When corporations rule the world

Google’s owners are not the only ones troubled by Microsoft’s unsolicited bid for rival search engine Yahoo. No less than the right-leaning, pro-business Daily Telegraph believes that Microsoft’s move is yet further evidence that corporations have become more powerful than governments. The Telegraph has discovered what many have known for a long time – that corporate-driven globalisation is at odds with what are considered to be the norms of a parliamentary democratic state.

Microsoft is a case in point. The corporation has a virtual monopoly on the software used to run personal computers. And it wields tremendous influence in government circles, including in Britain. Microsoft is tied into the New Labour government’s educational policies and practice, for example, and chief executive Bill Gates is close to prime minister Brown, as he was to his predecessor. Bids by the US and the European Union to weaken Microsoft’s monopoly have come to nothing.

For the Telegraph, this is all too much. Its editorial (2 February) concluded that Microsoft’s decision to offer to buy Yahoo shares at 62% over their closing price was essentially aimed at Google. Yahoo has lost out to its search engine rival and the company’s revenues are in decline. The paper is concerned that If Microsoft and Yahoo combine successfully then the future of internet technology will be dominated by a battle between Microsoft-Yahoo and Google, adding sardonically: “So much for the diversity of the free market.”

The conservative newspaper has clearly had its faith in capitalism shaken by the current financial crisis, because the editorial goes on to say: “A Microsoft-Google duopoly, meanwhile, is more subtly political: it brings us close to a world in which corporations wield more power than governments. In both cases, massive issues of sovereignty and commercial freedom are being decided not in parliaments but in boardroom negotiations. The West's elected politicians have some serious catching up to do.”

This is where the Telegraph has missed the point, however. The “West’s politicians” are deeply embroiled in the whole process of corporate-driven globalisation. They have willingly bowed to the power of the corporations in order to attract foreign investment. Politicians have given vast powers to the World Trade Organisation and the EU to promote deregulation and open markets. New Labour has brought business figures like banker David Freud into government. Freud has just proposed that millions of people should be denied invalidity benefit and compelled to work. What a surprise.


The transition from the welfare state to the market state we now live under, actually began under the Tories in the early 1980s and has been completed by New Labour. The Telegraph may be alarmed now, but it was complicit during this lengthy process. The paper embraced the alleged benefits of the free market economy when it seemed to be in the ascendancy. Now it is concerned that growing inequalities and instability will lead the public to question the legitimacy of the capitalist system as a whole.

The Telegraph is right to be worried. The parliamentary state is clearly incompatible with corporate-led globalisation and that is why it becomes more authoritarian with each passing day. In just one week, the state under New Labour has announced the reintroduction of arbitrary stop and search powers for the police and effective detention without trial for terror suspects. Even its own MPs are not safe from police bugging operations. Taking on corporate power will mean building a new, democratic state that supports the transfer of shareholder ownership into common, co-ownership by workers and producers. Now that’s a project the Telegraph won’t be too keen about!

Paul Feldman
AWTW communications editor