Global Solutions. An Internet Community Takes On Globalisation Published electronically March 2003 Copyright 2003 Westchester Press Permission hereby freely granted for non-commercial distribution of this work in whole or in part provided the source is properly credited. ISBN 0-9671232-9-1 Westchester Press 2132-J Crossing Way High Point, NC 27262 (336) 884-1038 Email: Westcpress@aol.com For information on trade paperback version (ISBN: 0-595-28067-6): iUniverse, Inc. 2021 Pine Lake Road, Suite 100 Lincoln, NE 68512 www.iuniverse.com To contact the editors: Adriaan Boiten, aboiten@xs4all.nl Richard Stimson, stimso1@juno.com Contents Introduction - How This Book Was Written Democratically CHAPTER 1 - Global Problems in Need of Solution CHAPTER 2 - Perfecting Democracy in Political Systems CHAPTER 3 - Restoring Human Control over Corporate Power CHAPTER 4 - Making Monetary Systems Work to Benefit People CHAPTER 5 - Democratizing the Communications Media CHAPTER 6 - The Spiritual Basis for Sustainable Living CHAPTER 7 - Civil Society and Alternative Life Styles CHAPTER 8 - Education as an Essential Tool for Finding Solutions CHAPTER 9 - Summary and Conclusions CHAPTER 10 - Finding out the Truth About the Editors Introduction - How This Book Was Written Democratically The origin of this book is quite unusual. Most books have one author, sometimes two, but this book is the product of collaboration by a large number of people in many countries participating in an Internet forum. Defying the adage that the only piece of good writing by committee was the King James Version of the Bible, the members of this forum set out to create a guide for reform of government at all levels from global down to local communities. They aimed especially to counter global control by financial interests at the expense of democratic self-rule. It all started in August 2000 when the Internet forum "FixGov" was set up for collaborative writing on reform of government and continued for over two years, ending with publication early in 2003. Many of the participants came from another forum called Alternate Culture, and quite a few had responded to an invitation at Blue Ear Forum, largely composed of journalists and writers from around the world. The purpose was stated on the FixGov home page as follows: "Fixing Government: FixGov aims to promote economic, ecological, and social justice. We are working on a book about government reform and we hope for ideas from many areas of the world. The FixGov group exists because all the efforts individuals make for sustainable living can be offset by corporate and government decisions. How can local, national, and international governments be made answerable to the people they govern instead of just the power elites? When major polluters of the atmosphere use political muscle to escape environmental controls, what can be done by the people who have to breathe the polluted air? When municipal sewage dumping or industrial waste fouls water that is vital to human health, how can people protect themselves? When large-scale corporate agriculture and food processing distribute contaminated food and make consumers unknowing guinea pigs for genetic modification, radiation, and dangerous substances, how can they be subjected to effective control? Join a discussion seeking ways to overcome the corruption that undermines public interest throughout the world, overthrowing or blocking democracy in some countries, making voting seem futile to many in the US, and secretly controlling such UN agencies as WTO, IMF, and the World Bank. Please make a strong effort to base your comments on facts and remember to respect the comments of others, as your postings will go straight through without screening by a moderator." Some 70 people joined in this project, including members from the United States, Canada, Mexico, United Kingdom, Netherlands, Poland, Sweden, India, Pakistan, Bangladesh, Mali, Australia, New Zealand, and possibly other countries (because email addresses do not always indicate the country). Messages were exchanged in English. As members contributed their thoughts, a volunteer editor was sought. When nobody offered to take on the task, the founders inquired whether one of the particularly articulate participants, Adriaan Boiten, would be willing to assume the responsibility. He agreed, and in addition created a web site displaying the results of the discussion and links to appropriate sources. That web site can now be found at www.fixgov.com or www.fixgov.org and is maintained by another volunteer, James McGuigan. At the beginning the discussion on the forum was wide-ranging and random. A difference in emphasis emerged between those whose main concern was developing more democratic structures in existing governmental units and others who saw more hope in small autonomous communities living in harmony with nature and sending representatives to bodies that would work out means of cooperation on a larger scale. Both approaches are reflected in the resulting book. As editor, Adriaan Boiten defined the major topics around which he discussion continued. Each of the chapters is based on the work of a volunteer who summarized the consensus developed in discussions of the forum on one of the topics. These summaries were disseminated to the entire group, then revised in the light of comments received. Finally, they were embodied in this book, edited jointly by Adriaan Boiten and Richard Stimson. Any royalties received from this work will be used to further the objectives of the forum. As in any forum, some people participated to a greater degree than others, but all were able to offer their thoughts and comment on the contributions of others. Any objections or disagreements were taken into account when the consensus reports were written. The most extensive work was done by the volunteers who prepared those reports. Their backgrounds are quite diverse. Adriaan Boiten, co-editor, engaged in historical preservation for the City of Amsterdam for 12 years. He studied new and theoretical history at the Municipal University of Amsterdam, graduating in 1986, and performed civic service in the library of the International Institute of Social History in lieu of military service. As the proprietor of a web design business he lives and works in the old inner city of Amsterdam. Richard Stimson, co-editor, is an author and retired business professor in High Point, North Carolina, serving voluntarily as national coordinator of the worldwide International Simultaneous Policy Organisation. Educated at Yale, Florida International University, and the University of North Carolina at Chapel Hill, his careers have spanned association management, public relations, university teaching, and computer operations. James McGuigan in England, who set up www.fixgov.org, is working on the Earth Emergency Initiative (www.earthemergency.org) and World Future Council Initiative (www.worldfuturecouncil.org). He is also a webmaster and a computer programmer, currently obtaining his degree on Information Technology with the Open University. He is an avid contributor of articles to internet forums on a diverse range of subjects. Peter Scott of New Zealand has contributed ideas for improvement of the layout design of the book. James Hall, summarizer of the consensus on political systems, grew up in a family of Republicans, supported Barry Goldwater's presidential campaign and the Vietnam war, but gradually migrated to a liberal viewpoint. A long-time resident of Orlando, Florida, he worked 23 years for the Walt Disney Company in jobs from ride operator to technical writer. In the Transportation/Communications Union at Disney, he served as a shop steward, district trustee, and finally as President and Treasurer, representing the interests of 3,000 Disney employees. He also was a writer and editor of the union's district newsletter for nine years. With a master's degree in liberal studies, he has taught at community college, written for The American Partisan and several other web magazines, and is collaborating on a book with Ian Foster. Liane Casten, who (with Stimson) assembled most of the material in the chapter on communications media, is an author, journalist, film writer and director. Presently she is co-founder and president of Chicago Media Watch, a volunteer watchdog group that monitors the media for bias, distortions and omissions, and she is working on her second book, an expos‚ of a criminal corporation, scheduled for publication in 2002. Her first book, Breast Cancer: Poisons, Profits and Prevention (Common Courage Press, 1996), grew out of a cover story in Ms. on the environmental connection to the disease. Her articles have also been published in E Magazine, The Nation, Mother Jones, Environment Health Perspectives, In These Times, Business Ethics, The Chicago Tribune and the Chicago Sun-Times. She wrote and directed four documentary films. With an M.A. from the University of Chicago, she has also taught high school and college classes. Richard Gauthier, who reported the consensus for the chapter on "The Spiritual Basis for Sustainable Living," was born in New Jersey, but has been living in Europe since 1986 as a yoga and meditation teacher. In the past five years he has worked in Poland on non-profit projects to spread organic farming in Poland and protect small farmers regarding Poland's pending membership in the European Union. As a member of the Ananda Marga yoga meditation association, founded by P. R. Sarkar (who died in 1990), he made several visits to India, became a monk and an authority on Sarkar's concept of Microvita. The organization was banned in India and its members blacklisted for its anti-capitalist, anti-communist socioeconomic philosophy, its anti-corruption stand, and a trumped-up murder charge against Sarkar later dismissed in court. To obtain a visa to enter India he changed his name legally from Richard F. Gauthier and got a new passport as Richard Richardson. He has also been known as Rudreshananda in India, and has the spiritual name of Viveka. Author of a book and many articles about Microvita, he runs several e- mail lists on various spiritual and scientific topics and can be reached at richard@sfo.pl. William N. "Bill" Ellis, summarizer of the chapters on civil society and on education, is a physicist, futurist, farmer working from the home he was born in on his farm in Rangeley, Maine, USA, to bring social change and civil globalization. He is General Coordinator of TRANET transnational network (tranet@rangeley.org) and of A Coalition for Self-Learning, that has recently published the book, "Creating Learning Communities," which grew out of his 1998 E. F. Schumacher Lecture in which he used homeschooling as an example of the application of chaos, complexity, and gaian theories in the social sphere. In the same lecture he used GrassRoots Organizations (GROs) as subset of Non- Governmental Organizations (NGOs) as another example of leaderless, unplanned, undesigned self-organization and speculated that the phenomenal growth and linking of GROs could lead to a radically different form of world governance. 1 Global Problems in Need of Solution Global communication is good; global monopoly is bad. Worrying about global problems may seem unnecessary to those among us who are fortunate enough to be living in a democracy during a period of history that lacks many of the horrors of the past. Human sacrifice, cannibalism, slavery, colonial oppression, and many diseases are largely (but not entirely) behind us, as are two world wars, and it is right to be thankful for the benefits we have. Laborsaving inventions of the Industrial Revolution have saved many of us from the backbreaking tasks of earlier times. The electronic age has made it possible to exchange information and ideas rapidly around the globe. Most innovation (although aided by government-funded research and sometimes subsidies) has been introduced to the public by private enterprise. Yet there are serious problems, especially as the means now exist to destroy all humans on the planet, possibly by global climate change and certainly with weapons of mass destruction. Too often governments act in concert with armaments manufacturers to promote the sale of weapons of war, sometimes to both sides in a conflict. As an example, the foreign aid budget of the United States currently includes many times as much "military aid" as peaceful grants. In the movement for sustainable development, groups of people have tried to escape from multinational corporate tyranny by forming self-sustaining communities, often drawing on the wisdom of indigenous cultures. These efforts for sustainable living, however, can be offset by corporate and government decisions, as in the case of native populations driven off their lands by mining and drilling operations that poisoned their water supplies and crops. As the world becomes more interconnected, the reins of control are found in fewer hands and most people discover they have less control over their lives. History has known centralized power before, but the rise of democracy in the 19th and 20th centuries raised the hope of greater personal freedom under governments answerable to their citizenry. Now this has often degenerated into what some call pseudo-democracy. Many people feel their choice in voting is between Tweedledum and Tweedledee, and so there are widespread protests and demonstrations, including some elements that become violent. Even some outbreaks of terrorism have their roots in the despair of people who have lost hope in peaceful solutions. The tribal rivalries and centuries-old feuds between ancient enemies are made worse by irresponsible divide-and-conquer tactics of the great powers and marketing of armaments to both sides in each dispute, including proliferation of nuclear, chemical, and biological weapons of mass destruction. When the most powerful people in the world come together in official economic conferences (G-8, IMF, WTO, etc.) and such unofficial groups as the Bilderberg, the Trilateral Commission, and the Council on Foreign Relations, they remain in splendid isolation from the less powerful people. After a series of protest demonstrations at major cities, they have recently held their official meetings behind strong barricades and heavily armed police forces and/or at isolated locations. The emphasis is on economic growth, but the measures they use are badly flawed. Gross domestic product (GDP) is based entirely on money transactions, thus missing the value of housework, home cooking, child raising, do-it-yourself work at home, "sweat equity," and all forms of voluntary service. Robert Eisner's 1994 book, The Misunderstood Economy, asked: "If restaurant meals are substituted for home cooking, is that an increase in product?" He estimated conservatively that if the value of unpaid labor services in the home were included the 1992 U.S. GDP would have been $8 trillion instead of $6 trillion. On the other hand, GDP ignores economic harm done to nature and to the health of individuals. Prominent at these meetings are top bankers, financiers, corporate executives, media owners, and politicians. Hardly ever present are labor leaders, consumer representatives, or environmentalists. Secrecy results in rumors of plots for world control that are sometimes wild and sometimes not totally outlandish. There are indications that the globalization moves and "neo-liberal" economics of these organizations have led to increasing disparity of wealth and income both within and between nations. In short, it is held that the rich are getting richer and the poor are getting poorer. Details of this disparity in wealth and income are given in Chapter 4. A June 2002 report of the UN Conference on Trade and Development (UNCTAD) on the poverty trap of less developed countries investigated "whether the current form of globalization is tightening the poverty trap and also increasing the vulnerabilities of those countries that appear to be escaping it." The answer was, in effect, "Yes." The report, however, stopped short of admitting that World Bank, IMF, etc., are collaborating with multinational corporations to bring about the impoverishment described in the report. (www.unctad.org) The specific problems that are described in the chapters on political systems, corporate power, monetary systems, and the communications media are very closely interrelated-and also interwoven with concerns about education, justice, medicine, religious freedom, land use, the oceans, and the atmosphere. Aids to their solution are presented in the chapters on spirituality, alternative life styles, and education. Proposed solutions are summarized in the final chapter of conclusions. The discussion addresses how local, national, and international governments can be made answerable to the people they govern instead of just the power elites. The goal is to make globalization work for the benefit of people and the environment instead of "neo-liberal" globalization of the "wild west" variety that has spread poverty, financial crisis, desperation, and bloodshed in many parts of the world that have become more and more unstable. 