We know the names of global corporations, where they are headquartered and where they invest and operate. But we don’t usually think of them in political terms. How do global corporations drive or modify the agendas of states?

Global corporations control rather than compete in markets. Their control of their markets is salient to how they express their economic interests, as opposed to having these constrained or dictated by market forces. This is a key reason why they should be viewed, first and foremost, as political actors, and it is important to re-embody them as such to understand their power. It is also important to re-territorialise them as national in their identities and regional in their operations, as opposed to global in their interests. Their home states and regions are the geographical source of their political power, just as their market control is its economic source. Accepting these twin realities, and the analysis in light of them conducted in the preceding chapters, suggests three key implications.

The first implication of conceiving global corporations as political rather than market actors is that the free market, as a concept, is largely defunct for understanding them. This being the case, neoliberalism is also an increasingly problematic theoretical lens through which to view their actions and interests. To the extent that a neoliberal lens is applied, even critically, it serves to hide the political power global corporations possess and seek to wield. It could be claimed that the concept of the free market and neoliberal ideology also serves their interests, but the potential for both to continue to be employed as what amounts to a discursive “veil” may be diminishing.

With the evidence that markets are neither free nor competitive but controlled by global corporations, it is possible to go further than identifying global corporations as more accurately political than market actors, and declare them anti-market actors. They may have been aided in their growth and expansion by free market policies and the neoliberal ideology underpinning them that helped to produce the dominant vision of globalisation. But by their nature and their actions, global corporations themselves now give the lie to, and as such threaten the veracity of, this vision.

The second implication is that they are more accurately seen as national or multinational, rather than transnational or global, political actors. If it is time to move on from the rather disembodied debates around free markets and neoliberalism to focus more on the embodiment of economic power in the hands of global corporations, then it is also time to focus more on the places where, and from which, they wield it. These are also the places where responsibility for how it is wielded lies. Rather than a global institutional context, the reality remains that differing national and regional contexts institutionally inform the political power that global corporations possess. These differing institutional contexts are not just contained within state borders, but are now projected and compete on the world stage between states via their global corporations.

The first two implications lead to the third one. Granting global corporations the legitimacy to exercise private authority in support of private governance, either in service of their material interests, or as an extension of the interests of their home states, is unlikely to be synonymous with the interests of the world’s peoples. Therefore, the states where global corporations are headquartered bear responsibility for modifying or controlling their political power. The rationale for global governance if powerful states find themselves unable, or unwilling, to govern their global corporations is not that the alternative is a world of neoliberal free markets, but of politically powerful global corporations that call the shots. Allowing them the unfettered freedom to employ their private authority to potentially increase their discursive power only serves to enhance, rather than moderate, the considerable instrumental and structural power they already possess.

John Mikler is Associate Professor in the Department of Government and International Relations at The University of Sydney. He researches relations between corporations and states, civil society and international organisations, and their role as political actors in their own right. He is presenting at AIIA NSW on Tuesday 8 May and you can register to attend here.

This article is an extract from John Mikler’s latest book, The Political Power of Global Corporations (Polity Books, 2018).