The neoliberal ideology of unrestrained markets has led to a global crisis. Humanity now faces an existential threat as the result of global dominance by corporations, whose ultimate goal is at odds with human flourishing.
Originally published March 14, 2022 in Inside Over as “The world on the brink of the abyss. Looking at the real danger.”
Back in 1947, as the world was rebuilding from the destruction of the Second World War, a few dozen free-market ideologues met in a luxury Swiss resort to form the Mont Pelerin Society—an organization devoted to spreading the ideology of neoliberalism throughout the world. Their ideas—that the free market should dominate virtually all aspects of society, that regulations should be dismantled, and that individual liberty should eclipse all other considerations of fairness, equity, or community welfare—were considered fanatical at the time. Over three decades, though, financed by wealthy donors, they assiduously established networks of academics, businessmen, economists, journalists, and politicians in global centers of power.
When the stagflation crisis of the 1970s threw classic Keynesian economics into disrepute, their moment of opportunity arrived. By 1985, with free market disciples Ronald Reagan and Margaret Thatcher entrenched in power, they initiated a campaign to systematically transform virtually all aspects of life into an unrestrained marketplace, where everything could be bought and sold to the highest bidder, subject to no moral scruple. They crippled trade unions, tore up social safety nets, reduced tax rates for the wealthy, eliminated regulations, and instituted a massive transfer of wealth from society at large to the uber-elite.
Through their control of government, finance, business, and 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 world’s twenty-six richest people own as much wealth as half the entire world’s population. It also created the conditions for large transnational corporations to become the dominant force directing our world, more powerful than any government or nation. Through their influence on legislation, they have virtually eliminated regulatory limitations on their growth, their permissible industries, or their competitive playing field. Massive corporations are gobbled up by even vaster ones, creating commanding monoliths that set the terms for their own activities. Of the hundred largest economies in the world, sixty-nine are now corporations.
In today’s corporate-dominated global stage, nations and municipalities compete against each other to attract corporate investment to their region, relinquishing taxation, regulations, and worker protections in the hope of jobs or infrastructure spending. In most countries, the boundaries between corporate executives and government have become so blurred as to be virtually nonexistent. Transnational corporations control most of the world’s finance, manufacturing, agriculture, and trade, and are routinely invited to intervene in international treaty negotiations, ensuring that their interests remain protected.
A new moniker arising from the corporate titans at the World Economic Forum is “stakeholder capitalism”: an inviting term that seems to imply that stakeholders other than investors will play a role in setting corporate priorities, but actually refers to a profoundly anti-democratic process whereby corporations are assuming even more dominant roles in global governance. The UN Food Systems Summit was essentially taken over by the same giant corporations, including Nestlé and Bayer, that are largely responsible for the very problems the summit was intended to grapple with — which led to a widespread boycott by hundreds of civil society and Indigenous groups.
If this supreme global force had benevolent aims, then at least a case could be made for permitting it to retain such control over human activity. But the opposite is true. The common goal of corporations around the world is to monetize human activity and what’s left of nature’s abundance as rapidly and efficiently as possible. The overriding purpose of the world’s most powerful institutional force is thus directly at odds with a flourishing Earth or a viable future for humanity.
A fundamental reason for the rapacious behavior of transnational corporations is their drive to maximize shareholder value above anything else. While there is no explicit requirement for this in the standard corporate charter, a century of case law has entrenched this principle into the behavior of large corporations to the point that is has become the de facto standard of operation. As a result, if corporations were people, they would be considered psychopaths, utterly devoid of any caring 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 onto a terrifying trajectory. The uncontrolled climate crisis is the most obvious danger: The world’s current policies have us on track for more than 3° C increase by the end of this century, and climate scientists publish dire warnings that amplifying feedbacks could make things far worse than even these projections, and thus place at risk the very continuation of our civilization.
But even if the climate crisis were somehow brought under control, a continuation of untrammeled economic growth in future decades will bring us face-to-face with a slew of further existential threats. Currently, our civilization is running at 40% above its sustainable capacity. We’re rapidly depleting the earth’s forests, animals, insects, fish, freshwater, even the topsoil we require to grow our crops. We’ve already transgressed five of the nine planetary boundaries that define humanity’s safe operating space, and yet global GDP is expected to more than double by 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 all-encompassing that it’s become difficult to visualize any other possible global system. Alternatives do, however, exist. Around the world, worker-owned cooperatives have demonstrated that they can be as effective as corporations—or more so—without pursuing shareholder wealth as their primary consideration. The Mondragon cooperative in Spain, with revenues exceeding €12 billion, shows how this form of organization can efficiently scale.
There are also legal and structural changes that can be made to corporations to realign their value system with human welfare. The pathology of shareholder value maximization could be addressed by requiring their charters to be converted to a triple bottom line of people, planet, and profits, and subject to rigorous enforcement powers. This alternative corporate value system is already available through chartering as a benefit corporation or certifying as a B-Corp. Since it is voluntary, however, it has had virtually no impact on a broader scale. If, instead the triple bottom line were a requirement for all corporations above a certain size, and strictly enforced, it would rapidly lead to a profound shift in corporate priorities.
The idea of restraining corporate domination of our society may seem daunting in the current global political environment. It must, however, begin with the clear and explicit recognition that the overarching goal 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 life-affirming values before it’s too late.
Teaser Photo by Dimitry Anikin on Unsplash