is maintained by another volunteer, James McGuigan.

At the beginning the discussion on the forum was wide-ranging and random. A difference in emphasis emerged between those whose main concern was developing more democratic structures in existing governmental units and others who saw more hope in small autonomous communities living in harmony with nature and sending representatives to bodies that would work out means of cooperation on a larger scale. Both approaches are reflected in the resulting book.

As editor, Adriaan Boiten defined the major topics around which he discussion continued. Each of the chapters is based on the work of a volunteer who summarized the consensus developed in discussions of the forum on one of the topics. These summaries were disseminated to the entire group, then revised in the light of comments received. Finally, they were embodied in this book, edited jointly by Adriaan Boiten and Richard Stimson. Any royalties received from this work will be used to further the objectives of the forum.

As in any forum, some people participated to a greater degree than others, but all were able to offer their thoughts and comment on the contributions of others. Any objections or disagreements were taken into account when the consensus reports were written. The most extensive work was done by the volunteers who prepared those reports. Their backgrounds are quite diverse.

Adriaan Boiten, co-editor, engaged in historical preservation for the City of Amsterdam for 12 years. He studied new and theoretical history at the Municipal University of Amsterdam, graduating in 1986, and performed civic service in the library of the International Institute of Social History in lieu of military service. As the proprietor of a web design business he lives and works in the old inner city of Amsterdam.

Richard Stimson, co-editor, is an author and retired business professor in High Point, North Carolina, serving voluntarily as national coordinator of the worldwide International Simultaneous Policy Organisation. Educated at Yale, Florida International University, and the University of North Carolina at Chapel Hill, his careers have spanned association management, public relations, university teaching, and computer operations.

James McGuigan in England, who set up www.fixgov.org, is working on the Earth Emergency Initiative (www.earthemergency.org) and World Future Council Initiative (www.worldfuturecouncil.org). He is also a webmaster and a computer programmer, currently obtaining his degree on Information Technology with the Open University. He is an avid contributor of articles to internet forums on a diverse range of subjects.

Peter Scott of New Zealand has contributed ideas for improvement of the layout design of the book.

James Hall, summarizer of the consensus on political systems, grew up in a family of Republicans, supported Barry Goldwater's presidential campaign and the Vietnam war, but gradually migrated to a liberal viewpoint. A long-time resident of Orlando, Florida, he worked 23 years for the Walt Disney Company in jobs from ride operator to technical writer. In the Transportation/Communications Union at Disney, he served as a shop steward, district trustee, and finally as President and Treasurer, representing the interests of 3,000 Disney employees. He also was a writer and editor of the union’s district newsletter for nine years. With a master’s degree in liberal studies, he has taught at community college, written for The American Partisan and several other web magazines, and is collaborating on a book with Ian Foster.

Liane Casten, who (with Stimson) assembled most of the material in the chapter on communications media, is an author, journalist, film writer and director. Presently she is co-founder and president of Chicago Media Watch, a volunteer watchdog group that monitors the media for bias, distortions and omissions, and she is working on her second book, an exposé of a criminal corporation, scheduled for publication in 2002. Her first book, Breast Cancer: Poisons, Profits and Prevention (Common Courage Press, 1996), grew out of a cover story in Ms. on the environmental connection to the disease. Her articles have also been published in E Magazine, The Nation, Mother Jones, Environment Health Perspectives, In These Times, Business Ethics, The Chicago Tribune and the Chicago Sun-Times. She wrote and directed four documentary films. With an M.A. from the University of Chicago, she has also taught high school and college classes.

