When this article appeared, Richard J. Barnet was a founder and co-director of the Institute for Policy Studies in Washington, D.C. He has taught at Yale and the University of Mexico, and during the Kennedy administration was an adviser in the State Department. He is the author of five books, including The Roots of War, and his articles have appeared in major magazines and newspapers across the country. When this article appeared, he was helping to develop the Transnational Institute, an organization devoted to the problems of world economy and politics.
He has co-authored Global Reach, a study of the power of multinational corporations. Barnet was interviewed by Wes Michaelson and Joe Roos of Sojourners. Barnet attended the Church of the Savior in Washington, D.C., when this article appeared.
Wes: You have maintained that the multinationals, or the transnational corporations, are ahead of the politicians in recognizing the obsolescence of national boundaries and advocating a kind of interdependence. Everybody advocates interdependence, seemingly, these days. But what kind of interdependence is it that they would like to foster?
Richard: They would like to foster an interdependence with the over-riding goal of economic efficiency as they define it. The division of labor is taken to its ultimate degree. You look around the world for those places where labor is cheapest or where you can obtain raw materials at the best price and you integrate that with operations in more advanced places where your market operations might be based. So in effect what you are trying to do is get the benefit of peculiar economic advantages of the developed world and the peculiar advantages of the underdeveloped world--all for the benefit of the over riding goal of the corporation, which is global profit maximization.
Wes: In that kind of an operation where the goals are maximization of profits and efficiency, what’s the operative economic philosophy? Is it a global “trickle-down” scheme of development?
Richard: Until recently the exact dynamics of development were really not examined very carefully by the managers of global corporations. There were some very broad assumptions, but there was no real conflict between “balance-sheet” efficiency (the highest profit de rived from the least input) and global welfare. One of the more articulate corporate spokesmen argued that the multinationals had developed a “win-win” strategy, where everybody benefited as the corporations increased their profits. There is more employment in the under developed countries, an improved balance of payments in the United States, efficiency that comes from moving the production line to lower wage areas, and building the so-called “postindustrial” economies, such as those of the United States, around service.
However, if you begin to look more specifically at how this particular interdependent system works, the problem is that the multinational corporations, because of their over-riding goal of global profit maximization, generally tend to take goods from where they are most needed and send them to where they are least needed--to take from the poor areas and distribute to rich countries or richer regions of countries. It’s probably most dramatic in the area of food. While it’s true that there is an overall short-fall of production in the world, the acute hunger problems are really distribution problems. In the areas of the world where people do not have the purchasing power to buy food, they don’t eat. But physically the food is not located all that far away.
Wes: Could it also be the fact that land which could be used to produce food for direct consumption in poor areas is instead being used to farm pineapples, as an example, for consumption in America?
Richard: That’s an extremely important point. The planning decisions about the use of agricultural land in poor countries are being made increasingly by multinational corporations who are more and more buying and renting their land. It’s a very clear case where the development interests of a country, just in terms of the survival of people, and the interests and profits of the multinational corporations come into very fundamental conflict. For example, in Colombia you can derive about 12,000 pesos for a hectare of wheat. But if you grow carnations for export you might get a million. It’s also the same for the international strawberry market.
There is an interdependence and a breaking down of national boundaries, but a building up of some extremely strong and dangerous class lines which cut across national boundaries. What’s emerging are “consumption communities” of people who are joined together by lifestyle--by what they eat, drink or wear. An Argentinian or a Colombian person in that class is far closer to his American counterpart than he is to his poor neighbor in Argentina or Colombia. So the fundamental case against the multinational corporations as a distribution system is that they are aggravating the differences between rich and poor. They are clearly contributing to the widening of that gap.
In countries like Brazil or Mexico, where the investment by multinational corporations has been very great and has indeed produced a very dramatic increase in multinational products, the gap between rich and poor has widened dramatically. Part of it has to do with the fact that those who benefit from prosperity brought by the multinational corporations are a very narrow segment of the population-top management, maybe some local investors, and what really amounts to a kind of “labor aristocracy” of people who are employed by these corporations. Beyond that, in agriculture, construction, and a number of other places, the kind of technology that the multinational corporations have brought in increases unemployment. In agriculture, for instance, a great many marginal farmers can no longer eek out a living on a small plot of land as they once did, as the farms become mechanized through the green revolution and concentrated in the hands of people who have the capital to carry on that kind of large enterprise. These become, then, much more capital-intensive than labor-intensive.
