High Finance and Democracy

Chapter 2 of Of the People

The view that multinational business has assumed a form over the last half century that is endangering democracy is no longer a plaint made only by those on the left of politics, but has gone global.^[1] The Covid pandemic and government actions to protect economies from the effect of lockdowns, needed to prevent wider spread of infection and fatalities, has stripped the last layer of mask off the reasons for growing inequalities in wealth – and therefore its influence over governments and societies – by nakedly and almost instantaneously accelerating the size of the inequality gap not just between rich and poor countries but between rich and mid-income people within countries

One effect of the pandemic was to increase the wealth of billionaires in the US by close to $640 billion to a total of more than $3.5 trillion, the largest gainers being owners and investors in the technology sector – social media companies, providers of conferencing platforms, and digital retailers such as Alibaba, Amazon, JD.com and Pinduoduo.^[2] Oxfam says that the ten richest people in the world doubled their combined net worth in the pandemic, putting more into their hands than the combined wealth of the 3.1 billion people at the other end of the scale.^[3] But the pandemic leap of billionaire wealth was not a new phenomenon, it was merely a sharp acceleration of a trend that has been rising steeply since 1980. In the period since that year, US billionaires have increased their wealth by 1,130%, which is over 200 times more than the rise in median wages; in the same period their taxes, measured as a percentage of their holdings, dropped by 78%.^[4] These are staggering figures.

What happened in the 1980s to trigger this process? A major factor was the implementation of ideas that underlay ‘Reagonomics’ in the US and were adopted elsewhere, notably in the policies of Margaret Thatcher in the UK. Ronald Reagan became president in 1981, and his policies reversed the consensus that had arisen after the First World War, and especially under F. D. Roosevelt in the 1930s, that government has an important economic role to play in society, by regulating markets to guard against excessive fluctuations that could cause collapses such as the 1929 Wall Street Crash and subsequent Great Depression, and by investing in public programmes and providing welfare to soften capitalism’s harsher effects on those less able to benefit from it.

Reagonomics was a response to the ‘stagflation’ which by the 1970s had brought a slowdown to the US’s post-Second World War economic boom. It consisted in deep tax cuts, lower social spending, more military spending, and deregulation of markets and financial services. The theory was that regulation and government spending was a barrier to incentives in business and interfered with the operation of markets. Reagan therefore lowered taxes and cut spending on Social Security, Medicaid, Food Stamps, education and training. Just one example of the effect was that over a million recipients of disability benefits were excluded by stricter enforcement of criteria for entitlements.

In the UK public utilities and other major state-owned companies were privatised – water, rail, gas, British Telecom, British Aerospace, Rolls Royce, British Airways, in all 40 state-owned corporations. If long-term consequences are a guide to the wisdom of the policy, one notes that the result has been higher prices and poorer quality services in essential UK sectors: polluted water is one, water company money being diverted to (largely foreign) shareholders instead of invested in maintaining and improving infrastructure; rail services are another, with the slowest trains and highest (indeed sky-high) fares in Europe; energy a third, with exorbitantly high costs compared to other European economies facing the same energy-supply stresses.^[5]

Back in 1980s America, at the same time as increasing the defence budget by 35% - Reagan’s ‘peace through strength’ initiative aimed at beating the Soviet Union by forcing its own defence spending to unsustainable levels – the government cut income and corporate taxes sharply, dropping the highest marginal rate from 70% to 28%, removed price controls on energy, opened more public land to oil exploration, and cut environmental programmes. Despite tighter control of money supply through interest rate rises in the early 1980s to control inflation, the policies generated a boom, but with almost all the benefit going to the rich; middle class incomes remained the same as they had been in the previous period of stagflation, and the poverty rate rose.^[6]

Cutting taxes required borrowing more for military expenditure and what was left of social spending, so the deficit and the national debt both grew, tripling over Reagan’s period in office. Both have continued to balloon upwards ever since, as the political necessity of holding down taxes and the practical necessity of increasing government spending pulled ever further apart. China joining the World Trade Organisation in 2001 added to the problem, because the leap in its market share of cheap goods widened the trade imbalance with the US, the latter paying China for its products with IOUs, which means that China’s holdings of US debt ballooned likewise – at time of writing China holds more than $850 billion of US debt.^[7]

When emergency situations arose in 2008 (the near-collapse of the financial markets) and 2020 (the Covid-19 pandemic) with governments intervening to protect their own and the global economy, the ever-widening inequality gap was exacerbated by the measures taken – fuel added to the fire – because the bail-outs in both cases went mostly to corporations and their investors; ‘socialism for the rich’ in the much-used phrase, leaving all others to the unforgiving action of markets, in particular the labour market.^[8] Starting with the reduction of already weak trade union power in the US – in the UK in the 1980s Margaret Thatcher had already ‘tamed’ the unions legislatively and through tough responses to strikes in industries hard hit by her government’s policies, notably mining –– the evolution of a ‘gig’ market for labour, a ‘precariat’, was given a kick and has since reached major proportions.

A compelling analysis of how this happens is the practice of central banks printing money to pump into the economy – ‘quantitative easing’ is the term of art – giving banks funds to lend to corporations and investors, who borrow it to buy their own shares on the stock market, thus increasing their value. The increased share value does not proportionally reflect increased profits, but far exceeds it; this is how the winners in the Covid pandemic grew startlingly so much wealthier in asset terms.

