on September 10, 1998
No book or university course has provided me such a concise description with compelling examples, measures and details of the workings and history of the global economy.
The title could have been simply "Corporations Rule the World".
First and foremost, the book provides a foundation for thinking about sustainable business, ones' role in society, day-to-day habits and our collective need to create a future for our children.
Take note, however, that the book is worth a read in a very pragmatic and personal way, as a primer for investors.
I was given the book on Aug 17 '98 and finished it by the 22nd. In recent years, I had placed all of my hard earned cash, and some inheritence from hardworking grandparents -- for convenience sake -- in the hands of fund managers dealing in "blue chip" companies in the global equity markets. Understanding something from Kortens' book, and his apt description of the world now around us...I sold all of those equities and funds on the 24'th. The markets collapsed on the 25'th. I'll go back to directing my own investments with the cash I've saved -- thanks to a timely reading of Korten's informative book.
Kortens' work is as brilliant as a Hitchcock movie -- providing space for the reader to fill in the "gaps", to "get" his global picture in a personal way. Korten avoids confronting readers with the simple statement that WE ARE corporations. We ARE government and we ARE civil society -- however healthy or sick...
Having said that, Korten's book is entertaining and frightening because he is fact-based and truthful.
Unlike other Amazon.com book reviewers, I generally accept and enjoy pondering Korten's ideas.
I volunteer and commit to spend my rare time on this planet to forward Korten's kind of agenda for people-centered development. There's no point having kids and no way to sleep at night, without wisdom and change.
I'll invest in new forms of global business opportunity, based on Korten's wisdom and call for change. I'll start by changing myself, to make my actions consistent with my words, to make my words consistent with such wisdom as Korten's and to make my business work towards a healthy tomorrow.
Thank you, David Korten.
The fact that transnational corporations and their agendas have come to dominate cultural, political, and economic life on a global scale can hardly be disputed. These powerful corporations have used national governments and government-created international bodies to create a legislative and institutional regime that accedes to and actively promotes and implements a "free-market" ideology. This book is largely concerned with detailing the tremendous costs to the political, economic, and social fabric of the entire global community as corporations have become ever more capable under this ideological regime in extracting wealth and generating huge profits on a worldwide basis. The author sees poverty, social and political disintegration, and environmental degradation as the main consequences of this global corporate ascendance.
The ability of corporations to penetrate the political and cultural sectors of our society is hardly a late twentieth century phenomenon. Despite the founders' efforts to contain corporations by explicit and revocable state charters, emerging industrialists in the post-Civil War era became powerful enough to sway legislators and the judiciary to act in their behalf. Not only did corporations generally gain rights to perpetuity, but the Supreme Court declared corporations to be legal persons entitled to the same rights as ordinary citizens, in addition to limited liability. By the late 1920s capitalism had largely emerged triumphant over worker and community interests. Consumerism was instilled as the only legitimate avenue for realizing individualized "freedom."
According to the author, a form of democratic pluralism existed among the civil, governmental, and market sectors of society in the post-WWII era, but any such sectorial accommodation was mostly an aberration that came about only because of the necessity to solve the twin crises of the Great Depression (caused by corporate-led economic excess) and WWII. Any social accord that may have existed was shredded as corporations, backed by the Reagan administration, renewed their assault on the working class and relentlessly pursued self-interested global strategies. Over the last two decades, middle-class jobs have been lost, median pay has stagnated, and austerity has been imposed on the less fortunate as a profound upward redistribution of wealth and income has occurred.
Globally, the structural adjustment measures forced upon developing nations by the World Bank and the IMF to qualify for loans, ripped the fabric of those societies and have actually increased indebtedness to First World bankers. Trade agreements and administrative bodies, such as the NAFTA and the WTO, are designed to eliminate local restrictions on investments by international firms and barriers to the free movement of goods between nations. The freedom for capital to move freely among nations has also fueled rampant financial speculation unrelated to productive investment. Unconscionably, American taxpayers have been forced to bailout those engaged in extracting wealth from the developing world.
Free market ideology is used to justify the gutting of the social and legal structures of nations. But it is a disingenuous view. Free market activities posited by Adam Smith involve local, individual economic actors, none of whom have the power to control the marketplace. Unregulated market activities by huge economic entities can result in market coercion. For example, monopolistic firms can externalize costs, that is, they are powerful enough to force societies to pay for the social and environmental side-effects of their activities. For example, labor and environmental regulations are often ignored with impunity with society picking up the pieces.