2 Perfecting Democracy in Political Systems (based on a summary by James Hall in Orlando, Florida) This chapter notes the spread of democratic elections as the basis for governance in more countries of the world, although imperfections exist even in the best of democracies. The forces that concentrate wealth and power into a few hands, and that abuse the earth's environment for their own benefit, also oppose democratic reforms, social justice, human rights, and efforts to create a sustainable local economy. Ways of overcoming these obstacles and furthering genuine democracy are discussed. A "security state" of the closed, fundamentalist and ruthless variety is not the solution for public fears and needs generated by terrorism. Although many people would like to conduct their personal, family, and community lives without interference from government, that is not the way it is. Even remote parts of the world are coming under political control, often combined with invasion by economic power. Thus traditional cultures in areas as widespread as Nigeria, Brazil, Papua New Guinea, and elsewhere are being driven off their land by the combined actions of governments and foreign exploiting industries, including cyanide or oil spills in their streams, destruction of their crops, and repressive police action. There is a legitimate difference of opinion as to how much or little government is desirable, but the alternative to government-anarchy-has not been demonstrated to work well in a world where greed overpowers goodwill. That makes it important what kind of government we have. Anarchy requires an educated and empowered independent public to work properly. It is never in the best interests of hierarchies to allow these conditions to exist in reality. Although it is often far from perfect in practice, democracy operates on the principle that no leader can be trusted to know what people need and want better than the people themselves. It aims to meet the desires of the majority without being unfair to minorities. Those who are lucky live in one of the world's liberal democracies where generally (if not perfectly) leaders are elected by popular vote and human rights are honored. Since 1950, the world has seen a phenomenal growth of democracies, from 22 nations representing 31% of the world's population, to 120 electoral democracies representing 58% of the world's people. That's a shift of historic importance, but it's not enough. Seventy-two sovereign nations representing 42% of the world's people still have no representative government. In such nations, working for democracy is an important first step towards creating social justice and a sustainable world economy. Some countries may have a democratically elected government, but few recognized human rights, and in some democracy and human rights may rest on fragile foundations. Even members of long-established democracies can't rest but must work hard to keep elections honest and citizens' rights from being abused. There are powerful interests that benefit from restricting human rights and corrupting democratic institutions. There was a time, perhaps, when politics was a noble statecraft, and politicians were regarded in high esteem. Politics was not their profession; they came from various respectable professional backgrounds; such as lawyers, physicians, teachers, landlords etc. Politicians belonging to a party believed in the ideology for which the party stood, and dedicated themselves in fulfilling the party objectives. Today politics is a full time profession to most politicians. The forces that concentrate wealth and power into a few hands and that abuse the earth's environment for their own benefit oppose democratic reforms, social justice, human rights, and efforts to create a sustainable local economy. Their goal is to block genuine democratic institutions, manipulate elections, limit human rights, and use the environment for their shortsighted interest-to gain wealth and hold onto power. A good citizen's political work is never done, and he or she must be vigilant both to create a better world and to sustain it. Corruption can occur both in the electoral process and in unfair influencing of public officials that amounts to bribery although not always illegal. For example, The Buying of Congress by Charles Lewis and the Center for Public Integrity (Avon Books, 1998) reports that in the United States thousands die and millions become ill from poisoned foods. Meanwhile Congress has blocked tougher safety standards and received $40 million campaign donations in ten years from the food industry. Also, members of Congress received $180 million from the 500 largest corporations and cut corporate income tax rates to provide only 10% of all federal revenue compared with 28% in 1956. With great difficulty a bill was passed in 2002 that will make a start on campaign finance reform after the November 2002 elections. The light of world public opinion has brought about honest elections in many countries for the first time with the help in some cases of United Nations monitors and in other cases of impartial international observers organized by former U.S. president Jimmy Carter. Any nation dominated by just one party fails to function as a democratic system. Some regimes try to give the appearance of democracy, but if only one party is permitted, the elections are mere window-dressing. The same is true in a two- party system when the same powerful interests largely control both parties. New parties should not face unreasonable requirements to get on the ballot. Legitimate voters should not be hindered and fraudulent voting should be prevented. The method of recording and counting votes varies among democratic countries, and there are advocates for each system. Balloting methods range from paper ballots marked with party symbols for the illiterate to high-tech mechanical or electronic voting machines. Honest counts require that there be a way to recheck the votes, so paper ballots must be safeguarded and machine tallies must preserve an audit trail so that totals can be checked against individual votes. Some elections are conducted on a "winner-take-all" basis where the candidate with the most votes in his or her district is elected. An alternative is proportional representation where each party gets the number of seats in a representative body that is in proportion to the votes it got in the election. In some jurisdictions, if a candidate fails to receive a majority of the votes cast, a run-off election is held between the two highest scoring candidates. Preference voting, or "instant run-off," is sometimes used where voters record first, second, and maybe third choices, for example, which are counted in order until someone has a majority. The U.S. presidential election involves an indirect method in which members of an "Electoral College" are chosen on the basis of whom they are pledged to support and then they choose the president (and vice president). Most states allocate all their electoral votes to the party that scored highest. Usually this results in choosing a president who also received the highest national popular vote, but there have been four exceptions, including George W. Bush in 2000, who was was chosen by a difference of 537 votes in one state. Variations in these methods can be quite acceptable, so long as they are approved by those governed and reflect the will of the people. Choices made by politicians, however, often suit their own personal and party interests. One of their tricks is to lay out districts (constituencies) for party advantage. This is called "gerrymandering" for an American politician named Gerry who mapped a district in the shape of a salamander. Officials, once elected, can be subverted in various ways. Corporations increasingly are using favors to politicians in ways that are tantamount to bribes, although they may not meet the legal definition of a crime. Even judges receive benefits that interfere with their objectivity. Corporations in the United States, and organizations heavily financed by them, have entertained at least 600 federal judges at luxury resort locations for seminars where they are exposed to propaganda for a pro-business movement called Law and Economics. Corporations have also spent millions to sponsor research and endow professorships reinforcing their points of view in law schools and other areas of academic study, notably including economics. Since the creation of NAFTA and WTO (see Chapter 3), they have used clauses banning trade restrictions to sue against national and local laws designed to protect health, safety, and the environment. Through the World Bank and IMF (see Chapters 3 and 4) they have obtained control of government-owned telephone systems, water supplies, and other public utilities, to privatize them for private profit, as well as drilling and mining to the detriment of local farmers and fishermen. National and local governments find themselves forced to compete against each other to attract industry by offering subsidies and repeal of public interest laws and regulations. One proposed method of forcing multinational corporations to "play by the rules" is the concept of "Simultaneous Policy" explained in a book of that name by John Bunzl. It suggests that political parties could be induced to pledge that when they are in power, and when most other nations have similarly pledged, the nations will simultaneously enact measures for such control of international finance and industry as individual nations were unable to do on their own. The International Simultaneous Policy Organisation (ISPO) is working toward that end in more than 20 countries (www.simpol.org). Among its objectives is the democratizing of such international agencies as the World Bank, IMF, WTO, etc. The World Federalist Association (www.wfa.org) and the Campaign for UN Reform (www.cunr.org) work for strengthening and reforming the United Nations. Despite the accomplishments of the UN, it also needs to be made more democratic and responsible to the world's people. Any higher level of government needs to be carefully limited in its scope and kept under democratic control to preclude the creation of a global tyranny. A further problem that complicates efforts for worldwide peace and freedom is the desire of some groups to establish a separate national homeland. This involves taking over land occupied by someone else and/or seceding from an existing government that usually wants to keep control. Hostilities can result with participants being labeled "freedom fighters" by one side and "terrorists" by the other. Under ideal conditions, each nation would be inhabited only by people who willingly consent to being under the government, which in turn would guarantee the rights and freedom of all. That is obviously a very long-term objective, but taking steps in that direction is imperative, both for the good of the contenders and for the welfare of the whole world in the context of weapons of mass destruction. Despite general agreement on most of the points in this chapter, there are some people who feel that political systems are so corrupt that it is useless to vote. They prefer to arrange their own lives in a way they think will be beneficial to people and the environment and to encourage others to do likewise. Voting percentages have declined sharply in many countries, partly because of a cynical feeling that "my vote won't make any difference," and partly because commercial media have encouraged later generations to focus on entertainment, trivia, and self-gratification. In a few countries, voting is legally required. This, it can be argued, is an invasion of freedom. If voting is to enable everyone to make choices, it should include the choice of not voting. Some have suggested a choice on the ballot should be "none of the above" with the election to be declared invalid if that choice wins. While some believe that progress lies in adopting different lifestyles and community organizations (which can certainly be beneficial), the freedom to pursue these and other personal choices seems to require reform of the powerful structures that limit freedom. The many sacrifices of those who died to replace despotism with democracy, and the eagerness of newly enfranchised citizens of former tyrannies to exercise their voting rights despite all obstacles, are arguments against abandoning one's right to vote. Global domination by corporate cartels has had detrimental effects on both the more powerful and less powerful countries. Arms sales have fueled internal warfare in less developed countries. The destruction of indigenous environments plus concentration of unemployed and homeless people in cities, combined with repressive governments in league with the multinational corporations (mining, oil, and timber companies) has generated waves of migration for economic and political reasons. As developed countries have been overrun by immigrants, often seeking asylum, cultural clashes and competition for jobs have had their effects. For example, European social-democratic or center-left governments, which have been under pressure from private business to reduce their social services and worker protections, are finding that new issues are arising. The traditional supporters of those parties see their social protections deteriorating while immigrants seek to share the benefits. Immigration and integration are now at the top of the political agenda in Europe, which is sad for all those who are engaged in rational discussions. There are real social and economic reasons for existing tensions, but culture becomes more or less the platform on which people can express their frustrations and emotions, feeling patriotic. New opposition arises to parties that are seen to be patronizing, arrogant, bureaucratic, and "politically correct." Voters turn to parties that promise action on the new issues that concern them, such as street crime and threats by Islamic fundamentalism against traditional liberal values. People don't trust the professional politicians anymore, in London, Paris, or The Hague. In Holland, for example, the last 5-10 years saw the rise of countless local parties that won local elections with local issues, feeding on fear of street crime and outrage about bureaucratic decisions of the local councils. The localization of politics could be furthered by Information and Communication Technology (ICT), especially through the Internet, which makes it easier for localities to be more independent from the knowledge and power centers. People become better informed, communicate via the web, organize themselves in discussion groups, meet each other, and start to move. The possibility for people to work at home instead of travelling to the city can make them more independent and capable of participating in self-government. SUGGESTIONS FOR ACTION: If some of these suggestions are impossible under your form of government, consider them as goals to be reached, and work to change the political circumstances so that you have the right as a citizen to exercise them. 1. Work to advance social justice, democracy, and environmentally sound policies. 