On Tuesday 8 May at Glover Cottages for the launch of his new book, The Political Power of Global Corporations, John Mikler delivered a much-needed insight that global corporations are not merely market entities but have increasingly also become political actors. Challenging the somewhat entrenched methodology of assessing the international political economy through ideologies such as (neo)liberalism, nationalism and Marxism, Mikler instead argues that focus should be directed towards the global corporations that have not only realigned the political landscape to their advantage, but also brought the state under their will.

Mikler highlights three key areas that have led to the current dilemmas of today’s economy. The first is that the discourse of a ‘free market’ contradicts the reality of the global economy. Global corporations have instead become oligopolies that are staunchly opposed to the free market competition that they so often ascribe to. The second is that these global corporations are more national than multinational. In actuality, they can be contemplated an extension of the states from where they originate, effectively extending state sovereignty on foreign soil. The third is that any potential solution must be conceived with the consideration that these global corporations are unlikely to be influenced by any corporate social responsibility given that they are supported in part by the state itself.

One of Mikler’s key insights was when he was pressed as to whether there was anything inherently wrong with the activity of global corporations, given that they generate economic production and employment and that they operate within domestic law. He acknowledged that this is the case, but we needed also to reflect on how they are also responsible for manipulating the rules to better suit their commercial agendas (for example in avoiding national taxation). Australian attempts to tax mining companies such as Rio Tinto and BHP led to both companies spearheading a multimillion dollar campaign in an effort to poison the political debate, eliciting misplaced fears that global corporations would reduce or relocate their operations and thus harm both Australia’s economy and its citizens’ welfare. These attempts to deliberately manipulate the truth and align ‘rational logic’ with its political and commercial goals is what Mikler refers to as ‘discursive legitimacy.’

AIIA NSW President Ian Lincoln, Associate Professor John Mikler and AIIA NSW intern Michael Nguyen

Mikler made the point that these ‘global’ corporations are not strictly global but instead regional or even national in their staffing and allegiance. Much like the states from which they originate, the sources of their political and commercial strength are often concentrated within certain areas of the globe. Society needs to ‘re-territorialise’ these global corporations.

Globalisation has therefore not led to a diffusion of political power and a lack of governance. It has instead merely led to the ascension of global corporations as political actors. What is needed in response is the establishment of a new framework for international economic analysis, one that steps away from ideologies, and instead concentrates on the real-life actors that have become the threat to the future of society.

Report by Michael Nguyen
AIIA NSW intern