Book Reviews

David Korten: When Corporations Rule the World

reviewed by Andrew Van Alstyne

Unlike many recent books that have critiqued current trajectories of globalization, David Korten's When Corporations Rule the World assigns the responsibility for the negative effects to corporations. Korten opens the book by outlining his credentials; this is quite effective, because he comes from an extremely conservative background. Through his work in neoliberal development, he began to question the ideology of the status quo. Because he is a "defector" who recognized the role of traditional development plans in exacerbating the problems they seek to cure, his work carries an added weight.

The book is divided into six sections. The first section, "Cowboys in a Spaceship," presents evidence that our economy is on the path to a clearly unsustainable future. While this is an important foundation for the work, the environmental limits to growth have been explored elsewhere.

The second section, "Contest for Sovereignty," explores the role of corporations in modern society. It opens by tracing the rise of corporate power in America. As corporate power increased, democracy was attacked. Korten labels this "Corporate Libertarianism." The section and the next section, "Corporate Colonialism," explore the impact of corporate power on the global economy, looking at the concentration of wealth and power. By nature a conservative, Korten attacks centralization, whether corporate or communist. In examining Structural Adjustment, the increasing wealth gap, the decreasing power of government, etc, Korten shows that corporations are the force behind our economic direction.

The fourth section, "A Rogue Financial System," outlines the global "casino" economy. Korten looks at how wealth is "created" in our economy. This section contains a lot of economics, but while dry at times, is fairly easy to understand.

In the fifth section, "No Place for People," Korten looks at the human cost of our current system. Included in this section is a look at efficiency and its impact upon labor. He shows that the new global economy includes the few and excludes the many.

The final section, "Reclaiming Our Power," examines alternatives to the current system. Korten has a lot of faith in the market place, and talks about the strength of local economies. What makes this section particularly interesting is that many of Korten's suggestions are concrete and realistic. For example, when he proposes eliminating the World Bank, International Monetary Fund, and World Trade Organization, he suggests replacing them by strengthening the role of the United Nations. Unlike the clearly secretive IFIs, the United Nations has the semblance of democracy (with the exception of veto power in the Security Council).

I would strongly recommend this book. Its focus upon corporations is necessary, because the rising power of corporations is responsible for the decline of democracy and the well-being of people in the global society. Korten argues that as corporations grow and consolidate their own power, they become more and more difficult for even their "owners" to control. He presents several examples of this. Korten often uses statistical indicators that come from International Financial Institutions that he attacks. This lends the work quite an air of legitimacy.

Interesting quotes:

"The fact that the interests of corporations and people of wealth are closely entwined tends to obscure the significance of the corporation as an institution in its own right. The corporate charter is a social invention created to aggregate private financial resources in the service of a public purpose. It also allows one or more individuals to leverage massive economic and political resources behind clearly focused private agendas and to protect themselves from legal liability for the public consequences.
Less widely recognized is the tendency of corporations, as they grow in size and power, to develop their own institutional agendas aligned with imperatives inherent in their nature and structure that are not wholly under the control even of the people who own and manage them" (53).

"We are ruled by an oppressive market, not an oppressive state" (157).

"Our need is to organize societies for sustainable good living. An important point, often neglected, is that many of the actions we need to take to bring our lives into balance with earth are collective, rather than individual, choices" (283).

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