Wes: Doesn’t that conflict with the fact that the thing which draws the corporations to countries is the prospect of finding a surplus of labor?
Richard: This is often one criticism. How can both things be true? But they are both true. For certain productive processes where labor is needed, it makes sense for the corporation to pay a dollar a day in Panama, Hong Kong, or Taiwan, rather than $4 an hour in Massachusetts. At the same time, in taking over local industry, the same corporations are also taking over local agriculture and local construction. They are constantly expanding. So while there may be some new jobs created in, say, the electronics industry, there are in effect a lot more jobs destroyed by the major transformation taking place in agriculture and in construction.
If you take the manufacturing industry in Latin America as a whole, for example, despite the enormous increase in the importance of the manufacturing industry over the last 50 years, it now employs a smaller percentage of the work force than it did 50 years ago. There is a certain strata of the population which is very useful for the corporation, but an increasingly larger percentage which is useless by any economic definition, either as workers or consumers. This, I think, is the problem with the “trickle-down” theory.
The adverse impact of income distribution in this development model are admitted by governments themselves at times. When in the United States some years ago, the President of Brazil commented that Brazil was doing well but the people weren’t. It was an interesting and very correct statement. What is said, though, is that eventually, if you build up enough of an economic base, somehow the process will gradually bring new people into the middle class. There is no question that the middle class grows somewhat, but nowhere near the rate of the lower class, which comprises 80-85 percent of the people.
So it is a model which has enormous political implications, because it means that a government can hold out no hope to an overwhelming majority of the people in the country, either for some basic level of decency, adequate food, water, health abilities, much less literacy. Such a society is a tinder box, and governments are always on the lookout for any political force that would try to organize or politicize that enormous potential for dissent. That’s why very strong repression, which is increasing now throughout the third world, is highly correlated to those countries where multinational corporate investments are extensive--in Korea, the Philippines, and Brazil for example. It has to do with the fact that repression is the only alternative for a government that is determined not to deal in a positive way with the radical maldistribution of wealth.
Wes: In the kind of interdependence that the transnational corporations envision, where do the poor fit?
Richard: I think they are completely left out. To some extent they are victims of that plan, very specifically in terms of exploitation. In the book we talk a great deal about the effects of advertising, particularly in the food area, which dramatically takes advantage of people. Food advertising, in many countries becomes a substitute for education. The first contact many people have with the outside world is the information system controlled by the corporations, and that is the information which is designed to further program people into buying their products.
There is often the question, are multinational corporations good or bad?
I simply start with the criterion of good or bad for whom? If they justify themselves they must be good for at least the majority of the world’s population. If that’s the criteria for determining if this is a good instrument for developing an integrated world economy, or a bad instrument, then on those criteria the record is very, very bad.
Poor nations are exploited, first of all, through transfer pricing, the tremendous overprices on drugs and machinery, misleading advertising, the promotion of drugs that are outlawed in the United States, and other procedures. There are numerous incidents where these multinational corporations are simply taking advantage of their superior buying power in very primitive and weak societies to maximize profits. But beyond this, the other point is that they are destructive to the possibility of building a community. When a given geographical area, a country in Latin America or even a city in the United States, basically becomes dominated by an organized corporation, it merely becomes an appendage of the corporation’s own private world economy. Decisions which are concentrated in the headquarters of the corporation are being made on the basis of what serves the worldwide interests of the corporations, not what serves the interests of the local people. Again and again there are real conflicts.
It may be, and it often is, in the interests of the corporation to close down a plant and forget about the people they put out of work, because they would rather pay a dollar a day than $4 an hour. But obviously from the point of view of the community, from workers who lose their jobs and local merchants that depended on that economy, it’s a disaster. Corporations should at least have to pay the cost of social damage caused by their decisions.