The impact of corporations acting as legal persons cannot be overemphasized. Corporations overwhelm actual citizen political participation and free speech by the extent and intensity of their political lobbying and media controlling efforts. Corporations and the rich, in a form of legalized bribery, basically fund political campaigns. They also heavily sway public opinion through public relations front organizations, conservative think-tanks, and the control of the major media. The dependency of the media on advertising dollars virtually guarantees presentation of views that are compatible with corporate interests, not to mention the fact that the huge media empires are themselves transnational corporations with no interest in harming broader corporate interests.
As the author indicates, corporations have largely "colonized" the common culture. Television is the main media outlet for the inculcation of business-friendly values, which emphasizes the avid pursuit of consumption. Even political activity has become mostly the marketing of pleasing candidates. The message is incessantly and subtly delivered that a free market system is self running and stabilizing and needs little or no political interference. Of course, the reality is far different. Corporations have infiltrated government at all levels with the sole purpose of ensuring that governments take an active role in supporting the corporate agenda, or pro-business regulation. In addition, governments are left to deal with the unprofitable aspects of society or side-effects of corporate actions. The net effect is a democracy hardly worthy of the name.
The author's principal approach to this regime of corporate hegemony is to call for a rollback to self-sustaining local communities. Such recommended measures as land reform (breaking up corporate farms) and urban agriculture seem almost quaint. The author confuses his message of a return to pre-consumption-dominated life by calling for high tech solutions, such as video-phones, to link local communities. Where does he think high tech products come from other than corporate development labs? A hard-hitting analysis seems to be getting waylaid by some fuzzy spirituality.
But the most practical approach is contained in the book. Free market propaganda has to be countered and a regime of regulating big business through governmental controls must be instituted. Is there any hope for this? The Seattle protest and other citizen demonstrations show that the democracy-killing initiatives of the WTO have not gone unnoticed. In addition, it has been claimed that 25 percent of the population belongs to a cultural grouping called "Cultural Creatives," who can be expected to oppose insensitive corporate agendas. And the author takes no note of minority interests that are generally opposed to the conservative business agenda. The author wants to see a cultural transformation, but a heightened awareness of class will be needed to combat the class warfare being perpetrated on the non-elites of the world.
on May 1, 2006
Just finished it tonight, and am overall impressed with all but the last section of the book. I came into this wanting to know why American democracy seems to be decaying at the behest of corporate greed and voter apathy, and feel this tome addresses these issues in a very well documented and reasoned way. I think it helps to state some of the various Green/economic issues that are behind the anti-globalization movements, and gives the movement a much more credible footing to use.
Oddly enough, I don't think anyone needs to be convinced that what major, multi-national corporations are doing to people and the planet are not good for the long-term viability of either. Still, Korten classifies the wrongdoings and gives them context, in a very methodical way. Sometimes it seems to drag, but that's because the problem is big and has many aspects to see before you can fully appreciate its scope.
The only place I had trouble was at the end, where the author suggests solutions to current corporate economic dominiation. The suggestion of a greater role of local economics and action makes sense to me, and probably to others. It's when he starts suggesting a life "driven not by the love of money, but by a love of life" that I start to groan. Such imprecise feel-good prescriptions (though well intended) don't really get us closer to corrective actions. To his credit, there are more concrete suggestions that we can follow (recycle/reuse, buy organic, etc), but they could be stated more coherently.
Still, this is a good primer for understanding the workings of both corporations and the IMF/World Bank in the global economy. Definitely worth the read.
on December 30, 2000
David C. Korten does a fine job mixing both analysis with history. This well referenced book cites the inherent flaws found within both the systems of Marxism and Free-Market Capitalism. The author clearly demonstrates a repulsion for these two "extremist ideologies."
Korten puts forth a well stated argument for Democratic Pluralism, while criticizing the inherent flaws of western societies growing economic system. Ironically, Korten uses Adam Smith (among many others) to support the ideas of a "regulated-market economy." An idea which recognizes the important roles that the Civic sector, Government sector and the Market sector all play in operating society. Korten propose a way to improve the quality of life for majority (not he minority) of people on this planet.
While doing so he repeatedly stresses the importance of creating economic sustainability, through ecological sustainability. The reviewer frmokehee 's comments regarding Korten as a communist, and his long drown out environmental criticism seem blatantly unfounded with in the texts of this book. Although his review seems to have some facts straight (regarding the environment), in regards to this book he does not. Whether or not this individual has even read this book or anything about it, aside from some negative reviews, seems questionable.
