1 

Small Is Beautiful, Big Is Subsidized 

 

By Steven Gorelick 

 

17 September, 2011 

Cou ntercu rrents.org 

 

Ch apter 1:  Mr. Bigglestone's Dilemma  

 

"[T]he trend toward concentration of economic power is not a response to 

natural law or inexorable technological imperatives.  Rather it is the result of 

institutional forces which are subject to control, change and reversal..."  

    

   Walter Adams, in Corporate Power in America1  

 

 

"'Excuse me ... but what planet are you living on?  You talk about participating 

in globalization as if it were a choice you had.  Globalization isn't a choice.  It's 

a reality....  I didn't start it, I can't stop it, and neither can you.'"  

 

Thomas L. Friedman, The New York Times2  

 

Montpelier, capital of the state of Vermont, lies comfortably nestled in the folds 

of the Green Mountains, midway between Boston and Montreal.  With a 

population just above 8,000, it is the smallest capital city in North America.  It 

is also the only one without a McDonald's restaurant -- a noteworthy distinction 

now that Golden Arches span from Belgrade and Beijing to Penang and beyond.  



 

 

 

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While Montpelier is unlikely to lose its standing among diminutive capitals, its 

status as a McDonald's-free zone recently came under serious threat: the fast-

food giant, frenetically opening new outlets at a clip of one every three hours, 

decided to put one in the middle of Montpelier's small but bustling downtown.  

Local residents were, for the most part, not pleased.  In an effort to preserve 

their town's character and economy, citizens engaged the corporation in a long, 

hard-fought battle -- and eventually succeeded in turning McDonald's away.  

Today, there are no Big Macs in Montpelier, and the only McBusiness in town is 

a local bar called McGillicuddy's. 

 

One might expect that Montpelier businesspeople -- for whose sake much of 

this battle was waged -- would have been all aglow in the aftermath of victory.  

The prevailing mood, however, was not optimism but fatalism.  Kent 

Bigglestone, president of the Montpelier Business Association, explained why: 

"People are only kidding themselves if they think they can keep all the big chain 

stores out of Montpelier," he said. 

 

Mr. Bigglestone, it should be noted, has no reason to look favourably on large 

corporations.  His own family-run office supply store on Main Street is 

endangered by another corporate giant, Staples, the world's largest office 

product retailer, which has opened one of their 'category killer' stores just two 

miles away, in a mall in an adjoining town.  Mr. Bigglestone may not welcome a 

future with no place for businesses like his, but he's resigned to it.  After all, "it's 

a natural evolution that the national chains are going to come", he says. 3  

 

Mr. Bigglestone is not alone in blaming 'nature' or 'evolution' for the growing  

dominance of huge corporations. Most people who give it any thought probably 



 

 

 

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believe that large scale must confer inherent, 'natural' advantages over 

anything smaller -- thus explaining trends clearly visible over the last century 

and more.  It's not only that giant supermarkets have replaced neighborhood 

grocers or that Wal-Mart is emptying whole downtowns of their small shops. In 

agriculture, small family farms have all but disappeared throughout the 

industrialised world, their lands swept up into huge a gribusinesses.  

Decentralised one-room schoolhouses have given way to 'consolidated' schools 

the shape and size of factories.  While small towns and rural villages are 

atrophying, cities and their dependent suburbs relentlessly expand.  

 

But the trend towards ever larger scale seems especially true within the business 

world, where a vast amount of economic power is being distilled into the 

boardrooms of a relative handful of transnational corporations.  Each day 

brings news of another merger or acquisition -- one corporate giant swallowing 

another, only to be swallowed in turn by one still larger.  The scale of these 

enterprises has grown so huge that family-owned Main Street businesses seem 

all but irrelevant.  Ted Turner neatly demonstrated the new standard s of 

measurement when his Turner Broadcasting System (TBS) merged into Time-

Warner.  He explained the move by saying, "I'm tired of being little all the time.  

I want to see what it's like to be big for a while".  At the time, Turner's company 

had 7,000 employees and annual revenues exceeding $2.8 billion. 4  

 

If this is 'evolution' at work, then natural selection apparently finds even the 

nation-state too small.  In thrall to the manic logic of boundless economic 

growth and borderless 'free trade', governments are systematically erasing 

barriers between regional and national economies to clear the way for a trading 

arena of the largest scale possible: an all-encompassing global economy.  If this 



 

 

 

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means destroying diverse local economies and small, self -reliant communities 

around the world, it is only to help 'natural selection' do away with vestigial 

appendages no longer useful.  The apparent evolutionary goal of all this is the 

'Global Village' -- an oxymoronic phrase which now connotes not only intimacy 

and community, but hints at manifest destiny as well.   

 

The trend toward larger scale is clear enough; but any questioning of root 

causes is stifled by the din of voices emphasising how natural and inevitable it 

is:  we are being told, in effect, that Nature itself abhors the small and the local.  

On the pages of The New York Times one can read that globalisation is 

"inevitable";5   the financial press adds that alternatives like economic 

localisation are "simply not possible".6   Heavily-promoted books like Bill Gates' 

The Road Ahead argue that "because progress will come no matter what, we 

need to make the best of it -- not try to forestall it".7   Even after massive flows of 

international capital into Asian countries pumped up speculative 'bubbles' 

which then collapsed spectacularly -- sending much of the continent into crisis -

- the IMF persisted in declaring capital liberalisation "an irreversible trend." 8    

Sometimes even the 'alternative' press sings the same refrain: one widely-read 

publication described biotechnology and other corporate-friendly mega-

technologies as "an irreversible evolutionary transition" from which "there's no 

going back".9    

 

It would be unnecessary to harp on the inevitability of these trends if the future 

looked uniformly bright to everyone -- if corporate growth and the ever-

expanding scale of the economy were not accompanied by so much ecological 

damage, so much social and economic hardship.  Bill Gates' euphoria cannot 

hide the fact that the trajectory of 'progress' has been mirrored  by that of 



 

 

 

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countless negative indicators -- including unemployment, the gap between rich 

and poor, homelessness, ethnic and racial conflict, wilderness loss, climate 

change, and species extinction.  And though economic globalisation has been 

sold to the world as a means of bringing stability and peace, it has already given 

rise to an entirely new problem -- 'contagious instability' -- in which economic 

upheaval in one country rapidly spreads around the world, leaving devalued 

currencies, bankruptcies, unemployment, even economic collapse in its wake.   

All of these trends, linked as they are to growing scale, might understandably 

lead people to seek ways of limiting that growth.  But if our course is set by 

forces outside human control, then debate is silenced, dissent stifled, and 

activism pre-empted.  How, after all, can we stand in the way of 'natural 

evolution'? 

     

Framing conditions for th e growth  of larger scale  

 

It is the thesis of this publication that the growth of ever larger corporations 

operating in an increasingly globalised economic arena is not the product of 

natural or evolutionary processes, but is very much the result of human 

decisions -- particularly the policy choices made in our names by governments. 

Such decisions can be changed, and so can the course of our collective social 

and economic life. 

 

Though human decisions are the motive force behind corporate growth and 

economic globalisation, this doesn't mean that an overarching conspiracy is at 

work.  The situation is analogous to the propaganda model described by Noam 

Chomsky, which explains how the media is censored -- not through the 

machinations of men meeting secretly in a smoke-filled room -- but through a 



 

 

 

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fairly simple set of conditions that ultimately lead even well-intentioned 

reporters and editors to play a role in censoring the news.  In his study of this 

model, David Edwards describes how an initial set of human-made 'framing 

conditions' can make for a predictable, inevitable outcome: 

 

"The mechanism by which this occurs can easily be demonstrated by 

setting out a flat, box-like framework on a table.  By pouring a stream of 

tiny balls over this frame, we find that we eventually, and inevitably, end 

up with a more or less perfect pyramid shape....  No one is designing the 

pyramid, or forcing the balls into place; the pyramid is simply an 

inevitable product of the framing conditions of round objects falling onto 

a square wooden frame."1 0  

 

What human-made 'framing conditions' make the small and local seem 

evolutionary dead-ends, promote the growth of ever larger corporations, and 

make a globalised economy appear 'inevitable'? 

 

Since the question is about large versus small, it's not surprising that one side of 

the 'frame' is built around power -- both the power of governing institutions to 

make decisions on behalf of society as a whole, and the power of a wealthy 

business elite that strives to maintain and expand its economic position.  Today,  

this elite is defined not just by the multi-million-dollar salary and stock option 

packages commanded by top CEOs, but also by the corporate form itself.  As 

globalisation critic Jerry Mander has pointed out, the 'rules of corporate 

behavior' offer little leeway for decision-making based on values other than 

those of growth and profit; many decisions made by seemingly ruthless CEOs 

are effectively dictated by the imperatives of the corporate machine and the 



 

 

 

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rules of finance.1 1   But with rare exceptions, business leaders are not clamoring 

for more restrictive corporate charters, tighter controls on finance and trade, or 

limits on corporate power generally -- in fact, quite the opposite.  While 

acknowledging the central importance of the corporate form, it seems fair to 

assume that the business elite ultimately sees its own interests served by that 

model, and would oppose fundamental changes to it.  

 

Another part of the frame is aligned along an ideological or worldview axis, and 

is made up of society's dominant economic and technological beliefs and 

attitudes.  In the industrialised world, this ideolog y is based upon such 

assumptions as these: 

 

• markets are the best and most rational means of governing social and 

economic affairs;  

 

• since the proper functioning of markets depends on individualism and 

competitiveness, these traits should be honored and cultivated; 

 

• the well-being of both individuals and societies is best measured in terms of 

their levels of consumption, and therefore healthy societies require constant 

economic growth;  

 

• advances in technology are either beneficial or at worst 'neutral', and in any 

event the advance of technology is beyond social control;   

 



 

 

 

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• whatever their costs, the technological and economic changes associated with 

'progress' are an improvement on the past, which was a time of unrelieved 

drudgery and deprivation. 

 

The notion that globalisation and corporate growth are inevitable, natural 

processes is becoming part of this worldview as well. 

 

Like the belief system of any culture, the industrial worldview is tightly self -

contained.  The intrinsic value of technological advance and economic growth 

are its basic underpinnings, and simply cannot be questioned: if problems arise 

because of technology, still more advanced technologies must be relied upon to 

provide the solution; if economic growth gives rise to social and environmental 

breakdown, the cure is predicated upon still more economic development. In 

this way the stakes grow ever larger, in a global game of gambler's ruin.   

 

Needless to say, these framing conditions are hardly independent.  Government 

decisions, for example, help determine whether the elite grows in economic 

power, or diminishes.  The business elite, in turn, has profound influence over 

government decisions -- for example through campaign donations that offer 

access to elected officials, and via the 'revolving door' that links corporate board 

rooms and the government bureaucracies that supposedly oversee them.   

 

The business elite also has the ability to manipulate the mainstream worldview.  

The billions of dollars spent on advertising, for insta nce, consistently portray 

consumption as the answer to all life's problems.  Through corporate control of 

the media, information contrary to a business-friendly ideology is consistently 



 

 

 

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filtered out.  Corporate-funded think-tanks, meanwhile, work to hone economic 

theory favorable to corporate interests into established gospel.  

 

Much of this territory is not new.  Many writers have described how the 'free 

trade' agreements signed by governments have been designed by and for 

corporations; others have revealed in depressing detail how government has in 

general been captured by Big Business.1 2   The role of industry in manipulating 

public attitudes through advertising and public relations is also well 

documented.1 3   A number of activist organisations in both the US and Europe 

have focused on ways in which 'corporate welfare' subsidies benefit various big 

businesses and industries.1 4   And the prominent features of the dominant 

economic and technological ideology have been accurately described and 

critiqued.1 5  

 

Less frequently discussed, however, is the way many seemingly neutral 

government policies intrinsically favor large-scale enterprises over those that 

are smaller in scale, a point first made by Helena Norberg -Hodge.  This is 

particularly the case with so-called 'investments in infrastructure'.  Even among 

many critics of the status quo, such expenditures are considered beneficial to 

society as a whole, so long as they are planned well and implemented fairly.  

These sorts of investments, however, have played a key role in promoting the 

growth of economic scale in general, and the rise of large corporations in 

particular.  Similarly, many government regulations whose avowed purpose is 

to protect the public and the environment from corporate abuse instead 

systemically serve to support large scale businesses at the expense of smaller 

ones. 

 



 

 

 

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This emphasis on the role of government does not mean that the trend towards 

a corporate-run global economy can be reversed by tinkering with government 

rules or tightening some regulations. Far more fundamental change is required, 

and this will require widespread grassroots efforts -- not only to dismantle the 

power of vested interests -- but also to do the hands-on work of building 

communities and economies that are smaller in scale and more localised, 

sustainable and equitable.    

 

But while it is unimagineable that fundamental change at the top will ever 

occur without significant, widespread pressure from below, the fact remains 

that the policy choices made by virtually every government currently serve to 

further the corporate agenda, and it is vitally important that those policies be 

changed.  Doing so would represent an important step towards stopping the 

corporate juggernaut. 

 

What's more, understanding the systemic roots of today's crises can be helpful 

even to the most local of grassroots efforts.  The drive towards a global economy 

has given rise to so many symptoms of breakdown and inequity that focusing on 

one symptom or another can easily blind one to the common thread that l inks 

them all.  Recognis ing that thread can help activists forge otherwise unlikely 

alliances, making efforts to combat the corporate-industrial system stronger 

and more effective.  From the clearcutting of old-growth forests to the hazards 

of genetically engineered foods, from sweatshop labor in the South to corporate 

downsizing in the North, from the erosion of democracy to the loss of 

indigenous ways of life -- all of these (and many more) seemingly separate 

problems emanate from the same economic and technological system -- one 

that is becoming ever more divorced from real human and ecological needs.   



 

 

 

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Alternative framing conditions 

 

The inevitability of ever larger scale is so much part of the modern worldview 

that one might wonder whether different framing conditions are even possible, 

and if so whether they would really lead in a different direction.  It's therefore 

worthwhile to look at a culture with very different power and worldview axes -- 

the Old Order Amish in the United States -- not as a model for industrialised 

societies to emulate, but as an indication that alternative framing conditions do 

indeed engender very different outcomes.  Since the Amish have largely held 

onto to their culture while living in the midst of mainstream America, they also 

dispel the notion that any exposure to the consumer culture automatically leads 

to adoption of its ways.1 6  

 

Although Amish communities comprise a number of different sects, common to 

all is an ideology that celebrates community and cooperation, unlike the 

mainstream's emphasis on individualism and competitiveness.  Far from 

elevating consumption to one of life's primary goals, Amish ideology instead 

honors simple living and self-reliance, while conspicuous consumption is 

actively discouraged.  The attitude towards technology is also fundamentally 

different:  Amish communities acknowledge that control of technology -- 

including outright prohibition -- is an appropriate and necessary societal 

responsibility.   

 

Given the Amish ideological milieu -- one in which neighborliness, religious 

faith, and simple living are prominent features -- it is not surprising that an 

economic elite has not developed to any significant extent.  While there are gaps 



 

 

 

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between the richest and the poorest in any Amish community, it is generally the 

best farmers and the most devout -- not the wealthiest -- who have the most 

influence and prestige. 

 

These conditions are in turn reflected in decisions made by Amish governing 

institutions -- essentially a theocracy of the church fathers in each community.  

Through changes to the Ordnung, the set of taboos and prescribed behaviour 

that gives substance to Amish ideology, community leaders determine, for 

example, which technologies would undermine core community values and 

should therefore be banned. 

 

Although this is a very sketchy and schematic view of a complex culture, the 

point is that the conditions around which the Old Order Amish are organized 

inevitably lead to and sustain small scale.  Thus, at the same time that the US 

Secretary of Agriculture was urging American farmers to "get big or get out", 1 7  

the governing institutions in Amish communities were rejecting mechanised 

tractors on the grounds that they would encourage farmers to farm more land 

than was socially or economically desirable.  In dramatic contrast with much of 

the rest of rural America, Amish farms have remained small and viable, their 

communities prosperous, their lands fertile and healthy.   

 

This is not to say that the Amish represent a perfect society.  It is merely a way 

of pointing out that conscious choices made by people and their governing 

institutions determine whether small or large scale, or something in between, is 

predominant.  If people in modern industrial societies were to decide to reverse 

the headlong rush towards the large and global, they would need to overcome 

powerful corporate interests, challenge a deeply embedded technological and 



 

 

 

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economic orthodoxy, and demand a fundamental redirecting of government 

policy.  None of this would be easy, but neither 'nature' nor 'evolution' would 

stand in the way. 

 

Ch apter 2:  Th e Big are Getting Bigger 

 

 

"[T]here seems only one cause behind all forms of social misery: bigness.... 

Wherever something is wrong, something is too big." 

 

    Leopold Kohr, The Breakdown of Nations1 8  

 

 

Constant and rapid growth would be considered unhealthy -- and in the long 

run impossible -- in almost any realm other than the economic.  In that self -

contained world, growth is considered the very measure of success.  Nowhere is 

this revealed more starkly than in the annual reports of corporations, which 

usually announce the prospects for future growth even more loudly than they 

trumpet past success.   Here, for example, is the CEO of Campbell's Soup 

Company breathlessly describing his company's growth potential: 

 

"As I look to the future, I shiver with business excitement. That's because 

Campbell Soup Company is engaged in a 'Global Consumer Crusade'.... 

The aim is to convert millions of new customers to Campbell brands 

every year.  We are moving across the oceans and into new nation-states 

and blocs.  The joy of it is that there is no speed limit on our progress.  

We can't be fined for speeding.  Rather, the cheering will grow louder 



 

 

 

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and stronger the faster we go... especially from our share-owners....  The 

potential rewards of this Global Consumer Crusade are virtually 

limitless."1 9  

 

The Coca-cola Company has the world's most familiar brand name; its products 

sell in 195 countries, generating annual revenues above $16 billion.  But 

financial markets insist on constant expansion, leaving the company no 

alternative but to grow still larger: 

 

"All of us in the Coca-Cola family wake up each morning knowing that 

every single one of the world's 5.6 billion people will get thirsty that 

day.... [I]f we make it impossible for these 5.6 billion people to escape 

Coca-Cola...then we assure our future success for many years to come.  

Doing anything else is not an option" (emphasis added).20 

 

If growth is what has been demanded of them, corporations have delivered, in 

part by expanding markets beyond the borders of the nation in which they were 

founded.  While the scale of the world economy has grown significantly in the 

last half century, international trade has increased even more rapidly.  Between 

1950 and 1992, the value of the goods and services the world produced 

increased by a factor of five; but the value of international trade grew twice as 

fast, going up by a factor of more than eleven. 21   Reflecting this steady 

internationalisation of the economy, companies themselves have changed. In 

1950, almost all companies, even those involved in international trade, were 

'national' in the sense that their shareholders were mainly residents of the 

country in which they were registered.  By 1990 the biggest firms were all 



 

 

 

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international, their shares being held by investors throughout the world and 

traded on several stock markets. 

