Corporate Dominance

The problem

Corporations come and stay, existing only for profit, having a free reign over politics, the law and the economy, which in turn, affects society and the environment. They are powerful enough to influence political decisions and actions, are able to bend the law and control the economy to any extent that benefits them, regardless of any outcome other than profit. They are able to control, escape and affect society and the environment, the political and legal system and the economy. In short, corporations influence the country and in turn, affect the world.

Effecting society and the environment

Legally, a corporation is an individual person although in reality, it is a group of people. By passing a legislation legalising corporations as an individual, you give it the same civil and political rights a normal citizen would have. You get one ‘person’ with more brain power than a normal person would have, meaning that corporations have more resources at their disposal. Just by passing the legislation, corporations have gained more power than it already had.

The media

The media is not exempt from corporate control, as corporations can influence what media broadcasts. If society was to find out that a certain product had health risks and so on attached to it, it would definitely hinder the corporation’s ability to generate profit.

A commonly use hormone to increase milk production in cows in the US, rBGH, was investigated by reporters Jane Akre and Steve Wilson, both worked for Fox News before being fired. Akre and Wilson refused to change their report on the health risks of rBGH on humans and the cruel effects it has on the animal after Monsanto wrote to Fox News. The result was a legal battle between Fox News and Akre and Wilson, in which Akre won. However, Fox News overturned the verdict and appealed that they did not have to report the truth as policies regarding about reporting truths were not legally binding.

Even if it was for the benefit of the public to know of these risks, Monsanto tried to repress the report. The reason for it is that the products of Monsanto would be questioned of its quality and the method to produce would appear unethical and immoral. Therefore, Monsanto will lose not only profit, but also credibility.

Influencing public view on environmental issues

Global warming is a common issue today, news reporters telling us of melting ice caps and raising temperatures, S+E teachers lecturing their students about it and an international agreement was created to help combat it. The Intergovernmental Panel on Climate Change had stated that "the balance of evidence suggests that there is a discernible human influence on global climate" and the likely result would be "widespread economic, social and environmental dislocation over the next century", a conclusion of 2 500 climate scientists.

However, corporations have paid other scientists, providing them funding, to disclaim this fact, saying that there isn’t enough information to act and it will be incredibly expensive to do so, casting doubt over the issue and consequently make society believe that there is still room for debate as to whether global warming is fact or myth. In fact, a group of corporations had released a video claiming that the rising carbon dioxide levels will actually help the production of crops and feed the poverty-stricken nations. Ironically enough, this group consists of fifty oil, gas, automobile, coal and chemical companies.

Global warming and its consequences

Also, morals and common sense take over on this point. The effects of global warming are common knowledge these days; it destroys the environment, causes animals to die, be displaced and seasonal events have moved out of place because of the rising temperatures. Yet industries seem determined to exacerbate the issue even further. Which begs the moral question: does any one of us have the right to destroy the world? Even if we actually do have the right to do so, corporations seem oblivious to the fact that without the world, there will be no profit.

Corporate power in politics and law

Corporations are able to donate large amounts of money to a political party, especially during election times. In Australia, there is no limit as to how much money is allowed to be donated, but anything over $10 500 must be declared. In the US, there is a contribution called "soft money", which can only fund in general to one party, is unlimited and does not need to be declared, and PACs (political action committees) can donate up to $5 000 per candidate of whichever party they share the same views with. Corporations can also form their own PAC.

Lobbying and paying the government

In today’s world, it is not uncommon for a corporation to give huge amounts of money to a political party of their choice or to the presiding government. However, if a corporation exists solely for profit, why do they bother to give money away? The answer would be to get their way in making profit without obstacles blocking their path to profit. The more money a corporation has, the larger its ability to receive deals for their projects to proceed or continue.

Walker Corp, who deals with property, was chosen for the $400million redevelopment of Kew Cottages into prime housing, donated $100 000 in 2007 (after a substantial time from its last donation of $55 000 in 2000) and had one of his lobbyist contacts to help along the process of an agreement for the continuation of the development, after the government decided to stop the controversial project. An agreement was signed guaranteeing that the project went ahead, just before election time.

Escaping the law

Corporations are in no shortage of money, and can afford to pay legal procedures and better lawyers than their opposition in court. They know that by lengthening court procedure it would make it even more expensive, which the government and other small businesses cannot afford. Most of the time corporate lawyers stand in court only to delay, so that the government and small business do not have enough money to pay for their legal fees and withdraw their complaints.