Richard Gauthier, who reported the consensus for the chapter on “The Spiritual Basis for Sustainable Living,” was born in New Jersey, but has been living in Europe since 1986 as a yoga and meditation teacher. In the past five years he has worked in Poland on non-profit projects to spread organic farming in Poland and protect small farmers regarding Poland's pending membership in the European Union. As a member of the Ananda Marga yoga meditation association, founded by P. R. Sarkar (who died in 1990), he made several visits to India, became a monk and an authority on Sarkar’s concept of Microvita. The organization was banned in India and its members blacklisted for its anti-capitalist, anti-communist socioeconomic philosophy, its anti-corruption stand, and a trumped-up murder charge against Sarkar later dismissed in court. To obtain a visa to enter India he changed his name legally from Richard F. Gauthier and got a new passport as Richard Richardson. He has also been known as Rudreshananda in India, and has the spiritual name of Viveka. Author of a book and many articles about Microvita, he runs several e-mail lists on various spiritual and scientific topics and can be reached at richard@sfo.pl

William N. “Bill” Ellis, summarizer of the chapters on civil society and on education, is a physicist, futurist, farmer working from the home he was born in on his farm in Rangeley, Maine, USA, to bring social change and civil globalization. He is General Coordinator of TRANET transnational network (tranet@rangeley.org) and of A Coalition for Self-Learning, that has recently published the book, "Creating Learning Communities," which grew out of his 1998 E. F. Schumacher Lecture in which he used homeschooling as an example of the application of chaos, complexity, and gaian theories in the social sphere. In the same lecture he used GrassRoots Organizations (GROs) as subset of Non-Governmental Organizations (NGOs) as another example of leaderless, unplanned, undesigned self-organization and speculated that the phenomenal growth and linking of GROs could lead to a radically different form of world governance.

Global Problems in Need of

Solution

Global communication is good; global monopoly is bad. Worrying about global problems may seem unnecessary to those among us who are fortunate enough to be living in a democracy during a period of history that lacks many of the horrors of the past. Human sacrifice, cannibalism, slavery, colonial oppression, and many diseases are largely (but not entirely) behind us, as are two world wars, and it is right to be thankful for the benefits we have.

Laborsaving inventions of the Industrial Revolution have saved many of us from the backbreaking tasks of earlier times. The electronic age has made it possible to exchange information and ideas rapidly around the globe. Most innovation (although aided by government-funded research and sometimes subsidies) has been introduced to the public by private enterprise.

Yet there are serious problems, especially as the means now exist to destroy all humans on the planet, possibly by global climate change and certainly with weapons of mass destruction. Too often governments act in concert with armaments manufacturers to promote the sale of weapons of war, sometimes to both sides in a conflict. As an example, the foreign aid budget of the United States currently includes many times as much “military aid” as peaceful grants.

In the movement for sustainable development, groups of people have tried to escape from multinational corporate tyranny by forming self-sustaining communities, often drawing on the wisdom of indigenous cultures. These efforts for sustainable living, however, can be offset by corporate and government decisions, as in the case of native populations driven off their lands by mining and drilling operations that poisoned their water supplies and crops.

As the world becomes more interconnected, the reins of control are found in fewer hands and most people discover they have less control over their lives. History has known centralized power before, but the rise of democracy in the 19^th and 20^th centuries raised the hope of greater personal freedom under governments answerable to their citizenry.

Now this has often degenerated into what some call pseudo-democracy. Many people feel their choice in voting is between Tweedledum and Tweedledee, and so there are widespread protests and demonstrations, including some elements that become violent. Even some outbreaks of terrorism have their roots in the despair of people who have lost hope in peaceful solutions.

The tribal rivalries and centuries-old feuds between ancient enemies are made worse by irresponsible divide-and-conquer tactics of the great powers and marketing of armaments to both sides in each dispute, including proliferation of nuclear, chemical, and biological weapons of mass destruction.

When the most powerful people in the world come together in official economic conferences (G-8, IMF, WTO, etc.) and such unofficial groups as the Bilderberg, the Trilateral Commission, and the Council on Foreign Relations, they remain in splendid isolation from the less powerful people. After a series of protest demonstrations at major cities, they have recently held their official meetings behind strong barricades and heavily armed police forces and/or at isolated locations.