The 2008 crash had much to do with deregulation of economies in the preceding decades. The culture in financial centres such as the City of London and Wall Street had run out of control. In the US the fraudster Bernie Madoff (one of the greatest in history, to the tune of nearly $70 billion) benefitted from deregulation, escaping the scrutiny of a budget-squeezed, understaffed and powers-restricted Securities and Exchange Commission for over a decade after the first red flags were raised.^[9] It was the events of 2008 that unmasked him, but the response to those events – ‘quantitative easing’ to keep most banks afloat – served to boost the position of large institutions and wealthy individuals while many ‘ordinary people’ lost their homes and savings. The financial institutions’ deliberate but irresponsible packaging and sale of toxic assets such as sub-prime mortgages – loans that borrowers had insufficient income to repay – make these ‘ordinary people’ just as much victims as those Madoff robbed – which means that the financial institutions were as great fraudsters as he. ‘Quantitative Easing’ kept most of the financial institutions afloat, none of their senior personnel were punished but instead, in outcome, actually rewarded, and since then the expedient of printing money to meet threats to the economic system has become a matter of course – the money continuing to go to those who already have much as the pandemic situation shows.

From SuperPACS down to Elon Musk’s crude bribery of swing state voters in the 2024 US presidential election with his $1million a day sweepstake and large donations to the Trump campaign, the influence of big money on US elections is well known. People do not disburse large sums without expecting a return.^[10]Within a state, big business can and does seek to influence political parties, governments and elections, the power of their money giving them a super-vote and a degree of influence no individual voter can hope to wield, other than in rare circumstances where an outcome depends on a few ballots. Coupled with the recent rapid change in the nature of the capitalist system itself – perhaps its displacement by a new form of capitalism, or its overthrow by something worse – powered by the new digital technologies, the prospects for controlling this trend, still less reversing it, diminish.^[11] The money-subversion of democracy could be handled within a state by legislation; but when real power is exercised by huge multinational entities lying outwith the jurisdiction of any single government, the corruption of democracy is unrestrainable. And this, as transnational corporations have grown in power and wealth increasingly over the course of the decades since 1950, is the chief problem. Enforcing standards, labour rights, transparency, ethical behaviour towards stakeholders and compliance with environmental protections, becomes harder if not impossible. Given that the overriding aim of business is to make profits, the expectation that businesses will think that profitability depends on responsible behaviour in these respects, and will act accordingly – even less, by tempering profits in the interest of such responsibilities – is, in too many cases, optimistic.

A study done in 2011 by a group of Zurich-based analysts showed that 80% of corporate wealth was held by seven hundred transnational companies, half of it by just 147 of them.^[12] Two-thirds of the world’s assets were owned by 400 companies, who between them controlled 70% of world trade. Concentration of big business into even bigger business is a trend that the logic of business itself promotes, and has continued since the year of the Zurich group’s study; mergers and acquisitions happen whenever and wherever scale brings benefits, both in larger market share and in reduced management costs. In a world in which capital, technology and the division of labour is internationalised, in which capital flows and exchange have created an integrated or at least interdependent international marketplace, the influence of national governments over economic factors within their borders is vastly reduced. Given that concentrations of economic power lead to concentrations of political power, the effect is that the direct and indirect influence of a small number of people – the decision makers in transnational businesses – is exerted over billions of others.

And these decision-makers are likely to have little stake in any one national jurisdiction; their wealth is sequestered in offshore tax-havens, immunising them from the negative effects of revenue-stressed governments on the fabric of civic life – revenue-stressed because so much of the rewards of business are not shared redistributively through taxation within a society, but drained out of it by tax avoidance schemes – in effect robbing states of resources for public services and support systems. It was estimated in 2016 that as much as $36 trillion sits in tax havens, the share from low-income countries exceeding the amount of foreign development aid they receive, and representing hundreds of billions in lost national tax revenues.^[13]

Social strife is a ready outcome of gig work and economic insecurity, in the guise of low-wage ‘labour flexibility’, in circumstances of extremes of wealth inequality. In situations where some live in conspicuous luxury while others sleep on the street in all weathers, where trades unions have little bargaining power, where protest over environmental harms and against regimes which suppress minorities or wage war on weaker entities has little effect, discontent and turbulence are inevitable. If it mounts, it is not the vulnerable who are protected, but the interests of big business. The latter is comfortable with children working down mines or in sweat-shops in the global South, with the continuance of discrimination against women and minorities, with poverty, homelessness, food insecurity and lack of health care at the bottom end of the economic scale everywhere. And this to say nothing yet of the environmental damage caused be processes of extraction of natural resources and large-scale production and transportation of goods.^[14]

The consumerism actively fostered by business has multiple negative effects. Not only does it impact the quality of individual and civic life by its focus on possession of often unnecessary goods as sources of satisfaction and status, but it operates as a major pull factor in economic migration of people from poorer to richer countries, and all this while harming the environment and climate. The connection between beef-burgers and the fact that areas of the Amazon rainforest ten times the size of Cornwall are annually cleared for cattle ranching is just one example.^[15]

Because transnational business influences governments but is not much influenced by them in return, and because it deprives states of revenue in the way described (its lobbying activities and payments to political parties are regarded as very small cost of business), it is regarded with hostility by many. As John Kay points out, people ‘hate the producers but love their products’, thinking of Amazon, Apple and others.^[16] But the chief effect is that transnational business’s disempowerment of national government makes people angry about government policy, irrespective of whether they know the reason for the government’s inability to serve their interests or answer their needs; and that infects attitudes to how governments are formed – in democracies, the democratic process itself. It is generally only in democracies that such discontent can be voiced without suppression in response, which, paradoxically, is an exacerbating factor, because the more ineffective protest proves, the greater the discontent grows.