Joe: As the nation state boundaries become less and less important and more of a global class begins to emerge, what do you see to be the major function and importance of governments in relation to all of these economic questions?
Richard: What it should be, or could be, is in fact different from what it is turning out to be. The power of our multinational corporations is sufficiently strong that in many countries they effectively dominate government policy. What the corporations hope from government is the use of governmental power to open up and facilitate the free movement of capital and goods, to keep order within the territories, and to make legal arrangements with the various countries so that the corporations can operate more effectively. I think that the corporations see government very much as a servant of their interests, playing the back-up role for the development of a transnational world economy which the corporations basically control.
I think the function of government is to foster a community in which there is some kind of social and ecological balance, and one where people themselves can achieve some kind of personal, psychological and spiritual balance in their own lives. You would come out with a very different looking world on this basis than the one you find with the dominance of multinational corporations. The task of government is to try to redress the balance of power which has now become so concentrated in the hands of the multinationals.
Wes: Could you talk about values a little more? You are saying that governments might be able to limit the damage or influence of global corporations. But deeper than that are questions of whether we buy into a global economy that is based on the values of maximization of profits and efficiency rather than the uplifting of people.
Richard: Even the definition of efficiency is a very special one. It’s a “balance-sheet” definition, based on getting the most out for the least in, but strictly in economic terms. From the point of view of saving resources, it’s incredibly inefficient. It’s highly efficient from a corporation’s standpoint to move components of products around the world through the use of jet airplanes. From the point of view of society, it’s a squandering of energy. It’s efficient, from the point of view of the corporation, to close plants and go elsewhere for cheaper labor. From the point of view of society that has to pay welfare or the cost of crime or all of the incalculable consequences of social dislocation caused by that corporation’s decision, it’s very inefficient.
We have an incredibly narrow definition of efficiency and productivity in this country. Basically the social costs of the corporation’s strategies for maximizing profits get sluffed off on society as a whole. The consequences are seen around us. The decay of our cities, the collapse of services, and even the real decline of spirit and feeling of helplessness that some people have, are all consequences of the distortion in the economic system.
The power of the multinational corporations comes from the wide acceptance of its own value system. These values hold that happiness is directly tied to an ever greater profusion of consumer goods--that consumption is happiness, that technology has a life of its own and that what can be developed should be developed. The consumptive ethic is the real source of the power for corporations. The corporation says, “we produce what the people want,” I think that is true.
Look at what really happened in Chile. To be sure, there is no doubt that the United States played a major role in stirring up the internal dissension and in putting pressure on the Allende government. But more important than that was the large middle class in that country which was not prepared to accept even minor changes in the standard of living to which they had become accustomed, in the interests of seeing some redistribution to the bottom of society. So what you had was a government policy that at least in theory intervened in the country to make redistribution so that, for example, there is free milk for the poor, and scarce foreign exchange gets used for the basics, benefiting the majority of people. With that conscious choice made, there was not quite the profusion of goods and services for the middle class and the rich that there was before. That choice greatly infuriated people. When goods are seen as more precious than liberty, then it’s very difficult to do much about the forces dominating the economy.
Joe: With this increasing disparity between rich and poor, you mentioned that for things to be maintained, repression is necessary. In this new emerging transnational global economy who do you see as the main suppressors of revolution--the governments operating with the global corporations?
Richard: There is no question that corporation have assisted repressive governments in a number of ways. First, they legitimate. American corporations have celebrated the position of martial law in the Philippines, for example. They much prefer, or so it strongly appears, strong military dictators to the uncertainty and confusion and tension of a society which is trying to grapple with these problems of economic justice. And a strong government which is displeased with that, and makes it clear that there is no room for it, is the kind of government which these corporations can work with and clearly prefer.
Second, their influence on the United States government has been such as to change what has been our policy in the early sixties, of at least having a strong preference for governments which were trying to be democratic. Certainly in Latin America that was the theory. Since the mid-sixties, that has been changed. The United States government, with the strong encouragement and complicity of particular corporations, has played an important role in bringing the Brazilian government to power and in supporting it and rejuvenating it and giving it massive aid.
