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Free markets are an illusion

The Political Power of Global Corporations
Forfatter: John Mikler
Forlag: Polity Press (USA)
John Mikler claims that the world's largest companies are so economically superior to their competitors that it is wrong to talk about global markets and free competition.


No new entrants can establish themselves in markets characterized by monopoly-like tendencies. Mikler argues that rather than competing in free markets, the big companies define and control them. This is the starting point for his study of the political power of global companies in the book The Political Power of Global Corporations.

"Global" vs. "Big" companies. Mikler first points out that only a small number of what are often referred to as "global companies" really are. UNCTAD defines companies as global if they have more than 60 percent of employees from other nationalities than where the head office is located, that more than 60 percent of sales revenue comes from countries other than where the headquarters is, and the same with the share capital. With this understanding, there are not many global companies in the world today. Mikler is therefore concerned that we are "re-territorializing" our understanding of global companies. Walmart is used as an example of a company many reviews as "global", but which according to the above understanding is uniquely American.

The political power of large companies is geographically rooted rather than global.

The political power of large companies is geographically rooted rather than global. Mikler shows us a number of examples of large companies negotiating favorable agreements for themselves in some countries, thereby helping to differentiate and exploit the global financial landscape.

Equally recognized despite the filth

For example, Apple paid no (0 percent) income tax on the $ 30 billion that the company – through so-called "aggressive tax planning" – earned in Ireland between 2009 and 2012. Google moved 80 percent of its profits to Bermuda's tax haven in 2011, paying only 2,4 , 600 percent corporate tax on profits earned outside the United States that year. Large contracts with 800 factories with a total of 000 employees mean that the American sports brand NIKE has such great political authority and bargaining power in several low-cost production countries that working conditions, including wages, can be pushed far below the reasonable. And this happens, paradoxically, at the same time as companies spend a lot of energy on building their own brand as "socially responsible companies". They do so well that they are virtually unaffected when tax evasion or production scandals become known to the public.

When it became known in 2010 that the Chinese company Foxconn Technology Group, which produced the iPhone for Apple, forced its workers to work 100 hours of overtime per month, housed them in very poor conditions in the factory's dormitories and paid them a miserable wage, it led not to anyone consuming the boycott of the iPhone – quite the contrary. The year after, Apple became the most profitable mobile manufacturer in the world. Apple changed manufacturer in China, but in 2015 it turned out that iPhones were also produced in the new factory under very reprehensible conditions – without sales falling or the share price falling. And how many of us have actually stopped using Google after Dagens Næringsliv last year revealed that the company paid a hefty 2,9 million in tax on a turnover of 2,5 billion kroner in Norway? Aggressive tax planning – where Google Ireland invoices Google Norway for trademark rights and other things – caused Google Norway to lose money in 2016! Still, according to the American financial magazine Forbes, Apple and Google are the world's most "most admired companies".

Determines the social discourse

The companies are largely able to maintain the positive image of themselves by deciding which societal discourse will apply. Because they are so large, they have enough resources to set the agenda and decide how we talk about things (the world's 20 largest companies have the same annual turnover as the world's 138 poorest countries). The large companies have a vested interest in us talking about neoliberalism and the power of the market as if "there is no alternative" (cf. Margareth Thatcher's slogan TINA from the early 1980s). But according to Mikler, the market has no power. It is the large companies that have power, while the free market is almost non-existent where the large companies operate. How free is the social media market when Facebook today has 2,2 billion users and has recently acquired both Instagram and WhatsApp?

Mikler's book is heavy material. He does not write "short and sexy", he loads up with references and takes a lot of reservations in what he writes.

The neoliberal discourse makes it sound as if economic development cannot be controlled, that it just goes its very natural course. But Mikler reminds us that the big companies have a vested interest in depoliticizing their own role and making people believe that development cannot be controlled politically. Thus, global companies can continue to influence political decision-makers to adopt conditions that enable companies to continue to grow – both in economic scope and in terms of political power.

Mikler's book is heavy material. He does not write "short and sexy", he loads up with references and takes a lot of reservations in what he writes. I would be content to read this review and leave the book alone. In any case: Do not buy it on Amazon – then you will help maintain the market monopoly of the global, large in their ruled neoliberal world.

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Ketil Fred Hansen
Hansen is a professor of social sciences at UiS and a regular reviewer at Ny Tid.

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