 

Merger mania 

 

As corporations grow in size, they often approach limits determined by the size 

of their market.  One way to sustain further growth is by taking over or merging 

with competitors.  In the United States, the first big wave of mergers and 

acquisitions occurred at the turn of the century, when approximately one-third 

of the entire nation's manufacturing assests were consolidated into just 318 

huge corporations.2 2   Mergers and takeovers have remained a fact of corporate 

life ever since.  Between 1956 and 1968, for example, American oil companies 

took over more than 200 of their smaller competitors. 2 3   The deregulation 

fervor of the 1980s precipitated another frenzy of takeovers and acquisitions: in 

the food and beverage industry alone, the decade saw over 450 mergers in 

Europe, and another 400 in the US.2 4    

 

Economic globalisation has now sparked yet another explosion of mergers and 

aquisitions.  Based on the conviction that bigger must be better when 

competing in global markets,  corporations that are already huge by any 

standard are seeking to grow still larger.   

 

In 1997, mergers involving American companies alone totaled a record $1 

trillion.2 5   Among the mega-mergers that year were Bell Atlantic and Nynex (at 

the time, the second largest merger in US history), between Chase Manhattan 

and Chemical Bank (creating America's largest bank), 2 6   and between the Swiss 

Bank Corporation and Union Bank of Switzerland (creating an even larger 



 

 

 

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bank, and the second largest in the world)2 7 .  If MCI Communications had 

accepted British Telecom's merger offer, it would have been the largest such 

deal in British history; instead, MCI accepted nearly twice as much from 

Worldcom, making it for a short while the biggest merger in American 

history.2 8 ,2 9       

 

By mid-1998, still larger mega-mergers -- including four of the five largest 

mergers in American corporate history -- shattered even 1997's record pace.3 0   

Banking giant Citicorp announced a merger with the Travelers Financial 

Corporation, creating a financial powerhouse with $700 billion in assets.  

Several automakers also combined: US-based Chrysler was taken over by 

Germany's Daimler-Benz, and British-based Rolls Royce merged with 

Volkswagen. Telecommunications giants SBC and Ameritech merged, a deal 

worth over $62 billion; aircraft manufacturer Boeing combined with former 

competitor McDonnell-Douglas; NationsBank and Bank America merged, a 

$60 billion deal that creates America's first nationwide bank; British Petroleum 

took over Amoco, forging a company worth more than $100 billion, the largest 

industrial combination ever.3 1       

 

The sums involved in such consolidations are so huge they are difficult to 

comprehend.  When asked how the deal involving his company's merger with 

another came about, the CEO of First Union Corporation replied, "I just kept 

stacking billion-dollar bills on the table."3 2   

 

Corporate control of economic life 

 



 

 

 

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Today there are some 40,000 transnational corporations, most of them based 

in the industrialised countries; among them, they generated three-quarters of 

all the world's imports and exports, and had sales of $5.5 trillion. 3 3    Not all of 

these corporations were large (at least not by Ted Turner's standards) but some 

were very large indeed.  In his book When Corporations Rule the World, David 

Korten cites some sobering statistics:  

 

• the 500 largest corporations in the world now control 25 percent of the entire 

world's economic output;  

 

• the largest 300 corporations (not including financial institutions) own roughly 

25 percent of the world's productive assets;  

 

• the 50 largest commercial banks and diversified financial companies control 

nearly 60 percent of all global capital.   

 

These numbers underscore Korten's point that "The global trend is clearly 

toward greater concentration of the control of markets and productive assets in 

the hands of a few firms..." 3 4   The big are getting bigger, much bigger. 

 

The control of so much wealth and power by a few transnational corporations is 

worrying to those who value democratic principles.  But while the corporate 

world is certainly not blind to its unprecedented power, it is more inclined to 

gloat than fret over the implications for democra cy.  A two-page spread in the 

advertising trade publication Adweek, for example, showed photos of Hitler, 

Lenin, Napolean ... and a Coke bottle.  The caption proudly declared, "Only one 

launched a campaign that conquered the world."3 5    



 

 

 

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Another way to gauge the phenomenal size of the biggest transnational 

corporations is to compare their revenues with the Gross National Products 

(GNP) of entire nations. The chart on pages --- --- shows that by 1993, 47 of the 

100 largest economies in the world were in fact corporations, not countries.  

Within these corporate economies, there is an immense gap between the richest 

and the poorest; there is no democracy, nor any goal more important than 

profit and growth.  In this light it is ironic that the United States gover nment 

has expended so much self-righteous fury over the lingering survival of Cuba's 

'planned economy', when there are more than 50 other planned economies 

larger, in economic terms, than Cuba.  Of course, all of these others are 

transnational corporations.3 6   

 

Th e decline of small bu sinesses 

 

We can also look at the other end of the scale, and see how small businesses are 

faring.  This is not so easy as it would seem: as the scale of the economy has 

grown, even the definition of 'small business' has grown a long with it.  In the 

United States, for example, the self-proclaimed mission of the U.S. Small 

Business Administration (SBA) is to "aid, counsel, assist and protect the 

interests of small business concerns."3 7   When the agency was founded in 1953, 

a small business was defined as a manufacturing plant that employed fewer 

than 100 persons, a wholesale establishment with annual sales of less than 

$200,000, or other business with sales or receipts of less than $50,000 per year.   

At the time, fewer than 10% of US businesses were larger than this standard. 3 8  

 



 

 

 

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Today, however, what the SBA considers a 'small business' has grown 

considerably:  for manufacturing, the maximum number of employees has 

quintupled to 500 -- and in certain industries (including ammunition 

manufacturers, telephone communications, and air transport services) a 

business can have as many as 1,500 employees and still be defined as 'small'.  

For most retail and service businesses, the upper limit of annual sales has 

grown to $5 million.  But if the term 'small business' makes you think of the 

corner shop, you might be surprised to find that the SBA considers 

supermarkets with up to $20 million in annual sales 'small'.  Even a 

commercial bank with up to $100 million in assets qualifies by today's 

yardstick.  In practice, the SBA umbrella covers any business that is "not 

dominant in its field", which means that 99% of all businesses -- some of them 

quite large indeed -- qualify.  Yet even the largest of these are minnows 

compared to the really big fish: the remaining 1% of businesses are so large that 

among them they employed over 40 percent of all US private sector workers in 

1990.3 9  

 

The growth of these very large businesses has been at least in part at the 

expense of the very small.  Studies in the US have shown that five years after the 

opening of a new Wal-Mart, stores within a 20-mile radius have lost an average 

of 19 percent in retail sales.  For many local enterprises, survival is impossible in 

the wake of such losses.  The typical result can be gauged from the experiences 

of a town in Iowa, where the opening of a Wal-Mart was followed in quick 

succession by the closing of eight smaller businesses -- including a hardware 

store, three clothing stores, a drug store, a shoe store, a department store, and a 

variety store.4 0     

 



 

 

 

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Unfortunately, this trend is not limited to the United States.  In England a 

superstore that opened in 1989 cost the nearest town center 70 percent of its 

trade within four years; at least ten other towns in the vicinity also lost 

business.4 1   Since 1991, the coming of superstores known as ipermarcati to Italy 

has resulted in the demise of 370,000 small, family-run businesses.  In less than 

a decade, half of the country's corner groceries and a third of its other small 

stores have been simply driven out of business.4 2  

 

Small farms vs. agribu sinesses 

 

The growth of large enterprises at the expense of smaller ones has been 

particularly true in agriculture.  In the United States, small farms have been 

steadily disappearing for generations.  When they do, their land is usually 

swallowed up by larger farms, with the result that the average farm size in the 

US more than tripled between 1935 and 1987. 4 3    Large farms also need fewer 

people per acre: between 1950 and 1955 alone, America's agric ultural sector 

shrank by more than a million workers.4 4   This trend has been going on so long 

that today less than 3% of the US workforce is directly engaged in farming; yet 

even with so few farmers left, small farms have still been disappearing at the 

rate of more than 30,000 a year.4 5     

 

This trend may have proceeded furthest in the United States, but it is occuring 

throughout the industrialised world. In Britain, more than 450,000 farms were 

in operation at the end of World War II, the majority of them smaller than 50 

acres. Today, there are only half that number.  Even as late as 1970, there were 

over 100,000 dairy farmers in the UK.  But more than 30,000 of them 

disappeared during the 1970s, and another 20,000 folded in the decade 



 

 

 

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following.  Though their numbers have already been decimated, dairy farmers 

in England and Wales are still disappearing at the rate of 100 each month. 4 6     

 

While small British farms are struggling, large-scale farms are thriving: the 

biggest 10 percent of farms today account for half of British output, and some 

analysts claim that cereal farmers will soon need 800 acres or more to remain 

profitable.  This trend toward larger scale is closely related to the 

industrialisation of agriculture, in which traditions of land stewardship give 

way to an obsession with productivity and short-term profits.  In fact, many of 

Britain's largest farms are now run by contract companies, which take on the 

farm's management and operation in return for a fee and a percentage of 

profits.  One such company, Velcourt, farms a total of 60,000 acres for large 

landowning clients.  Respected agricultural analysts point to this as the wave of 

the future, with the implication that the vast majority of Britain's agricultural 

production will soon be in the hands of just 12,000 decision-makers, few of 

whom will even reside on the land they farm. 4 7  

 

The loss of small farms goes hand-in-hand with the marginalisation of rural 

areas in general.  In the past ten years, for example, the British agricultural 

sector has shed some 88,000 jobs.  With their livelihoods gone, many rural 

people have little choice but to migrate to urban centers, leaving behind small 

towns and villages sapped of cultural and economic vitality.  Rural economic 

health suffers further injury from the invasion of corporate chains, which 

displace smaller, locally-owned retail shops.  While the latter recycle a high 

proportion of their revenues back into the local economy, corporate chains and 

franchises merely siphon wealth away and deliver it to corporate headquarters -

- where it fuels further corporate growth and adds to the portfolios of 



 

 

 

22 

stockholders, but gives little back to the local economy it came from.  Studies 

indicate that of the money spent at typical McDonald's restaurant, nearly 75% 

leaves the local economy.4 8   Other studies have shown that Wal-Mart, which 

sites most of its mammoth stores in rural areas, destroys three jobs for every 

two it creates.4 9  

 

Urbanisation  

 

All over the industrialised world, cities have grown at the expense of rural 

areas.  Thanks to Japan's urbanisation, for example, some 2,500 rural villages 

have been swallowed up by expanding cities. 5 0    The northeast United States 

has been so intensively urbanized that the entire 450-mile swath from 

Washington to Boston is often considered a single 'megalopolis'.  Many of the 

once-independent and lively small towns in that stretch are now merely 

'bedroom communities' -- suburban appendages of the nearest large city.  

 

In the Third World most of the population still makes a living from the land, 

but similar trends are underway there as well.  Not so long ago, farmers in the 

South typically produced a diversity of crops on their small holdings, thereby 

providing most of their family's needs for food, fiber, and fuel, and perhaps 

generating a small cash income by selling surpluses in a local market.  But 

colonialism, development, and free trade policies have systematically shifted 

production from local needs to the requirements of global export markets.  A 

farmer on a 2-acre plot can feed his or her own family quite well, but cannot 

compete in the global economy.  Export-led agriculture usually demands large-

scale monocultural plantations, industrial-scale machinery, and heavy 



 

 

 

23 

chemical inputs; but it does not require many farmers, and a large portion of 

the agricultural labour force is left redundant.  

 

This process is occuring rapidly in places like China.  Less than twenty years 

ago, 92% of China's population were farmers; now less than 40% remain on the 

land.  In one recent year alone, 10 million peasants left their farms.5 1   

Agricultural modernisation is expected to 'free' so many people from the land 

that 440 million will be migrating to China's urban areas in the next few 

decades.  While the vitality of rural village life is thereby decimated, 600 new 

cities will be needed by 2010 to handle the urban migration, according to 

China's Vice Minister of Construction.5 2  

 

The population explosions in Third World cities is thus far more closely linked 

to modernisation and development than to overall population growth.  In fact, 

cities like Karachi, Manila, and Lagos, which more than doubled in size 

between 1970 and 1990, grew twice as fast as overall population growth in their 

respective countries.5 3    Thanks to the systematic undermining of rural life, 

there will be 20 more cities with populations over 10 million at the end of the 

century than there were in 1970.  All of these additional megalopolises will be in 

the Third World.5 4  

 

Large and global vs. small and local 

 

The trends described in this chapter all follow a similar pattern: the growth of 

the large and global at the expense of the small and local.  Populations are 

being drawn into huge urban agglomerations, while rural communities are 

sapped of economic and cultural vitality.  Corporate businesses that have 



 

 

 

24 

already reached an unimagineable scale are growing still larger and more 

powerful, while small, local businesses are struggling to survive.  The scope and 

scale of the global economy continues to expand, while local economies almost 

everywhere are in decline.   

 

But what is small, and what is local?  The definitions of these terms may seem 

self-evident, but as the Small Business Administration proves, there is much 

room for interpretation.   Take, for example, an advertising or computer 

graphics business with just two or three employees operating out of a tiny office 

in the countryside.  On one level this is certainly a small business; but if it has 

clients on four different continents, to what degree is it a 'local' business?  Or 

consider an owner-operated shop selling fruits and vegetables -- surely a small 

business.  But if the produce comes from dozens of different countries, is grown 

on industrial-scale farms, and is delivered by large corporate wholesalers over 

international transport networks, is it really 'small', or is it just a tiny piece of a 

gigantic global-scale trading system?   

 

Truly small, truly local businesses are becoming increasingly rare, especially in 

the industrialised world.  Examples might include family farmers selling 

directly to their customers, or craftsmen and artisans using nearby resources to 

produce wares for surrounding towns.  One key feature of such enterprises is 

that the distance between producer and consumer is fairly short -- a good rule 

of thumb for 'local'.  But today a wide range of subsidies and ignored costs 

mean that goods transported halfway around the world and passed through 

several corporate middlemen can easily be cheaper than goods produced right 

next door, making it hard for truly local producers to survive.  Because of 

hidden subsidies the cost of local garlic in Spain, for example, is twice that of 



 

 

 

25 

garlic imported from China; similar distortions make local butter in Kenya 

more expensive than butter imported all the way from Denmark.  It is an 

absurd situation, none the less so because it is justified by economic logic.  

 

In cases like these the distance between producers and consumers is enormous, 

with heavy costs to people and ecosystems at both ends of the transaction.  Yet 

government policies are encouraging this gap to widen still further.  Thus, the 

US government sponsors dozens of programmes to induce even small firms to 

"travel along the exciting and profitable road to overseas markets." 5 5   

 

In countless other ways, governments are actively promoting trade among 

goods that could be produced locally, and are systematically encouraging the 

growth of scale at every level.  These policies are costing people their jobs, and 

are breaking down the community fabric that depends upon healthy local 

economies; they are eroding democracy and widening the gap between rich and 

poor; and they are irreparably damaging ecosystems and human health across 

the planet.   

 

Clearly, a fundamental change in direction is needed.  The goal would not be to 

shrink the producer-consumer distance to some arbitrarily-defined number of 

miles, nor would it be to eliminate all trade.  Instead, the aim would be to offer 

support to the small producer instead of the corporate giant, to local economies 

rather than the global.   

 

Truly local economies -- where the separation between producers and 

consumers is minimal -- inherently promote small scale on many levels. 

Businesses and industries can be smaller, less centralized, and less taxing on 



 

 

 

26 

the environment, and communities can be less populous but still culturally and 

economically vibrant.  In that sense, the terms 'local' and 'small' are intimately 

related.  Importantly, they define a vision of the future radically different from 

that being embraced in our names by governments everywhere. 

 

Ch apter 3: I nfrastru ctu re and Scale 

 

"International donors, including the International Monetary Fund, have been 

urging the Philippines to increase infrastructure spending.... [This] would 

strongly improve the country's chances of being awarded investment grade 

ratings by the international credit rating agencies." 

 

        Financial Times5 6  

 

Politicians, economists, and business leaders often speak of the need for 

improvements in 'infrastructure'; when they do, no one mistakes their meaning.  

Images spring to mind of highways and bridges, railroad lines, airports, 

harbors and shipping terminals, dams, power plants, telecommunications 

facilities, hospitals, universities, perhaps even the 'information superhighway'.  

 

None of this is inaccurate, of course, but what is almost never acknowledged is 

that these represent a particular kind of infrastructure, suitable to a particular 

kind of society and economy: one that is large-scale and centralized, and that 

encompasses huge markets.  What's more, there is no recognition that other 

viable forms of infrastructure, suitable to other forms of society and economy, 

even exist. 

 



 

 

 

27 

Faith in the industrial growth model is so deeply embedded in modern western 

thought that membership in a society organized along industrial lines is now 

considered a basic human right.  In a report to the US Congress, for example, 

the Office of Technology Assessment declared: 

  

"The interests of all nations ought to be fairly straightforward -- quality 

jobs, a rising standard of living, technological and industrial 

development, ensured rights of workers and consumers, and a high-

quality environment at home and globally..." (emphasis added). 5 7  

 

Both 'technological and industrial development' are oddly out of place on this 

list, but since no alternative to a high-tech, industrial way of life is deemed 

valid, very few people would find it incongruous.  

 

A monocultural globalised economy depending on endless growth, obsessive 

trade, and ever-increasing levels of consumption is not only environmentally 

unsustainable, it is socially unstable and economically unsound.  Rather than 

continuing to devote public resources to its creation, it would be far more 

sensible to support economies that are, among other things, smaller in scale 

and more localised.  Such a shift in policy would in turn require support for 

infrastructures appropriate to small scale rather than large.  Unfortunately, 

public monies are rarely invested in ways that serve anything but large 

enterprises operating in ever expanding markets.   

 

Still worse is that locally adapted forms of infrastructure are being 

systematically destroyed wherever they still exist.  In recent years, most of this 

destruction has occurred in the Third World, where localised economies are 



 

 

 

28 

reshaped to industrial contours in a process described as 'development'.  In her 

book Ancient Futures: Learning from Ladakh, Helena Norberg-Hodge 

described this process as she witnessed it in a remote Himalayan kingdom: 

 

The development of Ladakh, as everywhere else in the world, required a 

massive and systematic restructuring of society that presupposed 

enormous and continual investments in 'infrastructure': paved roads, a 

Western-style hospital, schools, a radio station, an airport, and, most 

importantly, power installations.... At no point was it even questioned 

whether or not the result of these tremendous efforts constituted an 

improvement on what had existed before.  It was like starting from zero, 

as if there had been no infrastructure in Ladakh before development. It 

was as if there had been no medical care, no education, no 

communication, no transport or trade.  The intricate web of roads, 

paths, and trade routes, the vast and sophisticated network of irrigation 

canals maintained over centuries: all these signs of a living, functioning 

culture and economic system were treated as though they simply did not 

exist.5 8  

 

Human-scale, locally-adapted forms of infrastructure work very well for people 

and the ecosystems they inhabit, as was clearly the case in Ladakh for many 

hundreds of years; but being of no use to a corporate-run global economy, these 

systems are undermined and ultimately destroyed through the imposition of a 

heavily-subsidized infrastructure built to industrial standards.   