What happens within a national economy is a symptom of the larger disease. To take a parochial example – exemplifying the macrocosm in the microcosm – consider the first budget of the Labour Party government that came to power in the UK in 2024. Because of the chaos of the preceding Conservative Party government years, the effects of Covid stresses on the economy, and above all the strange reversal of Labour Party policy on Europe – its refusal to rejoin the European Single Market, Brexit having caused a massive hit to the national finances – the new government had to raise taxes. One proposal was to lift the maximum rate of tax on profits (‘carried interest’) from merger and acquisitions activity from 28% to 45%. Vigorous lobbying resulted in the government compromising at 32%. According to the Guardian newspaper, fund managers were joyous (suffering, if that is the word, ‘hangovers’ after celebratory parties), one telling the paper that ‘We got them down to 32% and made them feel like they had to be grateful for it’.^[17] A statement from Tax Justice UK said, ‘This is a rare, in-plain-sight example of the super rich lobbying the government. Mostly this happens behind the scenes – but it is constant. This is what we’re up against: powerful vested interests consistently lobbying the government to protect [their] interests…We want to see a fairer tax system that takes more from the super-rich and wealthy companies to fund better public services: high quality healthcare, education, transport and social care. The vested interests want to see their power and wealth unchecked.’^[18]

A yet more striking example is the impact of Donald Trump’s 2024 election victory. Even as results were coming in on election night, the New York Stock Exchange saw a big rise in stock values, and the chief gainers were the world’s ten richest individuals, who collectively saw their wealth jump by $64 billion according to Bloomberg’s ‘Billionaire Index’.^[19] CNN reported on the day after the election that ‘The biggest gainer was Elon Musk, the world’s richest person and one of Trump’s most outspoken and dedicated supporters, whose wealth jumped $26.5 billion to $290 billion Wednesday…Amazon founder Jeff Bezos’ wealth grew $7.1 billion a week after defending his decision to withhold the Washington Post’s endorsement of Vice President Kamala Harris. Oracle cofounder Larry Ellison, another Trump supporter, saw his net worth rise $5.5 billion Wednesday. Other gainers include former Microsoft executives Bill Gates and Steve Ballmer, former Google executives Larry Page and Sergey Brin and Berkshire Hathaway CEO Warren Buffett…Bloomberg said it’s the “biggest daily increase” of wealth it’s seen since the index began in 2012. The market rallied Wednesday as the election concluded swiftly and with expectations that Trump will usher in a new era of deregulation and other pro-business laws and policies investors believe could benefit the stock market overall — especially billionaires who hold much of the world’s wealth. “There is this huge perception of business friendly, tax-friendly regime coming into place, especially with them winning the Senate,” said Michael Block, chief operating officer at AgentSmyth’.^[20]

The connection between wealth accumulation among the few and right-wing politics is luminously demonstrated by this single event.

The foregoing animadversions stand despite the fact, for fact it is, that transnational business has brought plenty of benefits too. The open international economic system it has forged and on which it relies has brought people and peoples together, fostered cultural exchange, encouraged innovations in technology, brought employment to many in developing economies, and lifted many millions out of poverty. It would be surprising, indeed incomprehensible, for transnational business to flourish if it had not brought benefits. But alas the benefits have been bought at great costs in the ways described. And if, as it threatens to do, it brings democracy down, and with it the rights, civil liberties and rule of law which are the principal goods of democracy, those benefits will be a very poor compensation.

In its Global Rights Index report issued in the late summer of 2024 the International Trade Union Confederation (ITUC), representing many among those who see the effects of globalised corporate power on individuals and societies close up, charged mega-businesses with ‘financially supporting extremist political movements, fuelling climate crisis and violating labour and human rights’.^[21] It identified corporations such as Amazon, Tesla, Meta, Blackstone and Vanguard as supporters of far-right political movements, their support aimed at protecting themselves from regulation and tax policies that would oblige them to conform to the same rates as smaller businesses. Evidence already mentioned is provided by Elon Musk’s support of Donald Trump in the 2024 presidential election and Jeff Bezos, as owner of the Washington Post, refusing to allow his newspaper to endorse either of the candidates – a way of hedging bets and sending a silent message.^[22]

The lobbying and financial backing of those who will serve mega-business interests extends beyond politicians to the United Nations and other international bodies. Mega-business wealth also buys a compliant, even sycophantic, media and (except in Russia and China) immunity from justice. According to ITUC, this allows big transnational business to do what it specifically charges Amazon with: ‘union busting and low wages on multiple continents, a monopoly in e-commerce, egregious carbon emissions through its AWS data centers, corporate tax evasion and lobbying at national and international levels’. It goes on to accuse Amazon of poor workplace standards resulting in high injury rates among its more than a million workers worldwide, and notes that as the company was mounting a legal challenge over the constitutionality of the US National Labor Relations Board it was being banned by the European Parliament from lobbying activities, in reprisal for its refusal to discuss violations of labour rights.