Look where our aid goes. It goes basically to regimes that practice dictatorship. Frankly I don’t think it’s because we in fact prefer dictatorships; I think it’s the opposite. But the fact is that it is only those dictatorships, run by an extremely narrow base without any popular support and prepared to repress popular sentiment, that will create the conditions for what corporations call a “good investment climate.” They will make concessions for business by doing what the corporations want--getting rid of labor unions, keeping wages low, being easy on the taxes, and so on. So I think that there is a profoundly anti-democratic spirit at work there, in which the corporate goal is stability at any cost. You must be able to predict what is going on in those societies, and if necessary to take what action is needed to keep the lid on in very explosive situations.
Wes: You said that the consumption ethic is the source of the corporation’s power, and that in the case of Chile, what the middle class weren’t willing to give up had a lot to do with what happened. Was that unique, or could it also be applied on a broader scale? In a global situation of affluence and scarcity, how do lifestyles of people fit into the whole picture, and what is a Christian response to these realities?
Richard: There is, I think, a confrontation developing between the lifestyle of a developed society and the aspirations of the overwhelming majority of the people of the world. There is a fundamental incompatibility in the level, weight, and character of our consumption of scarce and nonrenewable resources, of energy, and scarce metals. For 6 percent of the worlds population to have 30-60 percent of the consumption simply guarantees the further widening of the gap. That seems clear.
The economic and political reasons for the pattern of mindless growth that has gone on in the United States and other advanced countries cannot continue. We cannot have any semblance of peace in the world without a radical redistribution of wealth and power. It’s so obvious that they go together. And this cannot come about until there is a real confrontation in the United States with what our system is doing, not only to the outside world, but what it’s doing to ourselves.
We really have been sold a notion that equates happiness with an ever greater consumption mentality. In biblical terms, I think it’s making a virtue out of gluttony. There is a real and deeply pervasive sense people have that goods are supposed to be the goal of our economic struggle, for which we turn our personal relations inside out.
It’s clear that lifestyle has to change in the United States, and that there must be much more emphasis on sharing resources, on community control and community ownership of scarce resources. There must be a much greater sense of priority as to what is needed. We don’t need nearly as many things as we have, and they don’t need to be as technologically elaborate or as wasteful. We need to get back much more into a people-centered and labor-oriented technology in which we make use of what we are rich in, not poor in. What we have been doing over the last 25 years is developing our technology to be labor expensive, and so now we have unemployment and more and more energy guzzling at a time when it’s clear that energy sources really are limited. They are limited far more than we have yet realized. We’re still living with a very complacent attitude towards the energy shortage--that we can very easily convert from one kind of energy to another. When we consider “net energies” (the energy it takes to get energy), things don’t look so promising.
The efforts that many groups are making in trying to change their own personal lifestyles is very important and an absolute precondition for any kind of social transformation. But I don’t think it’s sufficient. Some of it seems to be only exemplary conduct. It is clear that giving up a hamburger in the United States is not going to be turned into grain for people who need grain unless there is a real change in the distribution system. And that’s basically a matter of political change.
Only out of a sense of a different value system, a different kind of style of living, can we really develop a new politics. But the both have to go together. There are lots of people who intellectually perceive the problems of the world distribution system and try to work on it, but have yet to grapple with that in their own lives; there are other people who are concerned with their personal lifestyle and don’t see its relevance for politics. I think the great political end and spiritual challenge is to bring those two together.
The reason why there is so much boredom and apathy in politics, including the so-called new politics growing out of the sixties, is that it seems unconnected to a different vision of what society could be. There are people around all over the world who have glimpses of this. Clearly it is a global picture; it is a sense of our common humanity--that the species is one. But there is no very clear idea as to how to connect that vision with specific practical programs. Now, in a way, the global corporation may be able to bring such a force together, because it does really represent the only practical global vision that’s being offered to the world today. It’s the only really global institution that has more than a rhetorical function, and I do think that it dramatizes every one of these value conflicts--not only the consumption ethic we talked about, but the notion of centralization, of hierarchy, of bureaucracy and the fact that somebody very remote makes the decision of how my life is going to be lived. The reaction is a need to figure out the kind of scale in which people can have human relationships.