The emphasis is on economic growth, but the measures they use are badly flawed. Gross domestic product (GDP) is based entirely on money transactions, thus missing the value of housework, home cooking, child raising, do-it-yourself work at home, “sweat equity,” and all forms of voluntary service. Robert Eisner’s 1994 book, The Misunderstood Economy, asked: “If restaurant meals are substituted for home cooking, is that an increase in product?” He estimated conservatively that if the value of unpaid labor services in the home were included the 1992 U.S. GDP would have been $8 trillion instead of $6 trillion. On the other hand, GDP ignores economic harm done to nature and to the health of individuals.

Prominent at these meetings are top bankers, financiers, corporate executives, media owners, and politicians. Hardly ever present are labor leaders, consumer representatives, or environmentalists. Secrecy results in rumors of plots for world control that are sometimes wild and sometimes not totally outlandish.

There are indications that the globalization moves and “neo-liberal” economics of these organizations have led to increasing disparity of wealth and income both within and between nations. In short, it is held that the rich are getting richer and the poor are getting poorer. Details of this disparity in wealth and income are given in Chapter 4.

A June 2002 report of the UN Conference on Trade and Development (UNCTAD) on the poverty trap of less developed countries investigated “whether the current form of globalization is tightening the poverty trap and also increasing the vulnerabilities of those countries that appear to be escaping it.” The answer was, in effect, “Yes.” The report, however, stopped short of admitting that World Bank, IMF, etc., are collaborating with multinational corporations to bring about the impoverishment described in the report. (www.unctad.org)

The specific problems that are described in the chapters on political systems, corporate power, monetary systems, and the communications media are very closely interrelated—and also interwoven with concerns about education, justice, medicine, religious freedom, land use, the oceans, and the atmosphere.

Aids to their solution are presented in the chapters on spirituality, alternative life styles, and education. Proposed solutions are summarized in the final chapter of conclusions.

The discussion addresses how local, national, and international governments can be made answerable to the people they govern instead of just the power elites. The goal is to make globalization work for the benefit of people and the environment instead of “neo-liberal” globalization of the "wild west" variety that has spread poverty, financial crisis, desperation, and bloodshed in many parts of the world that have become more and more unstable.

Perfecting Democracy in

Political Systems

(based on a summary by James Hall in

Orlando, Florida)

This chapter notes the spread of democratic elections as the basis for governance in more countries of the world, although imperfections exist even in the best of democracies. The forces that concentrate wealth and power into a few hands, and that abuse the earth's environment for their own benefit, also oppose democratic reforms, social justice, human rights, and efforts to create a sustainable local economy. Ways of overcoming these obstacles and furthering genuine democracy are discussed. A “security state” of the closed, fundamentalist and ruthless variety is not the solution for public fears and needs generated by terrorism.

Although many people would like to conduct their personal, family, and community lives without interference from government, that is not the way it is. Even remote parts of the world are coming under political control, often combined with invasion by economic power. Thus traditional cultures in areas as widespread as Nigeria, Brazil, Papua New Guinea, and elsewhere are being driven off their land by the combined actions of governments and foreign exploiting industries, including cyanide or oil spills in their streams, destruction of their crops, and repressive police action.

There is a legitimate difference of opinion as to how much or little government is desirable, but the alternative to government—anarchy—has not been demonstrated to work well in a world where greed overpowers goodwill. That makes it important what kind of government we have. Anarchy requires an educated and empowered independent public to work properly. It is never in the best interests of hierarchies to allow these conditions to exist in reality.

Although it is often far from perfect in practice, democracy operates on the principle that no leader can be trusted to know what people need and want better than the people themselves. It aims to meet the desires of the majority without being unfair to minorities.

Those who are lucky live in one of the world's liberal democracies where generally (if not perfectly) leaders are elected by popular vote and human rights are honored. Since 1950, the world has seen a phenomenal growth of democracies, from 22 nations representing 31% of the world's population, to 120 electoral democracies representing 58% of the world's people.

That's a shift of historic importance, but it's not enough. Seventy-two sovereign nations representing 42% of the world's people still have no representative government. In such nations, working for democracy is an important first step towards creating social justice and a sustainable world economy. Some countries may have a democratically elected government, but few recognized human rights, and in some democracy and human rights may rest on fragile foundations.