The report’s authors pointed to Tesla’s opposition to trade unions in Germany and Sweden as well as the US, and Elon Musk’s personal support for politicians on the further right of the spectrum such as Trump, Javier Milei in Argentina and Narendra Modi in India.^[23] Meta invited criticism for giving its platforms to far right movements, and lobbying to ‘block legislation aimed at protecting citizen’s private data’.^[24] The value of such data to advertisers and political parties is great, and selling it is a source of revenue. The use made of ‘big data’ in political campaigns became controversial after exposés of the activities of Cambridge Analytica in 2016.^[25] ITUC’s report criticises ExxonMobil, Vanguard, Blackstone and Glencore for financing campaigns against environmental organisations and indigenous activists, citing ExxonMobil as an example of mega-business in the fossil fuel sector devoting efforts to undermine climate science or distract from the energy sector’s impact on global warming.^[26]

ITUC campaigns for an international treaty that will bind transnational business to human rights law. The case for saying that full observance of human rights provisions would solve many problems faced by individuals around the world seems idealistic but is a compelling one, as argued by this writer in Discriminations.^[27]

If the fact that these ITUC labour-defending views invite a ‘well they would say that, wouldn’t they’ response, a counterbalance is provided by the non-partisan US think-tank Freedom House, which argues that democratic decline threatens business, and that protection of democracy’s chief benefits – the rule of law, individual and group rights and freedoms – is essential to business.^[28] In dispensations where these values are upheld the business environment is one of stability and predictability, both essential to making good decisions because the risk and opportunity factors required for due diligence assessments are clearer in an environment of steady, transparent and law-abiding government. In authoritarian outlooks supported by Musk and others, and in the view of those who think big profits are to be had in situations of chaos and disorder (a view propounded by Jacob Rees-Mogg’s father William Rees-Mogg in The Sovereign Individual^[29]), arbitrary decisions and switches of policy, corruption, the absence of checks and balances, the unreliability of information and the increased possibility of unrest, not only makes rational decision-making difficult but increases the reluctance of investors both within and outside the polity.

Freedom House publishes an annual ‘Freedom in the World’ index, in 2024 providing dismaying evidence of decline in democracy and human rights since the first decade of the twenty-first century.^[30] Its indices reveal that over three-quarters of the world’s population live in countries where freedom is declining, including the US and UK. In the US Trump’s attacks on the press and the claimed unreliability of electoral processes, in the UK clampdowns on the rights of assembly and protest, are troubling symptoms.^[31]

Leaving aside the obvious cases of Russia, China and North Korea, matters are considerably worse elsewhere. Victor Orban’s far-right government in Hungary has changed election rules to benefit itself, attacked LGBTQ rights, imposed controls on teachers and judges, and introduced draconian provisions to keep out migrants^[32]. The Hindu nationalist government of Narendra Modi in India has seen a major assault on human rights and the rule of law: according to the Amnesty International country report of 2023, ‘National financial and investigation agencies were weaponized against civil society, human rights defenders, activists, journalists and critics, further shrinking civic space. Government officials, political leaders, and supporters of the Bharatiya Janata Party (BJP)…advocated hatred and violence against religious minorities with impunity, particularly Muslims, marking a rise in hate crimes. Punitive demolitions of largely Muslim properties – including homes, businesses and places of worship – resulting in mass forced evictions after episodes of communal violence, were commonplace and went unpunished. India continued to impose arbitrary and blanket internet restrictions including internet shutdowns’.^[33] In Myanmar (Burma) following another military coup in 2021 there has been a continuing ‘nationwide crackdown on millions of people opposed to its rule. The junta security forces have carried out mass killings, arbitrary arrests, torture, sexual violence, and other abuses that amount to crimes against humanity. Freedom of speech and assembly face severe restrictions’.^[34]

Some might think that business opportunities under an authoritarian regime are good because, if the regime is on one’s side, it will facilitate one’s activities and, with weak or non-existent regulation of standards and labour, costs will be lower. But the arbitrariness factor make this a chancy matter.^[35] In countries where democratic principles are upheld and relatively good governance prevails, there is a general culture of integrity, and business thrives on it including the certainty it provides; trust can be placed in contracts and the security of patents. Where governments are suborned by business seeking to enhance its interests, their capture is a mark of weakness in the system, diminishing the longer-term prospect of matters ending well. Therefore in their own best interests, Freedom House argues, business would be wise to promote democratic and human rights agendas. That means there is, in fact, a convergence between this perspective and the aims of the ITUC, when one takes an overall view.

The technological revolution of the decades preceding this writing has thrown these matters into sharper relief. Not only is the digital universe a site of opportunity for disrupters, propagandists, disseminators of misinformation and destabilisation – all this despite the positives that can be named also – but the effect on the global business environment itself has changed that environment in negative ways.