 

I nfrastru ctu re h as scale 

 



 

 

 

29 

The architects of today's industrial economies are well aware of their 

infrastructural needs:  a transport network capable of quickly and reliably 

delivering raw materials, agricultural commodities, and manufactured goods 

over long distances; large quantities of cheap energy, both to fuel 

manufacturing processes and to enable household consumption to rise; 

communications networks to permit central coordination of widely dispersed 

corporate activities; educational institutions to provide a workforce trained for 

roles in the corporate economy; and research bodies to maintain a rapid rate of 

technological innovation.  There is no doubt that this is the agenda that drives 

government policy on infrastructure development today.  A British member of 

the European Parliament expressed it this way:   

 

"For British industry to make the most of the business opportunities 

presented by the single market, we need to provide the infrastructure to 

cater to their demands" (emphasis added).5 9   

 

This would not be new policy: government-funded infrastructure development 

has "catered to the demands" of large corporate enterprises for many years.  To 

see what the result has been, it's worth considering one corporation, Wal -Mart, 

the world's largest retail business -- and by some projections, soon to be 

America's largest corporation.6 0   The success of this firm has often been noted, 

and usually ascribed to the business acumen and personality of the company's 

founder, Sam Walton.  Rarely, if ever, does the role of a publicly-funded 

infrastructure enter into the analysis.  If it did, it would become clear that the 

'everday low prices' the corporation uses to drive small shops out of business are 

made possible by a wide range of indirect subsidies. 

 



 

 

 

30 

In a typical week, Wal-Mart serves some 70 million customers, the vast majority 

of whom drive their cars to the store, sometimes from 50 or more miles away.  

Their journeys are made easier thanks to Wal-Mart's preferred location, 

adjacent to an artery of the Interstate Highway System or other limited access 

highway.  Inside the store laser scanners at each cash register read computer 

bar codes, speeding customers through the checkout lines while tracking the 

supply of the 80,000 different items sold.  These computers are connected by 

satellite communication links to Wal-Mart's central headquarters in Arkansas, 

where sales and inventory at each of the company's more than 2,300 stores are 

closely monitored. Further satellite links connect central headquarters with the 

company's 43 distribution centers and with Wal-Mart's fleet of trucks -- whose 

location can be pinpointed using geo-positioning technology.  With distribution 

warehouses sited adjacent to Interstate highways, travel time is minimized for 

delivery trucks just as it is for customers.  A growing numb er of Wal-Mart's 

products are manufactured overseas -- including more than 47,000 container 

shipments in 1995 alone.6 1   These shipments arrive at coastal ports designed for 

unloading container cargoes, are transported by rail, and then transferred to 

trucks for the journey to distribution centers.  The entire system enables the 

company to dispatch trucks loaded with precisely the right stock to every store 

as needed, keeping the shelves full at all times. 6 2  

 

In sum, virtually every product Wal-Mart sells has been transported thousands 

of miles on superhighways paid for by the public; the shipping terminals where 

foreign-produced goods arrive have been built on public land and maintained 

by public agencies; the satellites the company relies upon to communicate with 

and monitor its stores and trucks are the product of a publicly-funded space 

programme, and the laser technology that makes inventory tracking possible 



 

 

 

31 

stems from government-funded military research; the journey of virtually every 

customer has been facilitated by a massive public highway system; even the 

workforce that built, programmed, and maintains the company's computers is 

the product of an educational system, funded largely by the public, that focuses 

on training people for such high-tech roles.   

 

Such a list could go on and on, but it should already be clear that public funds 

have created the infrastructure Wal-Mart requires; more to the point, even the 

concept of a corporate retailer on the scale of Wal-Mart would be impossible 

without such an infrastructure.   

 

Not only large-scale retailers, but producers, as well, benefit from these public 

infrastructure investments: they move raw materials and finished products over 

the same transport infrastructure, coordinate their geographically-dispersed 

subsidiaries via similar communications networks, and rely on a publicly-

funded educational establishment for personnel and for sources of 

technological innovation.  This dependence on public transport and 

communications networks was indirectly revealed in a Toyota advertisement 

that recently appeared in American magazines.  The Japanese transnational 

touted the 'made-in-America' content of its Camry model by claiming, "We buy 

the best parts in the world, no matter which state they're from."  The ad 

diagrammed the car, proudly pointing to the different states where its various 

components were manufactured: even though the assembly plant was in 

Kentucky, the 40 manufacturers involved were scattered from one end of the 

country to the other, from California to Vermont.6 3    

 



 

 

 

32 

Toyota's Camry is not exceptional in this regard, and 'free trade' rules mean 

that components for many goods are now transported even further before 

assembly.  US manufactured goods are so routinely fabricated in several 

different countries that the Federal Trade Commission was heavily lobbied by 

industry to change the definition of what it means to be locally-produced.  The 

proposed rule change would have allowed businesses to expend as much as 25 

percent of an article's cost of production outside the US, and still label the 

product 'Made in the USA'.6 4    

 

To build up an economy suitable to the scale at which transnational 

corporations operate, an industrial infrastructure is an absolute necessity.  

Most Third World 'development' projects are devoted to creating exactly that 

sort of infrastructure, thus enabling those countries to climb onto the bottom 

rungs of the global economic ladder, while facilitating corporate access to 

Southern resources and markets.  A recent conference on "investment 

opportunities" in less-developed Mediterranean countries concluded that "Poor 

infrastructure is a key constraint on investing in the Middle East and North 

Africa".  Building up the energy infrastructure alone in order to encourage 

investment would cost as much as £250 billion, most of which would be paid by 

the public.6 5    As in the case of Ladakh, the centralized infrastructure 

envisioned would meet the needs of large-scale industrial enterprises, but 

would undermine the livelihoods of people whose needs are now met within 

more localised economies. 

 

Small-scale infrastru ctu re 

 



 

 

 

33 

If global economies and the corporations that dominate them require an 

industrial infrastructure, small-scale economies built around more localised 

markets would have very different needs.  There would be far less dependence 

on long distance transport, reducing the need for superhighways, airports, and 

shipping terminals.  Since manufacturers would be producing for a smaller 

market, they would likely be smaller themselves, and use more human labour 

and less energy.  Communication links to coordinate activities across continents 

would no longer be a high priority.  Though schools would still provide 

information about other cultures, they would primarily be diverse reservoirs of 

location-specific knowledge.  Research would likely aim toward the best use of 

local resources in a particular environment, rather than focusing on high -tech 

findings with applications anywhere in the world.  

 

Even though these smaller-scale options would cost far less than building 

according to the corporate blueprint, governments have systematically ignored 

them.  Like most important choices, decisions about the kind of infrastructure a 

society invests in are inherently political.  Unfortunately, real debate on this 

issue is extremely rare, even in countries described as democratic.  What little 

debate there is generally focuses on the margins:  Whose backyard will the 

superhighway run through?  What safeguards will be in place at the nuclear 

power plant?  How can the communication tower be built without ruining the 

aesthetic appeal of the mountain?  Meanwhile, small-scale infrastructure 

options that provide for people's needs -- not the needs of giant corporations -- 

are ignored or dismissed out of hand.   

 



 

 

 

34 

The result is a self-fulfilling prophecy: if public monies are continually invested 

in the infrastructural needs of a large-scale, industrial economy, no one should 

be surprised if that is the sort of economy that 'evolves'.  

 

Th e myth  of u ser fees 

 

One of the arguments associated with infrastructure development is that 

certain investments 'pay for themselves'.  In the United States, where some $90 

billion of local, state, and federal funds are spent on roads and highways 

annually, it is often said that this infrastructure is not really subsidized, since 

most of that money comes from user fees -- taxes on fuel, vehicle registration 

fees, and the like.  In the US, this was the rationale for earmarking those fees 

for a Highway Trust Fund, which could only be spent on further road 

construction.   

 

The argument is fallacious on at least two grounds.  First, the expenses that 

these user fees cover are only direct costs, at best. 6 6   Indirect costs, like the 

pollution caused by car and truck transport, the long -term costs of global 

warming, the environmental damage caused in drilling for, transporting, and 

refining oil, the military expense of guaranteeing its supply from the Middle 

East -- and many others -- are simply ignored. 

 

Second, the fact that a given form of infrastructure pays for itself in narrow 

economic terms doesn't mean that society is better off for having invested in it.  

If the state were to allocate $20 billion to equip each neighborhood with a 

state-run brothel and crack-cocaine outlet, would it be assumed that this was a 

wise use of public funds just because the money could be recouped through 



 

 

 

35 

user fees?  Probably not, but the logic is no different from that which justifies 

other infrastructure investments simply because they generate enough taxable 

transactions to pay for them.   

 

The shape a society takes tomorrow depends in part on the kinds of 

infrastructure investments it makes today.  Any number of different 

infrastructure can pay their own way, but citizens must first decide upon the 

kind of future they want to bring about.  Today almost all infrastructure 

investments are leading toward larger scale, greater separation between 

producers and consumers, and a world further dominated by corporations.  

 

Ch apter 4:  Su bsidizing Long-Distance Transport 

 

"If you've got it, a lorry delivered it." 

 

  Tesco leaflet supporting 'The Good Lorry Code' 6 7  

 

When the typical American family sits down to dinner, the food on the table has 

traveled, on average, some 2,000 miles.  America is not particularly exceptional 

in this regard among industrialised countries: a recent study in Germany, for 

instance, revealed that the ingredients in a single container of yoghurt had 

come from four different countries, and required 1,000 km of transport. 6 8   

Clearly, people in these countries are dependent for food -- the most basic of all 

day-to-day needs -- not on their local economy, but on a geographically huge 

economy that is increasingly international in scope. 

 



 

 

 

36 

As was argued in the last chapter, large-scale economies depend upon 

infrastructures suited to that scale.  The ways in which these infrastructures 

were created varies from country to country, but a detailed look at a particular 

case reveals the sorts of forces that have been involved almost everywhere.  

 

The transport system in the United States is a particularly instructive example, 

in part because a single national US economy could never have been forged 

from such a vast expanse without a reliable and extensive long -distance 

transport network -- one that is today the largest in the world.6 9  

 

Th e railroad cru sade 

 

The decline of railroads as a medium for passenger transport in America has 

led to the mistaken belief that rail is no longer a significant part of the nation's 

overall transport picture.  But in 1994 alone, railroads were responsible for 

more than 1.2 trillion ton-miles of freight, more than any other mode of 

intercity transport.  The use of railroads for freight transport is also growing: 

since 1960, the ton-miles of freight accounted for by rail in the US has more 

than doubled.7 0    

 

America's rail infrastructure is clearly geared to long-distance transport, rather 

than transport within more localised economies.  The average length of haul in 

the US was over 800 miles in 1994,7 1  and hauls less than 500 miles are 

unusual.7 2  

 

How did this long-distance rail network come about?  Partly responsible was an 

ideology of growth and expansion that made a cross-country rail link into a 



 

 

 

37 

national crusade.  Vested interests took advantage of that ideology, but it was 

government support that really made a nationwide rail system possible. 

 

Railroad building in the US began in the 1820s.  Thousand of miles of track 

were laid in the next few decades, although most of the lines served only local 

markets.  But by the middle of the century there were calls for expansion into 

newly-acquired western lands, a political and commercial urge that meshed 

seamlessly with popular Enlightenment attitudes about the relationship 

between Man and Nature.  It was considered America's God-given duty to 

subdue and civilize the untamed wilderness, and her "manifest destiny to 

overspread the continent allotted by Providence... ". 7 3       

 

There was also a pragmatic awareness of the role rail transport could play in 

tying together the huge nation, which was already beginning to fracture along 

lines of natural geography and local economic interest. 7 4   If America's 

dispersed local economies were to be amalgamated into a single, national 

economy, a nationwide transport network would be required.  An enthusiastic 

advocate of a trans-continental railroad made the argument this way: 

 

"Let this road be constructed, and there will be no North and no South, 

no East and no West, but our country will be everywhere!"7 5   

 

Immediately following the Civil War, the federal government officially 

embraced the idea of connecting the eastern and western halves of the 

continent by rail, and put vast resources at the command of the corporations 

that would construct the line.  Over 183 million acres -- an area larger than 

California and Florida combined -- were transferred from public ownership 



 

 

 

38 

into the hands of railroad corporations in just a few decades. 7 6   This land -- 

lying in alternate sections six miles deep on either side of the track -- was to be 

sold to settlers, with the proceeds funding railroad construction.  Even when 

sold at a few dollars per acre, it was a bonanza for the railroad companies: land 

given to the Union Pacific and Central Pacific railroads for their sections of the 

transcontinental rail line, for example, generated over $27 million.7 7   This was 

a huge sum, almost four times as much as the US government paid Russia two 

years earlier for the entire territory of Alaska. 7 8  

 

Powerful monied interests -- not only railroad moguls but all those who stood to 

gain from economic expansion -- pushed many projects through, often by 

bribing legislative officials.7 9   Sometimes politicians were also principals in 

railroad corporations:  Leland Stanford, one of the owners of the Central Pacific  

railroad, was at the same time governor of California .  Vested interests also 

made liberal use of the media of the day to encourage settlers to head for the 

'paradise' awaiting them further west.  Kansas -- well-known today for its 

shortage of rainfall, scorching hot summers, winter blizzards, and occasional  

tornadoes -- was promoted to unsuspecting settlers as home to the nation's 

most desirable climate.8 0  

 

The US government not only subsidized the building of railways, but also used 

its Army to protect trains and settlers from the Native Americans whose land s 

were being taken.  Thus, while America's industrial economy was expanding in 

scale and geographic scope, it was doing so at the expense of countless 

indigenous cultures, whose ways of life were, for the most part, obliterated.  

 



 

 

 

39 

Thanks to the railroad boom, a number of business interests grew enormously 

in both wealth and power.  Railroads were America's first Big Business, and 

many of the original railroad corporations are still in operation, including 

Union Pacific, today one of the world's largest corporations.  Financiers like 

J.P. Morgan -- whose name survives in another Fortune 500 corporation, the 

Morgan Stanley Group -- also profited handsomely.8 1   But more significant 

than the benefits accruing to individual corporations was the overall expansion 

of the American market.  Soon, a wide range of raw materials, manufactured 

goods, and agricultural products would be traveling long distances relatively 

quickly by rail, making it possible for businesses to expand their scale in 

tandem with the geographical growth of the market.  

 

America's railroad system was not designed to meet the internal needs of 

localised economies -- and in fact one of its primary goals was to absorb those 

economies into a single national one.  Today as in the past, this highly 

subsidized transport infrastructure most directly benefits private interests 

involved in long-distance trade and huge markets. 

 

High way transport 

 

During the past 75 years, America's long-distance transport infrastructure has 

expanded exponentially, largely because of the construction of an immense 

highway network.  By 1994, there were over 175,000 miles of highways in the 

federal system alone, including 45,000 miles of Interstate Highways; various 

state systems contributed an additional 97,000 miles of 'principa l arterial' 

highways.8 2   This immense system has been built and maintained almost 

exclusively at public expense.  The sums involved are not insignificant: over $55 



 

 

 

40 

billion dollars in state and federal funds were expended on roads in 1994 

alone.8 3  

 

As the last chapter indicated, major corporations rely heavily on this system: 

altogether, trucks traveled a total of 182 billion miles in 1994 on the Interstate 

highways alone.8 4   Total intercity truck transport accounted for 900 billion 

ton-miles of freight that year.  As with rail, the trend is upward: the ton-mileage 

of truck transport has grown more than three-fold since 1960.8 5     

 

The present form of America's highway transport infrastructure is not only the 

product of massive public subsidies:  it is also, to a  large degree, the result of a 

conscious corporate plan. 

 

Wh at's Good for General Motors 

 

Although a federally-funded macadamized road between Washington and Ohio 

was built as early as 1817, most roads in the US remained unpaved and suitable 

only for fairly short, local trips until well into the 1900s. In 1893, a headline in 

the Washington Post read, "Our System of Highways -- It is the Worst on Earth 

and Should Be Reformed."8 6   

   

Despite the Washington Post's admonition, roads were not considered a high 

priority, even by the end of the century: when the office which later became the 

Federal Highway Administration was first established, it consisted of just two 

people with an annual budget of $10,000. 8 7  

 



 

 

 

41 

As late as 1922 only one American in ten owned a car; most people had no 

compelling need for one either, since electric streetcar lines were both extensive 

and reliable, and made travel possible virtually anywhere within most cities at 

very low cost.8 8   In some cases the ends of one town's lines even linked up to 

that of another -- enabling one to travel, albeit slowly, all the way from New 

York to Boston and other cities by streetcar.  Even so, the focus of these systems 

was local, not long-distance travel.  

 

Starting in the mid-1920s, however, these local systems were bought up and 

systematically destroyed by a consortium of automobile-related companies, 

including General Motors (GM), Standard Oil of California, Firestone Tire, and 

others.  By 1946 National City Lines, the front company for these corporations, 

controlled public transit systems in over 80 cities.  In every case the local transit 

system was intentionally allowed to deteriorate. Service was slowed, then cut.  

Rails were torn up, streetcars removed from service and burned.  Many of these 

were replaced by GM's buses -- with public relations campaigns portraying the 

shift as 'progress'.  But public transit was systematically being made 

inadequate; cars became no longer a luxury, but a necessity. 8 9  

 

The government may not have directly supported this process, but it certainly 

did little to stop it.  By the time antitrust and conspiracy charges were filed in 

1946, it was already too late: the corporations had destroyed local 

transportation systems that, by one estimate, would today cost as much as $300 

billion to build.  Although the companies responsible were found guilty of 

conspiracy, they were each fined only $5,000.  For his role in the crime, the 

Treasurer of GM was fined the princely sum of one dollar. 9 0  

 



 

 

 

42 

The destruction of public transportation was a boon for the automobile and oil 

interests, but the continued growth of these companies would be limited unless 

more roads and highways were built.  Lobbying groups were formed, including 

the National Highway Users Conference, headed by the president of GM .  Slick 

promotional films and advertising campaigns pointed to the nation's 

increasingly congested roads, and urged people to support the building of new 

ones.  One GM film showed people stuck in traffic honking their horns.  "What's 

a citizen gonna do?" the narrator asks:  

 

"Don't honk your horn; raise your voice.  Ask for better highways and 

more parking spaces.  It's your country.  Give yourself the green light."9 1    

 

These efforts had the desired effect: the nation's highway infrastructure, 

including a Federal Highway system composed of thousands of miles of two-

lane roads, was continuously expanded at public expense.  Separate state-

funded highway systems also grew rapidly. 

 

But highway building got its biggest boost when General Motors president 

Charles Wilson was appointed Secretary of Defense. During his confirmation 

hearing in 1953, Wilson argued that since "what's good for General Motors is 

good for the United States", there was no conflict between his loyalty to GM and  

his responsibilities to the nation.  Wilson put this belief into practice by pushing 

for a nationwide system of superhighways, on the grounds that it was crucial 

for national security.  In 1956, Congress authorised federal funds for a 41,000 

mile Interstate Highway System.  At the time, it was described as "the greatest 

public works programme in the history of the world."9 2   

 



 

 

 

43 

It may seem that America today is already covered in tarmac, but road -building 

continues unabated.  With the Interstate Highway System nearly complete, a 

new National Highway System has been proposed which would make 

"improvements" to 156,000 miles of existing highways and add 21 new "high 

priority corridors".  The cost will be some $6.6 billion. 9 3   Much of the federal 

financing for these roads has come from a Highway Trust Fund into which gas 

taxes and other user fees have been directed.  For many years these funds could 

only be used to build more roads, creating a positive feedback loop: more 

driving led to more funding for roads, which inevitably led to still more driving.       

