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The resistible rise of corporate power

Corporate power has grown as regulation has receded - and the outsourcing of public services has played a major part in this growth of unaccountable economic power, writes Hilary Wainwright

October 1, 2010
4 min read


Hilary WainwrightHilary Wainwright is a member of Red Pepper's editorial collective and a fellow of the Transnational Institute. @hilarypepper


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Nye Bevan, the driving force behind the creation of the NHS, gave a succinct description of the process now destroying one of the greatest achievements of the Attlee government – indeed, of any Labour government. He declared that: ‘In practice it is impossible for the modern state to maintain an independent control over the decisions of big business. When the state extends its control over big business, big business moves in to control the state.’

While he could not have anticipated the extent to which private companies have moved in to control and profit from the steady destruction of the NHS ), he did show an appreciation, rare among politicians, of the asymmetric power of private business.

It is a power which has grown enormously over the past half century, both pressing for and gaining from the political creation of a deregulated and globalised capitalist economy.

It is vital here to distinguish between capitalist markets and markets more generally. Indeed the economic historian Fernando Braudel referred to capitalist markets as ‘anti-market’, because of their secrecy, and their predatory drive to accumulate partly through eliminating and taking over competitors.

The problem is that the ‘naturalisation’ of the capitalist market – the uncritical acceptance of ‘the free market’ and the idea that there are unavoidable ‘imperatives’ of globalisation – has elided this distinction. It has created the impression that we face ebbs and flows as unstoppable as the ocean when in fact we face institutions driven by power struggles and flawed human decision-making, legitimately open to challenge.

Our political institutions, meanwhile, have allowed themselves to be effectively occupied, or more accurately warrened-because half of the process has not been visible from the surface-by these anti-market (and anti-public) institutions.

The result has been a lethal gulf between parliamentary politics, where the growth of economic power is hardly debated – beyond one-off scandals – and people’s daily lives, where the opaque, unaccountable pressure of corporate power is pervasive: at work (or out of work), as service users, consumers and debtors, and as pensioners. This induces a feeling of powerlessness and lowers expectations of change.

A fatal problem with New Labour – now questioned by thoughtful Labour party members such as John Denham – was that its strategy of encouraging the capitalist market with the aim of redistributing some of the results treated private corporations as ‘wealth creators’ rather than as concentrations of power. This includes power over the workers who create the wealth pocketed or controlled by the shareholders.

Corporate power has grown as regulation has receded, so that most markets are now controlled by three or four companies whose assets dwarf those of many nation states. The outsourcing of public services has played a major part in this growth of private economic power.

Serco and Capita are two examples of companies who have been propelled into the FTSE 100 on the back of public contracts. In the process, they have become political players, not simply lobbying for contracts but influencing supposedly public policy.

When Nye Bevan first became an MP in the 1930s, he described parliament as ‘a sword pointed the heart of private property’. The last 30 years have seen the executive, first under Thatcher, then under Blair, allowing private companies to thrust a sword into the heart of public property.

Cameron is now finally trying finally to destroy the public hands that could seize it back.

Public power cannot be rebuilt through the parliamentary institutions that so beguiled Nye Bevan. Rebuilding public and social power requires new strategies at every level of society, including state institutions.

An experience such as Bolivia (see issue page 28), however distant from our own, indicates the importance of politicians seeing themselves as empowering social movements, internationally as well as locally. And, in a more ambiguous way, Brazil (page 25) points to spaces for challenging the US-dominated power of the global market.

Resistance to the cuts can simultaneously build the power to improve public services, even bringing them back into public ownership, as has happened in Germany and Norway. The movements for free culture, open access to knowledge and expansion of the digital commons is producing a new imaginary around the centrality of common goods and infrastructure that can spread beyond the digital world (see issue page 44).

In all these ways, and through intensive exposure and education, we must bring the concentrations of anti-democratic economic power to the centre of political struggle.

Apart from anything else, in age where people aspire to autonomy and democratic control, it is the way to turn the tables on Cameron. It is essential to an effective strategy to save and update the legacy of Nye Bevan.

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Hilary WainwrightHilary Wainwright is a member of Red Pepper's editorial collective and a fellow of the Transnational Institute. @hilarypepper


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