Economist Mordecai Kurz of Stanford University outlines the process in an article entitled ‘How Capitalism Became a Threat to Democracy’.^[36] The reason lies in the achievement of market dominance by innovating technology companies, the product of a ‘winner takes all’ situation in which victors in technology races first consolidate their position by blocking market entry with patents, and by acquiring rivals who see that joining them is more advantageous than competing with them. Deregulation has encouraged the growth of these monopolies, reprising the situation in the ‘Gilded Age’ of American capitalism in the half-century before the First World War. ‘As a result, market power becomes a permanent feature of a capitalist economy. Technological competition is ineffective, and creative destruction does not restore economic efficiency…it also produces a concentration of economic and political power that threatens democracy, whose survival then becomes dependent on the creation of new policy tools to protect it’.^[37]

Monopoly wealth, which is the value placed by stock markets on future monopoly profits, is distinct from capital income and material assets. By 2019 three quarters of stock value on US markets consisted in monopoly wealth, with trading in it their chief activity. Because successful innovations sharply increase the value of technology stocks, and because the number of beneficiaries of this success is small – the innovators, early investors and financial advisors – large amounts of wealth quickly accumulate in very few hands. This explains the rapid increase in the number of US billionaires; by 2024 there were 756 of them.

‘These economic and market dynamics,’ Kurz writes, ‘have far-reaching political implications. One is high inequality, which is a direct result of a high degree of market power…economic inequality creates political inequality, by giving the wealthy a stronger voice… The main winners from free-market policy and rising market power since the 1980s have been the few in the top income stratum and the technically skilled with a college education, while unskilled workers without a college education have been most harmed… Those who lost their livelihoods recognize that they are the victims of a policy choice. They paid the price for others to benefit, and for some to grow immensely wealthy, and American democracy has been weakened as a result. The evidence shows that most of the participants in the January 6, 2021 attack on the Capitol were former thriving workers who had been left behind’.^[38]

Kurz identifies ‘a dangerous trifecta’: rising market power, automation, and globalization. The first two have caused a decline in wages and rising inequality, the third has introduced challenges of the kind exemplified by China’s economic surge and its detrimental effect on US manufacturing jobs. When incomes fall the effects are social and regional – families and communities suffer from the retrenchment, and areas of the US associated with particular sectors (mining, steel, automobiles) experience an ‘economic death’. Destabilisation follows in the form of resentment at governments perceived at being insensitive to the sufferers’ plight, and hostility towards immigrants perceived as taking jobs or burdening support services. The victims of the trifecta’s effects have accordingly, says Kurz, turned away from conventional politics and ‘found a home in new anti-democratic movements such as Donald Trump’s MAGA’.^[39]

There is a paradox at work here – and if it is not a paradox it is a mark of something worse, which, as someone allergic to conspiracy theories, this writer wishes not to believe. It is this: that the nexus between big money and right-wing politics is more than a natural socio-economic phenomenon, but a deliberately planned one. The influence of the beneficiaries of what Kurz calls the ‘techno-winner-takes-all economy’ – big companies and a handful of ultra-wealthy individuals – over politics and governments, steering them in rightward directions aimed at protecting and advantaging their interests, is too pat to be adventitious. The Supreme Court ‘Citizens United’ decision of 2010 which lifted restrictions on the use of corporate wealth for political purposes has proved to be an invaluable gift to them. The self-interests they thereby promote hurt those disadvantaged by them, yet these latter support the right-wing populist politicians whom the wealthy support, induced to believe that these politicians are on their side.

The outcries of the disaffected are potentiated by the use of social media, among the results a familiar litany of ill effects – mob behaviour, fake news, conspiracy theories and hate speech, all – as Kurz points out – protected by §230 of the US’s somewhat misnamed Communications Decency Act of 1996, and much of it serving to promote division. Ultra-wealthy owners of social media platforms profit from this activity, using their profits to entrench the system harming those suffering under it. If this were indeed a deliberate strategy, it would be cynical in the extreme; if on the other hand the ‘tech bros’ are unwittingly sowing seeds of a socio-economic disruptions that might eventually come to disadvantage them, it would be equally remarkable, this time for – at very least – its short-sightedness.

What those who vote for populist politicians want is what the latter tell them would solve their problems: jobs and an end to immigration, perhaps together with, in some way, punishing the ‘elites’ who have caused their misery. Since the real elites – the money elites – are supporters of the populist politicians, they have to direct the ire of the disaffected away from themselves and point it elsewhere – to a different ‘elite’ consisting of the political opposition, ‘liberals’ and ‘the woke’ with their agendas on discrimination. Immigration is a particularly useful target, because inflaming hostility towards anyone regarded as foreign wishing to enter (and even those who have already entered) the country – economic migrants and asylum seekers are often lumped together – and introducing measures to deal with them, is a ready resource.