 

Just as the long-distance railroads served the interests of large-scale business in 

general, the highway transport system has benefited more than just the the 

automotive, oil, and road building corporations that most actively promoted it.  

Among their other impacts, these public investments make it much easier to 

transport goods to and from anywhere in the nation, offering advantages to any 

business large enough to exploit huge markets.  In fact Charles Wilson might 

have more accurately said, "what's good for GM is good for all large 

corporations."  

 

As Robert Reich notes, the potential repercussions of heavily subsidized 

highways were never part of the public debate: 

 

"The manifestly real possibility ... that [they] might also generate 

sprawling suburbs and shopping malls, harm downtown retailers, fatten 

the construction industry, boost auto sales, create an entire trucking 

industry, displace barges and railroads, and radically lower the cost of 



 

 

 

44 

transporting and distributing goods across America -- was not openly 

discussed."9 4  

 

One can be certain, however, that many of these effects were discussed among 

the powerful corporate interests that benefited from them and consciously 

promoted them. 

 

Corporate-friendly skies 

 

America's economy could expand only so far if its transport infrastructure were 

limited to rail and highways.  As international trade has increased, the 

importance of air transport has grown apace.  In 1994, over 11 billion ton-miles 

of freight were carried by air in the US -- more than 20 times what was carried 

by air in 1960.9 5   Obviously geared towards long-distance transport, the 

average length of haul by air is now over 1,300 miles. 9 6    

 

A global economy also requires people to travel more, and to travel longer 

distances.  For the US, the number of passenger-miles flown in 1994 was more 

than 12 times what it was in 1960; in the last ten years alone, passenger-miles 

flown increased by almost 40 percent. 9 7   Over half a billion passenger 

boardings in the US were expected in 1997, and the airline industry projects 

that number to increase by half in the next decade. 9 8   

 

Many countries have built up their national airlines as industries wholly- or 

partly-owned by the state.  This has been the case not only in the formerly-

communist world -- the Russian government, for example, still owns 51% of 

Aeroflot9 9  -- but in capitalist countries as well:  the Dutch government owns 38 



 

 

 

45 

percent of KLM airlines, and until recently Japan owned 50 percent of Japan 

Air Lines; Germany was once a majority owner of Lufthansa, and Britain owned 

British Airways until it was 'privatized' in 1987. 1 0 0   Most airlines in the less-

industrialised world were built up by the state, and many are still state-run.   

 

In the US, however, airlines have always been independent businesses.  

Nonetheless, taxpayers have made -- and continue to make -- huge investments 

in the infrastructure on which air transport depends.  For example, all major 

airlines rely on a government-funded air traffic control network -- a massive 

technological infrastructure employing 17,000 people.  The annual budget for 

the Federal Aviation Agency, whose duties include air traffic control, safety 

inspections, and airport improvement, is well over $8 billion. 1 0 1  

 

Further subsidies for air transport are embedded in military research spending 

and government research and development funding.  These subsidies benefit 

American aerospace companies, which in turn provide planes to all major US 

airlines.  The value of that assistance is estimated at $1 billion annually. 1 0 2  

 

Another form of hidden subsidy comes with the training of pilots for 

commercial air fleets.  In 1996 for instance, most of the 500 pilots that resigned 

from the US Air Force did so because they were lured to commercial airlines, 

which pay trained pilots higher salaries than the military for work that is less 

demanding.1 0 3   The Air Force estimates that over a period of nine years, the 

training it has provided each pilot that 'defects' to an airline costs the public 

$5.9 million.1 0 4    

 

Airport su bsidies 



 

 

 

46 

 

Each of America's 400 or so major airports have received large public subsidies.  

Even today, airports pay no federal or state corporation taxes and are exempt 

from local property taxes; they receive federal grants for capital improvements, 

and can borrow at subsidized rates.1 0 5   In the early days of aviation growth, 

start-up costs for new airports were often paid for by the city where the airport 

was located.  These expenditures were usually justified on the grounds that an 

airport would be an economic boon to the community.  This was New York City 

mayor Fiorello Laguardia's rationale for using the city's tax money to build 

Idlewild (later Kennedy) Airport in 1945: 

 

"The greatest airport in the world is rising from the meadows at Idlewild 

in New York City.  It will cost $71 million.  Filling grading, planting, 

drainage, field lighting utilities, runways, taxiways and aprons will cost 

about $35 million.  The administration building, together with loading 

docks, apron and parking spaces will cover well over three hundred acres 

and cost about $10 million.... The airport will bring millions of dollars 

monthly in commerce, business and traffic to the City of New York.... 

The airport is a costly undertaking, yet it will be one of the best 

investments the City ever made."1 0 6  

 

Even though $71 million was a huge sum -- more than half a billion in today's 

dollars -- the final cost was over five times La Guardia's estimate. 

 

Perhaps air travel today is easier and less expensive for everyone, but the 

subsidies for air transport have primarily benefited corporations, particularly 

those engaged in global trade.  The Washington-based Reason Foundation, for 



 

 

 

47 

example, has estimated that business jets alone use about 20 percent of the 

capability of the nation's air traffic control systems, and well over half of the 

FAA's control tower services.1 0 7    

 

But nowhere is the air transport subsidy for Big Business more starkly exposed 

than in a rural corner of Arkansas, where an airport with runways long enough 

to handle fully-loaded cargo-carrying 747s is taking shape.  The federal 

government is expected to pick up $90 million of the airport's projected $145 

million tab.  According to investigative journalists Ken Silverstein and 

Alexander Cockburn, the beneficiaries of this government subsidy would 

include Arkansas' giant poultry companies, Tyson Foods, Hudson Foods, and 

Peterson Industries.  According to the feasibility study approving the project, 

"If competitive air freight rates were available, these companies estimate that 

Japan would become a boom market for U.S. fresh chicken products."  Another 

beneficiary would be Wal-Mart, which, "Given dependable air service available 

at competitive rates, would import a number of electronics, men's and women's 

fashion apparel product lines by air."  A third major beneficiary would be the 

J.B. Hunt Transport Co., the largest overland cargo hauler in the United 

States.1 0 8  

 

As for local people living in the rural communities nearby, this federally-

subsidized airport certainly doesn't have their needs in mind: "Most of the 

people here have never been in a plane", according to Jay Fulbright, who owns 

a farm near the site.1 0 9   Meanwhile, about 50 families will be forced off their 

land to make way for the 2,700 acre airport. 1 1 0   "Big business interests, that's 

the only reason this is coming about", Fulbright concluded.  

 



 

 

 

48 

This project is just one of many funded by an Airport Improvement Programme 

with an annual budget of over $1.3 billion. 1 1 1   The subsidy involved seems 

especially outrageous since it's clear that the project benefits only a few big 

corporations.  But even when it can be claimed that a given project will spur 

economic growth and help the 'local economy', virtually every such project 

inherently subsidizes long-distance transport, and the major corporations that 

depend on huge markets.  

 

Perhaps even La Guardia, were he alive today, would reconsider the wisdom of 

subsidizing New York's long-distance transport network so heavily.  Today New 

York is a center for international trade, but its local transport infrastru cture is 

crumbling; it is home to numerous flourishing Fortune 500 corporations, but 

many of its citizens have no job and nowhere to live.  In any event, New York's 

policymakers are having no such second thoughts: public agencies will be 

spending $4.8 billion to "modernize" the city's airports in the coming years. 1 1 2   

 

Small-scale alternatives 

 

The advantage that a cheap and reliable long-distance transport system gives to 

large-scale businesses is one reason why they have been able to supplant so 

many smaller enterprises; it also helps explain how the global economy is able 

to overrun so many diverse local economies around the world.   

 

If society has other goals in mind than promoting corporate growth, then 

support can still be redirected towards transport infrastructures that serve the 

needs of smaller enterprises operating in more localised economies.  It's not too 

late to shift course. 



 

 

 

49 

 

A simple exercise in Worldwatch magazine demonstrated how much less 

expensive such investments would be.  The $300 million budgeted for a single 

Interstate highway interchange in Virginia, for example, could instead provide 

each of twenty different towns and cities with a 100-mile network of paved, off-

street bicycle paths.  And the funds intended for a $10 million highway 

expansion in Eugene, Oregon, could instead provide every Eugene resident over 

the age of eleven -- all 93,000 of them -- with a new bicycle, basket, lights, 

locks, and raingear.1 1 3   

 

Some communities are rediscovering transport modes long ago abandoned in 

the quest for modernity.  Bristol, Vermont, for example, recently awarded its 

trash collection contract to a local citizen who makes the rounds with a horse-

drawn wagon.  His bid was competitive with those from contractors using the 

latest mechanised equipment, but his horses had many other advantages:  they 

are far quieter on their early-morning rounds than large trucks; they use local, 

renewable resources (hay and oats) for fuel, rather than imported oil; and they 

are non-polluting, since the only wastes they produce are biodegradeable -- and 

a valuable source of organic fertiliser for nearby farms. 1 1 4     

 

This is not necessarily an argument for the use of bicycles or horses everywhere 

in the world.  If priority is given to the needs of local economies rather than to 

long distance trade, and if locally-available resources are used to their full 

potential, then transport systems will tend to differ widely from place to place.  

This is only is as it should be.  It means communities are adapting to their local 

environment and their own internal needs, rather than conforming to the 



 

 

 

50 

imperatives of a global economy -- one in which the same corporate plan is 

recklessly followed everywhere. 

 

Ch apter 5: Commu nicating globalism 

 

"[Merrill Lynch recently] signed a $400 million contract with the AT&T 

Corporation to manage Merrill's vast communications system...  [A]s it tries to 

build networks to link its 54,200 employees in 870 locations around the world, 

[Merrill Lynch] has become an archetype of the customers that are driving the 

evolution of the high-technology industry." 

 

New York Times1 1 5  

 

 

"The Defense Satellite Communications System (DSCS) is an essential part of 

the global Defense Communications System.  It is... designed to provide vital 

command, control and communications service to the United States and Allied 

Forces throughout the world..." 

 

US Department of Defense Fact Sheet 

 

"Reach out and touch someone." 

 

AT&T advertisement 

 

 



 

 

 

51 

Modern communication networks are publicly promoted as a means to 'bring 

people together': advertisements typically show close friendships sustained 

thanks to the telephone, or children gaining an understanding of faraway lands 

through documentary television programmes or the Internet.  If these were 

their most important effects, however, it is unlikely so many billions of dollars 

would have been invested in them.  Far more significant is their ability to 

expand the reach of industrial economies, transnational corporations, and 

governments. 

 

Effective communications networks are such a linchpin of industrial economies 

that many countries have nurtured this infrastructure under the government's 

wing.  British Telecom was a state enterprise until 1985, and the company was 

not fully privatized until 1993.  Japan's Nippon Telephone and Telegraph, t he 

world's most valuable company, was state-owned until 1985.  Other countries 

still retain partial ownership of their communications infrastructure:  

Telefonica de España, for example, is 32 percent owned by the Spanish 

government, and the Italian government owns 53 percent of STET, the 

country's largest telecommunication company. 1 1 6  

 

Space is th e place 

 

Even in countries like the United States, where the communications 

infrastructure has largely been in private hands, the public has provided much 

of the research and development funding needed for its expansion and growth.  

One need only consider the vast sums spent by advanced nations on their 

various space programmes -- without which orbiting telecom satellites would 

be no more than a fantasy -- to comprehend the size of the subsidy involved.  



 

 

 

52 

The 'space race' between the United States and the former Soviet Union, for 

example, ended up costing a sizeable chunk of the budgets of both countries.  

Before the US had even achieved suborbital manned flight, the Na tional 

Aeronautics and Space Administration (NASA) was already the country's 

seventh largest single department.1 1 7   A large portion of the military budgets of 

both countries was devoted to gaining the ability to launch and guide their 

arsenals of nuclear-tipped missiles -- and to defend against them.  Some of the 

non-military fruits of that research include the international reach of satellite 

television networks like MTV and Star-TV, banks with ATM 'branches' in every 

country, and the global proliferation of cellular phones. 

 

Having funded the research and development needed to place satellites in orbit, 

governments are now stepping back and handing the keys over to corporations.  

Typical of the trend is a project called Sea Launch, in which satellites will b e 

launched from a modified oil-drilling platform positioned on the equator.  The 

project is funded by an international consortium of companies, including the 

Boeing Commercial Space Company (which benefited from decades of NASA 

funding), a Russian aerospace company and two Ukrainian rocket makers (all 

three of which are products of the former Soviet Union's space and military 

programmes). Sea Launch expects to charge $40 million per launch, 

undercutting the $55 million charged by Arianespace (a consortium heavily 

subsidized by several European governments), and the $50 million per launch 

charged by Lockheed Martin (whose expertise comes from years of military 

contracts funded by the US government). 1 1 8  

 

By the end of 1996 there were already close to 200 commerc ial satellites 

orbiting the earth.  But the world's giant telecommunications corporations are 



 

 

 

53 

planning to bring that number to over 1,000 in the next few years.  US -based 

Teledesic plans to launch 840 satellites alone to make their mobile 

communications network possible.  Motorola is planning to launch 66 satellites 

for their 'pocket telephone' project.1 1 9  

 

Public funding is also behind many of the computer technologies that make 

global communications possible, including the Internet, originally a US 

military project.  As Nathan Newman of Progressive Communications points 

out: 

 

"The Internet is in many ways the product of central planning in its 

rawest form: planning over decades, large government subsidies directed 

from a national headquarters, and experts designing and overseeing the 

project's development....  The comparison has been at times to the 

interstate highway system, but the analogy would hold only if employees 

of the federal government had first imagined the possibility of cars, 

subsidized the invention of the auto industry, invented the technology of 

concrete and tar, and built the whole system...."1 2 0       

            

Regu lating th e airwaves in th e corporate interest  

 

Governments have also created a regulatory environment within which 

corporate-dominated communications enterprises thrive.  In the United States, 

for example, the Federal Communications Commission (FCC) coordinates and 

licenses thousands of commercial users of the airwaves, and alots segments of 

the electromagnetic spectrum to private interests -- from radio and television 

networks to cell phone and pager companies.   



 

 

 

54 

 

Like most regulatory agencies, the FCC is heavily biased towards the large and 

global.  For example, FCC rules prohibit any radio station with less than 100 

watts of power from broadcasting.  Though such low-wattage 'micro-radio' 

stations are ideal for very localised, decentralised, and inexpensive 

broadcasting, the FCC has gone to great lengths to insure that corporate-

funded messages continue to dominate the airways.  According to a press 

release, micro-power broadcaster Jim Brewer's station in Tampa, Florida was 

shut down in no uncertain terms by a 20 person Multi-Jurisdictional Task 

Force led by the FCC: 

 

"With automatic weapons trained on them [Brewer and his wife] were 

ordered to the floor where they were handcuffed face down with gun 

muzzles at their head.  For the next 12 hours they were detained in their 

own home, not even allowed to go to the bathroom alone, while agents 

stripped their home of anything remotely related to radio transmission 

equipment.  Police cordoned off the block around their home, the site of 

the micropower broadcasting station, and brought in a crane to 

dismantle his broadcasting tower." 

 

While banning small, local, non-commercial broadcasting, the FCC is bending 

over backwards to grant corporate communications companies rights 

superceding those of local communities.  Having already ruled that all 

commercial television stations must be capable of digital broadcasting by 2002,  

the FCC is aware that at least 350 stations will be forced to build new 

communications towers, ranging in height from 1,000 to 2,000 feet.  Not 

surprisingly, many of the communities where such towers are to be located are 



 

 

 

55 

vigorously protesting.  In response, the FCC is considering a rule that would 

prevent local planning and zoning boards from restricting the 'right' of 

communications companies to site communications towers where they 

want.1 2 1 ,1 2 2  

 

Th e airwaves: pu blic or private? 

 

In the early years of radio a healthy public discussion ensued about whether the 

airwaves should be used commercially or retained for use in the public interest.  

Clearly, the corporate world emerged victorious.  In the US, a recently-passed 

Act of Congress sealed that victory by effectively deregulating a ll 

communications industries and allowing the market, not the public interest, to 

determine how the communications infrastructure develops in the future.  

According to media expert Robert McChesney, this law "is widely considered to 

be one of the most important federal laws of this generation".  And yet, 

 

"the debate surrounding the 1996 Telecommunications Act was a farce.  

Some of the law was actually written by the lobbyists for the 

communication firms it affects.  The only 'debate' was whether 

broadcasters, long-distance companies, local telephone providers, or 

cable companies would get the inside track in the deregulatory race." 1 2 3  

 

The possibility that the public, not corporations, should control the airwaves 

was not even considered.  One effect of the new law is to hand over to media 

corporations additional segments of the broadcast spectrum.  Estimates of the 

value of this giveaway range from $11 billion to $70 billion. 1 2 4  

 



 

 

 

56 

Corporations need to commu nicate 

 

The ability to communicate instantaneously across continents is hardly 

necessary in businesses that are small and local.  But huge transnational 

corporations need to maintain tight central control over their far-flung 

enterprises, and so a sophisticated worldwide communications infrastructure is 

an absolute necessity.  Manufacturers from IBM and Daimler-Benz to Nike and 

Unilever must coordinate deliveries of raw materials and manufactured 

components from numerous subsidiaries and independent contractors, as well 

as arrange shipments of finished products to middlemen, distributors, and 

corporate sales outlets.  Giant retailers like Home Depot, Tesco, and Continente 

must monitor inventory at hundreds of locations, sometimes thousands of miles 

apart, and coordinate ship, rail, truck and aircraft deliveries from both 

domestic and overseas suppliers.  Every transnational corporation needs to 

communicate decisions made at corporate headquarters to subsidiaries and 

branches in different countries, and quickly transfer capital back and forth.  

 

High speed computers linked to satellite communications networks also enable 

banks, financial service companies, currency speculators, and others with 

global investments to shift vast amounts of capital from continent to continent 

at the stroke of a computer key.  David Korten describes how  

 

"... an individual at a computer terminal can maintain constant contact 

with price movements in all major markets and execute trades in any or 

all of them.  A computer can be programmed to do the same without 

human intervention, automatically excecuting transactions involving 

billions of dollars in fractions of a second."1 2 5   



 

 

 

57 

  

Thanks to such technologies, currency valued at $1.3 trillion was exchanged 

each day in 1995 -- 30 times more than the daily GDP of all the developed 

countries in the world combined.1 2 6  

 

Do small shopkeepers, small family farmers, or producers for local markets 

require such a highly developed communications infrastructure?  Hardly at all, 

and in fact their livelihoods are threatened by enterprises that can make use of 

it.  While they slip further and further behind, their taxes continue to help 

maintain the infrastructure that is in part responsible for their difficulties.  And 

as usual, they are told that natural evolution is responsible.  

 

On another level, this is happening to entire cultures as well.  From Chiapas to 

East Timor, small and local economies are being pushed aside by governments 

seeking a more prominent place in the global economy, more uniformity among 

their populations, more land to devote to producing for global markets.  All too 

often, high-tech military technologies -- which depend on modern 

communications networks for intelligence, planning, and execution -- are 

employed to do so.  The US victory in the Iraq war, aimed at preserving the 

corporate-led New World Order, was also largely a product of such high-tech 

capabilities.  And the recent cruise missile strikes against targets in Sudan and 

Afghanistan, indicating that the war against terrorism will also be fought using 

these technologies, has given new meaning to AT&T's slogan, "Reach out and 

touch someone".  