Others have done well at addressing the strengths of this book, what I can do is bring to bear a few links to other books that deeply support this author and his views.
We must begin in the 1970's, when Richard Barnett in Global Reach and others first began to understand that corporations were amoral, disconnected from communities, and beyond what Kirkpatrick called "human scale." Joining the authors focusing on multinationals as a unique new breed of corporation were authors such as Lionel Tiger, whose book Manufacture of Evil: Ethics, Evolution, and the Industrial System remains a standard. The industrial era disconnected kinship and community from the manufacturing process, and trust was a casualty (a thesis confirmed in the 1990's when a Nobel Prize was awarded for a man who proved that trust lowers the cost of doing business).
Now we have an entire new literature on how corporations have abused the personality status intended for freed slaves, and been largely freed from all accountability and transparency. Books like The Informant: A True Story and Conspiracy of Fools: A True Story and the books about Wal-Mart, Enron, and Exxon, all support the concerned premise of this author.
Corporations have created a global class war (see the books by that title), and have compromised virtually all governments. Corporations have bought the US Congress (see Breach of Trust: How Washington Turns Outsiders Into Insiders and The Broken Branch: How Congress Is Failing America and How to Get It Back on Track (Institutions of American Democracy); they have compromised national, state, and local social safety networks and standards, they have enhanced the power for 45 dictators world-wide, and they have bribed or created and then bribed elites in virtually every country on the planet so as to loot the commonwealths of those nations with the permission of the elites and against the public interest of the larger population.
Corporations do not rule the world, they are killing the world, and as one wag whose name I cannot recall has said, those doing the killing have names and addresses. Hence this book is a natural lead in to the author's latest work, The Great Turning: From Empire to Earth Community (Bk Currents) which I am also reviewing today.
There are *many* books on the evil of unfettered corporations, if I were to recommend only two, they would be Barnett's "Global Reach" for historical context, and this one for the current threat. I also recommend the DVD, The Corporation
on October 13, 2002
(This review is of the 2001 updated and explanded second edition of When Corporatinos Ruled the World. With 5 new chapters, updated statistics and a revamp, we now know that it is possible to improve upon perfection.)
By far, the most comprehensive, well-researched, incisive documentation of systemic corporate abuse available. However, When Corporations Rule is not simply a litany of profligate corporate excess. Korten explains the dysfunctional logic of our system, outlines the horrendous consequences for community and environment, and provides clear, cogent plans of action to restore democracy and awaken culturally.
The thesis is so obvious it is a wonder no one has formulated before. We always harangue socialism as an "extreme ideology," but capitalism is also an extreme ideology. Socialism concentrates power in a centralized government, creating unsupportable social and environmental costs. Likewise, capitalism concentrates power in huge private institutions (the modern multinational corporation), which also have enormous social and environmental costs. Both advance the concentration of rights of ownership without limit, to the exclusion of the needs and rights of the many who own virtually nothing. And as Korten points out, the impoverished many are growing.
As of 1992, the richest 20 percent of the global population received as much as 82.7 percent of the total world income. The poorest 20 percent received 1.4 percent. These figures indicate growing economic inequality, which is has become even more pronounced in the last decade. In 1998, the world's top three billionaires totaled more assets than the combined GNP of all the least developing countries and their 600 million people. Of the world's 6 billion people, 2.8 - that is, nearly half - were living on less than $2 a day. Some 1.2 billion of that half lived on less than a dollar a day.
Inside America - the global economic trendsetter - this growing global inequality is mirrored in microcosm. In fact, inequality and hardship is even more exaggerated in the Land of the Free. The wealthiest 10 percent now owns almost 90 percent of all business equity, 88.5 percent of all bonds, and 89.3 percent of all stocks. In 1999, the total compensation of U.S. corporate CEOs was 475 times the average production worker's pay; and 29 percent of all U.S. workers were in jobs paying poverty level wages, defined as an hourly wage too low to meet the needs of a family of four. Moreover, with each new mega-merger, more capital, power and control are concentrated in these already mammoth institutions.
These are just a few of the statistics sited in the book, but When Corporations Rule offers more than statistical analysis. With laser precision, Korten assays economic and political history, uncovering the reasons for these global trends: including the illusion of growth, the loss of governmental oversight in the affairs of corporations, the rise of the Newtonian mechanical worldview and its subsequent devaluation of spiritual values, etc. His critique of globalization was absolutely stunning: including the effects of NAFTA, and the general policies of the WTO, the WB and the IMF. Finally, his call for localism, activism, spiritualism, and an ecological awakening are inspiring and timely.