But the jobs question is more difficult, unless such measures as greening the economy are abandoned or reduced, or taxes are either raised to invest in job-creation conditions or lowered to incentivise entrepreneurial job-creators: both measures have their proponents among economic theorists. Raising taxes is always unpoplular, keeping them down (wealthy supporters’ winning preference) makes it more difficult to pay for major campaigns to upskill workers, subsidise new industries that will provide secure well-paying jobs, and maintain social welfare programmes. (One measure promised by Donald Trump – protectionism, imposing high tariffs on foreign goods to promote domestic production and to repatriate production that had gone abroad in search of cheaper labour and fewer regulations – does not worry the new techno-elite; their wealth does not depend on ports, ships, trade agreements, export licenses, and the rest, for they exist literally off the earth in the Cloud, operating without boundaries.)

Populist politicians thus ride to victory on the tiger’s back, and then find themselves with a problem. Bridging the gap between promises and results is harder for them than for more ‘small-c’ conservative, normativity-observant politicians. In the past, populist governments have dealt with their problem by resort to undermining government and civil society structures and increasing distraction activities even, in some cases, to the extreme of engaging in external war. Being able to nominate and accuse alleged enemies, within or without the state, provides a prime distraction from a populist government’s failures. As political scientist Michael W. Bauer put it, ‘Populist governments pose a threat to liberal democracy by fostering a leadership cult, undermining minority rights, and disregarding norms of self-restraint… Perhaps the most worrisome scenario is that of populists engaging in state transformation from the top position as heads of state or government. Once liberal democratic structures, procedures, and core state institutions are undermined, it can be difficult for a state to simply bounce back to the previous status quo. In fact, the state fabric may remain seriously de-pluralised in a populist manner.’^[40]

The situation of people in developing economies where transnational businesses operate is arguably worse, because the powerful influence exerted by international business on their governments make countervailing efforts difficult. Such people therefore direct their resentment towards their own governments instead, which find themselves caught between a rock and hard place, and the likelihood of their responding by oppression of their own people is all too great.

Whichever way one looks at it, the effect of very large business on economies and societies does not make a happy picture, not least in the impact on democracy. The argument put by Freedom House that business should actively promote democracy and human rights in its own interest is cogent, its several aspects hard to gainsay; yet the imperatives of the bottom line – profit – and the nature of the economy in the new age of digital technology, both militate against it. The kinds of businesses that produce tangible goods and services have not internationalised out of charity, but because labour costs and the costs of meeting regulatory standards are lower. The new mega-sized techno- businesses have reshaped markets, not least stock markets, and through monopoly power have turned them into milch-cows, increasing their wealth by tens of millions of dollars a day. With the influence thus accrued, big companies and wealthy individuals come to have a vote equal to millions of other people’s votes: and that is not democracy.

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^[1] The World Inequality Report 2022 provides the data

https://wir2022.wid.world

^[2] In 2021 Alibaba’s ecommerce gross merchandise value was $1.25 trillion, Amazon (in second place) was $602 billion.

^[3] Oxfam ref

^[4] https://www.weforum.org/stories/2020/10/covid-19-is-increasing-multiple-kinds-of-inequality-here-s-what-we-can-do-about-it/

^[5] See https://centreforpublicimpact.org/public-impact-fundamentals/privatising-the-uks-nationalised-industries-in-the1980s/, https://bsic.it/currents-of-change-navigating-uks-privatized-water-utilities/ , https://weownit.org.uk/blog/rail-privatisation-top-30-failures-30-years

^[6] Paul Krugman ‘The Reagan Economics Legend’ New York Times 11 June 2004.

^[7] https://www.investopedia.com/articles/investing/080615/china-owns-us-debt-how-much.asp The largest holder of US debt is the US Treasury; China and Japan are the next two.

^[8] The history of the phrase is given in https://en.wikipedia.org/wiki/Socialism for the rich and capitalism for the poor

^[9] Richard Behar Madoff: The Final Word. New York: Avid Reader Press 2024.

^[10] https://www.lemonde.fr/en/united-states/article/2024/11/04/elon-musk-s-1-million-a-day-voter-sweepstakes-can-proceed-says-pennsylvania-judge_6731567_133.html

^[11] There is a near-convergence of view from different perspectives on a ‘post-capitalist’ analysis: see John Kay The Corporation in the Twenty-First Century (Profile Books 2024) and Yanis Varoufakis Technofeudalism (Vintage 2023).

^[12] Stefania Vitali, James B. Glattfelder, Stefano Batiston ‘The network of global corporate control’ https://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf retrieved 5.11.24

^[13] IMF report on tax havens https://www.imf.org/en/Publications/fandd/issues/2019/09/tackling-global-tax-havens-shaxon retrieved 6/11/24

^[14] Just one example is the exploitive and damaging nature of the international ‘Big Chocolate’ business: two-thirds of cacao comes from the Ivory Coast and Ghana, where rainforest has been lost to cacao production, ecological diversity diminished, labour including child labour – an estimated 1.5 million children - earns as little as $1 a day. Rowan Jacobsen Wild Chocolate: Across the Americas in Search of Cacao’s Soul (Bloomsbury 2024).

^[15] ‘How Americans’ love of beef is helping to destroy the Amazon rainforest’ Washington Post 29 April 2022 https://www.washingtonpost.com/world/interactive/2022/amazon-beef-deforestation-brazil/ retrieved 6.11.24

^[16] Kay op. ci.