The corporation’s view of society is that people relate to one another as co-consumers, and there is a very small minority of producers. But I think there is a very strong, latent sense that people have--it’s both a spiritual and a political need--to relate to people in a very different way. The thing which is most traumatized in this country is the sense of isolation, the feeling that somehow there are no structures within which people can relate to one another for the building of a society which they themselves control.
Wes: What is the role of biblical, or spiritual, insights in the choices necessary for that kind of transformation?
Joe: Or how can religious bodies, communities of people, be participating in linking this vision to its practical outworking?
Richard: I think that there are several ways. First is the basic biblical teaching about the obligation to the poor. This is a fundamental obligation of humanity and is really the basic test of community. The purpose of a social structure is to create the condition for the development of spirit and the possibilities as a human being. If you try to conform a human being to political or economic structures That don’t permit that, you distort and cripple the spirit.
We are entering into a period when more and more of the world’s population are buying the criteria of economic efficiency and usefulness. That’s one reason I see this life ethic, or triage: “let’s get rid of the people who really are in the way.” We see now that most people are in the way, in a sense, consuming more than they produce. Even if they are on the edge of starvation, they are using up the air and polluting. So there is this strong feeling of wanting them to disappear, which I think is certainly the intellectual or psychological basis for genocide on the largest and most massive scale. Now if that is the way things are headed, then you have to start with a very different assumption of what other people’s worth is. There can only be a religious definition of that; you can’t make a utilitarian argument for the worth of most people in the world.
It’s true, I believe, that you cannot live in a society, even in a very primitive society, which is based upon exploitation without fundamental destruction of the spirit. I think that’s a message which runs throughout the Bible, that the obligation is to stand with the oppressed. If we don’t do that, we will eventually suffer a fundamental loss of spirit and energy. It has almost become a stock phrase in so many political speeches, to mourn the loss of spirit in the country. But nobody really questions why, except those with a very shallow kind of religiosity, that we are out of touch with God--as if you can exhort people to be more spiritual when the whole structure and the real educational system is teaching the very opposite of those values.
Wes: Is part of what you are saying that the struggle against forces which are exploitive of the poor and the masses is in fact a spiritual confrontation?
Richard: I think it is, very definitely. Increasingly I think it’s going to become much more stark and less ambiguous. It’s impossible to hide and to confuse certain basic choices. A lot of the masks that have kept us from seeing who we were and what we were doing have now fallen away--especially with Vietnam, Watergate, and other events. And now I think we’ll see beyond the high sounding rhetoric.
I would say that some of Moynihan’s speeches represent this new kind of rhetoric. I also see it in some of the business leaders now, who are saying never mind all that liberal baloney. We have our own interests to protect in a barbarian majority. There is no thought at all about why there is a politics of desperation. They say we’re just going to beat it down, with military confrontation, using all our economic weapons and playing on the jingoism of the people.
Wes: You have served in administrations, and outside them as a critic. Are there other people in secular, academic professional circles who, like yourself, have come to a deeper, more philosophic, moral, or spiritual analysis, ending up asking for answers which are connected to the recovery of basic spiritual values?
Richard: Definitely. I think there is a very strong awareness that the issues are not, as President Kennedy said in 1961 or '62, basically technical or managerial but that they are moral. The essence of politics has to do with values and choices. The notion that we have developed the tools to manage the social order--whether it’s the arms race through tinkering with arms control, or whether it’s the economy by tinkering with Keynesianism and fine tuning--there is a very wide feeling that this isn’t so any longer. This sense extends all across the sector, left and right.
But there is going to be a real fight now on some basic issues like justice. There is by no means a unanimity on those value questions, but just the opposite. That’s why one’s view of the value and purpose of human life assumes such a great importance.
There is the whole notion of stewardship. How far does our obligation extend--both geographically to distant points on the earth and also through time to future generations? Those questions--are we here to use up and end the earth, or are we here to use it as somebody’s guest for a while--are of crucial importance.
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