2. Work against concentration of wealth and power into a few hands-whether in the name of good or ill-and against pollution or waste the earth's resources. 3. Block efforts of those who would subvert democracy by organizing opposition; educating others and demonstrating against wrongs; taking legal action to enforce human rights. 4. Vote at every opportunity: check out candidates' records, join a political party or create one to reflect your values, volunteer to help candidates write letters for publication attend meetings and express your concerns, donate time and money if you can. 5. Help keep your political system honest: work as a poll-watcher and monitor the counting of ballots, help those who are illiterate to read their ballots, support efforts to keep balloting both secret and honest. 6. Become involved in local community organizations that reflect your agenda, work with local people to clean up your local environment, to create more parks and people-friendly environments, to support public transportation, to protect civil rights, to elect responsible local and national officials, and to fight pollution and unwanted corporate intrusion; work to educate your community through letters, newsletters, organized events, and demonstrations. 7. Encourage cooperation by your local groups with other local, regional, national, and international organizations. Support candidates and parties that advance your efforts and work for positive changes. 8. Work for: * the creation of constitutional, democratic institutions; * the non-violent resolution of conflicts; * basic human rights for all people; * environmental protections that sustain local ecosystems; * recycling of wastes; * alternative energy sources; * environmentally appropriate building technologies; habitat and species restoration; * effective monitoring of ecosystems; * sustainable local agriculture; * voter initiatives that can bypass representative bodies and place issues directly before the voters; * open government, including keeping all meetings and records public and "transparent" subject to the public's scrutiny and criticism; * public financing of political campaigns to keep money from "special interests" from having an impact on the government's ability to do the people's work; * media (press, radio, television, web access, etc.) free of control by government or corporate monopolies but required to broadcast candidate debates and political forums in the public interest; * democratic regulation of all private use of the "public commons," including air, water, public parkland, etc. * "true-costing" of any products or industrial processes that might cause environmental degradation, including in their costs the regulation and clean-up of any pollution, and use of those costs to perform the cleanup; * creation of agencies to monitor the environment, detect pollution and polluters, and to charge and fine them the amount needed to cleanup any resulting pollution; * redefinition of the legal status of the corporation (see Chapter 3); * promotion of democratic, transparent international organizations to replace current institutions like the World Bank, WTO, and IMF. When considering reforms to correct global abuses, it should not be forgotten that votes can be registered in the marketplace and not just at the polling place. Some organizations have had success with boycotts of offending companies to bring changes in their behavior. The choices of consumers can have considerable effect on the degree of pollution and waste of natural resources resulting from production. To accomplish favorable results, they must resist advertising and promotion of inefficient, wasteful, and unnecessary products. "If liberty and equality, as is thought by some are chiefly to be found in democracy, they will be best attained when all persons alike share in the government to the utmost." -Aristotle (384 BC-322 BC) "It has been said that democracy is the worst form of government except all the others that have been tried." -Sir Winston Churchill (1874-1965) 3 Restoring Human Control over Corporate Power "Corporations rule," says the Hightower Lowdown newsletter. "No other institution comes close to matching the power that the 500 biggest corporations have amassed over us. The clout of all 535 members of [the U.S.] Congress is nothing compared to the individual and collective power of these predatory behemoths that now roam the globe, working their will over all competing interests. "The aloof and pampered executives who run today's autocratic and secretive corporate states have effectively become our sovereigns. From who gets health care to who pays taxes, from what's on the news to what's in our food, they have usurped the people's democratic authority and now make these broad social decisions in private, based solely on the interests of their corporations." The quoted paragraphs introduced an April 2002 expos‚ of the world's biggest corporation, Wal-Mart, with more than $220 billion annual revenues (www.jimhightower.com). The compensation of chief executive officers of these corporations (CEOs) in the United States by 2001 averaged 531 times that of blue-collar workers compared with a 40 to 1 ratio in 1960. The highest rewards went to those who had fired workers and found tax loopholes for their companies, according to "Executive Excess 2001," Institute for Policy Studies and United for a Fair Economy (Multinational Monitor, Oct. 2001, p. 4). Some, but not all, of the world's wealthiest people are CEOs-others exert their control behind the scenes as major stockholders or financial backers. Corporate management, directors, investment advisors, stockbrokers, bankers, lawyers, and accountants are supposed to be looking after the interests of the stockholders. Often they seem to be more concerned with personal profits to be made from trading in and out, fees, commissions, stock options, and all the other gimmicks for their own benefit. They "scratch each others backs" and "one hand washes another." Ordinary investors are lucky to have their interests get any consideration. Their ownership through mutual funds and/or pension plans is routinely used by the trustees (without consulting them) to rubber-stamp management proposals. Extreme abuses in some corporations came to light in 2002, when one of the world's biggest accounting firms, Arthur Andersen, was convicted of obstruction of justice in the case of Enron. This involved one of the world's largest corporations where members of top management walked away with millions of dollars from the company plus large profits from selling Enron stock before declaring bankruptcy. The Andersen firm provided advice to set up undisclosed partnerships for hiding corporate losses, and simultaneously served as auditors to verify the reliability of the company's financial reports. Employee pension funds invested in Enron stock were almost completely wiped out, as was the value of stock bought by small investors trusting financial analysts and stock brokers. Although Enron had been rated at or near the top of all corporations based on the market value of its stock, it owned very few physical assets. It was described as an energy trader, and its manipulations were discovered to have been behind the electric power crisis in California. Other activities included buying public utilities, including water supply services, from governments around the world at bargain prices and then jacking up the rates to customers of the privatized monopoly. It was among the largest donors of campaign contributions to politicians-tantamount to bribes, if not legally so defined. While investigations and litigation involving Enron were still going on, another Arthur Anderson client, WorldCom, disclosed the largest corporate overstatement of cash flow in history, amounting to more than $3.8 billion in the previous 15 months, using a series of accounting tricks to hide expenses and inflate cash flow. The company's CEO owed the company more than $366 million for loans and loan guarantees when he abruptly resigned, the stock that had sold for $62 dropped to about 9 cents, and 17,000 workers are to lose their jobs. Only a week earlier, executives of Rite Aid, a drug store chain, were indicted, having run up a record overstatement of profits totaling $2.3 billion over two years. This company's auditor was another large accounting firm, KPMG. Other current corporate scandals include Global Crossing (an Andersen client) and Tyco. Merrill Lynch and other brokerage firms were found to have been urging customers to buy stock in such companies that the analysts knew were in trouble. Multinational corporations have close ties to major financial houses, which will be discussed further in the next chapter. Directors of banks, investment companies, and other corporations serve on each other's boards and they or their representatives are appointed official advisors to governments. They employ former government officials as lobbyists, who then may return to prominent government positions in a process sometimes known as the "revolving door." Armament companies put retired generals and admirals on their boards of directors, while top executives move in an out of high-level government jobs. Those munitions manufacturers, preferring to be called "defense industries," also are major financial supporters of politicians, resulting in getting not only government contracts but also subsidies and help in selling their products to foreign countries. A report by the Congressional Research Service in 2000 disclosed that the United States is the world's leading arms merchant, responsible for almost half the weapons sold worldwide, 70% going to developing countries. Listed next in order as suppliers were Russia, France, Germany, Britain, China, and Italy. Aside from threats of nuclear war and terrorist attacks, the major challenge to democracy and human progress involves the domination by corporations of the institutions of self-government, which is made more difficult when the corporations are actually bigger than the national governments. Democracy has always had an uphill fight against various forms of tyranny, whether absolute monarchies or military dictatorships. Through concentrated corporate control of the information media, as well as corporate favors and campaign financing to politicians, the rulers of big corporations tend to get their way most of the time. On the world scene, global corporations (including global bankers and financial companies) dominate international agencies unrestrained by democratic safeguards. A network of faceless bureaucracies, the most familiar of which are the World Bank, the International Monetary Fund (IMF), and the World Trade Organization (WTO), make no pretense of being democratic and are dominated by representatives from large transnational corporations and banks. Already, both the USA and the European Union (EU) have been compelled by the WTO to annul various of their health and environmental laws. Most of the third world has been forced to adopt entire legislative agendas dictated by the IMF under what are called "free trade" treaties, and under conditions which are attached to loans given to third-world countries by the regime's agencies. The governments, in some cases, have made deals with multinational corporations to share in profits from mining operations that drive native populations off their lands either by using military force or by contaminating their sources of livelihood, resulting in cities crowded with unemployed, homeless adults and children. Under pressure from the global bankers to attract foreign investors, governments have suppressed labor unions and held down wages, benefits, and labor standards. They have given special tax breaks to foreign corporations and relaxed environmental regulation. Recently they have been required to raise water prices and then sell government water utilities to private monopolies ("Privatization Tidal Wave: IMF/World Bank Water Policies and the Price Paid by the Poor" by Sara Grusky, Multinational Monitor, Sept. 2001). Nations have also allowed misuse of patent laws. Corporations send representatives, sometimes called "bio-pirates," to learn from indigenous people about natural remedies. Then the companies apply for patents to turn these remedies into profitable monopolies. Patents have even been awarded for genes and other natural phenomena that corporations have identified or "discovered" in their laboratories. A study of World Bank and IMF loan documents with 26 countries shows that they require privatizing of government-owned enterprises, layoffs of government employees, easing of rules on firings and working conditions, increasing the wage gap between employees and managers, and cutting pensions for workers. For example, the World Bank recommended to Vicente Fox when his new government came into power in Mexico that there be a phase-out of severance payments, collective bargaining, enforceable labor contracts, seniority rules, and liability for subcontractors' employees. It also has stated that it cannot support workers' freedom of association and right to collective bargaining. ("Against the Workers: How IMF and World Bank Policies Undermine Labor Power and Rights" by Vincent Lloyd and Robert Weissman, Multinational Monitor, Sept. 2001.) A few examples from around the world will illustrate the unfortunate results. In Haiti, after the military dictatorship was removed from power and the elected president Aristide returned with U.S. help, the IMF, the World Bank, the U.S. Agency for International Development, and the Inter-American Development Bank offered to help Haiti rebuild. However, the economic program they imposed was the so-called "neo-liberal" structural adjustment that bankers have favored around the world. Similar plans forced on Haiti's neighbors-Mexico, Nicaragua, and Venezuela-were supposed to reduce poverty and external debts. Instead they widened the income gap, increased poverty, and undermined national sovereignty. These conditions involved privatization of state-owned industries, deregulation of the economy, and opening the country to massive foreign investment. Costa Rica has long been known as one of the most democratic of Latin American countries, with less of an income gap than its neighbors. The IMF and the World Bank have begun to change this, ostensibly to pay off foreign debt. Thousands of small farmers have been displaced in favor of large agricultural export operations. Increasing crime and violence have resulted in higher police costs, and the country now imports its basic food requirements. Although foreign debt has doubled, Costa Rica has been able to meet its debt service payments, so the IMF and the World Bank call it a success story. The World Bank, which