kiltedmonkey (kiltedmonkey) wrote,

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Corporations! Do they rule?

I wish I could have used magic for this, BELIEVE me...

So yeah, this is my Sociology essay, I JUST finished it...*huge yawn* and I need to go reference it properly now before I go to bed...or fall asleep here. So if you want to tell me what you think then please do! But no "OMGYOUARESOWRONG" please, it's late and I'm very tired and liable to turn nasty.


Do transnational corporations rule in today's globalising world?

In the so-called ‘global village’ of today, the influence of transnational corporations is inescapable. It may not always be immediately obvious, but the might of gross capitalism is being used everywhere, for purposes which vary from positive and charitable, to downright criminal. There are some areas in which this influence is more obviously wielded than in others, for example in the fields of media, technology, economy and law.

When it comes to the global economy, there is no doubt about it – the transnational corporation is king. Prior to the Industrial Revolution, people worked for themselves, and therefore produced things to maintain their lifestyle directly – for example, growing their own food. This is still the case in many of the world’s poorest regions. However, as technology has flourished and grown, it has forced a drastic change in the everyday way of life in Western society. The inventions which revolutionized production in the late 1700s - and the way in which they were used - brought about a huge boom in capitalism, ensuring the continual exploitation of workers for the benefit of the company owners. These workers are exploited in every single aspect of their lives. Primarily, they are forced to sell their labour in exchange for money, in order to live – to pay for a home and buy food, as the most basic examples. However, they are also exploited routinely in their everyday lives, as they are arguably being charged simply for the privilege of having every single thing they own or consume. While such exploitation is inherent in the very nature of capitalism, transnational corporations have proven time and again that their only concern when it comes to workers is how little they can get away with paying them for their labour. In some cases, what had the potential to be a positive force has in fact turned out to be very negative. Large corporations have decided to move production from developed countries like the United Kingdom and the United States of America to much poorer ones, where the people are much less wealthy and therefore more willing to work for lower wages than those who know what the products are actually worth. As a result, workers have been known to earn only a fraction of the profit the company makes from the product. As the wealth in the area increases as a result of the corporation’s presence, the cost of wages increases, and the corporation moves production once more, to another poor country where they can exploit workers. Theoretically this could continue forever – by the time there was no area of the world which had citizens poorer than a certain level, the capitalist leaders in developed countries would be richer and therefore able to pay more for the products, and the cycle would simply begin again. As a system, capitalism perpetuates inequality, it cannot exist without it, and transnational companies exploit this trait to its full extent. They generate obscene amounts of money through this system – according to the Institute for Policy Studies’ “Report on the Top 200 Corporations”, fifty one of the world’s largest one hundred economies are actually corporations. To put that into perspective, the top corporation on the list, General Motors, had a reported profit of more than the gross domestic product of twenty seven countries listed, which included Portugal, Ireland, New Zealand and even Denmark.

How corporations use all the money they make is also a contentious issue. There are concerns over a handful of companies controlling large sections of the economy, particularly in relation to media. In November of 2007, the Federal Communications Commission in America announced a proposal to relax rules regarding ownership of multiple media outlets in the same market. These rules, implemented thirty two years ago, were intended to prevent media monopolies in local news markets. Despite the FCC’s assurances that this was a minor alteration and would not affect news coverage, they attempted to hide the fact that loopholes in the proposal could have extreme consequences for the future of the American media, causing unprecedented consolidation as well as allowing larger companies to push out small, independent owners, and permitting newspapers to own television stations of any size. The FCC decided on this course of action despite proof from at least as far back as 2001 which showed that media consolidation could have a negative impact on racial minority content, as increased consolidation would lead to less black ownership of media, with the knock-on effect of reducing the amount of ‘black-targeted content’ (Waldfogel, 2001). As it is now, despite the fact that minorities make up 34% of the total American population, they own only 3.15 per cent of full power commercial television stations, a decrease of 0.3 percent in the space of a year (Free Press, 2007). However, rubbishing public protest the FCC allowed only one month for complaint - rather than the typical three month period they normally allow - and changed the rules. A “resolution of disapproval” – that is, a bill which would nullify the rule changes – has been introduced to the Senate, and campaigning has begun again in earnest to do something about media consolidation before it is too late.

