Capital’s First International?

In September 2000 the World Economic Forum (WEF) is holding its ‘Asia-Pacific Summit’ in Melbourne. Alexander Downer, who attended the 1998 summit, describes the summit as the world’s ‘Business Olympics’. On of the summit co-organisers, the Business Council of Australia (BCA), represents major transnational corporations (TNCs) operating in Australia, such as BHP, Boral, Coca-Cola, McDonald’s, North Ltd, Rio Tinto, Shell and Westpac. The WEF and the Business Council of Australia will bring 800-1,000 Chief Executives of the world’s transnational corporations to the Melbourne summit, which, appropriately enough, will be held at the Melbourne Casino. Their goal is to ‘share their analysis of the new Asia and to identify together, through intensive networking, the opportunities for business and economic cooperation’. Having networked in Melbourne they will proceed to Sydney to occupy their executive suites at the Olympic sponsorship jamboree.

What will arrive on the banks of the Yarra in September? What is the role of the WEF?

The WEF was born as a yearly ‘European Management Forum’ of Euro-corporates, held in Davos, Switzerland. It was funded by the European Commission until 1987, when it became the WEF and started to claim global reach. Its membership reflects its class orientation, and includes the most prominent transnational corporations, 1000 of which make up the WEF ‘Foundation Members’. In addition there is a club of ‘Global Growth Companies’, 300 ‘Industry Governors’, 300 Global Leaders of Tomorrow’, ‘World Economic Leaders’ from both politics and business, ‘World Media Leaders’ from 100 media groups, 100 ‘World Cultural Leaders’, and ‘Forum Fellows’ from academia and the heads of national economic research organisations.

The WEF aspires to be an agenda-setting Forum. It is, in its own modest opinion, ‘the foremost global partnership of business, political, intellectual and other leaders of society committed to improving the state of the world’. With the diffusion of neo-liberalism, and consequent advances in corporate globalisation from the 1980s, the WEF has taken on an unprecedented role as a rallying point for global elites, and as a vehicle for class power. Clearly the WEF can’t set the agenda and certainly can’t determine the outcomes – it is not a conspiratorial cabal standing over society. Rather, it is a class grouping fully embedded in social relations, that self-consciously takes on the role of planning for collective class interests. It seeks to influence the political agendas and respond to the prevailing challenges – and in this respect, as Kees van der Pijl argues, it is the first ‘true International of capital’.

The forum has been remarkably successful; since 1971 the ‘state of the world’ has dramatically improved for many of the participating corporations. WEF strategising drove the neo-liberal agenda in the 1980s, bringing together politicians from the ‘pretender’ states of the newly industrialising world, as well as from the OECD states, to map out an agenda with transnational corporation business executives. It offered a proactive forum, removed from the public gaze, and played a central role in diffusing neo-liberalism. The model was presented as the solution to crises of accumulation experienced in the 1970s and early 1980s, and was highly effective in extending the reign of the market.

This success has come at the price of built-in uncertainty and unstability. Globalised neo-liberalism had led to a dramatic redrawing of the boundaries of capitalism. Temporal boundaries have melted away with the speeding up of circulation; spatial boundaries have been superceded with the growing transnational reach of corporations; even socio-psychological boundaries have lifted, with the increased commodification of life. A newly empowered transnational capitalist class has emerged triumphant, presiding over the new landscapes of accumulation. But class hegemony is by no means assured – uncharted territory imposes incalculable risk. Speeding circulation compresses business cycles, confidence rests on ephemera, ideological symbols embody so-called ‘fundamentals’, speculation rules. Corporate transnationalism exhausts social and physical environments, and the fall-out becomes uncontainable as corporations are pincered by investor and consumer volativities. Deeper commodification disassembles social solidarity and generates powerful imperatives for cultural survival, often carried through the new modes of social communication.

As a result, since at least the mid-1990s, neo-liberal prescriptions have been widely discredited. Exponential rises in executive salaries, and in corporate accumulation, along with a dramatic concentration of economic power across all sectors, offer clear evidence of the success of neo-liberalism as a class strategy. But neo-liberal globalisation has also brought unprecedented levels of global inequality, and undreamed-of degrees of financial instability, environmental exhaustion and social dislocation. The neo-liberal triumph has created new sources of opposition, the impacts and responses have been unremitting, and advocates have been forced onto the defensive. The high water mark was 1995, when the OECD declared it was marking out a ‘global vision for the year 2020, a New Global Age’. But already a political revival, inspired by social democratic ideas, and expressed in a new form of social liberalism sometimes described as the ‘Third Way’, was sweeping the OECD.

As neo-liberal prescriptions have unravelled, there has been an urgent revision of the WEF’s neo-liberal project. The WEF has left behind its market fundamentalism, and now is charting a new agenda for corporate globalism, one that embraces rather than rejects ‘the social’. The massed ranks of analysts, consultants and advisers, from credit-ratings agencies, management consultancies, inter-governmental institutions and non-government organisations, have entered the fray, battling to define the new accumulation paradigm. There are continuing efforts to enhance ‘market discipline’, to suppress the advancing crises, to institutionalise transnational class power, and render neo-liberal globalism irreversible. Yet there is also deepening dissent amongst policy-making groups. There is a rethinking of neo-liberalism even amongst the most elite institutions: as Hans-Peter Martin and Herald Schuman demonstrate, many of the most powerful players in global capitalism are questioning the ‘dictatorship of the market’. Primary advocates and beneficiaries of neo-liberal globalism, such as George Soros and Ted Turner, both of whom had embarked on paternalist interventions – the imaginatively branded ‘Soros Foundation’ and ‘Turner Foundation’ – began expressing sincere regrets at the social costs of neo-liberalism. Other elements, as van der Pijl highlights, went further and increasingly have embarked on a rethinking explicitly ‘mobilised against yesterday’s prescriptions’. These have much wider ramifications, potentially enabling ‘a deepening of democracy, a reappropriation of the public sphere by the population, and eventually a more fundamental transformation away from class society’.