awarded Mexico 13 structural and sectoral adjustment loans between 1980 and 1991, imposed the following conditions on its 1991 agricultural loan: slashing tariffs, canceling price controls on basic foods, privatizing state-owned monopolies, and eliminating price guarantees for corn- the mainstay of the rural poor. A million people died in Mozambique, a Cold War hot spot where rebel forces backed by apartheid South Africa and right-wing U.S. business with covert U.S. government approval fought the left-wing movement that took over the government after Portugal pulled out. The U.S. forced Mozambique to join the IMF and World Bank in 1984, which resulted in World Bank-mandated "structural adjustment" in 1987, and an IMF-controlled stabilization" in 1990. The World Bank used many loans in the 1950s in an effort to win India away from policies of building local production to displace imports and of government intervention in the economy. Large-scale development projects have displaced 20 million people over a 40-year period. After the World Bank withheld $750 million in Indian energy loans to enforce compliance with its opposition to the government program for electrification in rural areas, the Indian government scaled back alternative energy subsidies and power projects in its poorest states. The fastest growing component of the World Bank is now the International Finance Corporation (IFC) which loans directly to private companies, including multinational corporations, such as Chase, Citibank, Sumitomo Bank, New York Life, DuPont, Daimler-Chrysler, Electricite de France, Portugal Telecom, Shell, etc. Simultaneously, governments are pressured to turn over public utilities to such private companies. ("Dubious Development: The World Bank's Foray Into Private Sector Investment" by Charlie Cray, Multinational Monitor, September 2001; www.essential.org/monitor) When the North American Free Trade Agreement (NAFTA) was negotiated, certain externalities were supposed to be covered by "side agreements" on workers rights and the environment, but subsequent events showed the agreements to be toothless. The greatest harm was in the failure of protections against pollution and labor exploitation. As reported in a 1996 article in Dollars and Sense, "Corporations and their government allies in all three NAFTA countries vehemently opposed setting up institutions with strong monitoring and enforcement powers." They had their way, as no budget was provided for enforcement. A proposed expansion of NAFTA to the whole Western Hemisphere as Free Trade Area of the Americas (FTAA) seems likely to offer the same empty promises. The European Community or European Union (EU), on the other hand consists of nations that are much more concerned about preventing the exploitation of labor and the environment than the NAFTA countries have been. National laws and EU rules, such as the Social Chapter, provide a framework within which corporations must operate, however grudgingly. The biggest corporations and political parties friendly to them keep trying to relax such rules. One of the first attempts to bring corporations under control occurred in Europe on May 30, 2002, according to a news release issued by Richard Howitt, European Parliament Rapporteur (Spokesperson) on Corporate Social Responsibility. The European Parliament in Brussels voted for new legislation to require companies to publicly report annually on their social and environmental performance, to make board members personally responsible for these practices, and to establish legal jurisdiction against European companies' abuses in developing countries. In Europe social-democratic parties have been trying a "Third Way" between corporate freedom and social responsibility. They set out to reform the welfare state, sometimes (as in The Netherlands, Belgium, and France) together with moderate Liberal politicians (that is, in European terminology, those favoring corporate freedom). This led to great disenchantment among the population, who saw private wealth grow while public wealth and security dwindled. European people want to be protected against overwhelming economic power by a social-democratic state, but the politicians weakened government in favor of the market. Paradoxically, the extreme right-wing politicians in Europe, who want a strong state to close the borders against immigrants and proclaim jingoistic values, now tend to be the only parties giving people some sense of active government. Corporate power over the people--without responsible social government--leads not only to despair and terrorism in the Third World, but also to a boost for political fascism in Europe. People feel helpless against the economy and seek for scapegoats for their disenchantment, rising crime, and economic volatility. There is a grave danger now of a link between private corporate power and the emerging extreme-right parties. These parties blame the usual scapegoats, such as immigrants and Jews for social problems actually due to global oligarchy and thus shift attention away from the real causes. Franklin D. Roosevelt said: "The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic State itself. That, in its essence, is Fascism - ownership of government by an individual, by a group or any controlling private power." Instead of listening to the people, European Social Democrats, like corporations, have relied on marketing techniques to sell their policies. They are now paying the price for leaving Europe open to uncontrolled corporate power and unreformed globalization. It is in the interest of believers in democracy all over the world to strengthen rational, democratic structures, expanding them into the corporate world, and thus to give people their power back. Apart from corporate domination of many aspects of government, the structure of the work environment imposed by large corporations has serious effects on family and community life. The past few decades have seen changes that reduce the time people have for activities outside the workplace environment, although taking different form in three areas: the United States, Europe, and less developed areas. The expansion of work by women outside the home has been widespread. To the extent it represents more options open to women this can be counted as progress. However, for many women the option of remaining at home to care for children has largely been foreclosed by economic necessity. Longer working hours have been required by employers where unions and government protections are weak, particularly in the sweatshops of less developed countries, where people have been forced off their land to form a labor pool in the cities and where child labor is common. Employers in the United States extend the hours in some jobs to avoid hiring additional workers, which would entail the cost of fringe benefits such as health insurance, pension plans, unemployment insurance, etc. Conversely, employers make some other jobs part time-often about 37 hours per week-to avoid coverage for fringe benefits, but workers have to take more than one job to survive. Europe has been less affected, so far, by the trend for long hours, due to relatively stronger labor unions. In most countries, including the U.S., corporations and their controlling stockholders tend to dominate politics despite any laws intended to prevent it. Corporations generally enjoy a favored status in the courts where they have the privileges of natural persons without the responsibilities. The limited liability of corporations allows their officers to escape financial and personal responsibility in many improper schemes such as the Enron scandal (where the final outcome for officers of the corporation and its auditors is yet to be seen). It is common for top officials to get reimbursement from the company for legal expense and fines whenever they are taken to court for their actions. "In 1971, only 175 businesses had registered lobbyists in Washington. By 1988, 1,634 out of every 100,000 Washingtonians was a lawyer," according to The Paradox of American Democracy, Elites, Special Interests, and the Betrayal of Public Trust by John B. Judis. "By the mid-1980," writes Judis, "there were over a thousand former officials in Washington working as lobbyists, including over 200 former members of Congress...and much of what they were hired to do was to defeat environmental and social legislation which the corporations deem 'unaffordable'." As governments began to abandon enforcement of antitrust laws, mergers and acquisitions placed more and more of the world's economy in fewer hands. Economies of scale are usually given as the reason for business combinations. For any business, efficiency tends to increase with size up to some point. Often this is interpreted as "the bigger the better." However, large units are not always more efficient, because the disadvantages of bureaucracy exist in private enterprise as well as government. Many studies have shown that relatively small companies produce more innovation, new products, and new jobs than the giant corporations. The motivation for mergers and acquisitions, therefore, is more often a desire for market control than efficiency. Another motive, of course, has been the opportunity for windfalls to top management as well as Wall Street lawyers and investment bankers. Adam Smith's "Wealth of Nations" that explained how an "invisible hand" will cause the selfish actions of suppliers and consumers to create an equilibrium in the market that benefits everyone better than the mercantilist system (with its government monopolies) then existing. The book is revered by classical economists, but they often forget that his theory completely depends on really free competition and other basic assumptions about the market. Smith was aware of imperfections and declared in that book: "It is to prevent reduction of price...by restraining free competition...that all corporations, and the greater part of corporation laws, have been established." The assumptions of classical economics on the Adam Smith model are seriously violated by Wal-Mart, which has become the world's largest corporation, surpassing ExxonMobil. In the Hightower Lowdown article cited at the beginning of this chapter, Wal-Mart is not only a scofflaw in its own labor practices but also presses its suppliers in China and other low-wage countries (whose names and locations it keeps secret) to drive down costs by cutting wages and benefits. The article continues: "By slashing its retail prices way below cost when it enters a community, Wal- Mart can crush our groceries, pharmacies, hardware stores, and other retailers, then raise its prices once it has monopoly control over the market....By crushing local businesses, this giant eliminates three decent jobs for every two Wal-Mart jobs that it creates...." Special characteristics of corporations under U.S. law that make them different from individuals include these: 1. Corporations have perpetual life. 2. Corporations can be in two or more places at the same time. 3. Corporations cannot be jailed. 4. Corporations pursue a single-minded goal, profit, and are typically legally prohibited from seeking other ends. 5. There are no limits, natural or otherwise, to corporations' potential size. 6. Because of their political power, they are able to define or, at very least, substantially affect the civil and criminal regulations that define the boundaries of permissible behavior. Virtually no individual criminal has such abilities. 7. Corporations can combine with each other, into bigger and more powerful entities. 8. Corporations can divide themselves, shedding subsidiaries or affiliates that are controversial, have brought them negative publicity, or pose liability threats. These unique attributes give corporations extraordinary power, and makes the challenge of checking their power all the more difficult. The institutions are much more powerful than individuals, which makes all the more frightening their single-minded profit maximizing efforts. (Adapted from "Corporations: Different Than You and Me" by Russell Mokhiber and Robert Weissman) The power of the corporate oligarchy is displayed whenever there is an international meeting of such groups as the World Bank, International Monetary Fund (IMF), World Trade Organization (WTO), or the G-8 economic summit. The United States sends its CIA and FBI to work with local agencies to make sure the delegates are not bothered by, or exposed to, any public objections. Peaceful protesters are regularly attacked with tear gas, water cannons, and charging hordes of police with helmets, shields, clubs, and firearms, using the excuse that somewhere vandals are rioting and looting-or else citing violence, when the violence was actually by the police or their agents provocateurs. Meanwhile, inside the fortified enclave the big corporations get what they want while defenders of the environment and human rights get mere lip service. Despite the enormous power of the corporations and their friends in government, the role of corporations in the political process tends to be ignored by the academic community. According to Russell Mokhiber, editor of the Corporate Crime Reporter and Robert Weissman, editor of the Multinational Monitor, a recent convention of the American Political Science Association in Washington, D.C., almost entirely neglected corporate power in about a thousand papers presented. Local, regional, and national governments compete for industrial development by offering subsidies, privileges, and tax breaks at the expense of the public and other businesses. By failing to enforce health and safety standards, they put the public at risk of disease, injury, and death, while allowing business to profit from polluting air, water, and food, including the use of people as unwilling guinea pigs for experiments with hormones, radiation, and genetic modification of food. Politicians accept money from business interests to let them drive people off their land and poison it with petroleum spills, cyanide from gold mining, and other abuses. Corrupt national leaders hide their ill-gotten gains in secret foreign bank accounts, while using force to intimidate and kill opponents of exploitation by the multinational corporations. They side with business owners to destroy trade unions and prevent worker protests against unsafe working conditions. Localities now compete for corporate headquarters and other enterprises by outright subsidies, tax abatements, and laws that favor employers against trade unions and unorganized workers. Similar practices are applied to competition for professional sports teams and even for the Olympic Games. In the same way, shipping companies have avoided national restrictions by chartering their vessels in countries like Panama and Liberia that have competed by offering permissive charters. At the global level, the International Monetary Fund (IMF) acts to protect banks and speculators from losses due to bad judgment, while pressuring governments to curtail public services. The World Bank and the IMF place conditions on financial aid to developing countries that favor penetration by multinational corporations and curtailment of government protections for its citizens. The World Trade Organization (WTO) makes decisions in secret, with almost never any involvement of nongovernmental organizations (NGOs). Industry representatives and government trade negotiators often closely allied with them denounce health, safety, and ethical rules of member states as unauthorized barriers to trade and impose penalties against countries that try to enforce these protections. Information media (to be discussed in detail in another