Action against media consolidation appears to be viewed by some people as an attempt to prevent large companies achieving more success. However, there is far more behind the attempts to stop it, than meets the eye. For one thing, studies have shown that where media are owned by the same company, they tend to feature at least some of the same news, and naturally this cuts down on the variety and amount of news covered, as well as limiting coverage of local issues. While these consequences are all negative, one in particular could be important. Joel Waldfogel of the Wharton School at the University of Pennsylvania, presented to the FCC some research conducted into the effects of consolidation on localism in 2001. In 2006 he published some research conducted in conjunction with Harvard’s Felix Oberholzer-Gee, which showed that in an experiment into the effect of local media, the introduction of Spanish language local news boosted Hispanic voter turnout by five to ten percentage points, compared to non-Hispanic voter turnout. The authors hypothesise that therefore there is a “trade-off between integrated media markets and civic engagement”, and state that, in complete contrast to the FCC’s decision, their results “provide a basis for the continued pursuit of regulatory policies that promote localism.” In today’s increasingly niche society, it is all too easy to get national news, popular television and other content online, decreasing community involvement and causing apathy. The results of the 2006 research indicate that increasing local news coverage would have the benefit of increasing community participation, which in turn leads to more involvement in society as a whole as people feel they can actually make a difference. However in light of the FCC’s decision to relax the rules on media consolidation, it seems that America may be doomed to a future of citizens growing increasingly isolated and apathetic in front of computer screens. More evidence is also provided by Herbert Schiller in his book “Information and the Crisis Economy”, in which he states that “In the gathering crisis which affects employment, production, and survival itself, the communication process could serve constructive ends if it would be utilized to inform, alert, and mobilize people to the problems that face them, and, if it offered as well, a channel for the presentation and discussion of genuine options.” Clearly this shows promise for social change should the media be revolutionised with fairer ownership and coverage. However, he adds, “This…is a description of democratic communication. It requires…the widest possible public access to and involvement with the means of expression, in both an active and reactive mode…Minimally, it would guarantee representative expression, subject to continuous popular review and correction. Is even an approximation of this kind of communication possibly in an economy, national or international, that is dominated by huge private companies and combines?” This would appear to be the pertinent question, as if this is not the case, should questions be raised about whether an America without a democratic media can honestly continue to be called a democracy?