Even members of long-established democracies can't rest but must work hard to keep elections honest and citizens’ rights from being abused. There are powerful interests that benefit from restricting human rights and corrupting democratic institutions.

There was a time, perhaps, when politics was a noble statecraft, and politicians were regarded in high esteem. Politics was not their profession; they came from various respectable professional backgrounds; such as lawyers, physicians, teachers, landlords etc. Politicians belonging to a party believed in the ideology for which the party stood, and dedicated themselves in fulfilling the party objectives. Today politics is a full time profession to most politicians.

The forces that concentrate wealth and power into a few hands and that abuse the earth's environment for their own benefit oppose democratic reforms, social justice, human rights, and efforts to create a sustainable local economy. Their goal is to block genuine democratic institutions, manipulate elections, limit human rights, and use the environment for their shortsighted interest—to gain wealth and hold onto power.

A good citizen's political work is never done, and he or she must be vigilant both to create a better world and to sustain it. Corruption can occur both in the electoral process and in unfair influencing of public officials that amounts to bribery although not always illegal.

For example, The Buying of Congress by Charles Lewis and the Center for Public Integrity (Avon Books, 1998) reports that in the United States thousands die and millions become ill from poisoned foods. Meanwhile Congress has blocked tougher safety standards and received $40 million campaign donations in ten years from the food industry.

Also, members of Congress received $180 million from the 500 largest corporations and cut corporate income tax rates to provide only 10% of all federal revenue compared with 28% in 1956. With great difficulty a bill was passed in 2002 that will make a start on campaign finance reform after the November 2002 elections.

The light of world public opinion has brought about honest elections in many countries for the first time with the help in some cases of United Nations monitors and in other cases of impartial international observers organized by former U.S. president Jimmy Carter.

Any nation dominated by just one party fails to function as a democratic system. Some regimes try to give the appearance of democracy, but if only one party is permitted, the elections are mere window-dressing. The same is true in a two-party system when the same powerful interests largely control both parties. New parties should not face unreasonable requirements to get on the ballot. Legitimate voters should not be hindered and fraudulent voting should be prevented.

The method of recording and counting votes varies among democratic countries, and there are advocates for each system. Balloting methods range from paper ballots marked with party symbols for the illiterate to high-tech mechanical or electronic voting machines. Honest counts require that there be a way to recheck the votes, so paper ballots must be safeguarded and machine tallies must preserve an audit trail so that totals can be checked against individual votes.

Some elections are conducted on a “winner-take-all” basis where the candidate with the most votes in his or her district is elected. An alternative is proportional representation where each party gets the number of seats in a representative body that is in proportion to the votes it got in the election. In some jurisdictions, if a candidate fails to receive a majority of the votes cast, a run-off election is held between the two highest scoring candidates. Preference voting, or “instant run-off,” is sometimes used where voters record first, second, and maybe third choices, for example, which are counted in order until someone has a majority.

The U.S. presidential election involves an indirect method in which members of an “Electoral College” are chosen on the basis of whom they are pledged to support and then they choose the president (and vice president). Most states allocate all their electoral votes to the party that scored highest. Usually this results in choosing a president who also received the highest national popular vote, but there have been four exceptions, including George W. Bush in 2000, who was was chosen by a difference of 537 votes in one state.

Variations in these methods can be quite acceptable, so long as they are approved by those governed and reflect the will of the people. Choices made by politicians, however, often suit their own personal and party interests. One of their tricks is to lay out districts (constituencies) for party advantage. This is called “gerrymandering” for an American politician named Gerry who mapped a district in the shape of a salamander.

Officials, once elected, can be subverted in various ways. Corporations increasingly are using favors to politicians in ways that are tantamount to bribes, although they may not meet the legal definition of a crime. Even judges receive benefits that interfere with their objectivity. Corporations in the United States, and organizations heavily financed by them, have entertained at least 600 federal judges at luxury resort locations for seminars where they are exposed to propaganda for a pro-business movement called Law and Economics.