^[17] ‘How private equity convinced Labour to go easy on its multimillion pound tax perk’ The Guardian 31 October 2024 https://www.theguardian.com/business/2024/oct/31/how-private-equity-convinced-labour-to-go-easy-on-its-multimillion-pound-tax-perk retrieved 7.11.24

^[18] Tax Justice UK homepage

https://taxjustice.uk

retrieved 7.11.24

^[19] Bloomberg https://www.bloomberg.com/news/articles/2024-11-07/trump-s-election-win-supercharges-net-worth-of-world-s-richest-by-64-billion. Cited CNN article 7 November 2024 https://edition.cnn.com/2024/11/07/investing/billionaires-net-worth-trump-win/index.html?utm_source=cnn_Evening+Newsletter+-+Thursday%2C+November+7+2024&utm_medium=email&bt_ee=%2BfLYkYSZsBvJ82iI8DZ3bLnA9eMUiORTWtPtZBIW00YbcCXgCZE%2B9yEYlSmqz7Wu&bt_ts=1731020484759retrieved 8.11.24

^[20] CNN ibid.

^[21] Ynet eport on ITUC Global Rights Index 2024 https://www.ynetnews.com/business/article/skpihnl0r retrieved 6.11.24. ITUC represents nearly 200 million workers in 169 countries.

^[22] The media in October and November 2024 is full of reports of both. See e.g. https://www.politico.com/news/2024/11/05/elon-musk-trump-twitter-x-election-00187467 and https://www.nytimes.com/2024/10/28/business/media/washington-post-endorsement-editorial-board.html retrieved 6.11.24

^[23] News media in the UK in December 2024 reported that Elon Musk was planning to give $100 million to Nigel Farage’s far-right Reform Party in the UK in an effort to put it into power at the next available occurrence of a general election. See e.g. The London Evening Standard https://www.standard.co.uk/news/uk/elon-musk-nigel-farage-donald-trump-reform-uk-b1197417.html retrieved 2.12.24

^[24] Ynet op. cit.

^[25] This was the result of tireless efforts by Observor journalist Carole Cadwalladr https://www.theguardian.com/membership/2018/sep/29/cambridge-analytica-cadwalladr-observer-facebook-zuckerberg-wylie retrieved 7.11.24. The involvement of Meta (as it was later renamed) was revealed by whistle-blower Christopher Wylie.

^[26] See AC Grayling For the Good of the World (Oneworld 2022) on the efforts of pro-fossil fuel industries to distract and divert from climate change issues.

^[27] AC Grayling Discriminations: Achieving Peace in the Culture Wars (Oneworld 2025).

^[28] Freedom House home page

https://freedomhouse.org

; see the webinar at https://www.google.com/search?client=safari&rls=en&q=youtube+global+business+threat+to+democracy&ie=UTF-8&oe=UTF-8#fpstate=ive&vld=cid:50b7e759,vid:W_w4R_oXRLk,st:0 which specifically addresses the value of upholding democratic values and human rights to national and transnational business. Urls retrieved 6.11.24

^[29] William Rees-Mogg and James Dale Davidson The Sovereign Individual (Touchstone 1997)

^[30] Freedom in the World Index 2024 https://freedomhouse.org/report/freedom-world retrieved 7.11.24

^[31] See e.g. https://www.theguardian.com/world/2023/nov/13/how-will-recent-and-future-legislation-affect-the-right-to-protest-in-the-uk retrieved 7.11.24

^[32] Amnesty International report on Hungary 2023 https://www.amnesty.org/en/location/europe-and-central-asia/western-central-and-south-eastern-europe/hungary/report-hungary/ retrieved 7.11.24

^[33] Amnesty International report on India 2023 https://www.amnesty.org/en/location/asia-and-the-pacific/south-asia/india/report-india/ retrieved 7.11.24

^[34] Human Rights Watch report on Myanmar 2023 https://www.hrw.org/world-report/2023/country-chapters/myanmar retrieved 7.11.24

^[35] The founder of Alibaba in China, Jack Ma, might serve as an example; after criticising government regulators he suffered what appears to be a backlash from them, losing half his wealth and having to step down from his position. An intended IPO by Ant (formerly Ant Financial), part-owned by Alibaba, was halted by the Chinese government, and a heavy general crackdown on private enterprise followed. See CNN 12 July 2023 ‘Jack Ma loses half his wealth after criticizing Chinese regulators’ https://edition.cnn.com/2023/07/12/business/china-jack-ma-wealth-drop-intl-hnk/index.htmlretrieved 7.11.24

^[36] Mordecai Kurz ‘How Capitalism Became a Threat to Democracy’ Project Syndicate 15 March 2024 https://www.project-syndicate.org/onpoint/how-capitalism-became-a-threat-to-democracy-by-mordecai-kurz-2024-03 retrieved 4.11.24. See Kurz The Market Power of Technology (Columbia University Press 2023).

^[37] Kurz ‘How Capitalism Became a Threat’ Ibid.

^[38] Ibid.

^[39] Ibid.