Not a stone goes uncovered. The failure of development strategies for the Third World (his stated specialty), critical discussion of traditional economic theory, the rise of PR, global poverty, currency speculation and corporate raiding, downsizing, contracting labor, automating, the loss of the small farm, the effects of Wal-Mart and the like, ecological collapse, the coming Ecological Revolution, sustainability, socially responsible investment, systems theory, urban design, history of the current globalization protest movement, detailed agenda for democratic change - these and so many other important issues are weaved together in a remarkable argument that will move you. I cannot think of a more important book for this troubled planet.
on November 9, 2006
Korten's book, When Corporations Rule the World, is a clear, devastating look at what's been going on under the radar of many Americans for the past three decades. Hey! Free Trade! What's there not to like? Well... plenty, and Korten tells it such that even a boob like me can understand. There's still time to take back control of the world from the transnational corporations. This book helps to show the way.
It should come as no surprise to well-read students of the late 20th century that the goals, ethos, and practices of transnational business corporations are oblivious and often inimical to the needs of specific cultures and particular nations. But what is even more alarming is the extent to which these corporations persist in behaving as though the consequences of their activities and practices are either accidental or unavoidable. Thus, "When Corporations Rule the World" helps to inform, enlighten and prepare us as to what mischief these relatively new and potentially revolutionary forms of organizations are doing to societies, cultures, and the environment.
They act in their own best interests, and the way in which they perceive these interests is narrow, self-serving, and quite shortsighted. The fact is that transnational corporations have successfully trumped ordinary citizens in terms of their power, influence, and ability to determine the laws, regulations, and social conditions under which they operate in any particular polity, so that even in the so-called social democracies such organizations seem able to act with near absolute impunity. As a result, their actions are increasingly at odds with those of the society itself, and increasingly ordinary citizens are coming to recognize that the political lobbies created by such organizations have captured the strings of power for their own uses. As H. L Mencken said almost eighty years ago in reference to the U. S Congress, "We have the best Congress money can buy". Some things never seem to change.
Author Korten lays out a virtual panorama of ways in which such transnational corporations rule, and shows how the benefits of such practices seem to be progressively narrowing the basis of the so-called "good-life" to an ever-decreasing portion of the citizens of post-industrial society. In this sense, Korten does a handy job of deftly highlighting the ways in which the world's many environmental and social problems are interconnected and related. Moreover, he contends, the trend of this unhealthy and undemocratic combination of bad habits, narrowly focused corporate values, and profligate ideologies combine to produce the likelihood of a very negative future. Yet, as Korten is quick to point out, it is not all necessarily bleak and unchangeable. He draws out scenarios in which a more sustainable future that would be more palatable to everyone within the modern post-industrial society, including the most conservative business elements among us.
Yet, even as he attempts to paint a more positive possibility for the future, he is left ruminating over the many ways in which transnational corporations continue to run amok, beyond the reach of national laws or meaningful regulation, motivated more by greed and short-term profit orientations than by any meaningful ties to a broader ethos which includes elements of social responsibility or cultural appreciation. Today, as we see the ways in which the post-industrial societies have surrendered to the leitmotif of the transnational corporations, in a world run increasingly for the convenience and interest of large commercial business interests, it is difficult to see how the kinds of happier times he hopes for can come to pass. This is an excellent primer for anyone interested in learning more about the scope of transnational corporations and the many ways in which they have encroached on the rights, prerogatives, and benefits of citizens in particular societies such as our own, and the dangers they pose for our continuing liberties and well being. Enjoy!
on March 17, 2004
By far, the most comprehensive, well-researched, incisive documentation of systemic corporate abuse available. When Corporations Rule is not simply a litany of profligate corporate excess, though. Korten explains the dysfunctional logic of our system, outlines the horrendous consequences for community and environment, and provides clear, cogent plans of action to create real democracy and awaken culturally.
We always harangue socialism as an "extreme ideology," but as Korten makes clear capitalism is also an extreme ideology. Socialism concentrates power in a centralized government, creating unsupportable social and environmental costs. Capitalism concentrates power in huge private institutions (the modern multinational corporation), which also have enormous social and environmental costs. Both advance the concentration of rights of ownership without limit, to the exclusion of the needs and rights of the many who own virtually nothing. And as Korten shows, the impoverished many are growing.