 

Creating consu mers 

 



 

 

 

58 

A worldwide communications web is crucial for corporations in another way:  it 

gives them the ability to transmit their commercial messages to hundreds of 

millions of people, day and night, from one end of the planet to the other.  It 

has often been observed that the real purpose of media like television is not to 

deliver entertainment to the public, but to deliver the public to advertisers.  In 

the global economy, this is truer than ever. 

 

Advertising is itself a product of industrial economic expansion.  When the first 

model-T rolled off the assembly line at Henry Ford's factory in Detroit in 1909, 

the event was a turning point not only for the automobile industry, but for 

virtually every other industry as well.  The assembly line made it possible to 

mass produce virtually any item faster, more cheaply, and in greater quantities 

than ever before.  American industrialists, who had previously sought to expand  

production, now had to think in terms of expanding consumption as well.  After 

all, there would be no point in mass-producing millions of items that could only 

be sold in a market with a buying capacity measured in the thousands.  

 

Industrialists thus needed to expand significantly the markets for their goods.  

This could be accomplished in part by amalgamating smaller local economies 

into much larger ones, something the expanding transport infrastructure was 

already making possible.  Regional differences among those markets, however, 

had to be overcome.  America was a nation of immigrants and exhibited little 

uniformity:  local, regional and ethnic tastes and preferences differed widely.  

But advertising offered businesses the means to homogenise those tastes.  

Desires could now be mass-produced along with the products to satisfy them.   

 



 

 

 

59 

Advertising also enabled industry to make wholesale changes in popular 

ideology and worldview.  As Stuart Ewen has shown in his important book 

Captains of Consciousness, advertising altered long-standing American values 

stressing frugality and self-reliance, replacing them with a new cultural norm 

based on conspicuous consumption and a preference for store-bought over 

home-made products.  Through increasingly sophisticated advertising 

techniques, "Excessiveness replaced thrift as a social value", and entire 

populations were invested with "a psychic desire to consume."1 2 7   

 

In less than a generation consumerism had been embraced by virtually the 

entire country.  This 1953 advertisement for Gimbels, a New York department 

store, proclaimed the new ideology: 

 

"Economic salvation, both national and personal, has nothing to do with 

pinching pennies....  Economic survival depends upon consumption.  If 

you want to have more cake tomorrow, you have to eat more cake today.  

The more you consume, the more you'll have, quicker."1 2 8    

 

The spread of this ideology was not limited to businesses and their advertising 

allies.  That same year, the chairman of President Eisenhower's Council of 

Economic Advisers claimed that the American economy's "ultimate purpose" 

was "to produce more consumer goods."1 2 9  

 

Over the years, advertising has become more sophisticated, more effective, and 

more pervasive.  It has been estimated that the average American is exposed to 

16,000 commercial images daily -- not only in magazines and newspapers and 

on television and radio, but plastered to walls, cars and trucks, food packaging, 



 

 

 

60 

windows, scoreboards, pens and pencils, sports arenas, supersonic jets, and 

anywhere else a commercial message can be embedded.1 3 0    The trend has 

reached absurd levels.  One of the sad miracles of modern life is the way 

children, teenagers, and adults attempt to express their 'identity' by wearing 

clothes conspicuously emblazoned with corporate logos.  The practice has 

become so commonplace in America that The New York Times Magazine 

recently ran a 'style' article featuring young children modeling Tide sweatshirts 

and XXXXXXXX teeshirts.  And while the idea of launching huge 'billboards' 

into earth orbit was considered slightly mad when it was proposed a few years 

ago, the notion may prove to be more prophecy than lunacy:  the Russian space 

station Mir and its crew have already been pressed into service promoting such 

products as Pepsi-cola and Israeli milk.1 3 1     

 

Televising consu merism 

 

Today, television is the medium by which the manipulation of individual 

desires is most effectively carried out.  In America, advertisers seek to influence 

children as young as two with their commercial messages.  Children younger 

than five years old watch an average of three and a half hours of television every 

day; adults watch nearly five hours.  In  a year the average American adult thus 

sees some 21,000 televised commercials.1 3 2     

 

As technology critic Jerry Mander points out, television is being used by 

corporations to spread the gospel of consumption to every corner of the planet: 

 

"By its ability to implant identical images into the minds of millions of 

people, TV can homogenise perspectives, knowledge, tastes, and desires, 



 

 

 

61 

to make them resemble the tastes and interests of the people who 

transmit the imagery.  In our world, the transmitters of the images are 

corporations ....  And satellite communications is the mechanism by 

which television is delivered into parts of the planet tha t have, until 

recently, been spared this assault."1 3 3  

 

It is not only the specifically commercial content of television that is so effective 

in assaulting these distant parts of the world.  The consumer culture also 

invades the Third World through the way of  life shown in between the 

commercials.  As S.M. Mohamed Idris of the Consumers' Union of Penang has 

written,  

 

The consumer culture of the North now pervades almost all aspects of 

life in the South.  This culture is in reality a way of thinking and a way 

of life generated by advertisements, cinema shows, pop songs, 

magazines, comics, and other channels of the mass media....  As a 

result of this bombardment, the consumer is made to feel insecure 

unless she smokes a cigarette, unless he buys a certain brand of 

haircream, unless she uses a certain brand of lipstick, unless they 

change motorcars once every two years, unless the colour of the 

curtains at home matches the colour of the carpet. 1 3 4  

 

Corporations looking to homogenise tastes in order to expand their markets 

fully understand this power of global media.  Anthony J.F. Reilly, CEO of the 

H.J. Heinz corporation, accurately declared that in the Third World, "Once 

television is there, people of whatever shade, culture, or origin want roughly the 



 

 

 

62 

same things."1 3 5   According to a development analyst, "India's markets seem 

more accessible" now that corporate messages are arriving via satellite: 

 

"...half of the 35 million television sets now in India receive satellite or 

cable channels, providing a new window on the outside world for more 

than 60 million people and creating a mass consumer market almost 

overnight." (emphasis added).1 3 6  

 

As Robert McChesney puts it, "the corporate media are carpet-bombing people 

with advertising and commercialism."1 3 7   MTV reaches more than a quarter of 

a billion households on five continents, enabling corporations to globalise the 

'youth market' for Nike sneakers, Pepsi-cola, and Levi's jeans.1 3 8    American 

television shows like "Dynasty" and "Baywatch" are broadcast to the most 

remote corners of the planet, giving people a distorted impression of modern 

urban life, and creating a whole new range of desires for corporations to fill.  

And CNN, which reaches 145 countries from Bangladesh to Zimbabwe, ensures 

that every culture now gets the corporate spin on world events.1 3 9  

 

Those who believe the Internet will be a global medium run by and for the 

people should think again.  As AT&T's director of Internet services points out, 

the Internet may become the best advertising medium yet:  "If it's done well, 

you won't feel there's any tension between the consumerism and the 

entertainment", he says.1 4 0   

 

Sh ifting direction  

 



 

 

 

63 

While today's modern communication infrastructure is custom-built for the 

needs of governments, the military, the financial world, and corporations, 

limits on its reach are often seen as challenges to individual rights.  By this 

twisted logic, advertising becomes a form of 'free speech';  bombarding the 

South with distorted, culturally-homogenizing images becomes the 'free flow of 

information'; people chained to their computers, faxes, modems, cellular 

phones, and beepers become exemplars of the 'convenience of modern life'.  

 

Similarly, the available options are often seen to depend on purely individual 

choices: simply turn off your TV, or choose to ignore its messages, for example.  

On some levels, to be sure, personal decisions must be made; but at other levels 

public policies are forcing changes on people in which they have no real choice 

at all.  This is particularly true in the South, where long-standing cultural 

traditions can be erased in a generation by a steady diet of Disney, Rambo, 

CNN, Star-TV, and corporate advertising.   

 

There are other questions to ask, questions whose answers depend on how 

much faith we have in the industrial model.  Do corporations have an 

inalienable right of access to the broadcast spectrum?  Should they be allowed 

the unlimited right to position their communications satellites where they can 

reach everyone on earth?  Do cultures -- and individuals -- have the right to 

declare themselves offlimits to the commercial messages others wish to send 

them?  The answers to these and similar questions have a significant bearing on 

the nature of the world we are making.   

 

Ch apter 6:  Energy 

 



 

 

 

64 

 

"Economic growth and increased energy use are inseparable...." 

 

Richard Douthwaite, The Growth Illusion1 4 1  

 

Though modern societies never seem to have enough energy, the earth is 

actually awash in it.  Each year the sun showers our planet with 15,000 times as 

much energy as humans currently use.  Much of that energy is reflected back 

into space, but the remainder powers photosynthesis, runs the hydrologic cycle, 

and generates weather systems -- thereby creating such renewable energy 

supplies as wind energy, hydro-power, biomass fuels, food for human and 

animal power, as well as the direct use of solar energy itself. 1 4 2   

 

If the human need for energy were largely limited to such tasks as illuminating 

and heating homes, cooking and refrigerating food, pumping water, providing 

local transport, and powering small-scale farm and manufacturing equipment, 

then diverse and decentralised renewable energy supplies would probably be 

quite adequate.  This was, in fact, the situation everywhere before the era of 

fossil fuels.  Farmers in the Himalayas, for example, devised small water-driven 

wheels to mill grain; they employed solar energy for crop drying; and they used 

draft animals for transport and agricultural needs.  In forest-rich New 

England, wood was the source of cooking and heating fuel for many 

generations, while water power provided energy for numerous small-scale 

industries, from milling grain to sawing lumber.  Windmills for pumping water 

and for other agricultural uses once dotted rural landscapes throughout 

Europe.  In these economies, the demand for energy was as decentralised as the 



 

 

 

65 

supply, and the scale was small enough that locally available energy could 

provide for most needs. 

 

But industrialised economies demand vastly greater quantities of energy.  

International trade and long-distance transport require huge fleets of transport 

vehicles -- cars, trucks, trains, ships, aircraft -- all of them energy guzzlers.  

Transport, in fact, is the most energy-intensive sector of industrial economies: 

in Britain, the energy used for transport is more than ten times that required for 

food, clothing, and shelter combined. 1 4 3     

 

Another reason industrialised societies consume so much energy is that they are 

highly urbanized.  Almost everything consumed in urban centers -- from food 

and water to building materials and clothing -- originates elsewhere, and so it is 

all embedded with a significant amount of transport energy.  What's more, the 

centralized millions in today's urban conglomerates are easier for marketers 

and advertisers to reach, and so the psychological pressure for a high-

consumption lifestyle is that much greater.  

 

While small-scale, decentralised economies can take advantage of a wide range 

of local energy sources, industrial economies are far more limited in the kinds 

of energy they can use: every major form of transport in industrial societies, for 

example, is powered by petroleum.   Urbanisation, meanwhile, makes the use of  

decentralised renewable energy sources far more difficult.  Instead cities must 

depend on centralized power plants that turn fossil-fuels, nuclear energy, or 

hydro power into easily-deliverable electricity. 

 



 

 

 

66 

Renewable energies in their various forms are distributed fairly evenly around 

the world -- one place may have more abundant supplies of biomass but less 

wind, another more solar but less hydropower -- but the forms of energy needed 

for industrialisation and urbanisation are very unevenly distributed.  This has 

not only been a famous source of international conflict but has spawned an 

immense worldwide trade in energy: almost half of the world's annual 

consumption of oil, 14 percent of its gas, and 11 percent of its coal are traded 

internationally.  At the start of this decade over a million kilometers of trunk 

pipelines were required for transporting natural gas, and an additional 

400,000 kilometers of pipelines for oil.  Transporting crude oil from source to 

refinery requires, among other things, some 2,600 tankers plying the high 

seas.1 4 4    

 

Su bsidizing th e energy infrastru ctu re 

 

As industrial economies have expanded and the South has been 'developed', 

energy use worldwide has steadily risen.  In 1996 the use of oil, natural gas, and 

coal all set new records1 4 5 , and construction began on more new nuclear 

reactors than at any time in the previous decade. 1 4 6    The link between rising 

GDP and increased energy consumption is axiomatic for economies on the 

industrial development track, and government policies everywhere focus on 

ensuring a steady -- and rising -- energy supply.   

 

Like transport and communications, energy is so vital to industrialisation that 

many countries have built up major portions of their energy infrastructure at 

public expense.  In Britain the electric industry has long been government-run, 

although it is now being sold off to the private sector -- often at a loss1 4 7 .  In 



 

 

 

67 

France, where nuclear generating plants provide much of the country's power, 

the state still controls the electric industry.  The Great Whale project, a river 

diversion project in Canada that has been opposed for years by indigenous 

groups and environmentalists, is a project of Hydro Québec, a huge energy 

conglomerate wholly owned by the Québec government. 1 4 8   In almost every 

Third World country, the domestic energy infrastructure is in government 

hands. 

 

In the US, the energy sector is largely run by private-sector corporations, but 

massive subsidies have been provided to keep companies healthy, profitable, 

and growing.  The watchdog group Alliance to Save Energy has estimated that 

the energy sector is subsidized at the rate of $21 billion to $36 billion 

annually.1 4 9   For the oil industry alone, subsidies and tax breaks have been in 

place for some 75 years, and have amounted to many billions of dollars.  

Another public interest group, Citizens for Tax Justice, estimates that just one 

tax break -- the percentage depletion allowance -- will cost the public Treasury 

$4.2 billion over the 1995-99 period.  This is actually an improvement over 

earlier years, since the allowance was even greater up until 1975: in that year 

alone, the tax break amounted to $3 billion.1 5 0  

 

While the risks to the overseas operations of US oil companies are covered by 

taxpayers through the Overseas Private Investment Corporation, the US 

military further minimizes corporate risk by ensuring that regimes friendly to 

US interests gain power and hold onto it in oil-rich parts of the world.  

Importantly, this also ensures the continuous flow of oil.  Protecting this source 

of energy does not come cheap.  According to Edwin S. Rothschild, Energy 

Policy Director of Citizen Action, 



 

 

 

68 

 

"the national security cost of oil is in the area of $57 billion per year; or 

approximately $9.19 per barrel of oil used in the U.S."1 5 1  

 

Externalized costs sometimes run even higher.  Despite all the rhetoric about 

democracy, the Gulf War was fought to ensure that the Kuwaiti and Saudi 

Arabian oil fields continued to supply the industrialised world with the energy 

it requires.  The direct costs for 'Desert Storm' alone were over $60 billion, 

spread out among all the governments that participated. 1 5 2   This does not 

include the cost to Iraq, nor does it put any value on the lives lost or the damage 

done to Persian Gulf ecosystems.  None of these military costs are internalized 

in the price of petroleum.   

 

Su bsidies for oth er energy sou rces 

 

The US government provides energy subsidies for more than just the oil 

industry: since the goal has been to promote the growth of industry in general, 

subsidies are provided for all of the large-scale, centralized energy forms the 

industrial system requires.  As early as World War I, for example, the 

government was building dams to supply electric power to the munitions 

industry, and later to provide reliable power to the Pacific Northwest's 

aluminum and aircraft industries.1 5 3   Today, government agencies or 

cooperatives provide roughly one-fourth of all the electricity sold in the US.  

These producers benefit from indirect subsidies totalling $2.2 billion 

annually.1 5 4    

 



 

 

 

69 

Major US electric utilities are poised to receive another major windfall from 

taxpayers.  As deregulation of the industry proceeds, it seems likely that so-

called 'stranded costs' will be passed on to taxpayers and consumers.  In large 

measure these costs are the result of bad investments -- usually nuclear power 

plants that are uncompetitive with other sources of electricity.  Instead of 

writing off these losses, there are legislative moves afoot to pass the bill on to 

taxpayers.  Moody's Investor Services places the value of the bailout at from 

$50 billion to $300 billion, while consumer and environmental activists say it 

could reach $500 billion.1 5 5  

 

Another way the federal government subsidizes a centralized energy 

infrastructure is by making sure that public lands are available for energy 

extraction.  Approximately 750,000 acres of coal-bearing public lands -- 

containing over 1.5 billion tons of coal -- are currently leased to mining 

interests.  Oil companies have acquired leases to explore for oil on some 58,000 

federally-owned sites, including 5,000 offshore sites on the continental shelf, 

and the Clinton administration has recently authorised oil drilling in a 

previously sacrosanct wilderness area in Alasaka.  In total, over 125 million 

barrels of oil and 1.7 trillion cubic feet of gas were extracted from federal lands 

in 1993 alone.1 5 6    

 

The coal industry has been the recipient of many generous subsidies.  The 

government sponsors research into technologies needed by the industry -- 

including the Department of Energy's $2.5 billion Clean Coal Technology 

programme.  Government agencies ranging from the National Science 

Foundation to the Department of Defense also sponsored research on behalf of 



 

 

 

70 

the coal industry -- totaling $138 million in 1989.  Mitigating the damage done 

by surface mining costs the public an additional $800 million a year. 1 5 7  

 

To these subsidies must be added the externalized costs of coal extraction and 

burning.  Until 1977, no environmental reclamation on mines was required, 

and strip-mining operations in particular left behind scarred landscapes and 

polluted rivers and streams.1 5 8   Coal-fired power plants release heavy metals 

that pollute land and water many hundreds of miles downwind.  They are 

prime culprits in the acid rain problem, and they add significant amounts of 

greenhouse gases to the atmosphere.  The pollutants they discharge also do 

significant damage to cropland and to public health.  None of these costs are 

internalized in the price of coal: if they were, the price of coal might be as much 

as fifty times what it is today.  A British researcher in 1992 found that the 

environmental costs of a KWh produced from coal -- selling for around twenty 

cents -- could be as high as ten US dollars. 1 5 9   

 

Su pporting th e nu clear indu stry 

 

Of all the industrial energy sources, none are so directly the product of 

government support as nuclear power.  Born of the Manhattan Project's atomic 

bomb research during World War II, nuclear power remained in military hands 

until the 1950s, when the US Atomic Energy Commission (AEC) began major 

efforts to promote the technology's commercial applications.  This quickl y 

became a high priority of US energy policy, representing "the Federal 

Government's largest and most significant energy project from the 1950s into 

the early 1970s."1 6 0  

 



 

 

 

71 

Since the AEC did not believe that private industry would make the necessary 

investment in nuclear power research, government funds were used to 

commission the first full-scale nuclear reactor.  Afterwards, in order to "further 

spur private industry's participation in nuclear power development", the AEC 

initiated a programme whereby the government provided funding and other 

assistance, but industry would design, construct, and own the reactors. 1 6 1   US 

government aid to the nuclear industry has continued unabated, with almost $1 

billion budgeted for nuclear power development R&D in 1992 1 6 2 , and with 

additional expenditures hidden in military budgets every year.   

