The neoliberal ideology of unbridled markets has led to a global crisis. Humanity now faces an existential threat due to global corporate dominance, whose ultimate goal is at odds with human flourishing.
Originally published on March 14, 2022 in Inside Over like “The world on the edge of the abyss. Looking at the real danger.
In 1947, as the world was rebuilding from the destruction of World War II, a few dozen free market ideologues gathered at a Swiss luxury resort to form the Mont Pelerin Society, an organization dedicated to spread the ideology of neoliberalism worldwide. Their ideas—that the free market should dominate virtually every aspect of society, that regulations should be dismantled, and that individual liberty should eclipse all other considerations of justice, equity, or community well-being—were considered fanatical at the time. For three decades, however, funded by wealthy donors, they assiduously established networks of scholars, businessmen, economists, journalists and politicians in the world’s centers of power.
When the stagflation crisis of the 1970s brought classical Keynesian economics into disrepute, their moment of opportunity arrived. In 1985, with free market disciples Ronald Reagan and Margaret Thatcher entrenched in power, they launched a campaign to systematically turn virtually every aspect of life into a frenzied market, where anything could be bought and sold to the highest bidder. , without any moral scruples. . They crippled unions, tore up social safety nets, cut tax rates on the wealthy, eliminated regulations, and instituted a massive transfer of wealth from society as a whole to the elite.
Through their control of government, finance, business and the media, neoliberal adherents have succeeded in transforming the world into a globalized market-based system. The triumph of neoliberalism has led to the greatest inequality in history, where the twenty-six richest people in the world own so much wealth like half the world’s population. It also created the conditions for large transnational corporations to become the dominant force running our world, more powerful than any government or nation. Through their influence on legislation, they have virtually eliminated regulatory limitations to their growth, permitted industries, or competitive playing field. Massive societies are swallowed up by even larger societies, creating towering monoliths that set the conditions for their own activities. Among the hundred largest economies in the world, sixty-nine are now corporations.
In today’s corporate-dominated global scene, nations and municipalities compete to attract business investment to their region, foregoing taxation, regulations and worker protections in the hope of jobs or infrastructure spending. In most countries, the lines between business leaders and government have become so blurred that they are virtually non-existent. Transnational corporations control much of the world’s finance, manufacturing, agriculture and trade and are regularly called upon to intervene in international treaty negotiations, ensuring that their interests remain protected.
A new nickname emanating from corporate giants at the World Economic Forum is “stakeholder capitalism”: an appealing term that seems to imply that stakeholders other than investors will play a role in setting corporate priorities, but actually refers to made in a profoundly undemocratic process where corporations take on even more dominant roles in global governance. The United Nations Food Systems Summit was basically supported by the same giant corporations, including Nestlé and Bayer, who are largely responsible for the very issues the summit was supposed to tackle – which led to a widespread boycott by hundreds of members of civil society and indigenous groups.
If this supreme world force had benevolent purposes, then at least a case could be made for it to retain such control over human activity. But the opposite is true. The common goal of companies around the world is to monetize human activity and what remains of nature’s abundance as quickly and efficiently as possible. The overriding objective of the most powerful institutional force in the world is therefore directly at odds with a flourishing Earth or a viable future for humanity.
One of the fundamental reasons for the rapacious behavior of transnational corporations is their desire to maximize shareholder value above all else. While there is no explicit requirement for this in the standard corporate charter, a century of jurisprudence has anchored this principle in the behavior of large companies to the point that it has become the de facto operating standard. Therefore, if companies were people, they would be considered psychopathsutterly devoid of any regard for the harm they cause in the pursuit of their goals.
This relentless pursuit of profit and economic growth above all else has propelled human civilization down a terrifying trajectory. The unchecked climate crisis is the most obvious danger: Current global policies put us on the right track for a rise of more than 3°C by the end of this century, and climatologists are issuing dire warnings that amplified feedbacks could make things much worse that even these projections, and therefore place at risk the very continuation of our civilization.
But even if the climate crisis were somehow brought under control, continued unbridled economic growth in the decades to come will bring us face to face with a host of new existential threats. Currently, our civilization is running at 40% above its sustainable capacity. We are quickly exhausting the earth forests, animals, insects, fish, fresh waterEven the topsoil we need to grow our crops. We have already transgressed five of the nine planetary boundaries that define humanity’s safe operating space, and yet global GDP should more than double mid-century, with potentially irreversible and devastating consequences.
We have already transgressed five of the nine planetary boundaries defining humanity’s safe operating space.
The corporate takeover of humanity is so global that it has become difficult to visualize any other possible world system. However, alternatives exist. Around the world, worker-owned co-operatives have demonstrated that they can be as effective as corporations—or more— without making shareholder wealth their main consideration. The Mondragon Cooperative in Spain, with a turnover of more than 12 billion euros, shows how this form of organization can evolve effectively.
Legal and structural changes can also be made to companies to realign their value system with human well-being. The pathology of maximizing shareholder value could be addressed demanding their charters be converted into a triple bottom line of people, planet and profits, and subject to rigorous enforcement powers. This alternative enterprise value system is already available via charter as service company Where certification as a B-Corp. However, because it is a voluntary program, it has had virtually no impact on a larger scale. If, instead, the triple bottom line were a requirement for all businesses above a certain size, and strictly enforced, it would quickly lead to a sea change in business priorities.
The idea of restricting corporate dominance over our society can seem daunting in today’s global political environment. This, however, must begin with the clear and explicit acknowledgment that the overriding purpose of corporations is currently at odds with a healthy Earth and the future flourishing of humanity. The neoliberal model that has led our global civilization to the precipice of disaster must be supplanted by a different economic system based on vital values before it is too late.