chapter) have largely been transformed into propaganda machines run either by repressive governments or by an oligarchy of corporations that control most of the media, as well as much of the world economy. The military-industrial complex manufactures weapons of mass destruction in ever larger numbers the making of which uses natural resources far surpassing those of the conventional market and increasingly places the world at risk of destruction. In recent years corporations have been obtaining patents that would have been flatly rejected in the past. Outrageous copyright extensions will be discussed in the chapter on the media. Corporations have now been allowed to patent many innovations pioneered by government-conducted and/or government-financed research. Their friends in the U.S. Congress and Patent Office have allowed them to obtain patents on the products of nature (herbal remedies of indigenous peoples), genes of living creatures, and other things that are completely inappropriate to be patented. It also works out that individual inventors seldom get the financial benefit of their work, because their employers require them to sign over all their rights to the company. Individual actions have little direct impact on government decision-making today. The deck is stacked against us and manipulated by corporate interests. The same holds true on environmental issues where the actions of individuals compared with those of corporations is miniscule, but the public is subjected to strict emissions testing while businesses continue polluting with use of political influence and delaying tactics. Some governments have set up programs to pay corporations to become more energy and resource efficient, but sometimes this merely resulted in corporate welfare. Some large corporations have invested in efficiency measures and their return on investment was better than their investments in their product lines. Among the reasons for corporation actions harmful to the environment is the economic system that ignores what economists call "externalities." That is, business activities may involve serious costs to others in the form of pollution-caused illnesses, poisoning of food sources (such as fish in the streams and crops in the land), and hazards to employees that do not enter into product costs and prices. One suggested method of correcting this would be for government to require such costs to be included in prices, with proceeds to be used for overcoming the harmful effects. This is called "true-cost-pricing" and is further discussed in chapter 3 of Jim Bell's book, free at www.jimbell.com. Some of the uncontrolled actions of major corporations are so heinous no monetary amount could compensate for the damage. At the top of the list might be sales of arms, often to both sides of conflicts. Here it is valuable for the armament manufacturers to have friends in government, both to obtain "defense" contracts and to arrange military aid to other countries that become customers of the arms producers. One technique widely practiced, at least in the United States, is to cultivate the support of admirals and generals with the prospect of lucrative positions and directorships upon their retirement from active duty. It also helps the corporations if they can obtain appointments of their people to high level civilian positions in the nation's defense establishment. President Dwight D. Eisenhower expressed concern about what he called the "military-industrial complex" in his farewell address. Other seriously harmful "external" costs imposed by various large corporations on people around the world include air and water pollution, contamination of food with persistent pesticides, fostering of drug-resistant bacteria by overuse of antibiotics on healthy livestock, recklessly injecting hormones into dairy cows, and experimenting on the public by promoting genetically modified foods before determining that they are safe. Other related issues involve laxity in food handling and inspection, undisclosed irradiation of food, and use of "low- level" radioactive materials in products sold to and/or used by the public. Air pollution has made the natural problems of allergies much worse. Dr. Linda Ford, past president of the American Lung Association and current president of the Asthma and Allergy Center in Nebraska, says: "Air pollution definitely makes people with allergies more sensitive. Even in nonallergic people, diesel exhaust and ground-level ozone causes inflammation of air passages." (Quoted in "How Global Warming Affects Your Allergies" by Heidi Ridgley in the April/May 2002 issue of National Wildlife-see www.nwf.org/climate.) These widespread effects would explain why some 35 million people in the United States now suffer from seasonal allergies (according to the American Academy of Allergy, Asthma and Immunology) as compared to the experience of Dr. John Bostick who first identified hay fever in 1819 after spending nine years just to find 28 cases, according to Dr. Ford, quoted in the same article. Another even more serious disease that undoubtedly has been greatly aggravated by pollution is cancer. Statistical proof is difficult, if not impossible, because only a few generations ago the means for identifying cancer were lacking and most deaths were attributed vaguely to "old age" or "natural causes." There have been instances, however, where cause and effect are quite clear, such as Love Canal. Other areas in the vicinity of polluting industries have been found to have much higher rates of cancer (and other diseases) than the average for the population. Corporations responsible for such lethal "externalities" attempt to escape responsibility by at least two strategies: (1) they demand absolute proof that the harmful effects are due to their operation rather than other sources, and (2) they counter proposed regulation by trumpeting exaggerated estimates of the cost and asserting that it would be passed on to consumers. They and their allies use financial and political power to thwart government clean-up efforts and to influence academic research. They have succeeded in getting cancer-fighting organizations to limit their work to assisting victims and recommending healthy diets instead of investigating industrial causes of cancer. Under corporate pressure, governments tend to put the burden on the general public rather than big business (Example: passenger automobiles in the US are required to meet strict emissions tests, while trucks, busses, and industry- favored sports utility vehicles (SUVs) are largely exempt-and factory smokestacks get delay after delay in pollution reduction.) In many ways, capitalist enterprises use resources efficiently, to give them their due, and create wealth that can be used for education and for control and mitigation of pollution. Perhaps it was because they had no great wealth that industrial Communist societies permitted so much of their pollution to go untreated, and lack of wealth today means that developing countries need assistance to reduce pollution. Some people say that if we put the necessary democratic and environmental constraints on market economics, then we will have abolished capitalism. Others favor a reformed capitalism that sustains democratic values rather than restrains them and a capitalism that includes all the costs to the environment- rather than an abolished capitalism. Such reform would include giving workers a legitimate right to bargain with corporations, breaking up powerful trusts, holding corporate officers criminally responsible for corporate crimes, and making it illegal for corporations to participate in any political process. Perhaps capitalism is the only socio-economic system in world history that can function well in democracies. It causes democracy, because it brings into being a considerable middle class. This is a thesis in the book of Robert Heilbronner, Twenty-first Century Capitalism (1992). The relationship between democracy and capitalism (market system) is a complex one. Big corporations misuse their powers, but small and middle sized companies (and enterpreneurs) give opportunities to individuals. In the U.S. (and some other countries that have followed its example) there was what academics in political science and economics called a "mixed system" in which private businesses, producer cooperatives, consumer cooperatives, and government agencies all played their part. Then the "Chicago School" disciples of Milton Friedman largely prevailed in the US (and in Margaret Thatcher's Britain) with a new political and economic faith so opposed to any government activity or regulation that it could properly be described as "anarchy." Many of us feel that small businesses competing by Adam Smith rules are fine, and if they so please their customers that they grow large, so be it. What is wrong is when businesses combine to stifle competition and improperly influence government. Corporations are NOT persons, and much harm was done by the US Supreme Court in a series of decisions that gave them even more rights than individuals. Limited liability without responsibility has caused much of the trouble we see today. By 2000, according to a study by the Institute for Policy Studies, "The Top 200 corporations' combined sales were bigger than the combined economies of all countries minus the biggest 10....Between 1983 and 1999, the profits of the Top 200 firms grew 362.4 percent, while the number of people they employ grew by only 14.4 percent....U.S. corporations dominate the Top 200, with 82 slots (41 percent of the total). Japanese firms are second, with only 41 slots." (view in PDF at http://www.ips-dc.org/top200.htm ) The following proposals were submitted to the forum members as a summary of those on which all were thought to agree: 1. Corporations, especially the multinationals (also called transnationals), must be brought under control. They have extended their size and power to the point that they are a threat to the planet and its inhabitants. Some corporations are actually bigger than many national governments in the world. They are able to get free of environmental regulation by threatening governments that they will move to a more permissive jurisdiction. They undermine and destroy labor unions by similar threats or actual movement of factories to areas of low or non-existent standards for wages, health, and safety. 2. Remove the legal fiction that a corporation is a person. Given that there are important differences between corporations and real people, corporations should not be awarded the rights of free speech and political activity that properly belong to citizens. 3. Improper influence on government officials must be prevented. Outright bribery is used in some countries. Elsewhere, large corporations and their wealthy controlling stockholders influence public officials by campaign contributions and by favors such as expense-paid trips to luxury resorts, interest-free loans, and free use of corporate jet planes. They also underwrite propaganda campaigns to help political parties and candidates. To circumvent election laws in the US they stop short of saying "vote for X" or "vote against Y" but come as close to that as possible. Although it is illegal for corporations to contribute to political campaigns, they seem to have done so by various loopholes and subterfuges. 4. Newspapers and broadcasters need to be freed from the control of corporate cartels. Since the Telecommunications Act of 1996 there has been a parade of media mergers and over 4,000 radio stations have been bought up in the United States, while television networks are now in the hands of huge corporations like General Electric, Viacom, Disney, and Rupert Murdoch's News Corporation. Murdoch also controls large portions of the television and newspaper media in Great Britain, Australia, and elsewhere. Corporate media have done their best to hide corporate scandals and to downplay or distort any protests against corporations. 5. Corporate efforts to undermine pure food laws, to raise livestock under factory conditions with dangerous use of antibiotics and hormones, to treat food with hazardous radiation, to modify crops genetically without adequate testing, to patent life forms and traditional remedies, and to promote "killer" seeds that make farmers forever dependent on corporate suppliers, must be brought under control. This should be done by national laws to the extent possible and by new international controls under the UN or similar body. 6. Agencies of the United Nations need to be prevented from operating in secrecy in behalf of multinational corporations. On the world scene, global corporations (including global bankers and financial companies) dominate international agencies unrestrained by democratic safeguards. At the World Bank, IMF, and WTO the walls of secrecy should be removed, independent outside experts should be used, and the policy-makers and advisory groups should include balanced representation of the interests involved, not dominated by the global corporations. The World Bank should include experts not beholden to the financial community; e.g., economists from labor organizations, consumer groups, and the academic world, as well as environmental organizations and experts from the countries involved in their development programs, and the same should apply to the IMF. The WTO should include balanced representation of consumers as well as producers, and judges on its tribunals should be independent scientific experts who can distinguish legitimate environmental concerns from mere pretexts, especially in the matter of food safety. 7. Voting in the World Bank and IMF needs to be more democratic, instead of being based on financial investment that favors rich nations, especially the United States. Reform of the IMF must include keeping it out of politics. The enormous leverage of the IMF over democratic institutions in borrowing countries was made plain in South Korea's presidential elections, as the Fund insisted that all presidential candidates endorse the IMF bailout agreement. 8. Every available influence should be brought to bear by the UN, World Bank, IMF, etc., to prevent multinational corporations (in league with repressive governments) from driving local inhabitants off their land by pollution from poisons such as cyanide used in mining, by oil spills into water supplies, and by using violence against those who protest. There have been many instances, including Shell in Nigeria, BHP (Australia's largest company) in Papua New Guinea, Gemala Industries of Indonesia in occupied East Timor, DuPont in Goa, mining companies in the Philippines, and many others. 9. Regional trade agreements such as NAFTA and global agreements such as GATT should not be ratified without enforceable protections of the environment and workers rights. Prime examples of this need are the corporations that set up polluting factories in Mexico near the US border and get away with firing any employee who joins a union. Often police and armed forces of the host nation are used to coerce employees. 10. Steps should be taken by national and international authorities to stop the bidding war in which corporations extract subsidies, tax abatements, and exemption from environmental and human rights requirements in a competition among localities for the placement of corporate activities. 11. The "revolving door" for individuals who shuttle back and forth between government positions and corporate lobbying needs to be abolished. In the US former government administrators and congressmen become lobbyists and many make as much as a million dollars annually. Some, like Henry Kissinger, form consulting firms that lobby without disclosing the names of corporations for whom they work. 12. Corporations should be prohibited from financing front organizations such as"think tanks" and purported grassroots organizations to advocate corporate interests, or at least their role should be publicly revealed. 