 

The US government is not alone in sponsoring nuclear research.  Michael 

Renner of the Worldwatch Institute notes that  

 

"Since 1974, OECD governments have invested a cumulative $247 billion 

in energy R&D.  The bulk of these funds went to nuclear programmes -- 

conventional reactors, breeders, and nuclear fusion."1 6 3  

 

Subsidies for nuclear power are not always direct.  Since the potential costs of a 

major nuclear accident are so high, it would be extraordinarily expensive to 

fully insure a nuclear utility's potentially liabilities.  In the US, the 1959 Price-

Anderson Act capped the responsibilities of nuclear utilities, thereby 

significantly reducing their insurance premiums.  Although the $560 million 

liability limit for damages due to one accident was raised in 1988 to $7 billion, 

that amount is still only a small fraction of the potential costs of a major 

nuclear accident:  the near-meltdown of the Chernobyl reactor, for example, 

cost an estimated $358 billion (as well as 125,000 lives). 1 6 4    If nuclear utilities 

were forced to cover potential losses by purchasing liability insurance -- instead 



 

 

 

72 

of passing the bulk of cleanup bills to taxpayers -- it would add an estimated $3 

billion a year to the cost of nuclear power.1 6 5    

 

The federal government has also taken on the responsibility for ensuring that 

radioactive wastes will be 'safely' disposed of, although no real solution has ever 

been devised.  It is indeed amazing that some 460 grid-connected nuclear 

reactors have been built around the world, yet there is no viable method to 

dispose of the many radioactive wastes they generate.  Undeterred, 

governments have commissioned an additional 37 nuclear plants. 1 6 6  

 

Government support worldwide for nuclear power stands in sharp contrast to 

the tiny subsidies given to renewable energy.  This is not surprising: nuclear 

power is an energy source that meets the needs of a large-scale industrial 

economy, while decentralised renewable energies -- like rooftop solar water 

heaters -- inherently run against the grain of the centralized industrial model.  

An exception that proves the rule is US funding for a huge high-tech solar 

energy project in the American southwest, in which hundreds of computerized 

and motorized mirrors track the sun to focus light on a boiler for producing 

electricity.  Hooked into the national grid, the electricity can then by used to 

power a computer chip manufacturer, an aluminum smelter, or the neon lights 

of Las Vegas.   

 

Energy for development 

 

If Southern countries are to develop along industrial lines, they too will have to 

invest heavily in their energy infrastructures.  Although oil refineries and 

natural gas pipelines are part of the mix, electric power plants are the prime 



 

 

 

73 

focus: they enable industries to expand and individual consumption to rise, and 

support the vast cities that development is creating.  Thus, according to a 

World Bank analyst,  

 

"it's hard to imagine economic growth in much of the developing world 

without the use and availability of far more electricity than those 

countries now have".1 6 7    

 

Building the infrastructure to provide that electricity will cost an estimated one 

trillion dollars1 6 8 ; even paying for a small portion of that sum will require the 

South to deliver even more of its resources to the North.  Yet government 

leaders in the South are busily preparing World Bank loan documents for their 

splurges in energy projects.  For example: 

 

• China plans to add the equivalent of a medium-sized power plant to its 

electric generating capacity every week for the next several years.  Since coal 

is one of China's most abundant industrial energy sources, plans include 

dozens of large coal-fired power plants and a 500-mile-long coal slurry 

pipeline.1 6 9   Construction also began on two nuclear power plants in 1996; 

plans call for four more in 1997.1 7 0   

 

• India's government intends to spend $170 billion to triple the country's 

electric power infrastructure.  The largest single project is the Dhabol Power 

Project, a $2.8 billion gas-fired facility, using natural gas piped in from 

Qatar.1 7 1  

 



 

 

 

74 

• South Korea is currently the world leader in nuclear power construction, with 

9 now being built -- adding to the 11 already operating.  Despite this 

commitment to the nuclear energy path, the government has yet to find a 

suitable location for a radioactive waste facility. 1 7 2  

 

• Brazil is undertaking a massive programme of hydroelectric dam-building, 

including 18 planned for the Amazon basin between 1990 and 2010, and 62 

more in the 21st century.1 7 3    

 

• Vietnam, which currently gets most of its energy from hydro power, is 

building a gas-fired power plant in partnership with two American 

corporations, and has also expressed interest in nuclear power. 1 7 4    

 

• By the end of the century, Latin America will be installing 41,000 MW of 

capacity, mostly concentrated in Argentina, Brazil, Chile, Colombia, Mexico 

and Venezuela.1 7 5   And in Africa, the US Trade and Development Agency 

cites the potential for $126 billion in energy projects. 1 7 6  

 

Such projects are disturbing in part because of the devastation they cause in the 

lives and livelihoods of nearby villagers, many of whom will be permanently 

displaced to become industrial refugees in their own countries.  Among China's 

energy projects, for example, is the Three Gorges Dam, the world's largest, 

which will flood nearly 100,000 hectares of China's best farmland, dislocate 

over a million people from their homes, and threaten the rural livelihoods of 75 

million more.1 7 7    

 



 

 

 

75 

The negative impact will be felt not only by villagers who are relocated to make 

way for huge energy projects.  Since it is far easier to provide electricity to 

centralized, urban populations than to dispersed rural villages, most projects 

serve large cities -- which makes them still more attractive as the locus of 

'modern' life.  For example, a huge energy project in Nepal costing more than 

the country's entire annual budget will only provide electricity for Kathmandu, 

Nepal's largest city.  In this sense, rural villagers are being both pushed into the 

cities by development processes that dispossess them of their livelihoods, and 

pulled into the cities by the psychological draw of urban life, full of the 

technological excitement for which electric power is a prerequisite.  

 

These huge projects also do irreparable damage to surrounding ecosystems.  

Despite their own relatively short life expectancies, large-scale dams 

permanently damage riverine ecosystems; some are so large they may be 

responsible for earthquakes and even for shifting the earth's axis.  Nuclear  

power plants create radioactive waste that will be hazardous for thousands of 

years; the 'accidents' to which these plants are prone regularly release 

radioactive particles into ecosystems worldwide.   

 

But the environmental and social impacts are even more far-reaching because 

these energy projects are among the first steps in a development process that 

has as its goal the replication of Northern lifestyles around the world.  That 

process is already leading to family and community breakdown, increases in 

crime, violence, competition, and ethnic conflict.  What's more, the rising levels 

of consumption that are the measure of development success are closely linked 

to increased fossil fuel consumption, and hence to global warming.   

 



 

 

 

76 

Some analysts argue that 'techno-fixes' will increase energy efficiency so much 

that economic growth can be sustained while energy consumption slows. 1 7 8   

But even at current global levels, energy consumption places an unsustainable 

burden on the biosphere.  Even if the North's energy efficiency were to increase 

substantially, it is likely that any gains made will be negated by simultaneous 

efforts to industrialise the more populous South, where per capita emissions of 

CO2 are still only one-tenth what they are in the most industrialised 

countries.1 7 9    

 

The promoters of development claim that their long-term goal is to raise Third 

World living standards to near those of the North.  If this is to be accomplished 

while reducing greenhouse emissions to levels that stabilize global climate,  then 

the efficiency savings would need to be immense:  the US, for example, would 

need to cut fossil fuel consumption by 93.5 percent, Britain by 87 percent, and 

the Netherlands by 90.5 percent.1 8 0    Techno-fixes alone, it seems obvious, will 

fall far short of these targets.  The reality is that techno-fixes merely allow 

policymakers to apply an industrial solution to a problem whose source is the 

industrial system itself.  By its nature, that system requries vast amounts of 

energy, and is so centralizing that the use of diverse, locally-available renewable 

energy forms is largely precluded. 

 

Sh ifting direction  

 

It is difficult to imagine the current crop of government leaders suddenly 

shifting support away from centralized energy supplies to embrace instead the 

full potential of decentralised renewable energies.  Such a change in course 

would first require a shift in the vision those policymakers have of the future.  



 

 

 

77 

In The Whale and the Reactor, Langdon Winner described the social and 

political structures inherent in the various energy options under consideration: 

 

"Would it be nuclear power administered by a benign priesthood of 

scientists?  Would it be coal and oil brought to you by large, 

multinational corporations?  Would it be synthetic fuels subsidized and 

administered by the state?  Or would it be the soft energy path brought 

to you by you and your neighbors?"1 8 1  

 

Only if there were intense pressure from below would leaders be convinced to 

pursue the latter path.  But as with all policy choices, lasting solutions are not 

possible unless problems are traced to their root causes.  Following a 'soft 

energy path' towards diverse, decentralised renewable energy sources is not an 

option if every other policy choice tends towards centralisation, larger scale, 

and high technology.  

 

In the South today, where the energy infrastructure is still largely undeveloped, 

there are tremendous possibilities for promoting and adopting renewable 

energy strategies.  But such strategies will be most successful if they go hand -in-

hand with efforts to shift away from industrial 'development', and to seek a 

greater degree of self-reliance rather than greater global economic dependency.  

 

Ch apter 7:  Edu cation  

 

"Our schools are, in a sense, factories in which the raw materials are to be 

shaped and fashioned into products to meet the various demands of life.  The 

specifications for manufacturing come from the demands of the twentieth 



 

 

 

78 

century civilisation, and it is the business of the school to build its pupils to the 

specifications laid down." 

 

E.P. Cubberly, 19341 8 2  

 

 

"There can be no doubt that the fantastic wealth of American big business is a 

direct result of schools training a social mass to be needy, frightened, envious, 

bored, talentless, incomplete.  A successful mass production economy must 

have such an audience....  Just as the Amish small business/small farm 

economy requires intelligence, competence, thoughtfulness, and compassion, 

ours needs a well-managed mass.  Leveled, spiritless, familyless, friendless, 

communityless, godless, and conforming people are best -- people who can 

believe that the difference between Coke and Pepsi is a subject worth fighting 

about." 

John Taylor Gatto, 19981 8 3  

 

 

While the public generally accepts expenditures on infrastructure as a 

necessary price of progress, it often loudly applauds investments in education.  

Literacy statistics, high school graduation rates, and per capita spending on 

schooling are often used as yardsticks of national enlightenment.  Education is 

considered so crucial to societal well-being that most countries make the formal 

schooling of their children compulsory.  Given the importance modern societies 

attach to education, it's reasonable to ask what its function is.   

 



 

 

 

79 

First of all, the modern educational system is a homogeniser, with the goal of 

ensuring that children are all molded into roughly the same shape before 

leaving school.  In a sense this is not so different from the role education has 

always played in self-sustaining cultures.  Anthropologist Margaret Mead 

described education as "the cultural process... in which each new born 

individual is transformed into a full member of a specific human society" 1 8 4  -- a 

definition that could be applied equally well to hunter-gatherers and to modern 

urbanites.  But Mead's reference to specific human societies is crucial:  each 

society is unique in its environment, local resources, and cultural history, and 

so an appropriate education will naturally differ from place to place.  

 

But today a single societal model is forcing itself into every corner of the planet; 

in the process, it is homogenising cultures and erasing the adaptations that 

connect people to their local circumstances.  In the monocultural global 

economy, there is little room for educational diversity; instead a one-size-fits-all 

curriculum is uniformly applied.  This homogenisation of knowledge makes 

schools into "institutions which more and more resemble one another, like 

airports and motels", in the words of Wendell Berry. 1 8 5     

 

This is particularly destructive in the Third World, where modern schooling 

systematically erases centuries of accumulated location-specific knowledge.  

Helena Norberg-Hodge has described traditional education in Ladakh, where 

children learned from parents and grandparents how to thrive in their 

particular environment: 

 

"Helping with the sowing, for instance, they would learn that on one side 

of the village it was a little warmer, on the other side a little colder.  From  



 

 

 

80 

their own experience children would come to distinguish between 

different strains of barley and the specific growing conditions each strain 

preferred.  They learned to recognis e even the tiniest wild plant and how 

to use it, and how to pick out a particular animal on a faraway mountain 

slope.... Education was location-specific and nurtured an intimate 

relationship with the living world. It gave children an intuitive awareness 

that allowed them, as they grew older, to use resources in an effective 

and sustainable way."1 8 6  

 

Modernisation, on the other hand, brought with it a very different f orm of 

education: 

 

"...modern schooling acts almost as a blindfold, preventing children 

from seeing the context in which they live. They leave school unable to 

use their own resources, unable to function in their own world.... School 

is a place to forget traditional skills and, worse, to look down on them....  

The basic curriculum is a poor imitation of that taught in other parts of 

India, which is itself an imitation of British education.  There is almost 

nothing Ladakhi about it."1 8 7  

 

When imposed on largely self-reliant communities and their economies, 

modern schooling severs a link in the chain by which knowledge was passed 

from generation to generation, knowledge that enabled people to sustain 

themselves from local resources.   

 

The single, global standard to which modern education aspires is, however, 

well-suited to the needs of corporations, which use similar methods to produce 



 

 

 

81 

goods that are meant to be purchased by similar consumers everywhere in the 

world.  Thus, formal schooling in Indonesia teaches students little about 

indigenous knowledge and the sustainable use of local resources, but it does 

prepare them well enough to assemble sneakers in a Nike factory, to respond to 

advertising messages that influence their spending habits, and to count it all  as 

'progress'.  

 

It is not only in the South that formal schooling separates children from their 

local context.  John Taylor Gatto, who spent 26 years as an award -winning 

teacher in New York City's public school system, has described what his 

seventh-grade students know: 

 

"My kids don't know what a mile is, not really, although I think they 

could pass a test on it; in similar fashion they don't know what 

democracy is, or what money is, or what an economy is, or how to fix 

anything.  They've heard of Mogadishu and Saddam Hussein but they 

couldn't tell you the name of the tree outside their window if their life 

depended on it....  Some of them can do quadratic equations, but they 

can't sew a button on a shirt or fry and egg;  they can bubble in answers 

with a number two pencil but they can't build a wall."1 8 8  

 

Learning th e indu strial worldview 

 

Homogenising children worldwide also means imbuing them all with the 

worldview of industrialism.  Among other things, that worldview is highly 

scientific and reductionist, and values empirical 'facts' above all other forms of 

knowledge.  As David Orr notes,  



 

 

 

82 

 

"the architects of the modern worldview, notably Galileo and Descartes, 

assumed that those things that could be weighed, measured, and 

counted were more true than those that could not be quantified.  If it 

could not be counted, in other words, it did not count."1 8 9   

 

This emphasis on the scientifically measurable reduces nature to clusters of 

matter randomly interacting in obedience to the laws of physics; deprived of 

intrinsic value, nature's worth is determined only by what it provides for human 

use.  This is the Enlightenment attitude articulated nearly 400 years ago by 

Francis Bacon, father of the scientific method, whose goal was "to establish the 

power and dominion of the human race itself over the universe".1 9 0    Bacon's 

ideological descendents in the scientific/educational establishment continue to 

pursue that goal today -- in part through oxymoronic disciplines like "Wildlife 

Management", through reputable scientific papers devoted to "Managing 

Planet Earth",1 9 1  and through concerted efforts to alter, for human ends, the 

genome of the living world.   

 

An education consistent with the modern worldview is compartmentalised into 

disciplines that are separate and seemingly independent.  Through the 

fragmented lens of specialised knowledge, problems appear as isolated 

symptoms; root causes, meanwhile, are obscured -- especially when revealing 

them would challenge the assumptions underpinning the industrial model.   "In 

this way", Edward Goldsmith argues, 

 

"the world-view of modernism prevents us from understanding our 

relationship with the world we live in and adapting to it....  Instead 



 

 

 

83 

modernism, and the paradigms of science and economics in particular, 

serve to rationalise economic development or 'progress' -- the very 

behaviour that is leading to the destruction of the natural world.... 1 9 2  

 

In a similar way, a narrow, fragmented perspective allows individuals to avoid 

confronting the consequences of their own actions.  Even well-intentioned 

people -- many of them with an earnest concern for humanity and the 

environment -- nonetheless work for corporations or institutions involved in the 

rawest forms of human and environmental exploitation.  A Union Carbide 

employee that looks no further than the increased 'productivity' pesticides 

provide can be blind to the impacts on human health, the environment, and the 

livelihoods of small farmers.  A World Bank employee focused closely on per 

capita income or the availability of electricity can neglect the breakdown of 

cultures, communities, and ecosystems that Bank policies cause.  Scientific 

specialists can devote their working lives to technologies ranging from atomic 

weaponry to cloned sheep, while the consequences are neatly 

compartmentalised into subject headings marked 'national defense' or 

'scientific curiosity'.  For such people, many years of specialised training has 

narrowed their focus so tightly that the broader effects of their work are 

obscured.   

 

Promoting tech noph ilia  

 

The educational system also reinforces the notion that viable societies must be 

based upon the industrial model.  If 'alternatives' are considered they too must 

be variants of industrialism -- such as socialism, communism, or even the 

'Global Village' with its on-line virtual communities.  Despite its fundamental 



 

 

 

84 

flaws, the 'normalcy' of the industrial model is rarely questioned by the 

educational establishment, as Edward Goldsmith makes clear: 

 

"... the modern discipline of economics is based on the assumption that 

the destructive economic system that is operative today is normal; the 

discipline of sociology on the assumption that our modern atomised and 

crime-ridden society is normal; our political science on the assumption 

that the elected dictatorships that govern modern nation states are 

normal; and our agricultural science on the assumption that large-scale, 

mechanised, chemical-based agriculture (which rapidly transforms 

arable land into desert) is normal.  It simply does not occur to many 

academics that what they take to be normal is very atypical in the light of 

humanity's total experience on this planet..."1 9 3   

 

Since its baseline is firmly drawn in the industrial era, modern education 

focuses far more on the workings of the technosphere than the biosphere.  The 

implicit message is that life itself ultimately depends on technology and human -

made institutions, not on the natural world.  This delinking is a frequent 

feature of learned treatises on modern problems.  A Yale University economist 

thus dismissed the impact of the greenhouse effect on the US, since "climate 

has little economic impact upon advanced industrial societies": 

 

"Cities are increasingly becoming climate proofed by technological 

changes like air-conditioning and shopping malls.... Studies of the 

impact of global warming on the United States and other developed 

regions find that the most vulnerable areas are those dependent on 

unmanaged eco-systems -- on naturally occurring rainfall, run-off and 



 

 

 

85 

temperatures, and the extremes of these variables .... Most economic 

activity in industrialised countries, however, depends very little on the 

climate.  Intensive care units of hospitals, underground mining, science 

laboratories, communications, heavy manufacturing and 

microelectronics are among the sectors likely to be unaffected by climatic 

change.  In selecting whether to set up in, say, Warsaw or Hongkong, few  

businesses will consider temperature a weighty factor."1 9 4  

 

In this view, the world inhabited by industrialised peoples is so divorced from 

nature that major disruptions to the biosphere would scarcely be noticed.  