Corporations have also spent millions to sponsor research and endow professorships reinforcing their points of view in law schools and other areas of academic study, notably including economics. Since the creation of NAFTA and WTO (see Chapter 3), they have used clauses banning trade restrictions to sue against national and local laws designed to protect health, safety, and the environment. Through the World Bank and IMF (see Chapters 3 and 4) they have obtained control of government-owned telephone systems, water supplies, and other public utilities, to privatize them for private profit, as well as drilling and mining to the detriment of local farmers and fishermen.

National and local governments find themselves forced to compete against each other to attract industry by offering subsidies and repeal of public interest laws and regulations. One proposed method of forcing multinational corporations to “play by the rules” is the concept of “Simultaneous Policy” explained in a book of that name by John Bunzl. It suggests that political parties could be induced to pledge that when they are in power, and when most other nations have similarly pledged, the nations will simultaneously enact measures for such control of international finance and industry as individual nations were unable to do on their own.

The International Simultaneous Policy Organisation (ISPO) is working toward that end in more than 20 countries (www.simpol.org). Among its objectives is the democratizing of such international agencies as the World Bank, IMF, WTO, etc.

The World Federalist Association (www.wfa.org) and the Campaign for UN Reform (www.cunr.org) work for strengthening and reforming the United Nations. Despite the accomplishments of the UN, it also needs to be made more democratic and responsible to the world’s people. Any higher level of government needs to be carefully limited in its scope and kept under democratic control to preclude the creation of a global tyranny.

A further problem that complicates efforts for worldwide peace and freedom is the desire of some groups to establish a separate national homeland. This involves taking over land occupied by someone else and/or seceding from an existing government that usually wants to keep control. Hostilities can result with participants being labeled “freedom fighters” by one side and “terrorists” by the other. Under ideal conditions, each nation would be inhabited only by people who willingly consent to being under the government, which in turn would guarantee the rights and freedom of all. That is obviously a very long-term objective, but taking steps in that direction is imperative, both for the good of the contenders and for the welfare of the whole world in the context of weapons of mass destruction.

Despite general agreement on most of the points in this chapter, there are some people who feel that political systems are so corrupt that it is useless to vote. They prefer to arrange their own lives in a way they think will be beneficial to people and the environment and to encourage others to do likewise.

Voting percentages have declined sharply in many countries, partly because of a cynical feeling that “my vote won’t make any difference,” and partly because commercial media have encouraged later generations to focus on entertainment, trivia, and self-gratification. In a few countries, voting is legally required. This, it can be argued, is an invasion of freedom. If voting is to enable everyone to make choices, it should include the choice of not voting. Some have suggested a choice on the ballot should be “none of the above” with the election to be declared invalid if that choice wins.

While some believe that progress lies in adopting different lifestyles and community organizations (which can certainly be beneficial), the freedom to pursue these and other personal choices seems to require reform of the powerful structures that limit freedom. The many sacrifices of those who died to replace despotism with democracy, and the eagerness of newly enfranchised citizens of former tyrannies to exercise their voting rights despite all obstacles, are arguments against abandoning one’s right to vote.

Global domination by corporate cartels has had detrimental effects on both the more powerful and less powerful countries. Arms sales have fueled internal warfare in less developed countries. The destruction of indigenous environments plus concentration of unemployed and homeless people in cities, combined with repressive governments in league with the multinational corporations (mining, oil, and timber companies) has generated waves of migration for economic and political reasons.

As developed countries have been overrun by immigrants, often seeking asylum, cultural clashes and competition for jobs have had their effects. For example, European social-democratic or center-left governments, which have been under pressure from private business to reduce their social services and worker protections, are finding that new issues are arising. The traditional supporters of those parties see their social protections deteriorating while immigrants seek to share the benefits.

Immigration and integration are now at the top of the political agenda in Europe, which is sad for all those who are engaged in rational discussions. There are real social and economic reasons for existing tensions, but culture becomes more or less the platform on which people can express their frustrations and emotions, feeling patriotic.