Recent developments have only strengthened the leverage of this dissenting segment. Institutional crises of legitimacy have accumulated, with the OECD shelving its ‘Multilateral Agreement on Investment’ in 1998, the temporary ditching of the World Trade Organisation’s ‘Millenium Round’ in 1999, and the advancing crisis in the International Monetary Fund’s global regime of ‘structural adjustment’. Add into the equation the continuing crisis in ‘transitional’ post-communist societies, especially Russia, and the severe jolt delivered to the ‘newly industrialising countries’ of East Asia by financial ‘contagion’ in 1997-98, and the impending bursting of the infotainment bubble, then the challenges to neo-liberalism begin to seem irresistable. Expressing this, there have been the dramatic public explosions against neo-liberal globalism: Geneva 1996, Cologne 1998, Seattle 1999, Washington 2000.

For the first time in many years, ‘anti-capitalist’ protest has returned to the capitalist heartland, and to the global stage. These protests open up the ideological space for the articulation of alternative guiding principles, putting on the agenda the possibility of transformation away from the current malaise. As the promotion of capitalist discipline is questioned, protest targetted at the agents of neo-liberal globalism gains remarkable political leverage. In this political climate WEF meetings start to take on a special significance. Since 1996 the WEF has attracted increasingly militant opposition, and it has responded by attempting to re-chart the neo-liberal project. The WEF response is to deliberately avoid the appearance of backroom strategising, and instead to seek a higher public profile, attempting to reground its legitimacy by being seen to engage with prominent advocates of the emerging alternatives. The WEF is thus placing itself at the centre of debates about the revision of neo-liberalism, asserting that Davos can play ‘important role in forging the new geometry’.

Reflecting this, the WEF has reached out to those ‘excluded’ by neo-liberal globalism – notably non-OECD governments, such as Mexico and South Africa, and critical Non-Government Organisations, such as the International Confederation of Free Trade Unions (ICFTU). In 1998 Hillary Clinton argued the role of NGOs and other representatives of ‘civil society’ had to be enhanced, while John Sweeney, from the AFL-CIO, focused on issues of distribution, arguing markets had to ‘work for the majority and not simply for the few’. In 1999 Vice-President Al Gore appeared with Kofi Annan, who appealed for a ‘global compact’ between business and the United Nations founded on ‘core values in the areas of human rights, labour standards, and environmental practices’. In 2000 President Clinton shared the millennial limelight – somewhat blurred by Seattle – with Tony Blair. Davos policy debates are now couched in terms of ‘institutional accommodation’, ‘corporate responsibility’ and ‘global dialogue’, with sessions in 2000 on ‘responsible globality’, ‘inclusive prosperity’ and ‘sustainable development’. Perhaps most cynically, the WEF’s ‘World Competitiveness Scorecard’ – a yearly league-table of ‘how national environments are conducive or detrimental to the domestic and global competitiveness of enterprises’ – was supplemented by an ‘Environmental Sustainability Index’ at Davos 2000. At the same time, as Jane Kelsey highlights, a new ‘World Economic Community’ Internet link-up between 10,000 key economic decision-makers (an Internet ‘hotline’ for concertising corporate responses) is being constructed.

The contest is on to establish a revised normative and institutional framework for the global economy. The WEF is claiming a central role in shaping the agenda, and some, such as the ICFTU, are willing participants in the process, taking heart in the WEF’s apparent willingness to become an advocate of ‘globalisation with a human face’. But the key question is whether the WEF should be permitted to drive this agenda. Should a forum that is dominated by corporate interests be encouraged to take on the role of mapping out future frameworks for global governance? Should it be granted recognition and legitimacy in this agenda-setting process? Or, rather, should its role be challenged, and alternative sources of legitimacy be asserted?

There was a telling moment at Davos 2000 when the assembled executives refused to vacate the conference chamber to enable a security check before Clinton’s speech. The US President’s Security Service was forced to back down after a corporate ‘sit-in’. Clinton’s speech went ahead: even the President of the United States has to respect the wishes of the corporate club. Perhaps he should have joined the thousand protestors outside the conference venue, and joined the democratic movement against corporate power.

There will be similar protests outside the Melbourne regional summit of the WEF in September. In 1999 the summit lobbied for regional governments to back the coming WTO ‘Millennium Round’, arguing that trade liberalisation was inevitable and needed to be extended into ‘free and fair competition, protecting intellectual property and foreign investment’. In 2000 we can expect much rhetoric about inclusiveness and sustainability. Just as the Casino poses itself as a ‘family entertainment’ centre, so the Melbourne WEF meeting will be spinning the rhetoric of corporate responsibility. There will be plenty of ironic moments and opportunities to politicise globalised neo-liberalism and put up the alternatives. Perhaps this is what lies behind the comment, from Melbourne’s Lord Mayor, that the forum will be a ‘huge opportunity for the city’.

James Goodman works in the Faculty of Humanities and Social Sciences at the University of Technology Sydney

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