Disruptions to the technosphere, on the other hand, would be catastrophic:  

"There is no life today without [computer] software", an executive of a major 

US-based corporation claimed.  Without computers, "the world would 

probably just collapse".1 9 5     

 

As David Orr has observed about modern schooling, faith in technology "is built 

into nearly every part of the curriculum as a kind of blind acceptance of the 

notion of progress"1 9 6 .  But corporations also use the educational infrastructure 

to gain acceptance for the specific technologies they control.  This is 

particularly true in America, where corporations provide cash-starved schools 

with free study materials and teacher's kits laden with corporate-friendly 

messages.  Monsanto, the corporation responsible for biotechnologies ranging 

from Roundup-ready soybeans to genetically-engineered bovine growth 

hormone, recently conferred an 'environmental' award on company employees 

who devised a "student education project ... that worked to raise student 

awareness about environmental benefits from biotechnology."1 9 7    Along with 

seed corporation Pioneer Hi-Bred International, Monsanto also underwrote 



 

 

 

86 

Field of Genes, a classroom curriculum for teachers that gives an industry spin 

on genetics, biotechnology, and genetic engineering. 1 9 8   Similarly, the timber-

industry giant Weyerhauser created a teacher's guide that suggests students 

discuss the "innovative practices" Weyerhauser has introduced to forest 

management.1 9 9  

 

Training for a roles in a corporate economy  

 

A further function of the modern educational system is to prepare children and 

young adults for jobs in a corporate-dominated global economy.  Even 

corporations readily admit that they depend on the educational infrastructure 

to churn out their labour force.  Eminent European chemists recently issued a 

report concluding that Europe's chemical industry would relocate to another 

part of the world unless research received more government support.  One of 

the report's authors noted that "industry is reliant on universities for its 

workforce, so we must ensure that academic institutions are properly funded" 

(emphasis added).2 0 0  

 

Having grown wealthier than many governments, corporations are increasingly 

willing to pay for the right to tailor the educational infrastructure to their 

specific needs.  Corporations endow university chairs, pay for the construction 

of buildings and research facilities, and fund whole departments in fields useful  

to their commercial enterprises.  England's Loughborough University, for 

example, is now offering a Bachelor of Science degree in "Retail Automotive 

Management" -- the country's first university-level degree in car-selling.  

Funding for the programme is being provided in part b y the Ford Motor 

Company.2 0 1    



 

 

 

87 

 

Since corporations need a steady supply of MBAs, business schools have little 

trouble attracting corporate support. In Leasing the Ivory Tower, Lawrence 

Soley describes how the funding sources for a new building at Michigan St ate's 

business school are documented in the names of various building components: 

 

"The second floor of the building is named after the Kresge Foundation, 

a 350-seat lecture hall is named for the Ford Motor Company, the fourth 

floor is named for a Toyota dealer, the fifth floor is named for the 

Chrysler Corporation, and the MBA lounge is named for the First of 

Michigan Corp."2 0 2  

 

Corporate labels go on more than just building parts.  Thanks to Bank of 

America's $2 million donation to the University of California at Berkeley, the 

new dean of the University's business school, Laura d'Andrea Tyson, is officially 

the 'BankAmerica Dean'.2 0 3    

 

Though their influence is not always this visible, corporations are quite clear 

about what they expect from the educational system.  In Britain a Graduate 

Employability Test, which "objectively measures and profiles the skills most 

often specified by employers", focuses on just three areas: "business awareness",  

"personal working style", and "computer skills". 2 0 4    There is nothing location-

specific about these skills, nor is there anything remotely connected with 

critical thinking, civic responsibility, or moral understanding.  

 

Today's well-trained worker can be ignorant about the local ecosystem, but 

their computer training must be up to snuff.  According to Bill Gates, failure to 



 

 

 

88 

be computer-adept means "you risk being ineffective in almost any kind of work 

you pursue".2 0 5     US government leaders apparently agree, since they are 

spending billions of dollars in public funds to equip schools with computers 

and to wire them for Internet access, with the goal of providing online access 

for every 12-year old.  As Bill Clinton explained, "This can make all the 

difference for communities struggling to make sure their students are ready for 

the 21st century."2 0 6    

 

Thanks to thinking like that, children in the industrialised world are seated in 

front of computer terminals earlier and earlier in life. In Britain, parents can 

send their children to Whizzkids, which teaches computer literacy to children 

under the age of five.  An organiser of these early-learning centres boasts that 

they are teaching ten-finger touch-typing to children as young as three.2 0 7    

This is relatively late in life compared to American children, whose parents 

made a big seller out of "Jumpstart Baby", software 'suitable' for children as 

young as nine months old.2 0 8   Manipulated by media hype and their own work-

place fears, parents are thus helping to mold their children to corporate 

specifications even before they enter the formal educational system. 

 

Of course not every child will graduate to a well-paid job tapping away at a 

computer keyboard or managing a business empire.  But corporations also need 

low-paid service employees, and modern educational systems are churning out 

these workers as well.  In Australia, in fact, the McDonald's Corporation has 

entered into discussions with the Minister for Education regarding 

"accreditation" for the training workers receive in the restaurant.  Under the 

plan, students working at McDonald's would be given course credit for flipping 



 

 

 

89 

burgers and dishing out fries -- excellent preparation for the only kinds of jobs 

many will find in the new global economy. 2 0 9  

 

Selling th e minds of ch ildren  

 

The corporate economy not only needs to ensure that the slots on organisational 

charts are filled, it also needs consumers for the dizzying array of products it 

churns out.  An expanding role for modern schooling today is thus to familiarise 

children with the consumer world they will inhabit the rest of their lives.  

Nowhere is this more true than in America, where school-age children combine 

their own spending with the influence they wield over parental buying habits 

into a $485 billion market.2 1 0   In order to create and tap this market, 

corporations are insinuating themselves deeper into the educational system, 

where they have a captive audience for any commercial messages they can 

introduce.  In many schools corporate advertising now adorns school hallways, 

cafeterias, school buses, and computer screens.     

 

Perhaps the most insidious example of this trend is Channel One, a 

commercial-laden television 'news' programme that nearly 40 percent of 

American secondary schools compel students to watch.  Whittle 

Communications, the for-profit corporation that dreamed up this scheme, 

provides schools with video equipment and a satellite dish permanently tuned 

to Channel One in exchange for a contract guaranteeing that students will 

spend twelve minutes each day watching the network's programming -- 

including two minutes of commercials.  In the course of a year, students spend 

the equivalent of one whole day watching advertising.  One study found that a 



 

 

 

90 

majority of students thought the advertised products must be good for them, 

since they were shown in school.2 1 1    

 

The negative impact of commercial television in the classroom goes well beyond 

the advertising messages themselves: children are also taught that television is a 

reliable source of information and a viable educational medium.  Any parent 

wanting to eliminate television from their children's lives has to contend not 

only with peer pressure, but with the educational establishment's implicit 

endorsement as well. 

 

I mplanting ideology 

 

Corporations today 'generously' offer teachers free study guides, magazines, 

posters, and other products for classroom use.  As educational materials their 

value may be dubious, but as vehicles for corporate messages they are quite 

effective.  Kellogg's produces 'nutrition' posters that feature the company's 

cereals; the Hershey Food Corporation distributes a video on geography, 

nutrition and science prominently featuring Hershey's chocolate; Nike hands 

out free book covers plastered with its logo.  Today, virtually every Fortune 500 

company has a school project of a similar nature. 2 1 2  

 

Several companies have found a lucrative niche creating these classroom 

materials.  Often the goal is simply to familiarise impressionable children with 

commercial products -- as when third graders learn to solve arithmetic 

problems by counting Tootsie Rolls, or learn to read using the corporate logos 

of Kmart, Coke, Pepsi, or Cap'n Crunch. 2 1 3    

 



 

 

 

91 

Other times, more sophisticated ideas are implanted.  Procter and Gamble's 

teaching aid about labour issues, 'Coping with Growth', essentially encourages 

children to accept corporate rule as a benevolent part of the social order.  Thus 

a role-playing game within the curriculum asks students to see events from the 

point of view of corporate management during a series of strikes against the 

company in 1886:  

 

"Whenever the employees start a walkout you feel there ought to be some 

way of kindling among the workers a stronger feeling of respect for and 

loyalty to [the company].... How can they be convinced that their overall 

interests are truly inseparable from those of Procter and Gamble?"2 1 4    

 

According to Michael Jacobson and Laurie Ann Mazur, authors of Marketing 

Madness, similar materials have been created for industry public relations arms 

ranging from the American Nuclear Society to the National Frozen Pizza 

Institute.  They also point out that the companies producing these materials are 

clear about their purpose when soliticing business:   

 

"'Let Lifetime Learning Systems bring your message to the classroom, 

where young people are forming attitudes that will last a lif etime,' purrs 

the company's sales kit.  'Whatever your objective, we can help you meet 

it.... Coming from school... all these materials carry an extra measure of 

credibility that gives your message added weight'.  Another ad asks 

potential clients to 'IMAGINE millions of students discussing your 

product in class.  IMAGINE their teachers presenting your organisation's 

point of view.'" .2 1 5   

 



 

 

 

92 

Not even pre-schoolers are safe from this corporate assault.  Lifetime Learning 

Systems notes that by age four children are making "brand decisions", and -- in 

an unintentionally profound statement -- points out that "Preschool prepares 

children to become consumers".2 1 6    

 

In sum, modern education serves to turn children into adults who are passive 

consumers and workers.  John Taylor Gatto lists some of the learning required 

of Americans: 

 

"The American economy depends on school teaching us that status is 

purchased and that others run our lives; we learn there that the sources 

of joy and accomplishment are external, that contentment comes with 

possessions, seldom from within.  School cuts our ability to concentrate 

to a few minutes duration, creating a life-long craving for relief from 

boredom through outside stimulation.  In conjunction with television 

and computer games which employ the same teaching methodology, 

these lessons are permanently inscribed."2 1 7  

 

 

Educating children for roles in the corporate economy, indoctrinating them 

with an industrial worldview and an uncritical faith in technology, subjecting 

them to corporate manipulation in the classroom -- all these are considered 

reasonable functions of the educational system.  But even the fairly mild 

environmental programmes underway in many schools have come under attack 

from an industry-led backlash.  Turning reality on its head, critics claim that  

 



 

 

 

93 

"unlike most schooling from kindergarten through 12th grade, 

environmental education often expressly encourages students to change 

their own behaviour and that of their society."2 1 8  

 

Re-localising edu cation  

 

It is a commonplace observation that the average child in the industrialised 

world can recognise hundreds of corporate logos, but not more than a few local 

plant species.  Though this state of affairs cannot be blamed entirely on formal 

education, it nonetheless reveals how children are systematically disconnected 

from the places where they live, and measures how successfully the architects of 

the corporate economy have done their job.   

 

Educational systems can still be redirected to serve the needs of communities 

rather than corporations, and to enable individuals to participate in diversified 

local economies rather than becoming specialised, blinkered cogs in a global 

economy.  What this would require is more educational diversity -- systems of 

schooling that reflect local circumstances and teach ways of using nearby 

resources to meet local needs.  This does not imply that the flow of information 

from other cultures should be shut off; in fact an emphasis on local adaptation 

would give students a positive framework for understanding and respecting 

cultural differences. 

 

Some shifts in the educational system could be fairly straightforward.  Direct 

experience of nature could replace much of the learning that now comes from 

books, videos, and computers.  Some of this knowledge might be imparted 

better by parents and neighbours with an intimate knowledge of the local 



 

 

 

94 

ecosystem than by formally-trained teachers.  Food for school lunches could be 

provided by local farmers -- and students could even grow some of their own -- 

thereby providing a vital link to local resources and the local economy.  This 

would be a radical departure from current practice in places like the United 

States, where Taco Bell has outlets in more than 3,000 schools, and Pizza Hut 

delivers to 4,000.2 1 9    

 

Rather than segregate children into factory-like same-age classrooms that 

inherently foment competitiveness, a return to mixed-age classrooms -- similar 

to the neighborhood one-room school houses still found in some rural areas -- 

would be a great improvement.  Experience has shown that when children are 

in a position to help younger students and learn from older ones, cooperation 

rather than competition becomes the norm.   

 

Erasing the many regulatory obstacles to homeschooling would also be 

beneficial, particularly where parents are involved in agriculture, forestry, and 

other means of local production -- using skills that cannot be taught in 

classrooms or learned from books.  Apprenticeships in those fields or in local 

artisanry should also be accorded their due as real and valuable forms of 

education.  Such a shift would not only return children to their traditional place  

as important members of the local economy, but would also impart a sense of 

responsibility to children at an early age. 

 

On a deeper level, a questioning of the industrial worldview that modern 

education now implants in children is in order.  As David Orr points out, the 

products of an educational system based on that worldview are a cosmic 

embarrassment: 



 

 

 

95 

 

"Overflowing landfills, befouled skies, eroded soils, polluted rivers, 

acidic rain, and radioactive wastes suggest ample attainments for 

admission into some intergalactic school for learning-disabled 

species."2 2 0    

 

Instilling instead a worldview that emphasises humanity's connection with all 

life would be far healthier for both people and the planet: 

 

"That affinity needs opportunities to grow....  Education that builds on 

our affinity for life would lead to a kind of awakening of possibilities and 

potentials that lie largely dormant in the industrial-utilitarian mind."2 2 1  

 

Among those potentials is a future in which people are free to create and 

nurture systems of knowledge as diverse as the places they inhabit.    

 

But since education serves the function of perpetuating a particular form of 

society, it would be naive to think that fundamental changes in education will 

occur without an equally deep reordering of overall societal priorities.  John 

Taylor Gatto, referring to American schooling in particular, argues that modern 

education does not allow children to grow into fully responsible, self -reliant 

adults, nor does it allow for their diversity: 

 

"As our economy is rationalised into automaticity and globalisation, it 

becomes more and more a set of interlocking subsystems coordinated 

centrally by mathematical formulae which cannot accomodate different 



 

 

 

96 

ways of thinking and knowing.  Our profitable system demands radically 

incomplete customers and workers to make it go. 2 2 2     

 

"To rehumanize schooling", he adds, "we would need to re-humanize the 

economy and abandon our dreams of empire."2 2 3  

 

Ch apter 8:  Th e Research  I nfrastru ctu re 

 

"...the White House has approved a proposal to spend up to $1 billion to help 

US companies compete with Japan in making sophisticated computer display 

screens....  The plan builds on current research programmes paid for by the 

Pentagon and the Energy Department, for which Congress already has 

authorised $100 million." 

 

       San Francisco Chronicle2 2 4   

 

Industrial growth depends in part upon a steady stream of technological 

innovations.  These advances improve the productivity of corporations, provide 

them with better access to geographically dispersed markets and resources, and 

expand the range of products they sell.  

 

Corporations rely heavily on publically funded research for these innovations.  

In the United States alone, government expenditures on research total some 

$65 billion a year.  A recent study on the origins of technological innovation 

demonstrated that such research is a "fundamental pillar of industrial 

advance".  The study showed that for the most part corporations do not rely on 

themselves for the research that fuels their growth: nearly three-quarters of 



 

 

 

97 

American industrial patents in recent years were based on research financed by 

the public -- either directly, by governments, or indirectly, through non-profit 

agencies.2 2 5  

 

The governments of industrialised countries are the biggest sources of funds for 

research and development.  Among them, the US, Japan, Germany, France, 

Britain, Italy, and Canada provided more than $170 billion for research 

annually in the early 1990s.2 2 6   More than a third of that total went towards 

military spending, with spinoffs that eventually reach industry in general.  

Little of this spending generates anything of fundamental use to small -scale 

producers or locally-based economies, but instead adds to the technological 

treadmill that undermines rural life.    

 

In agriculture and health, much of the research funding is being poured into 

biotechnology.  The $3 billion the US government will be spending on the 

human genome project has garnered the most publicity, but numerous other 

biotech projects are also being funded.  The US Department of Energy, the 

National Institutes of Health, and the National Science Foundation have 

teamed up to provide $100 million for researching the genome of a small 

mustard-like plant that has emerged as a key model for genetic engineering.  

This research will ultimately benefit pharmaceutical and agricultural biotech 

firms.2 2 7    Similarly, the UK's Department of Trade and Industry (DTI) 

provided businesses with £7.5 million in biotechnology R&D grants in 1994 

alone.  This research went hand-in-hand with DTI's Biotechnology Means 

Business programme, which "promotes the use of modern biotechnology by 

companies which have not previously used it within their operations."2 2 8  

 



 

 

 

98 

Germany also earmarks considerable amounts of public funds for high-tech 

research.  The German Aerospace Research Establishment (DLR), for example, 

employs more than 4,000 people in seven research centers, working on 

aviation, space flight, and energy technologies.  According to information 

provided by the organisation, "results from this research and development work 

... plays a significant role towards securing the industrial and technological 

position of Germany".2 2 9   Such public investments in research pay off 

handsomely for corporations, which can improve their efficiency and obtain 

marketable innovations at little or no cost.   

 

University research  

 

Though geared towards the needs of corporations, much of  the research 

conducted today occurs on university campuses.  The universities themselves 

are willing participants in this system, since the flow of grant money from 

governments increasingly depends on performing research that corporations 

want.  Universities can even make out at both ends by receiving payments for 

the fruits of research conducted at public expense.  

 

Lawrence Soley describes how this works at the Massachusetts Institute of 

Technology.  For a small fee, some 300 corporations are provided with MIT 

research reports, invited to symposia and seminars, and given personal access 

to MIT's faculty.  As the catalog for the university's Industrial Liaison Program 

unabashedly points out, MIT places "at the disposal of industry the expertise 

and resources of all the schools, departments and laboratories of MIT."  The 

$10,000 to $50,000 per year corporations pay is a pittance, considering that 



 

 

 

99 

they are being given access to the half-billion dollars in research done at MIT 

annually -- almost all of which is funded by the US government.2 3 0  

 

Similarly, the University of Wisconsin at Milwaukee licenses research findings 

to corporations and works directly with them on product development.  The 

aim of its Office of Industrial Research and Technology Transfer is to help 

"business and industry... convert research results obtained in the university into 

commercial products, processes and services."2 3 1   As at MIT, most of those 

research results are the product of public funding.  

 

Sometimes corporations pay substantially more than bargain basement rates 

for the research they require.  But Monsanto's $62 million arrangement with 

Washington University, Hoescht's $70 million deal with Harvard, and Ciba -

Geigy's $20 million payoff to the University of California at San Diego 

effectively turn those institutions into appendages of the corporations that fund 

them.  For their dollars, the companies get exclusive licenses, patent rights, 

early access to research results, and access to the labs themselves.  Despite the 

relatively large sums involved, the corporations are paying only a fraction of the 

cost of research; the difference is effectively a public subsidy. 2 3 2  

 

The marriage of corporate industry and publically funded research institutions 

is now commonplace: a research center planned for Harvard University's 

Institute of Medicine, for example, will devote almost half its space to corporate 

offices and research facilities.  Harvard will own the patents to any discoveries 

made at the institute, while the corporations will be allowed to market them.  

As usual, substantial funding will come from the US government, which 



 

 

 

100 

currently provides more than half the $650 million annual budget of Harvard's 

Medical School and its affiliates. 2 3 3     

 

Even research funded by the former Soviet Union is now being exploited by 

corporations:  in 1990, Monsanto paid $500,000 to a team of Russian 

biological scientists at Moscow's Shemyakin Institute in return for the right to 

market their discoveries in the West.2 3 4  

 

European universities and corporations are similarly intertwined, but the 

European Commission is concerned that the relationship is not intimate 

enough.  Thus, Europe's  

 

"limited capacity to convert scientific breakthroughs and technological 

achievements into industrial and commercial success [stems from] the 

still inadequate links between universities and businesses ... and the lack 

of coordinated strategies between businesses, universities and the public 

authorities..."  

 

In the future, therefore, Europe will be taking steps to further facilitate "the 

transfer of technologies from university laboratories to companies...." 2 3 5  

 

Th e natu re of h igh  tech nology 

 

These trends are troubling not only because they reveal another layer of 

corporate welfare, but more importantly because of the inherent nature of the 

technologies that are being created with public funds.  For the most part, the 

research infrastructure is creating technologies suitable only for the needs and 



 

 

 

101 

purposes of huge corporations, thus propelling society still further in the 

direction of the large and global.   