New opposition arises to parties that are seen to be patronizing, arrogant, bureaucratic, and “politically correct.” Voters turn to parties that promise action on the new issues that concern them, such as street crime and threats by Islamic fundamentalism against traditional liberal values. People don't trust the professional politicians anymore, in London, Paris, or The Hague. In Holland, for example, the last 5-10 years saw the rise of countless local parties that won local elections with local issues, feeding on fear of street crime and outrage about bureaucratic decisions of the local councils.

The localization of politics could be furthered by Information and Communication Technology (ICT), especially through the Internet, which makes it easier for localities to be more independent from the knowledge and power centers. People become better informed, communicate via the web, organize themselves in discussion groups, meet each other, and start to move. The possibility for people to work at home instead of travelling to the city can make them more independent and capable of participating in self-government.

SUGGESTIONS FOR ACTION: If some of these suggestions are impossible under your form of government, consider them as goals to be reached, and work to change the political circumstances so that you have the right as a citizen to exercise them.

1. Work to advance social justice, democracy, and environmentally sound policies.

2. Work against concentration of wealth and power into a few hands—whether in the name of good or ill—and against pollution or waste the earth's resources.

3. Block efforts of those who would subvert democracy by organizing opposition; educating others and demonstrating against wrongs; taking legal action to enforce human rights.

4. Vote at every opportunity: check out candidates’ records, join a political party or create one to reflect your values, volunteer to help candidates write letters for publication attend meetings and express your concerns, donate time and money if you can.

5. Help keep your political system honest: work as a poll-watcher and monitor the counting of ballots, help those who are illiterate to read their ballots, support efforts to keep balloting both secret and honest.

6. Become involved in local community organizations that reflect your agenda, work with local people to clean up your local environment, to create more parks and people-friendly environments, to support public transportation, to protect civil rights, to elect responsible local and national officials, and to fight pollution and unwanted corporate intrusion; work to educate your community through letters, newsletters, organized events, and demonstrations.

7. Encourage cooperation by your local groups with other local, regional, national, and international organizations. Support candidates and parties that advance your efforts and work for positive changes.

8. Work for:

· the creation of constitutional, democratic institutions;

· the non-violent resolution of conflicts;

· basic human rights for all people;

· environmental protections that sustain local ecosystems;

· recycling of wastes;

· alternative energy sources;

· environmentally appropriate building technologies; habitat and species restoration;

· effective monitoring of ecosystems;

· sustainable local agriculture;

· voter initiatives that can bypass representative bodies and place issues directly before the voters;

· open government, including keeping all meetings and records public and "transparent" subject to the public's scrutiny and criticism;

· public financing of political campaigns to keep money from "special interests" from having an impact on the government's ability to do the people's work;

· media (press, radio, television, web access, etc.) free of control by government or corporate monopolies but required to broadcast candidate debates and political forums in the public interest;

· democratic regulation of all private use of the "public commons," including air, water, public parkland, etc.

· "true-costing" of any products or industrial processes that might cause environmental degradation, including in their costs the regulation and clean-up of any pollution, and use of those costs to perform the cleanup;

· creation of agencies to monitor the environment, detect pollution and polluters, and to charge and fine them the amount needed to cleanup any resulting pollution;

· redefinition of the legal status of the corporation (see Chapter 3);

· promotion of democratic, transparent international organizations to replace current institutions like the World Bank, WTO, and IMF.

When considering reforms to correct global abuses, it should not be forgotten that votes can be registered in the marketplace and not just at the polling place. Some organizations have had success with boycotts of offending companies to bring changes in their behavior. The choices of consumers can have considerable effect on the degree of pollution and waste of natural resources resulting from production. To accomplish favorable results, they must resist advertising and promotion of inefficient, wasteful, and unnecessary products.

“If liberty and equality, as is thought by some are chiefly to be found in democracy, they will be best attained when all persons alike share in the government to the utmost.”