13. Corporations should not be allowed to sponsor US presidential debates as Anheuser-Busch, U.S. Airways and 3Com did in 2000. After the original organizer, the League of Women Voters opened the debates to a third party candidate in 1980, the two major parties set up a Commission on Presidential Debates (run out of a political consulting firm's office in Washington, D.C.) that has set rules effectively excluding third party candidates. 14. People should be provided information on how to organize to deal with local issues--how to deal with Wal-Mart moving into a small town, or a corporate polluter nearby, cleaning up a polluted neighborhood, or how to oppose large developments that destroy a community's lifestyle. (Al Norman of "Sprawl- Busters" who has helped 88 smaller firms fight Wal-Mart, is one source.) 15. People who wish to do so should be encouraged to develop and put into practice local economies, beginning with local food economies, to shorten the distance between producers and consumers, to make the connections between the two more direct, and to make this local economic activity a benefit to the local community. Other proposals supported by many or most forum members: 16. There should be a democratically chosen body on a global level to act as an umpire to enforce rules of the economic game. 17. Restore the "mixed system" in which private businesses, producer cooperatives, consumer cooperatives, and government agencies all played their part. This has largely been destroyed in the US and other countries where it used to flourish. Preserve it wherever it survives. 18. Corporations should be prohibited from donating to political parties or campaigns. 19. Political campaigns should be publicly financed to replace bribery by means of campaign finance. 20. Lobbying should be strictly limited by forbidding anything of value being offered to public officials. 21. Make corporate officers personally responsible for violating laws. 22. Make corporations report to the public, as well as shareholders, on their undertakings and plans that affect workers, consumers, and the environment. 23. In regard to the terms and length of copyrights on "intellectual property" the right balance needs to be achieved to provide inducement for creative work without locking it out of the public domain for an unreasonably long period. The same applies to patented inventions. In the US entertainment companies like Disney were successful in lobbying to extend the duration of copyright far beyond the lifetimes of the creators. 24. There should be a body such as the "Environmental Council" proposed by Earth Action to make binding decisions to protect the planet, perhaps by transforming an already existing UN institution, with its actions subject to approval by the General Assembly, combined with an expanded environmental role for the World Court. 25. All nations need to agree to implement simultaneously a range of measures to re-regulate global markets and corporations in order to restore genuine democracy, environmental protection, and peace around the world. This is because no nation nor group of nations alone can control global capital nor implement vital economic, social or environmental policies that might incur market or corporate displeasure. A method for breaking this impasse is proposed by the International Simultaneous Policy Organization (ISPO), whose website is www.simpol.org. 26. If there is no other way to overcome the favored status US courts have given to corporations, it would have to be accomplished by constitutional amendment, making the limitations and responsibilities of corporations so clear the courts could not interpret them away. 27. Corporations should be required to have national charters rather than seeking charters in more permissive internal or external jurisdictions. 28. Foreign corporations should be subject to the same taxes and laws as domestic corporations. 29. Since the historical basis of all corporate charters is service beneficial to the general public, any corporate activity not beneficial to the public, especially if it involves explicitly illegal actions, should be cause for charter revocation both in the case of the parent corporation and of its foreign subsidiaries. 30. National laws protecting the environment, public health, safety, and human rights within any country should also apply to its corporations and their subsidiaries when operating outside that country. 31. Public officials should be prevented from holding secret meetings with heads of corporations and financial institutions, as at the Council on Foreign Relations, the Bilderberg, and the Trilateral Commission. 32. Businesses should be encouraged to use energy and resources efficiently without paying subsidies. In the efficient energy use chapter of Jim Bell's book he cites numerous large corporation who have invested in energy and resource use efficiency measures "and in every case their return on investment was better than their investments in their product lines." 33. As proposed by Jim Bell, governments should use experts from economics and accounting to determine the true cost of various goods, and then pass laws to include externalities, such as environmental damage, normally neglected in retail prices. Possible questions: Does this method create a huge bureaucracy of accountants to figure the true costs and lawyers to dispute them? Who gets the price increase? Does it become excess profit for the corporations? Does the government tax it away and use the proceeds to offset pollution and hazardous waste? If so, how do we prevent it being frittered away in litigation as is being done regarding the SuperFund taxes that were supposed to clean up toxic waste? What about the effect of these higher prices on GDP? National production is conventionally measured by market prices, so wouldn't the damage to environment and humans now be counted as an increase in GDP? 34. The obverse of true cost pricing is "The Neuman Proposal," which would have the government pay individuals to reduce their travel by car or plane in order to decrease emission of greenhouse gasses that contribute to global climate change. This raises questions of the possibility of enactment, the accuracy and administrative cost of determining these subsidies, and the possibility of fraud or misuse. 35. Limit the size that corporations can attain or their ability to merge to reduce competition. Of the world's 100 largest economic entities, 51 are now corporations and 49 are countries according to the Institute for Policy Studies. The world's top 200 corporations account for over a quarter of economic activity on the globe while employing less than one percent of its workforce. http://www.ips-dc.org/top200.htm 36. Remove the "limited liability" of corporations (Inc., LLC, Ltd., SA, NV, GmbH), making the liability of corporations real and full, so it will have an impact on the shareholders and will guide them to more responsible actions. Limited liability without responsibility has caused much of the trouble we see today. 37. Some people propose that capitalism be abolished. Richard Moore opined, "that if we put the necessary democratic and environmental constraints on market economics, then we will have abolished capitalism." Others would go further to replace markets and private investment entirely. 38. Localized economic control should replace multinational corporate control. If there is local economic control, then democracy may continue as a healthy form of government. Locally elected leaders may come together as the democratic representatives in a confederation. 39. There should be a large international peace-keeping force under the control of the U.N. or some other agency that ensures equitable distribution of natural resources and peace, after all weapons of mass destruction have been destroyed. 40. Large numbers of people should reduce using energy sufficiently to let the power brokers know who really is in control. 41. People could stop eating beef. Just in Central America alone 35 million people are now either landless or own too little land to support themselves while the transnational corporations have continued to drive the locals away and clear forest to raise beef cattle (1992 figures). 4 Making Monetary Systems Work to Benefit People This chapter asserts that control of the world's finances by major banks and corporations, in league with the International Monetary Fund, must be broken. The IMF acts to protect banks and speculators from losses due to bad judgment, while pressuring borrowing governments to take actions that favor penetration by multinational corporations and curtailment of government protections for its citizens. Also considered are concentration of financial power, mismeasurement of GDP, and the merits of local currencies. There is an old saying that "money makes the world go round." It reflects the extent to which control of money determines so much else that happens on this planet. Presidents of the United States like to be described as "the leader of the free world." Other holders of public office throughout the world likewise consider themselves "in control." In reality they often are merely responding to the pressures and carrying out the wishes of those who control the money. Wealth is known to be quite concentrated, although recent global figures are hard to find, especially for wealth rather than income. According to a recent study by World Bank economist Branko Milanovic, about 50 million people who made up the top one percent in the world's five billion population had 9.5% of the world's income in 1993. That was more than the whole bottom half who had only 8.5% (published January 18, 2002, in the Economic Journal). The contrast among nations is shown by figures compiled in 1992 by the United Nations Development Program (UNDP). They found that the 20% of the world's people who live in the world's wealthiest countries received 82.7% of the world's income, while only 1.4% of the world's income went to the 20% who live in the world's poorest countries. In the United States, headquarters of many of the multinational corporations, the top 5% of U.S. families received 20.3% of total money income in 1996, and the top fifth, 46.8%, while only 4.2% went to the bottom fifth. As for wealth, Federal Reserve figures for 1989 showed that the richest 1% of American households accounted for nearly 40% of the nation's wealth, and the top 20% accounted for 80% of the wealth. Wherever figures are available, wealth turns out to be even more unevenly divided than income, and figures are hard to get because the wealthy prefer not to disclose that information. Not only wealth is concentrated, but also power. Such banking families as Rothschild, Morgan, and Rockefeller have long exerted a powerful influence on public policy, including the financing of wars. In modern times, control is largely exercised by major financial houses and huge corporations whose interests are promoted by the International Monetary Fund (IMF), the World Bank, agencies for export financing, and regional development organizations. There is much confusion about the functions of the IMF and the World Bank. Both were created at the Bretton Woods Conference in 1944 during World War II. The original and officialF name of the World Bank is the International Bank for Reconstruction and Development, which is a better description of its purpose. Instead of being a bank in the usual sense, it was intended to provide financial aid by making and insuring loans where needed to promote economic recovery throughout the world. Ostensibly, it is still pursuing that objective, but its methods have been criticized as counterproductive and its management has acknowledged that reform is needed. The IMF's original function, on the other hand, was to maintain fixed and stable exchange rates among the currencies of member nations. This was largely based on a standing offer of the United States to other governments that it would buy or sell gold at a fixed price of $35 per ounce from its huge hoard at Fort Knox. When that policy was dropped and national currencies were allowed to "float" in the l970s, the IMF found a new mission. It began to offer loans to developing countries with strings attached, and later added guarantees of loans by international private banks with similar conditions attached. When a currency crisis occurs now, as it did in Asia late in 1997 and in Argentina in 2002, for example, the IMF remedy is to demand austerity and deregulation in exchange for additional loans or loan extensions. Its policies are thus in step with those of the World Bank for "structural adjustment" that have caused such opportunities for big business and disasters for local populations as described in Chapter 3. In the Asian crisis, for example, the global financial powers hastily put together a rescue package, bailing out the unwise investments of banks and others. South Korea, one of the major recipients of funding, did not punish corrupt politicians involved in the crisis, but agreed to give foreign corporations more access to its domestic market, open its bond market, and speed up the opening of branch offices by foreign banks and stock companies. In addition the IMF arrogantly insisted that all candidates in South Korea's presidential elections endorse the IMF bailout agreement. Another method of dealing with currency crises has been propping up of national currencies by foreign exchange operations of governments or their central banks at the expense of the public. Experience has shown that such efforts have only temporary effects at great cost. An example was the vain and costly effort in 1992 by central banks in England and Germany to support a weak British pound. This was the time George Soros' hedge fund won an estimate $1 billion profit betting the banks would not succeed. The British pound fell 41% in eleven months, as measured against the Japanese yen, and Britain had to withdraw from the Exchange Rate Mechanism (ERM) for stabilizing European currencies. On another occasion, more than $50 billion of US taxpayers' money was used to bolster the Mexican peso at the end of 1994, mainly benefiting Wall Street financial interests. One answer to the crises caused by such speculation in currencies could be the tax proposed by the late Nobel-Prize-winning Yale economist James Tobin that would discourage currency speculation by making it less profitable. His proposal is promoted by Attac, a 27,000-member organization in France, the Association for the Taxation of Financial Transactions for the Aid of Citizens. The Tobin tax at one-quarter percent would raise about $250 billion a year, exceeding five times all current international aid, but could not be levied by any single country without causing financial companies to move to more permissive venues. Another proposal to stabilize exchange rates would be to base currencies on actual commodities rather than existing credit money that is subject to risk by the herd mentality that drives speculators. Money has come almost exclusively under the control of privately owned banks. The history of money runs from barter without money, to commodities used to define the value of other goods, and to rare items such as gold and silver generally accepted as payment for other goods and services. Then governments started making coins of gold and silver as a convenient means of insuring purity and