^[40] Michael Bauer ‘Populist Governements as a threat from within the state’ The Loop https://theloop.ecpr.eu/populist-governments-as-a-threat-from-within-the-state/ retrieved 7.11.24

^[41] See Byline Times ‘The North East’s biggest scandal for 50 years’ 15 February https://northeastbylines.co.uk/region/teesside/the-north-easts-biggest-scandal-for-50-years/ 2024h

^[42] ‘Special Economic Zones in the UK – Ideology over Public Interest?’ Yorkshire Byline Times https://yorkshirebylines.co.uk/news/home-affairs/special-economic-zones-in-the-uk-ideology-over-public-interest/ retrieved 8.11.24

^[43] See Sarah Moser ‘Analysing a Private City’ Urban Studies 61 May 2024.

^[44] Yorkshire Byline Times ibid.

^[45] Ibid.

^[46] Wikipedia ‘Peter Thiel’ https://en.wikipedia.org/wiki/Peter_Thiel retrieved 8.11.24

^[47] ‘Palantir’s Peter Thiel’ The Guardian 21 November 2023 https://www.theguardian.com/technology/2023/nov/21/palantir-peter-thiel-nhs-natural-target-outspoken-tech-billionaire retrieved 8.11.24

^[48] https://www.prospera.co/en retrieved 8.11.24

^[49] ‘Billionaires are suing the Honduran government for blocking their profit-making scheme’ MSN 27 November 2023 https://www.msn.com/en-us/money/companies/billionaires-are-suing-the-honduran-government-for-blocking-their-profit-making-scheme/ar-AA1kBRFu retrieved 8.11.24

^[50] Derek Offord Ayn Rand and the Russian Intelligentsia: The Origins of an Icon of the American Right (Bloomsbury 2022).

^[51] Christopher Hitchens ‘Greenspan Shrugged’ Vanity Fair December 2000 https://www.vanityfair.com/culture/2000/12/hitchens-200012?srsltid=AfmBOoq_P6BcE6sI9EjR1oHBZKQrc0efa3bJWaXW-WQtWiYrgCVaVveN retrieved 8.11.24 The article demonstrates how Greenspan’s ‘official record shows how Washington can compromise even the most passionate of principles’- a point that cuts both ways.

^[52] See https://weownit.org.uk/blog/nhs-being-systematically-dismantled-privatisation retrieved 8.11.24

^[53] A classic statement of the view and its sources is given in a 2017 essay by a leading proponent of it, Nick Land, in his ‘A Quick and Dirty Introduction to Accelerationism’ available at https://www.scribd.com/document/639952390/Untitled retrieved 8.11.24

^[54] Fromm Studio for Bloomberg Newsweek 21 June 2024 https://www.bloomberg.com/features/2024-elon-musk-population-collapse-baby-push/ 8.11.24

^[55] Kyle Wggers ‘Elon Musk reportedly donated $10 million to a fertility research project’ Techcrunch 16 August 2023 https://techcrunch.com/2023/08/16/elon-musk-reportedly-donated-10-million-to-a-fertility-research-project/ retrieved 8.11.24.

^[56] History ‘Eugenics’ https://www.history.com/topics/european-history/eugenics 8.11.24.

^[57] Lisa Ko ‘Unwanted Sterlization and Eugenics Programs in the United States’ Independent Lens PBO 29 January 2016 https://www.pbs.org/independentlens/blog/unwanted-sterilization-and-eugenics-programs-in-the-united-states/ 8.11.24

^[58] Transcript of NPR broadcast on eugenics in the US 7 March 2016 https://www.npr.org/sections/health-shots/2016/03/07/469478098/the-supreme-court-ruling-that-led-to-70-000-forced-sterilizations 8.11.24

^[59] Should any more evidence be required to support the contention that masked international libertarian influence is active and highly influential in politics and government, Peter Geoghegan’s article ‘The “dark money” linking Trump and the British right’ in Prospect 8 November 2024 will more than suffice: https://www.prospectmagazine.co.uk/politics/68486/dark-money-donald-trump-british-right-farage retrieved 8.11.24.

^[60] Paul Rogers OpenDemocracy newsletter 23 June 2023 https://www.opendemocracy.net/en/arms-industry-shareholder-capitalism-perfect-war-syria-iraq-ukraine/ retrieved 10.11.24

^[61] Stockholm International Peace Research Institute homepage

https://www.sipri.org

10.11.24

^[62] Small Arms Survey report on global firearms holdings 2018 https://www.smallarmssurvey.org/database/global-firearms-holdings 10.11.24

^[63] AC Grayling War: An Enquiry (Yale Unviersity Press 2016).

^[64] Jordi Calvo Rufanges ‘No business without enemies: war and the arms trade’ Transnational Institute longreads May 2021 https://longreads.tni.org/stateofpower/no-business-without-enemies-war-and-the-arms-trade retrieved 10.11.24

^[65] In an Observer article of 10 November 2024 the indomitable Carole Cadwalladr, reviewing how social media has been used since 2015 to undermine democracy – about which she consistently warned following its manipulations to influence the Brexit referendum in the UK and the first election of Trump to the White House, concluded: ‘this is oligarchy now. This is the fusion of state and commercial power in a ruling elite…The chaos of Russia in the 90s is the template; billions will be made, people will die, crimes will be committed.’ https://www.theguardian.com/commentisfree/2024/nov/11/a-new-era-dawns-americas-tech-bros-now-strut-their-stuff-in-the-corridors-of-powerretrieved 11.11.24