But there are other ways of waiving their way through our legal system, by exploiting the loopholes. Alan Bond, one of the biggest corporate names, was charged for a corporate fraud worth $1.2 billion. He became bankrupt and was sentenced to seven years in jail. However, the High Court ruled that his sentence was to be reduced to four years due to a legal technicality. Bond was able to pay for a High Court appeal as well as his lawyer’s fees, even though technically bankrupt.

When corporations do get caught and are told to pay the fine, the law is usually on their side and the fine is usually not in the same level as the crime itself. A few examples would be Richard Pratt, fined $36 million for a fraud of $700 million and Steve Vizard, fined $400 000 for a fraud of $3 million. If this is the level of fines corporate CEOs get when charged with fraud, they’re still making a lot of profit.

The economy

The banks

Banks are not just buildings where you store your money; they are also corporations wanting profit. Banks can either approve or disapprove the loans to large corporations, to the extent in which it can lower the price of the company’s stocks. The banks can then buy stocks at a low price, approve of the loan which then causes stock prices to rise and sell them at a high price and thus gaining profit. Adding to that is the interest in which the company has to pay, gaining even more profit.

Bubble bursting

Normally, the government creates the money and circulates it around the economy. The US differs from this conventional mean, as the privately owned Federal Reserve Corporation was given all the power to create money in 1913. By the 1980’s, the US government was in a debt of $1trillion to the Federal Reserve, in which it uses taxpayers money to pay off. However, taxpayers themselves are continually in debt as they borrow money of the banks, with no hope of paying off the principle amount as well as the interest, although they appear rich with the created credit loaned to them by the banks, creating a credit bubble. Finally, the credit bubble burst, severely and globally affecting the economy.

The solution

With these three main factors in mind, I have created a three-point framework to solve this particular problem of countries controlled by corporations.

Firstly, new legislation should be passed, restricting the amount a corporation can donate to a political party or government to $12 000 per anum, and all donations must be reported. This is ensuring that there will be less corporate interference, especially on the large-scale projects which are responsible for many controversies. There should also be a code by which politicians should go by, limiting the amount of time spent around corporations, corporate groups and lobbyist. This ensures that there will be less distortion of facts as well as furthering to ensure that there will be less corporate influence within governments.

Secondly, laws, especially corporate laws, should be reviewed and changed to make certain that loopholes within the legislation are not exploited again by corporate lawyers (such as the Alan Bond case), and legal procedure involving corporations should also have a time limit, which will, to an extent, nullify the money power between the government and corporations.

Thirdly, in response to climate change, the government should move ahead with its plans to combat global warming instead of placating the corporations lobbying against governmental actions. Citizens of the country becoming increasingly concerned about global warming, doing their bit to stop it and supporting actions against global warming should be the main motivating factor for a democratic government to go ahead with their projects, not the unhappy corporations who will sulk over the loss of profit.

But, as usual, there is no plan that will be 100% effective in limiting corporate activities.

However, by limiting the amount that groups can donate will also mean that the government will need to find other sources of funding to provide for the public health, public transport and education sectors as well as for other various activities or projects such as road works. In addition, governments do not always rely on corporations for information, rather, they rely on other groups to come up with the information they ask. Coincidently, some of these groups are heavily funded by corporations.

Although trying to level out the playing field in legal procedures, corporations still have the wealth to pay better lawyers to defend their case. Also, the time limit may not be enough for the judge and the jury to decide on a proper verdict, and new evidence may be revealed after the verdict has been announced, in which a retrial is needed.

Conclusion

All in all, more regulations are needed to ensure that corporations have set boundaries and limits and less power to reign in corporations greed for money, letting society make up its own mind on national and international issues, protect the environment, keep our political and legal system from corrupt intentions and to prevent the economy from crashing down around our heads.

Bibliography:

http://www.polisci.ccsu.edu/trieb/InfluGov.html
http://corpau.blogspot.com/search/label/CF%20-%20Corporate%20Fraud
http://homepage.mac.com/herinst/sbeder/ecologist2.html
http://www.rense.com/general61/bbil.shtm
http://www.abc.net.au/7.30/stories/s108998.htm
http://www.thecorporation.com/index.cfm?page_id=312