accurate weight. The next development was for goldsmiths in the Middle Ages to accept gold for safekeeping, issuing paper documents as receipts, which were found to be more convenient to carry than the actual metal. This led to the discovery by goldsmiths that these receipts, which were in effect paper money, remained in circulation for considerable times before being used to claim the precious metal, and so they issued receipts for more gold than they actually had. These receipts were issued to borrowers who were expected to repay the amount with interest. Loaning at interest being forbidden by the Christian church at that time, this banking operation became an attractive trade for Jews. Meanwhile, governments began to issue paper money that promised redemption in precious metals, usually gold. They also, in time, discovered they could get away with issuing more paper than they had gold reserves to back up. Most, perhaps all, currency throughout the world is now redeemable only for more paper, and its purchasing power depends wholly on public confidence. Banks also discovered that they could create money in another form by simply crediting a customer's account with a balance equal to the amount of a loan document signed by the customer. Just as goldsmith's receipts were not all claimed at once, the balances in customers' bank accounts are not all claimed at once. Thus the banks are able to issue such credits amounting to many times the bank's capital, the ratio being set by bank regulators. With the purchasing power of currency depending entirely on public confidence (and the herd mentality of Wall Street), it is apparent that the structure is extremely fragile. If the public fears run-away inflation, a run on banks is likely. To build confidence and to ensure that banks' profits from interest are not eroded over time, central banks take deflationary measures whenever there is a hint of inflation and regardless of the calamitous rise in unemployment that often occurs. As another way of maintaining public confidence, central banks also call on the government to bail out (with public funds) financial firms deemed "too big to fail." This allows bankers to take bigger risks, with profits going to the bankers while debts and bank failures are at the expense of the public. The important interest rate decisions are made outside the structures of government that are answerable to the public. In the United States, whose dollars have become the de facto medium for international exchange, the Federal Reserve Board sits atop a banking hierarchy. Its members are insulated from government by long overlapping term appointments and control the 12 regional Federal Reserve Banks that actually issue the U.S. currency and whose shares are owned by other banks. FRB Chairman Alan Greenspan, first appointed by President Reagan, has become possibly the most powerful influence on the world economy. The results of monetary policy exercised by the central banks to counter business cycles are usually judged by the rate of inflation, imperfectly measured, and by economic growth, measured very imperfectly by Gross Domestic Product (GDP). As noted in Chapter 1, that measure is seriously flawed. For example, when a mother pays for child care, transportation, and outside meals, so she can work for wages, both her wages and expenses are counted in GDP, but her previous work in the home was not counted. Also, environmentally destructive activities are counted in GDP, as are the costs of repairing or counteracting the destruction. For more detail, see Beyond Globalization by Hazel Henderson (Kumarian Press, 1999), chapter 2, and Playing with the Numbers by Richard A. Stimson (Westchester Press, 1999), chapter 3 (www.stimson.homestead.com). The Bank of England and the new European Central Bank now have similar autonomy and the same "neo-liberal" economic philosophy as the FRB, the World Bank, and the IMF. The result is the policy of "scarce money" and people who are willing to work remain unemployed because potential customers for the goods they would produce lack the money to buy them, and businesses will not hire workers if there is no market for the products. Economist Stuart Chase explained this in 1934 during the Great Depression when millions wanted to work and could not find jobs, the rich were hoarding money or buying property at distress prices, mortgages were being foreclosed, and there were runs on banks: "The ten million unemployed in this country...would gladly take a volume of goods which would make factory wheels hum. The factory wheels are silent because the unemployed have no money." Chase went on to observe that production could keep on rolling if somehow people could be provided with cash. But that is "inflation" if people are equipped with money outside the "rules of the game." Those rules require that private bankers control the supply of money, manufacturing it by issuing business loans and crediting checking accounts. "Private bankers cry to high heaven," Chase noted, "when the government proposes to create some money of its own against, let us say, public works. Why is this more reprehensible than creating money against a shoddily built apartment house which may never be rented?" During that Great Depression another form of money was invented by municipalities when their tax receipts were insufficient to pay teachers, police, firemen, and other employees. Instead of legal tender they printed other pieces of paper called "scrip," that the cities would accept for tax payment and many local merchants agreed to accept. This expedient allowed many city workers to remain employed and merchants to pay their property taxes and to trade with each other. Although scrip became very successful in some places, the banks got it abolished as soon as they could. Similar arrangements have been created among buyers and sellers without the use of government-created currency or bank-created credit. They were especially useful to decrease unemployment and business failures during the 1980s recession. Computer software is now available that enables people to break the type of impasse described by Stuart Chase. One of the best known of "community currency" systems is the rapidly spreading "usury-free" LETS [Local Employment Trading System-sometimes called Local Exchange Trading System] of Michael Linton who lived in the Comox Valley on Vancouver Island in British Columbia, Canada, where many people were unemployed due to a money shortage. They trade their goods and services for those of others in the system, thus creating their own money. (www.cyberclass.net) The LETS system is based on a "mutual credit" system proposed by Silvo Gesell in the early 1900s. While these systems remain clearly local, there are proposals to turn them into national systems such as that proposed by J. Walter Plinge (http://ebean390.tripod.com/drwalt.htm). Other community currencies have also been developed, for which the "Ithaca Hours," established at Ithaca, New York (www.lightlink.com/hours/ithacahours), has become the model. This differs from mutual credit systems as it is a pure fiat currency. The RGT currency, similar to Ithaca Hours, afforded extensive bypassing of official currency during the recent crisis in Argentina. Similar systems exist in Brazil, Uruguay, Chile, and Spain (www.cyberclass.net/argentina.htm). While many community currencies fail to provide for long-term borrowing, the long-established Swiss WIR (Wirtschaftsring-Genossenschaft-German for economic cooperative) and Swedish JAK (Jord, Arbete, Kapital-Swedish for land, labor, capital) systems are said to have resolved this problem. JAK began as a cooperative savings and loan association in 1965 and was granted official bank status by the Swedish government in 1997, resulting in members' savings being covered by deposit guarantees. According to its official web site, it has over 21,000 members served by 80 trained volunteers in an interest-free banking system, whose main purpose is to provide interest-free loans to members. They also are able to earmark their savings for designated local enterprises. JAK has a commitment to "spreading information about the ill effects of the prevailing interest-bearing monetary system." (www.jak.se - in English) WIR, under the Swiss federal banking law since 1936, and known as WIR Bank since 1998, grew out of an economic cooperative founded in 1934 as a result of the Great Depression. It attempted to relieve the money shortage, or liquidity crisis, by applying the concept of "interest-free money" from liberal economic theory, which was opposed to charging interest and led to the concept that idle money should depreciate. At that time of crisis, according to the history given on the WIR web site (www.wir.ch), associations were formed in the United States, Europe, and throughout the world, for the exchange of goods (barter) among members, and WIR was patterned on a Nordic model. When the Depression was over, other such cooperatives disappeared. WIR continued, but the ideal of interest-free money was abandoned and modest interest charged for WIR loans and paid on participations in the cooperative. However, holdings in WIR money still do not bear interest. The idea of charging a tax on idle money was never actually applied. The principle of mutual aid among participants remains a priority. In 1992-98 WIR Bank revised its capital structure, entered commercial activity in new market segments, began global financing of building construction in combined accounts of WIR credits and Swiss francs. In 2000 it offered services to the general public in Swiss francs. (www.wir.ch - French, German, and Italian versions). In addition to community currencies are proposals for commodity-backed currencies for the purpose of resolving inequities in foreign currency exchanges. Early proposals came from Walter Bagehot in 1872 and later from Ralph Borsodi and J. M. Keynes in the early 1900s. Modern examples include the Terra of Bernard Lietaer, a former senior executive of the central bank of Belgium, expressed as a specified basket of raw materials, and a proposal made by J. W. Smith. Entrepreneurs seeking to start or expand a business can get financing from banks or issuance of corporate bonds only with the promise of paying interest. The alternative seems to be to offer equity, or a share of the profits, rather than interest payments, as is said to be allowed in Islamic banking where interest or "usury" is forbidden by religion (as it once was in Christianity). Unless systems such as those described above can grow rapidly to replace conventional banking and fiat money, there still remains the need to reform the national and international systems that dominate the world economy. For a comprehensive overview of alternate money systems, see Strohalm's Links to Economic Change (http://www.strohalm.nl/bookmarks/alles.htm). The following proposals were submitted to the forum members as a summary of those on which all were thought to agree: 1. Control of the world's finances by major banks and corporations, in league with the International Monetary Fund, must be broken. The IMF acts to protect banks and speculators from losses due to bad judgment, while pressuring borrowing governments to take actions that favor penetration by multinational corporations and curtailment of government protections for its citizens. 2. Any international organizations such as IMF, the World Bank, and various regional development agencies that make grants or loans to assist nations in financial crises should not be under the exclusive control of bankers; they should be responsible and accountable to elected representatives of the world's people. The agents of major banks and corporations tend to do what is in their own interest rather than that of the affected populations. 3. No such organizations should be allowed to operate in secret, and they should be required to consult with non-governmental organizations; otherwise, conditions imposed on recipients may have onerous consequences that are unknown to the public until too late. 4. These international organizations must not require any nation, as a condition of aid, to curtail any services or protections it affords its people, or to sell off any government operations to private companies. There have been past instances when well-run government operations were forcibly privatized with resulting price increases, loss of employment and/or damage to the environment. 5. Nor should these agencies require recipients to charge fees for children to attend school and for people to access basic health services. User fees for education discourage school attendance and user fees for health services lead to preventable death and disease. 6. These international organizations must also not require actions that favor penetration by multinational corporations in preference to local economic activity. Such actions have often deprived inhabitants of their traditional use of land and forced them to seek a living in the cities after they were driven off their land by armed forces or by poisoning of their streams with industrial waste, such as cyanide used in gold mining. 7. The "neo-liberal" economic approach that permeates these agencies must be overcome; the attitude of their bankers and multinational corporate allies places greater importance on rights of banks and corporations than on the liberties and economic welfare of the population. 8. Competition must be restored to the financial world by breaking the grip of monopolistic chains of banks, stockbrokers, and insurance companies that have crowded out independent entities and formed dangerous financial corporations across national and functional boundaries. In recent years these chains have grown, not mainly by providing better service to customers, but through mergers and acquisitions contrary to the intent of antitrust laws in various nations. The US Congress, after receiving many favors and contributions from financial firms, repealed the Glass-Steagall Act of 1933 and allowed banks again to sell financial securities and insurance. 9. Local mediums of exchange should be encouraged to reduce dependence on national currencies, international bankers, and manipulated exchange rates. Scrip not issued by governments or banks has been successfully introduced in some localities, including LETS (Local Employment/Exchange Trading System). 10. Likewise, mutual credit and barter in situations where appropriate should weaken the grip of the dominant financial institutions. New information technologies are making these arrangements more feasible. 11. Production should be measured without the errors of present Gross Domestic Product (GDP) calculations, which, among other things, ignore value produced outside the money economy, such as work in the home, and count the destruction of natural resources as production. 12. Governments and non-governmental organizations should encourage employee ownership of businesses, thus guarding against shortsighted policies of absentee ownership. Banks must not be allowed to dictate the selection of management, as is often the case at present. Other proposals supported by many or most forum members: 13. Nations that owe crushing debt because of past international banking policies need relief from that debt. International efforts should be made to recover funds diverted from those countries by leaders who embezzled them, and new grants or loans should be offered only when conditions are met to safeguard them from misuse. A bank that lends, without precautions, to a military dictator who then absconds with the money leaving his citizenry holding the debt is a predatory lender. International predatory lending laws could absolve poor citizens from repayment of such debt. 14. Private banks and bankers, necessarily having a vested interest in monetary decisions, must not be in control of central banks; and they must not be allowed to cause widespread unemployment by raising interest rates on the pretext of inflation risk. 15. Banks and money systems are the public's economic infrastructure like roads, rivers, and airspace. Bankers should be trustees with a fiduciary duty to be devoid of self-interest and to operate banks for the sole benefit of the communities and nations in which they operate. Banks should never be run for private profit, and no country should permit foreign nationals to own their banks. As a fiduciary operation, no bank should be allowed to engage in speculation in currency or other instruments. 