—Aristotle (384 BC-322 BC)

“It has been said that democracy is the worst form of government except all the others that have been tried.”

—Sir Winston Churchill (1874-1965)

Restoring Human Control over

Corporate Power

“Corporations rule,” says the Hightower Lowdown newsletter. “No other institution comes close to matching the power that the 500 biggest corporations have amassed over us. The clout of all 535 members of [the U.S.] Congress is nothing compared to the individual and collective power of these predatory behemoths that now roam the globe, working their will over all competing interests.

“The aloof and pampered executives who run today’s autocratic and secretive corporate states have effectively become our sovereigns. From who gets health care to who pays taxes, from what’s on the news to what’s in our food, they have usurped the people’s democratic authority and now make these broad social decisions in private, based solely on the interests of their corporations.” The quoted paragraphs introduced an April 2002 exposé of the world’s biggest corporation, Wal-Mart, with more than $220 billion annual revenues (www.jimhightower.com).

The compensation of chief executive officers of these corporations (CEOs) in the United States by 2001 averaged 531 times that of blue-collar workers compared with a 40 to 1 ratio in 1960. The highest rewards went to those who had fired workers and found tax loopholes for their companies, according to “Executive Excess 2001,” Institute for Policy Studies and United for a Fair Economy (Multinational Monitor, Oct. 2001, p. 4).

Some, but not all, of the world’s wealthiest people are CEOs—others exert their control behind the scenes as major stockholders or financial backers. Corporate management, directors, investment advisors, stockbrokers, bankers, lawyers, and accountants are supposed to be looking after the interests of the stockholders. Often they seem to be more concerned with personal profits to be made from trading in and out, fees, commissions, stock options, and all the other gimmicks for their own benefit. They "scratch each others backs" and "one hand washes another." Ordinary investors are lucky to have their interests get any consideration. Their ownership through mutual funds and/or pension plans is routinely used by the trustees (without consulting them) to rubber-stamp management proposals.

Extreme abuses in some corporations came to light in 2002, when one of the world’s biggest accounting firms, Arthur Andersen, was convicted of obstruction of justice in the case of Enron. This involved one of the world’s largest corporations where members of top management walked away with millions of dollars from the company plus large profits from selling Enron stock before declaring bankruptcy.

The Andersen firm provided advice to set up undisclosed partnerships for hiding corporate losses, and simultaneously served as auditors to verify the reliability of the company’s financial reports. Employee pension funds invested in Enron stock were almost completely wiped out, as was the value of stock bought by small investors trusting financial analysts and stock brokers.

Although Enron had been rated at or near the top of all corporations based on the market value of its stock, it owned very few physical assets. It was described as an energy trader, and its manipulations were discovered to have been behind the electric power crisis in California. Other activities included buying public utilities, including water supply services, from governments around the world at bargain prices and then jacking up the rates to customers of the privatized monopoly. It was among the largest donors of campaign contributions to politicians—tantamount to bribes, if not legally so defined.

While investigations and litigation involving Enron were still going on, another Arthur Anderson client, WorldCom, disclosed the largest corporate overstatement of cash flow in history, amounting to more than $3.8 billion in the previous 15 months, using a series of accounting tricks to hide expenses and inflate cash flow. The company’s CEO owed the company more than $366 million for loans and loan guarantees when he abruptly resigned, the stock that had sold for $62 dropped to about 9 cents, and 17,000 workers are to lose their jobs.

Only a week earlier, executives of Rite Aid, a drug store chain, were indicted, having run up a record overstatement of profits totaling $2.3 billion over two years. This company’s auditor was another large accounting firm, KPMG. Other current corporate scandals include Global Crossing (an Andersen client) and Tyco. Merrill Lynch and other brokerage firms were found to have been urging customers to buy stock in such companies that the analysts knew were in trouble.

Multinational corporations have close ties to major financial houses, which will be discussed further in the next chapter. Directors of banks, investment companies, and other corporations serve on each other’s boards and they or their representatives are appointed official advisors to governments. They employ former government officials as lobbyists, who then may return to prominent government positions in a process sometimes known as the “revolving door.” Armament companies put retired generals and admirals on their boards of directors, while top executives move in an out of high-level government jobs.