This fight for corporate control is not restricted to the traditional media, however. A debate on so-called ‘Network Neutrality’ has been raging violently since an FCC decision in 2005, and shows no sign of stopping. The theory behind the idea of ‘Net Neutrality’ is that the internet should remain entirely neutral and unbiased. This notion has been around since the internet’s inception – however it did not become an issue until 2005 when the FCC investigated a small broadband company for blocking access to the VoIP service Vonage. The company unblocked the service and paid a fine, but the issue of whether Internet Service Providers (ISPs) could legitimately block access to certain applications or websites began to arise ( On one side of the argument, supporters of Net Neutrality state that the internet is an invaluable tool for business and the transfer of knowledge because it is cheap to access and use, and point out that this is fair. The opposing view, however, is that since ISPs are run as businesses, they would be well within their rights to decide to block access to certain services if they wanted to. However, this is not an issue of ‘inappropriate content’ – it is actually all about money. America’s larger communications companies – AT&T, Verizon and Time Warner to list just a few examples – have plans to charge companies for fast access to their sites, slow down competitors’ sites, and block entirely any sites that they don’t like. Unsurprisingly, should this happen it will have a huge effect on the internet’s viability as an accessible, affordable resource. Essentially it’s an issue of corporate censorship, and an extremely important one. William H Dutton points out in his book “Information On The Line” that “Threats to equity…are among the societal risks most frequently raised by critics of the information society”, and points out that “…[r]esearch on the adoption and diffusion of [information and computing technologies] among the public at large highlights widening gaps in society between the information rich from [sic] the information poor…The most consistently dominant set of factors associated with the early use of ICTs in the household has been tied to the socio-economic status of the household - the income, occupation, and education of the head of household…for example, the heads of households with a computer in the home are more likely to have a higher income, be employed in a managerial or professional occupation, and have a college education than those in households without a computer.” While the cost of buying computers has fallen drastically in the past decade, enabling far more people to purchase them and access the internet, it is worth remembering that there are still people who do not have home access to the internet and must go elsewhere, such as libraries or internet cafes. Theoretically, is the Net Neutrality argument so different to this? The increase in speed and reduction in price of internet connections enjoyed by the public has had the major benefit of increasing the accessibility of the internet and the wealth of information it contains. Similarly, the introduction of cheaper access from internet cafes and free access in newly refurbished libraries has served to make computers more accessible on the whole to those who cannot afford their own home connection. No doubt politicians and corporations would argue that this is a good thing – particularly if they are making money out of it. However, had there not been a reduction in cost and an increase in the availability of public computers, would there still have been such a dramatic increase in internet use? Doubtful. Therefore it must be considered whether charging for faster connection speeds and slowing down or possibly even blocking competitors’ websites would have people turning off their computers in droves rather than face the spiraling costs and increasing censorship that such a system propagates. A mass revolt against such blatant commercial exploitation could prove more costly for these corporations in the long run, should this occur, than seeking alternative ways to make money from their ventures.

The final way in which transnational corporations greatly influence today’s society is in relation to what happens when they do wrong. Corporations have been getting away with causing damage, illness and loss of life for years, and such cases are now unfortunately commonplace. Ridiculously, due to a precedent set in an 1886 court case, Santa Clara County v. Southern Pacific Railroad Company, corporations are held legally to have the same rights as a human being, under the 14th amendment to the US Constitution. Despite the fact that this amendment was created to protect recently freed slaves, corporate lawyers have been exploiting this for years. It is made all the more ridiculous by the fact that according to David Korten, “The doctrine of corporate personhood creates an interesting legal contradiction. The corporation is owned by its shareholders and is therefore their property. If it is also a legal person, then it is a person owned by others and thus exists in a condition of slavery -- a status explicitly forbidden by the Thirteenth Amendment to the Constitution. So is a corporation a person illegally held in servitude by its shareholders? Or is it a person who enjoys the rights of personhood that take precedence over the presumed ownership rights of its shareholders? So far as I have been able to determine, this contradiction has not been directly addressed by the courts.”

In conclusion, transnational corporations wield a huge amount of power on a global scale. They have control over virtually every aspect of people’s lives – from their job to the food they buy; from the news they can access to the internet content they can download. Their influence is inescapable. However, people are beginning to fight back. Clearly sick of watching corporations escape punishment for their transgressions, projects such as Wal-Mart Watch and Exxon Secrets have sprung up in defiance, to ensure that these companies get exactly what they deserve. Organisations such as StopBigMedia and the Coalition have been formed to protect media from the corporations. While these actions are movements in the right direction, however, they do not come close to stopping the corporations’ power, and much more effort must be expended in order to regulate them. There are some proposals online at the moment for an international regulatory body for transnational corporations which, if created, would have the power to intervene and to levy fines on corporations found to be in violation of terms. While this is not good enough to solve the problems, it certainly would be a large step towards improving fairness in the global economy. Despite the fact that in the capitalist system there will always be winners and losers, with these organisations fighting for the public’s rights, the world may yet have a chance to eradicate the super-exploitative transnational corporations for good.
Tags: corporations, essay, sociology

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