16. National currencies must not be propped up by foreign exchange operations of governments or their central banks at the expense of the public. Experience has shown that such efforts have only temporary effects at great cost. 17. Instead of financing government services by taxes that are mostly imposed on productive activity, funds should be obtained by taxes and/or fees on externalized costs (pollution, health hazards, environmental damage, etc.) and financial transactions (via the Tobin tax). To prevent corporations from escaping taxation these charges should be imposed at the global level, partly financing worldwide needs and partly apportioned to member states. The benefits would be relief of existing taxes on useful work, discouragement of operations harmful to humans and the environment, and limitation of speculation in currencies and financial instruments that amounts to gambling and disrupts normal commerce. 18. The development of currencies-local, national, or worldwide-based on actual commodities rather than existing fiat money should be encouraged, along with mutual credit systems. 19. Support and encourage the restoration of a "mixed system" in which private businesses, producer cooperatives, consumer cooperatives, and government agencies all played their part prior to the ascendancy of the "Chicago School" disciples of Milton Friedman. 5 Democratizing the Communications Media (based on a summary by Liane Casten in Chicago with Richard Stimson) Concentrated ownership and control is dangerous enough in other areas, but it is especially harmful with regard to communications media. That is because it allows a few powerful people to limit and distort what information other people receive. In 1999, when there were still some restrictions media moguls were trying to break down, Rupert Murdoch and his Australian company, News Corporation, controlled over 70% of the press in Australia, and over 35% in Britain. They also had the New York Post, the Village Voice, New York magazine, the Boston Herald, the Chicago Sun-Times, the Twentieth Century Fox film studio, and Metromedia television stations in the United States, as well as satellite television in much of the world. Time-Warner and Bertelsmann AG were then making major acquisitions, and the three traditional US television networks (before Murdoch's Fox) were in the hands of General Electric, Westinghouse, and the Disney Corporation. By 2002 the monopolistic tendency had gone much further and information was increasingly dominated by entertainment. Viacom, owner of Paramount motion picture studios, book publishers, MTV and other cable channels, replaced Westinghouse as owner of the CBS television network. A special issue of The Nation (January 7-14, 2002) contained a color chart summarizing the holdings of the "Big Ten" corporations that make up the media cartel. These media-controlling corporations were shown to have revenues ranging from AT&T's $555 billion and General Electric's $130 billion down to Bertelsmann's $17 billion and News Corporation's $12 billion. The chart showed many joint ventures and percentage shares of ownership involving various of the ten companies. Since, at least in the United States, polls have shown that most people rely on television for their news, that medium has special importance. The Big Ten generally include both the studios that produce content with the channels that disseminate it. Al Franken, one of several people "The Nation" asked to comment on the chart, explained how this happened. "In 1995 the networks prevailed after years of fierce lobbying before Congress" in having the financial interest and syndication rules (fin-syn) rescinded that had prevented networks from owning more than a certain percentage of the shows they aired. Now, he wrote, "The same people who are scheduling the shows are making the shows, so what you see reflects the tastes of fewer and fewer people." The principle that content and distribution should be kept independent of each other is also breached with regard to DVDs (digital video discs). CSS (Content Scrambling System) prevents copying of DVDs and any software used for playing back DVDs must pay the major studios for a license. The world is split into six regions with DVD discs and players that are incompatible with those in other regions. Similarly, the incompatibility of television systems (and camcorders) in different parts of the world serves commercial interests at the expense of public convenience. A major political victory for the media oligarchy was the Telecommunications Reform Act of 1996. Overwhelmingly supported by both major parties, it effectively removed virtually all limits in the communications and entertainment industries. Congress also extended the duration of patents and copyrights, allowing firms like Disney to milk the profits from artistic work long after the originator is dead. The industry's political power is phenomenal. According to the Center for Public Integrity the fifty largest media companies and four of their trade associations spent $111.3 million between 1996 and mid-2000 for Washington lobbying, not counting millions of dollars in campaign contributions. All of the Big Ten in the chart have television holdings, including multiple channels and production facilities for content. General Electric, for example, has the NBC network and percentage shares in cable channels that include CNBC, MSNBC, A&E, History, Biography, AMC, Bravo, plus stakes in regional channels, Europe and Asia. Disney, with six production companies, 30 television stations, the ABC network, and Disney channels in over 140 countries, also has shares in a half-dozen other channels, plus theme parks in California, Florida, Paris, Tokyo, and Hong Kong. AT&T, with 60 million US telephone customers and 5 million corporate clients worldwide, also distributes television programs in 175 countries, has shares in television channels in the US, Asia, Europe, Canada, and South America. It is the largest cable company pending a $47 billion sale to Comcast. In the print media category, AOL/Time-Warner has more than 40 magazines and three book publishing companies, plus a stake in the Book-of-the-Month Club. It is is the leading consumer magazine publisher in Britain. Bertelsmann, the biggest broadcaster and main film producer in Europe, has 11 daily newspapers in Germany and Eastern Europe, many magazines in Europe and the US, and is the largest book publishing conglomerate in the US with Knopf, Random House, Modern Library, and Doubleday. The dominance of entertainment over information is illustrated by the film studios, libraries, and cinemas they own: Warner Bros. (AOL/Time-Warner), Viacom (Paramount and other studios plus cinema theaters in US, Canada, Europe, Asia, and South America), Disney, News Corporation (Twentieth Century Fox), SONY (Columbia Pictures, Screen Gems, Loew's Theaters), Vivendi Universal (Universal, world's second largest film library, and 3 cinema theater companies), and Liberty Media Corp. (spun off from AT&T, has shares in six movie companies). Music distribution is also important to AOL/Time-Warner, Bertelsmann, SONY, Vivendi Universal, and Liberty Media. Many of the companies have theme parks and professional sports teams. Further interests range from General Electric's nuclear reactors and financial services, through Disney's cartoon merchandise, to Vivendi Universal's hundreds of recycling, landfill, and incinerator sites worldwide, plus 220 advertising agencies in 66 countries. Internet involvement of the Big Ten includes Bertelmann's search engines, Internet service in Europe by Bertelmann and Vivendi Universal, AOL/Time- Warner's AOL and Compuserve Internet service, SONY's Internet service in Japan, and many websites related to their television channels. Access to the Internet is overwhelmingly through computers running Microsoft's Windows operating system and its Explorer net browser. This virtual monopoly was achieved by methods ruled by US courts to be illegal restraint of trade under the antitrust laws. Unlike the open-source Linux system, Windows keeps its source code secret and Microsoft uses its market strength to get its way with computer manufacturers and software applications companies. Media companies and other owners of "intellectual property" have not only extended the duration of copyrights but also used the patent laws beyond their original intention. Software patents that forbid copying the programmer's code are reasonable, but patents are being granted for the "method" of achieving a goal, even if different code is created. Software patents are often just elementary applications of mathematics or generic concepts. Inventors have long understood that patent law did not allow patenting a device that any competent mechanic could create. Under corporate political pressure, patent grantors, at least in the U.S., seem to have forgotten the traditional limitations and accepted outrageous extensions (even to the extent of patenting living organisms and traditional native remedies). Media problems have been discussed on the Blue Ear Forum, which consists mostly of journalists and writers around the world. A guest participant was Robert McChesney of the University of Illinois at Urbana-Champaign, author of "Rich Media, Poor Democracy" (University of Illinois Press, 1999), a book that dealt with many of the issues discussed in this chapter. Further information can be found at www.robertmcchesney.com. In another book with co-author John Nichols, "It's the Media Stupid" (Seven Stories Press, 2000) they declared: "No, the media system is not the sole cause of our political crisis, nor even the primary cause, but it reinforces every factor contributing to the crisis, and it fosters a climate in which the implementation of innovative democratic solutions is rendered all but impossible." When "The Nation" published its special issue with the chart showing the holdings of the Big Ten, discussion on Blue Ear heated up and Jay Rosen of Columbia University chided members for not differentiating between ownership and control, and for implying that control was so complete it was hopeless to oppose it. He asserted that freedom of expression of those in the forum belied their claims of media control. After various members of that forum responded to Rosen questioning whether he had any concern about recent developments affecting the media, however, he admitted concern and declared: "I'm worried about the rise of market values to a position where they trump all other values, such as public service, professionalism, truth, accuracy, genuine art, genuine popular culture, honesty, ethics. I think that dismantling the regulatory powers of the Federal government over broadcasting was a cave-in to major media corporations, and fully in line with the Republican party's agenda during those years, which was to evacuate any notion of the public interest beyond the 'verdict of the marketplace.'" The tight control of the communications media by major corporations leaves a few cracks and crevices, as Rosen pointed out, where information can seep through, such as Internet forums, small circulation publications, letters to the editor, local access cable channels, and occasional documentaries on public television or even some commercial TV reports. Overall, though, the information most people receive avoids issues about which the corporations owning the media (or their advertisers) are uncomfortable. Several examples will illustrate this point. Very little has been revealed about dioxin as the U.S. Environmental Protection Agency (EPA) has kept the scientific results of dioxin reassessment bottled up under both Clinton and Bush. Miniscule amounts are extremely harmful to humans. One source of dioxin is the bleaching with chlorine of newsprint-not something the major newspapers want to talk about. Dioxin is a component of Agent Orange, whose connection with illnesses of Vietnam veterans was long covered up by government and media. Another public health hazard that has been kept under wraps is the presence of bovine growth hormones (BGH) in milk and other dairy products in the U.S. They are causative for breast, prostate, and colon cancer, and diabetes according to studies in such peer-reviewed journals as "Lancet" and "Science." They are in school lunch programs in the United States but banned in Canada and the European Union. Political connections of Monsanto, the only maker of these hormones, may explain why the EPA and the Food and Drug Administration (FDA) have not acted. When two television reporters at a Fox station in Florida tried to report the dangers of BGH, they were fired. One more of many possible examples is that much of the nuclear radiation continually leaching into water tables and communities is from polluted sites never cleaned up by General Electric. Since that company owns NBC, no disclosure can be expected there. Some of the major media have been unable to avoid mentioning the dioxin in the Hudson River that GE refuses to clean up. In the political arena, U.S. television networks allowed a commission of the Republican and Democratic parties to exclude candidates of other parties from the presidential debates in 2000. In fact, the Green Party candidate, Ralph Nader, was forcibly excluded from the room. There is a website completely devoted to media censorship, which can be found at www.projectcensored.org. Free emails about items under-covered in the press can be obtained by subscription and the media research group issues an annual list of under-covered over-covered news items. The director of Project Censored is Dr. Peter Phillips, Associate Professor of Sociology at Sonoma State University in California. Media coverage of news can be influenced by considerations of patriotism, (not only in the United States). According to Phillips, "Marc Herold, an economics professor at the University of New Hampshire compiled a summation of the death toll in Afghanistan-saying that over 4,000 civilians died from U.S. bombs-more than died at the World Trade Center. Yet only a handful of newspapers covered his story." Phillips also noted that both the BBC and the Times of India published reports several months before 9-11 that the U.S. was then planning an invasion of Afghanistan. The Unocal oil pipeline from the Caspian Sea region was to be built through Afghanistan and the U.S. needed a cooperative government in power. He cited report from France regarding how the Bush administration, shortly after assuming office, slowed down FBI investigations of al-Qaeda and terrorist networks in Afghanistan in order to deal with the Taliban on oil. These, and other suspicious matters including the millions of dollars made on pre-9-11 put options on United and American Airlines stocks, have largely been ignored by the mainstream US news media. Liane Casten was appointed by Project Censored as one of