Those munitions manufacturers, preferring to be called “defense industries,” also are major financial supporters of politicians, resulting in getting not only government contracts but also subsidies and help in selling their products to foreign countries. A report by the Congressional Research Service in 2000 disclosed that the United States is the world's leading arms merchant, responsible for almost half the weapons sold worldwide, 70% going to developing countries. Listed next in order as suppliers were Russia, France, Germany, Britain, China, and Italy.

Aside from threats of nuclear war and terrorist attacks, the major challenge to democracy and human progress involves the domination by corporations of the institutions of self-government, which is made more difficult when the corporations are actually bigger than the national governments. Democracy has always had an uphill fight against various forms of tyranny, whether absolute monarchies or military dictatorships.

Through concentrated corporate control of the information media, as well as corporate favors and campaign financing to politicians, the rulers of big corporations tend to get their way most of the time. On the world scene, global corporations (including global bankers and financial companies) dominate international agencies unrestrained by democratic safeguards.

A network of faceless bureaucracies, the most familiar of which are the World Bank, the International Monetary Fund (IMF), and the World Trade Organization (WTO), make no pretense of being democratic and are dominated by representatives from large transnational corporations and banks.

Already, both the USA and the European Union (EU) have been compelled by the WTO to annul various of their health and environmental laws. Most of the third world has been forced to adopt entire legislative agendas dictated by the IMF under what are called "free trade" treaties, and under conditions which are attached to loans given to third-world countries by the regime's agencies.

The governments, in some cases, have made deals with multinational corporations to share in profits from mining operations that drive native populations off their lands either by using military force or by contaminating their sources of livelihood, resulting in cities crowded with unemployed, homeless adults and children.

Under pressure from the global bankers to attract foreign investors, governments have suppressed labor unions and held down wages, benefits, and labor standards. They have given special tax breaks to foreign corporations and relaxed environmental regulation. Recently they have been required to raise water prices and then sell government water utilities to private monopolies (“Privatization Tidal Wave: IMF/World Bank Water Policies and the Price Paid by the Poor” by Sara Grusky, Multinational Monitor, Sept. 2001).

Nations have also allowed misuse of patent laws. Corporations send representatives, sometimes called “bio-pirates,” to learn from indigenous people about natural remedies. Then the companies apply for patents to turn these remedies into profitable monopolies. Patents have even been awarded for genes and other natural phenomena that corporations have identified or “discovered” in their laboratories.

A study of World Bank and IMF loan documents with 26 countries shows that they require privatizing of government-owned enterprises, layoffs of government employees, easing of rules on firings and working conditions, increasing the wage gap between employees and managers, and cutting pensions for workers.

For example, the World Bank recommended to Vicente Fox when his new government came into power in Mexico that there be a phase-out of severance payments, collective bargaining, enforceable labor contracts, seniority rules, and liability for subcontractors’ employees. It also has stated that it cannot support workers’ freedom of association and right to collective bargaining. (“Against the Workers: How IMF and World Bank Policies Undermine Labor Power and Rights” by Vincent Lloyd and Robert Weissman, Multinational Monitor, Sept. 2001.)

A few examples from around the world will illustrate the unfortunate results. In Haiti, after the military dictatorship was removed from power and the elected president Aristide returned with U.S. help, the IMF, the World Bank, the U.S. Agency for International Development, and the Inter-American Development Bank offered to help Haiti rebuild. However, the economic program they imposed was the so-called "neo-liberal" structural adjustment that bankers have favored around the world.

Similar plans forced on Haiti’s neighbors—Mexico, Nicaragua, and Venezuela—were supposed to reduce poverty and external debts. Instead they widened the income gap, increased poverty, and undermined national sovereignty. These conditions involved privatization of state-owned industries, deregulation of the economy, and opening the country to massive foreign investment.

Costa Rica has long been known as one of the most democ

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