The resistible rise of corporate power

20 October 2010

The massive concentration and growth of corporate power poses a major threat to what remains of public services, highlighting the ever-deepening crisis of democracy, and the urgent need for people to reclaim the state.

Nye Bevan, the driving force behind the creation of the NHS, gave a succinct description of the process now destroying one of the greatest achievements of the Attlee government – indeed, of any Labour government. He declared that: ‘In practice it is impossible for the modern state to maintain an independent control over the decisions of big business. When the state extends its control over big business, big business moves in to control the state.’

While he could not have anticipated the extent to which private companies have moved in to control and profit from the steady destruction of the NHS ), he did show an appreciation, rare among politicians, of the asymmetric power of private business.

It is a power which has grown enormously over the past half century, both pressing for and gaining from the political creation of a deregulated and globalised capitalist economy.

It is vital here to distinguish between capitalist markets and markets more generally. Indeed the economic historian Fernando Braudel referred to capitalist markets as ‘anti-market’, because of their secrecy, and their predatory drive to accumulate partly through eliminating and taking over competitors.

The problem is that the ‘naturalisation’ of the capitalist market – the uncritical acceptance of ‘the free market’ and the idea that there are unavoidable ‘imperatives’ of globalisation – has elided this distinction. It has created the impression that we face ebbs and flows as unstoppable as the ocean when in fact we face institutions driven by power struggles and flawed human decision-making, legitimately open to challenge.

Our political institutions, meanwhile, have allowed themselves to be effectively occupied, or more accurately warrened—because half of the process has not been visible from the surface—by these anti-market (and anti-public) institutions.

The result has been a lethal gulf between parliamentary politics, where the growth of economic power is hardly debated – beyond one-off scandals – and people’s daily lives, where the opaque, unaccountable pressure of corporate power is pervasive: at work (or out of work), as service users, consumers and debtors, and as pensioners. This induces a feeling of powerlessness and lowers expectations of change.

A fatal problem with New Labour – now questioned by thoughtful Labour party members such as John Denham – was that its strategy of encouraging the capitalist market with the aim of redistributing some of the results treated private corporations as ‘wealth creators’ rather than as concentrations of power. This includes power over the workers who create the wealth pocketed or controlled by the shareholders.

Corporate power has grown as regulation has receded, so that most markets are now controlled by three or four companies whose assets dwarf those of many nation states. The outsourcing of public services has played a major part in this growth of private economic power.

Serco and Capita are two examples of companies who have been propelled into the FTSE 100 on the back of public contracts. In the process, they have become political players, not simply lobbying for contracts but influencing supposedly public policy.

When Nye Bevan first became an MP in the 1930s, he described parliament as ‘a sword pointed at the heart of private property’. The last 30 years have seen the executive, first under Thatcher, then under Blair, allowing private companies to thrust a sword into the heart of public property.

Cameron is now finally trying finally to destroy the public hands that could seize it back.

Public power cannot be rebuilt through the parliamentary institutions that so beguiled Nye Bevan. Rebuilding public and social power requires new strategies at every level of society, including state institutions.

An experience such as Bolivia, however distant from our own, indicates the importance of politicians seeing themselves as empowering social movements, internationally as well as locally. And, in a more ambiguous way, Brazil points to spaces for challenging the US-dominated power of the global market.

Resistance to the cuts can simultaneously build the power to improve public services, even bringing them back into public ownership, as has happened in Germany and Norway. The movements for free culture, open access to knowledge and expansion of the digital commons is producing a new imaginary around the centrality of common goods and infrastructure that can spread beyond the digital world.

In all these ways, and through intensive exposure and education, we must bring the concentrations of anti-democratic economic power to the centre of political struggle.

Apart from anything else, in age where people aspire to autonomy and democratic control, it is the way to turn the tables on Cameron. It is essential to an effective strategy to save and update the legacy of Nye Bevan.

About the authors

Hilary Wainwright

Hilary Wainwright is a leading researcher and writer on the emergence of new forms of democratic accountability within parties, movements and the state. She is the driving force and editor behind Red Pepper, a popular British new left magazine, and has documented countless examples of resurgent democratic movements from Brazil to Britain and the lessons they provide for progressive politics.

As well as TNI fellow, she is also Senior Research Associate at the International Centre for Participation Studies at the Department for Peace Studies, University of Bradford, UK and Senior Research Associate at International Centre for Participation Studies', Bradford University. She has also been a visiting Professor and Scholar at the University of California, Los Angeles; Havens Center, University of Wisconsin, Madison and Todai University, Tokyo. Her books include Reclaim the State: Experiments in Popular Democracy (Verso/TNI, 2003) and Arguments for a New Left: Answering the Free Market Right (Blackwell, 1993).

Wainwright founded the Popular Planning Unit of the Greater London Council during the Thatcher years, and was convenor of the new economics working group of the Helsinki Citizens’ Assembly from 1989 to 1994.

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