Corporations Get Bigger and Bigger

WASHINGTON – Corporate power keeps growing and growing. That’s the message of a new report released here Monday by the left-wing Institute for Policy Studies, one year after anti-corporate demonstrators and self-described ”anarchists” stalled World Trade Organisation (WTO) negotiations in Seattle. The report, the latest in a series of annual studies on corporate size produced by the Institute, notes that, of the world’s 100 largest economic entities, 51 are corporations and only 49 were countries measured by annual corporate sales and annual gross domestic product (GDP).

WASHINGTON – Corporate power keeps growing and growing. That’s the message of a new report released here Monday by the left-wing Institute for Policy Studies, one year after anti-corporate demonstrators and self-described ”anarchists” stalled World Trade Organisation (WTO) negotiations in Seattle. The report, the latest in a series of annual studies on corporate size produced by the Institute, notes that, of the world’s 100 largest economic entities, 51 are corporations and only 49 were countries measured by annual corporate sales and annual gross domestic product (GDP).

Moreover, the world’s 200 largest corporations have combined sales greater than the combined GDP of all countries but the world’s 10 largest economies and 18 times greater than the combined annual income of the roughly 25 percent of the world’s population living on less than one dollar per day.

Nor does it appear that all of these economic activities provide proportional benefits to these companies’ workers. The profits of the 200 largest companies – 82 of which are US based – grew 362.4 percent over the 16 years between 1983 and 1999, according to the Institute, while the number of people they employed grew by only 14.4 percent.

And while their sales amounted to the equivalent of about 27.5 percent of global GDP in 1999, the number of people employed by them directly amounted to only 14.4 percent of the global workforce, according to the report.

Reiteration Summary of Key Report Findings

[Key findings include:

The Top 200 corporations’ combined sales are bigger than the combined economies of all countries minus the biggest 10. –The Top 200s’ combined sales are 18 times the size of the combined annual income of the 1.2 billion people (24 percent of the total world population) living in “severe” poverty.

Between 1983 and 1999, the profits of the Top 200 firms grew 362.4 percent, while the number of people they employ grew by only 14.4 percent.

A full 5 percent of the Top 200s’ combined workforce is employed by Wal-Mart, a company notorious for union-busting and widespread use of part-time workers to avoid paying benefits.

U.S. corporations dominate the Top 200, with 82 slots (41 percent of the total). Japanese firms are second, with only 41 slots.

Of the U.S.corporations on the list, 44 did not pay the full standard 35 percent federal corporate tax rate during the period 1996-1998. Seven of the firms (including the world’s largest, General Motors) actually paid less than zero in federal income taxes in 1998 (because of rebates).

Between 1983 and 1999, the share of total sales of the Top 200 made up by service sector corporations increased from 33.8 percent to 46.7 percent. ]

Its publication comes at a time of growing popular concern here about corporate power, illustrated most recently by a special feature appearing in the Sep. 11 edition of the influential Business Week magazine. The article, entitled ‘Too Much Corporate Power?’, found that, despite the longest period of economic expansion in US history, the US public was increasingly uneasy about corporate influence on their lives and communities.

While almost half of respondents in a major poll sponsored by the weekly magazine and conducted by the Louis Harris polling organisation, agreed with the notion that what is good for business is good for most of the citizenry, two-thirds of those polled thought that large profits were more important to big companies than developing safe and reliable, quality products for consumers.

It also found that the so-called ”New Economy” of hi-tech and information companies – which have recently suffered serious setbacks in the stock market – are leaving workers and their families ”feeling overworked and stressed out”.

And about three out of four respondents agreed that big companies have too much influence over ”government policy, politicians, and policy- makers in Washington”.

”It’s no longer a youth or hippie thing,” the article stated. ”Today, those angry at business come from all parts of US society.”

That sense helps explain the decision by Vice President Al Gore to run a quasi-populist campaign – in which he strongly assailed tobacco, oil, health insurance, and pharmaceutical companies – in the presidential elections, a decision which caught many by surprise given his own history of friendliness both to corporations and their political campaign contributions.

For this year’s campaign, according to the Institute, the 82 US companies on the Top 200 list made direct contributions to candidates through political action committees totalling more than 30 million dollars, not counting many times more that amount made in so-called ”soft-money” donations to parties or interest groups directly involved in the campaign.

Overall, according to the Center for Responsive Politics, corporations outspent labour unions 15 to one during this year’s campaign.

”The growing private power has enormous economic consequences,” the report states. ”However, the greatest impact may be political, as corporations transform economic clout into political power. As a result, democracy is undermined. This threat deserves to be one of the major issues on the political agenda.”

At the same time that they wield enormous political power in Washington, companies have been successful in resisting government or public- interest efforts to make their foreign operations more transparent, according to the Institute. Among information that US firms which do business abroad are not required to make public are data about the number of workers they employ in each country, the amount of toxic gases their plants emit into the atmosphere; the location of their plants or contractors; and their wage rates.

Their influence is also illustrated by the extent to which they avoid paying taxes both here and abroad. One study by the Institute of Taxation and Economic Policy found that 44 of the 82 biggest US companies failed to pay the full standard 35-percent corporate tax rate during the period 1996-98, while seven – Texaco, Chevron, PepsiCo, Enron, Worldcom, McKesson, and General Motors – of them actually received rebates that exceeded the amount of taxes they paid during that time.

The liberal use of tax havens abroad has also reduced US corporate tax liability for overseas operations far below the rates at which their foreign profits have grown, according to the report.

The 82 US firms among the world’s top 200, as determined by Fortune Magazine, represent a substantial increase over 1995, when only 59 of the top 2000 were US-based. At that time, Japan was a close second with 58, but, with the continuing effects of its long recession, Japanese firms now account for only 41 of the 200 largest.

The world’s six largest companies as defined by 1999 sales are General Motors, Wal-Mart, Exxon, Mobil, Ford Motor, and the German company Daimler Chrysler in that order. As economic entities, they rate, 23, 25, 26, 27 and 28, respectively, behind the GDPs of the major western industrialised powers, China, Brazil, Mexico, India, South Korea, Russia, and Argentina.

The world’s biggest private employer in 1999 was Wal-Mart, whose global workforce has skyrocketed from 62,000 in 1983 to 1,140,000 last year. The report notes that while the retail chain, which has been expanding aggressively in Latin America, has undoubtedly created new-job opportunities for tens of thousands of workers, it remains ”notorious” for its anti-union efforts and heavy reliance on part-time employees to whom it is not required to pay health or other benefits.

Author: Jim Lobe

News Service: Inter Press Services

URL: http://www.ips-dc.org/downloads/Top_200.pdf