State of corporations: The rise of illegitimate power and the threat to democracy

A few years ago a book concerned with the “state of power” would probably have been mostly confined to or at least centred on the State and its more dominant attributes such as the military, its control over vital resources or its currency. In the present context one would doubtless want to add “its capacity to spy on other powers”– but this is not the sort I intend to discuss here.

Rather, I will focus on power unaccompanied by accountability of any kind; that which is not required to report to anyone concerning its activities and which, being difficult to understand, is equally difficult to counter. This is why the other half of the title is “the threat to democracy”. Legitimacy depends on democracy— otherwise all forms of power, where government is concerned, are merely variations on the theme of oppression whether called tyranny, dictatorship, or autocracy. The subtlety of illegitimate power makes it hard to identify. It does not have a name as such, does not stem from official decisions and is not often felt as oppression by those who submit to it, knowingly or not.

Illegitimate power, in the sense I will use it here, excludes tyrannies, dictatorships, one-party authoritarian States, African satrapies et alia. It concerns the power of the largest corporations and here I prefer the United Nations formulation of “transnational” or TNC to “multinational” or MNC. When you arrive at the upper reaches of the corporation, the CEO, the COO or the CFO, the director of R&D, the Board of Directors, these companies far more often than not have an identifiable nationality and although they may have subsidiaries in dozens of places they do not by any means give equal weight to the interests of each of those places. Furthermore, as we shall see, groups of companies from, say, the United States and European countries or Europe as a whole come together to obtain results they perceive as being in their collective interest. “Obtaining results” includes political results and the capacity to obtain them from governments is inexorably growing. This, to me, implies a serious breakdown of democracy.

So I shall first make a few quick distinctions concerning what is legitimate and democratic on the one hand and, on the other, illegitimate and undemocratic in government, now often called—and for good reason-- “governance”. 

Second, I’ll state my hypothesis: I believe the evidence shows that illegitimate authority is on the rise and that democracy is gradually succumbing to the disease of neoliberal ideology so that more and more functions of legitimate government are being assumed by illegitimate, unelected, opaque agents and organisations. This is the case at all levels, national, regional and international. Finally and most importantly, I will supply elements of proof and provide examples in support of this argument. The list of examples is ever-growing and could be much longer than the one here but I hope to show nonetheless that illegitimate, corporate rule now occupies greater and greater space at every level of government including the international sphere, that it is gravely damaging democracy and that it has an impact on our countries and our lives, especially if we live in the Western democracies.

This essay was published in the State of Power 2014.