As of 1992, the richest 20 percent of the global population received as much as 82.7 percent of the total world income. The poorest 20 percent received 1.4 percent. These figures indicate growing economic inequality, which is has become even more pronounced in the last decade. In 1998, the world's top three billionaires totaled more assets than the combined GNP of all the least developing countries and their 600 million people. Of the world's 6 billion people, 2.8 - that is, nearly half - were living on less than 2 dollars a day. Some 1.2 billion of that half lived on less than a dollar a day.
Inside America - the global economic trendsetter - this growing inequality that we see between nations is mirrored in microcosm. In fact, inequality and hardship is even more exaggerated in the Land of the Free. The wealthiest 10 percent now own almost 90 percent of all business equity, 88.5 percent of all bonds, and 89.3 percent of all stocks. In 1999, the total compensation of U.S. corporate CEOs was 475 times the average production worker's pay; and 29 percent of all U.S. workers were in jobs paying poverty level wages, defined as an hourly wage too low to meet the needs of a family of four. Moreover, with each new mega-merger and corporate takeover, more capital, power and control are concentrated in these already mammoth institutions. What ever happened to the anti-trust laws?
These are just a few of the statistics sited in the book, but When Corporations Rule offers more than statistical analysis. With laser precision, Korten essays economic and political history, uncovering the reasons for these global trends: including the illusion of growth, the loss of governmental oversight in the affairs of corporations, the rise of the Newtonian mechanical worldview and its subsequent devaluation of spiritual values, etc. His critique of globalization is absolutely stunning: including the effects of NAFTA, and the general policies of the WTO, the WB and the IMF. Finally, his call for localism, activism, spiritualism and an ecological awakening are inspiring and timely.
Not a stone goes uncovered. The failure of development strategies for the Third World (his stated specialty), critical discussion of traditional economic theory, the rise of PR, global poverty, currency speculation and corporate raiding, downsizing, contracting labor, automating, the loss of the small farm, the effects of Walmart and the like, ecological collapse, the coming Ecological Revolution, sustainability, socially responsible investment, systems theory, urban design, history of the current globalization protest movement, a detailed agenda for democratic change - these and so many other important issues are weaved together in a remarkable argument that will shock, sober and move you. I cannot think of a more important book for those who still have faith in the global economy. This troubled planet needs more Kortens. Bravo!
The most interesting thing about this book was when it first appeared - 1995, just when the late 90's stock market boom was getting started and everybody and their brother were loving corporations to death. Korten was breaking some new ground back then, and this book is now more relevant than ever with our recent corporate carnage,
Another very useful aspect of the book is that it highlights the absurdity in conservative political opinions toward corporate power. I won't try to start a left vs. right argument here, but remember that conservatives are always against the concentration of political power and preach a local, populist stance. Conservatives also promote free trade and the rights of corporate self-interest, and that's the paradox. Consider the way that corporations behave. Profits are centralized while costs are inflicted on local people through economic servitude or environmental damage. Corporations are full of middle managers and bureaucrats, with a few executives holding vastly more power than legions of workers (i.e. regular folks). Remove the economic angle from those concepts and replace them with socio-political power, and what do you have - socialism! Isn't that what conservatives hate with all their hearts? And speaking of socialism, the huge tax breaks and subsidies provided by the government to keep corporations artificially profitable are the biggest socialist handout in the world, and is thousands of times larger than the welfare given to poor people, which is the common conservative whipping boy for "wasteful" spending.
Korten does an excellent job bringing these troubling trends to light. Unfortunately this book's execution leaves something to be desired. Korten proves his points early on but can't stop giving examples, leading to a highly repetitive and predictable list of evil corporate acts and social problems. Korten is also obsessed with proving his conservative background, as his thesis is relevant in ways far beyond mere left vs. right politics. However, this merely shows his paranoia about debunking future critics, at the expense of enlightening the present reader. And finally, Korten's solutions to the current problems of corporate domination are weak, consisting mostly of platitudes about individual people "taking the power back" at the local level. This is not the solution, but the utopia that would come after the solution. That utopia is the end, not the means. Fixing the current system (which badly needs to be fixed) does not require pie-in-the-sky idealism, but real drastic and meaningful events. Maybe the collapse of gigantic and so-called indestructible companies like Enron or Worldcom will become a trend that induces real change.