 

Even funding for basic research -- which is thought to simply 'expand the 

frontiers of knowledge' -- inherently promotes larger scale:  as scientific 

knowledge has grown, so has the scale of technology needed for further 

expansion.  Probing the outer reaches of the solar system or the inner workings 

of the gene require technological infrastructures far beyond the small 

laboratories and backyard workshops of earlier scientists and inventors.  The 

scale and the cost involved have already grown so large that only huge 

enterprises have the ability to conduct basic research or apply the findings.   

 

Applied research is now so expensive in high tech fields that even the largest 

businesses have difficulty financing it on their own -- which helps explain the 

many mergers and partnerships among technology firms.  When Toshiba 

entered into an agreement with rival Siemens, a spokesperson for the former 

said, 

 

"The objective is to share the costs and the risks... because the 

development of the next generation of semiconductors requires huge 

costs -- huge costs -- and it is very difficult for any one company to do it 

alone."2 3 6  

 

The expanding scale of technology also requires a parallel expansion in 

economic scale.  Akio Morita, head of the Sony Corporation and a member of 

the Trilateral Commission, argued that "making the whole of the developed 



 

 

 

102 

world essentially one big market" was necessary if industries were to sustain 

their growth curves: 

 

"This is particularly true for the increasingly technology-intensive 

manufacturing sector, which requires global markets to justify its huge 

investment needs" (emphasis added).2 3 7     

 

In other words, today's technologies are so expensive they are only viable in the 

context of a huge, globalised economy.   

 

The main beneficiaries of technologies created by publically-funded research 

are corporations.  If individuals can be said to benefit at all from these 

innovations, it is only in their role as consumers of an expanding line of 

corporate products.  The technologies themselves remain firmly in the hands of 

corporations, adding to their power while furthering everyone else's 

dependence on the corporate world. 

 

Some innovations help provide the infrastructure needed by large-scale 

economies: more efficient and higher speed transport, faster and more reliable 

telecommunications networks, new means of extracting energy from the earth.  

Research in other areas -- pharmaceuticals and biomedical products, 

agricultural chemicals and machinery, building products, etc. -- is giving 

corporations tighter control over people's everyday needs.   

 

Some research merely enables corporations to encourage consumers to buy new 

products -- part of the 'new and improved' treadmill that keeps consumption 

high by creating new needs.  One heralded achievement of Rensselaer 



 

 

 

103 

Polytechnic Institute's Center for Product Innovation, for example, was a 

redesigned coffee pot for the Norelco Corporation. 2 3 8    And the US Jet 

Propulsion Laboratory (JPL) has teamed up in a "strategic alliance" with 

toymaker Mattell on a "Hot Wheels JPL Sojourner Mars Rover Action Pack Set" 

-- described in a press release as "one example of how the Jet Propulsion 

Laboratory Technology Affiliates Program works with industry". 2 3 9   Your tax 

dollars at work. 

 

Undermining small scale 

 

Most new technologies inherently benefit larger scale operators at the expense 

of smaller ones.  Nowhere has this been more true than in agriculture.  In his 

book The Growth Illusion, ecological economist Richard Douthwaite describes 

how the introduction of diesel and electric irrigation pumps to a small village in 

India favored the farmers who had the capital to invest in them, while those 

who remained with traditional methods -- based on oxen -- were irreparably 

harmed.  The new pumps allowed more water to be pumped, and raised the 

yields of the farmers that used them.  But the increased production ultimately 

led to a drop in crop prices;  the water table also fell, adding to the burden on 

farmers using traditional irrigation methods. 2 4 0    

 

Thus, this one new technology had increased the gap between the richest and 

poorest in the village, ultimately driving some farmers off the land; it also 

undermined the long-term sustainability of the agricultural system by depleting 

ground water supplies; and it siphoned money from the village to industrial 

pump manufacturers and energy firms.  Yet the technology was no doubt 

introduced to the village by the agents of 'development' as a great step forward.  



 

 

 

104 

 

A similar pattern of events has unfolded in the industrialised world as well, as 

new technologies centered on machinery and chemical inputs increased labour 

productivity, but hurt small producers and ultimately decimated rural life.  In 

Vermont, for example, half the dairy farmers in the state were driven out of 

business when refrigerated bulk tanks replaced the old 40-quart milk cans in 

the 1950s.  The cost of adopting the new technology was too great for farms 

with less than 30 cows, and 20,000 small family farm member were driven off 

the land.2 4 1   The mechanical tomato picker had a similar impact in California.  

The machine reduced the cost of harvesting tomatoes by $5-7 per ton, but the 

$50,000 price tag meant that only the largest farms could use it profitably.  

This one technology, developed at public expense by resea rchers at the 

University of California, led to a decline in the number of tomato farms from 

4,000 in the early 1960s to about 600 in 1973. 2 4 2  

 

Land grant colleges 

 

In the United States, much of the country's agricultural research takes place at 

land grant colleges, institutions that were created specifically to strengthen and 

serve small farmers and rural life.  Looking at that infrastructure reveals much 

about the impact of publically-funded research. 

 

The land grant system -- created by a series of legislative acts in the late 19th 

and early 20th centuries -- consists of agricultural colleges, experiment 

stations, and extension services.  The language of the acts setting up the system 

leaves little doubt that it was intended to help maintain an agricultural way of 

life and a rural economy.  Reference was made to "a sound and prosperous 



 

 

 

105 

agriculture and rural life", and the "development and improvement of the rural 

home".  The system was meant to "assure agriculture a position in research 

equal to that of industry, which will aid in maintaining an equitable balance 

between agriculture and other segments of the economy."  It would also help 

disseminate "useful and practical information on subjects relating to 

agriculture and home economics."2 4 3  

 

If the land grant colleges had stayed true to these goals, they might have helped 

small farmers survive.  Instead, the system ended up treating agriculture like 

any other industry, in which the primary goal is to increase production in 

general and labour productivity in particular.  Most of the meaningful research 

and teaching in the land grant system was eventually devoted to technological 

innovations -- primarily machinery and chemical inputs -- that improved 

'efficiency' so well that the vast majority of farmers were made redundant.  In a 

description that sounds similar to trends in universities today, Jim Hightower 

and Susan DeMarco point out who this research has really helped: 

 

"It is the largest-scale growers, the farm machinery and chemicals input 

companies and the processors who are the primary beneficiaries.  

Machinery companies such as John Deere, International Harvester, 

Massey-Ferguson, Allis-Chalmer and J.I. Case almost continually engage 

in cooperative research efforts at land grant colleges.  These corporations 

contribute money and some of their own research personnel to help land 

grant scientists develop machinery.  In return, they are able to 

incorporate technological advances in their own products.  In some cases 

they actually receive exclusive licenses to manufacture and sell the 

products of tax-paid research."2 4 4  



 

 

 

106 

 

As a result of research conducted at the land grant colleges, millions of 

farmworkers lost their jobs, hundreds of thousands of small farms went out of 

business, and the vitality of rural life was decimated.   

 

Local knowledge for local economies 

 

None of this was inevitable, nor is it now.  There is no reason why these colleges 

-- or any other research facility -- must continue turning out a "technological 

arsenal suited to a large-scale of operation", in the words of Hightower and 

DeMarco.  Wendell Berry, for example, lists some of the roles the land grant 

colleges could fill that would be helpful for small farmers and their local, rural 

economies.  These include developing small-scale technologies and methods 

appropriate to the family farm; promoting cooperatives and other means of 

protecting small farmers from corporate suppliers and purchasers; 

strengthening local markets for poultry, eggs, butter, cream, milk, and other 

farm products; and working to overturn the regulations that have destroyed 

such markets.2 4 5  

 

Agricultural researchers Jack Kloppenburg and Beth Burrows point out that if 

the goals are to feed people, to revitalize rural communities and local 

economies, and to maintain the stability of ecosystems, then public money for 

agricultural research might be devoted to such small-scale farming techniques 

as rotational grazing of dairy herds, or gaining a better understanding of the 

structure of Amish farming.  If, however, the primary goal is to meet the growth 

requirements of corporations, then research funding will go towards such 



 

 

 

107 

technologies as genetic engineering, which promises to give corporations an 

even tighter stranglehold on the world's food supply. 2 4 6  

 

A similar argument can be made for research in other areas of life: rather than 

pouring billions into nuclear power and fossil fuel research, funding could go 

towards making diverse and decentralised renewables more readily available; 

rather than research into high-speed rail and "intelligent transportation 

systems" that enable cars to drive themselves, money could be spent improving 

small-scale and locally-appropriate transport modes.    

 

The choices made by governments clearly favor larger scale, and no significant 

funding has been available for small-scale technologies adapted to local 

environments.  Emblematic of the trend is a university in the US which 

provided $27 million for a new biotechnology center, while housing its Family 

Farm Institute and other sustainable agriculture facilities in a tiny, remodeled 

furnace building.2 4 7   And in Europe, the EEC praises biotechnology as a field 

offering a "rich source of growth", one which should therefore be supported. 2 4 8   

About the future of small-scale, truly sustainable farming and rural life in 

general, they are quite silent. 

Ch apter 9: Th e I nfrastru ctu re Race 

 

"The modernisation of Europe's infrastructure is ... a precondition for carrying 

out the whole of Europe's ambitious political, economic, and social agenda."  

 

    European Round Table of Industrialists2 4 9  

 



 

 

 

108 

As the preceding chapters have shown, governments have for many years 

subsidized large-scale infrastructures that benefit the largest enterprises at the 

expense of smaller ones. 

 

But the growth imperative is relentless, and even the most modern 

infrastructures must constantly be improved.  When US Transportation 

Secretary Rodney Slater presented Congress with his agency's five-year, $175 

billion budget for ground transportation, he justified this vast sum with a 

familiar argument: 

 

"Our economy is rapidly changing and so must our transportation 

system.  The global marketplace is now as close as next door.  By 

improving access to markets worldwide... we will provide the foundation 

for American businesses to flourish in the 21st Century.   

 Nations throughout the world are making massive investments in 

transportation infrastructure, often in an effort to catch up with the 

United States.  The failure to meet these growing challenges could slow 

our economic growth and reduce our ability to compete effectively."2 5 0  

 

"Improving access to markets worldwide" will require new infrastructure 

investments in: 

 

• Rail transport, including $290 million towards high-spead rail service 

between Washington DC and Boston, and $35 million in research into 

technologies to "reduce the cost of high-speed rail systems to $2-$3 million 

per mile".2 5 1    

 



 

 

 

109 

• Air transport, including $1.35 billion for new airports and improvements to 

existing ones; $39 million for research in aircraft structures and materials; 

$80 million for satellite-based global positioning systems; $90 million for 

improving the air traffic control system; and another $1.8 billion to 

"modernize the infrastructure of the national airspace system". 2 5 2  

 

• Highways, including $17 billion for the Federal-aid Highway programme, and 

$100 million to leverage state resources "for projects of national significance, 

such as interstate and international trade corridors"; $612 million for 

research into "Intelligent Transportation Systems"; and $630 million for 

highway demonstration projects.2 5 3  

 

• Miscellaneous other trade-related projects, including $1.5 billion for 

"shipyard modernisation projects"; and $40 million in loan guarantees for 

export ship construction.2 5 4  

 

Th e race is on  

 

When Secretary Slater argued that these expenditures were necessary because 

of the "massive investments" other nations are making, he may well have had 

the nations of the European Union in mind.  As in the US, long-distance 

transport networks in Europe are already highly developed, thanks to many 

years of subsidies from national governments.  In Britain, for example, the 

government has paid for virtually every trunk road built since 1919, and has 

heavily subsidized the construction of canals, waterways and railways. 2 5 5   But 

Europe's corporate planners are aware that globalised markets and expanded 

trade require still faster and more extensive transport networks, and they have 



 

 

 

110 

used their influence to place transportation high on the agendas of the 

European Commission and individual European governments. 

 

Much of this corporate lobbying has been undertaken by the European 

Roundtable of Industrialists (ERT), composed of CEOs and other executives 

from Europe's most powerful corporations -- Volvo, Fiat, Olivetti, Philipps, 

Bosch, Siemens, ICI, Unilever, Renault, BSN, Nestlé, Ciba-Geigy, and 

others.2 5 6   At its initial meeting in 1983, this group was described by the 

Financial Times as a "Who's Who of European industrial heavyweights."2 5 7   

The group has since grown, and now includes representatives from 45 of 

Europe's largest transnational corporations. 

 

The ERT pushed not just for better transport, but for the complete integration 

of Europe's national economies, on the grounds that separate national markets 

"prevent many firms from reaching the scale necessary to resist pressure from 

non-European competitors."2 5 8    Unbelievably, the ERT believes that too much 

attention is being lavished on local needs: 

 

"...perhaps the greatest problem lies in changing the mind set of 

planners who, still today, work in a context dominated by the need to 

satisfy local and national requirements."2 5 9  

 

For the ERT, the goal is a single European market of 360 million people, larger 

than that of either North America or Japan, giving European corporations an 

edge in global competition.  The means to that end includes a greatly expanded 

transport and communications network, along with the political and monetary 



 

 

 

111 

changes needed to eliminate all trade barriers between European nations.  The 

latter steps are already well underway. 

 

The infrastructure additions were described in "Missing Links", in which the 

ERT called for $60 billion worth of new highway and high-speed rail projects 

that would complete a European-wide transport network.  "Missing Networks" 

expanded on the earlier document, and refers not only to transport, but to an 

expanded communications infrastructure -- including digital telecom 

exchanges and a high-capacity fiber optic network. 

 

The ERT 'recommendations' were accompanied by a warning: if these 

infrastructure investments were not made, Europe's corporations "might have 

to reconsider their long-term strategies... with the possibility of redirecting 

industrial investments to other parts of the world" -- another example of the 

not-so-subtle blackmail corporations now routinely employ. 2 6 0  

 

Not surprisingly, the ERT's infrastructure recommendations have been largely 

embraced by the European Commission, which incorporated a masterplan for a 

Trans-European Network (TEN) into the Maastricht Treaty.  This network 

encompasses much of Europe's existing transport infrastructure, plus some 200 

additional projects -- from rail links and motorways to sea crossings, airports, 

and natural gas pipelines.  Priority projects include seven new high-speed rail 

links in and between France, England, Italy, Austria , Germany, and Spain; 

motorways in Greece, Bulgaria, Portugal, Spain, Ireland, Great Britain, and all 

the Scandinavian countries; rail or road crossings over the Oresund Strait 

separating Denmark and Sweden, across the Irish Sea between Britain and 



 

 

 

112 

Ireland, and under the English Channel.  This latter project, the 'Chunnel', has 

already been built.  

 

The TEN also includes investments for a satellite-based network of mobile 

telecommunications for the European truck fleet, a unified European air traffic 

control system, and over 40 energy infrastructure projects.  The new 

communications infrastructure in particular "will enable companies to 

globalise their activities... on a scale never before possible". 2 6 1  

 

The fourteen priority TEN projects are listed on the cha rt on page ----, and the 

secondary projects on page ----.  An additional 150 or so projects are lower 

priority, but are still part of the network.   

 

All told, it is a massive undertaking, threatening the status of the US Interstate 

Highway system as the 'world's largest public works project'.  The estimated 

cost of this network is some $465 to $580 billion over the next 15 years; the 

fourteen highest priority projects alone are expected to cost some $100 billion.  

The European Union would provide up to 10% of the cost, as well as  feasibility 

studies, loan guarantees and interest rate subsidies.  In some high priority 

projects, EEC financing might reach 90 percent of the total. 2 6 2   The rest is 

ultimately the responsibility of national governments.  Although the European 

Commission claims that funding for most of the projects can come from the 

private sector, this seems unlikely.  The Channel Tunnel between Britain and 

France, which was 100% privately financed, has turned into a financial 

nightmare for investors, who will be leery of funding future projects. 2 6 3   To 

whatever extent these networks are built, they will most likely be built the old -

fashioned way: with public funds. 



 

 

 

113 

 

Destroying small scale 

 

If completed, the Trans-European Network will not only help big businesses get 

bigger, it will promote the growth of big cities as well.  Take, for instance, the 

high-speed rail lines that represent half of the priority projects in the planned 

network. Unlike many of the train lines that now criss-cross European 

countries, high-speed trains stop only at the largest cities.  The smaller towns 

and cities that are bypassed become reduced in economic importance, while 

resources, jobs, and economic power are further centralized in the most 

urbanized areas.   

 

The same is true of the multi-lane, 'limited access' motorways that are planned.  

Any town or village not served by an exit from the highway will be bypassed by 

commerce.  New development will tend to cluster near motorway exits (as has 

already been the case with existing European motorways) threatening the 

vitality of urban cores even among those cities served by the motorways.  Large-

scale retailers -- with lower prices that are partially the product of transport 

subsidies -- will draw customers from ever further away, and dependence on 

the car will grow.  No doubt the consequent increase in traffic will elicit calls 

for additional roads. 

 

People in the United States are all too familiar with this pattern.  Urban 

planners and environmentalists in America have already w itnessed the 

destructive impact of the car culture, and can only watch in amazement as they 

see the same pattern imposed on Europe -- promoted by corporate interests 

similar to those that helped set America on its current sprawling course.    



 

 

 

114 

 

The premise behind government investments in the Tran-European Network is 

that trade, and consequently long-distance transport, are necessary for 

economic growth.  But that growth will be largely limited to those businesses 

whose scale is large enough to participate in trans-European trade.  Small, local 

businesses will reap no benefits; in fact, they may not be able to survive the 

further advantages given to their large-scale competitors.  The demise of such 

small, locally-owned businesses will further impoverish small towns, villages, 

and rural life.  Even the European Commission is aware of this impact:  the 

planned doubling of the motorway system alone is expected to lead to the 

demise of 1,000 small villages throughout Europe. 2 6 4   

 

Valid concerns about the environment, about the further concentration of 

power in huge corporations, about the sapping of local economic vitality -- not 

to mention the erosion of national sovereignty and identity -- might convince 

people that their best interests are not served by these projects.  Corporate 

planners are well aware of this possibility, and are devoting considerable energy 

to  "obtaining the consensus of citizens".  For the ERT, this means sponsoring a 

center to provide "authoritative views" that support the corporate agenda.  As 

for concerns about the jobs that would be lost to high-technologies, the 

European Commission finds that "it is difficult to assess this factor precisely", 

and so it's an issue best ignored: 

 

"In any event, it would be fruitless to become embroiled in a  fresh 

dispute about the 'machine age', as was the case with the first industrial 

revolution. Worldwide dissemination of new technologies is 

inevitable".2 6 5  



 

 

 

115 

 

Likewise, people's objections on environmental grounds "cannot simply be 

granted a power of veto", according to the ERT: 

 

"If Europe is to escape from the effects of the sterile veto, the increasingly 

effective organisation of those arguing for environmental citizens rights 

must be matched by a more effective organisation of the advocates of 

change, adaptation, and growth."2 6 6  

 

'Change, adaptation and growth': once again the language of evolution is being 

employed in the service of changes consciously planned by and for 

corporations.  

 

Rather than 'evolution', a better analogy is an arms race.  European nat ions and 

their citizens are being asked not only to abandon their sovereignty, but to pick 

up the tab for an immense expansion of the industrial infrastructure so that 

European corporations can "reach the scale necessary" to compete globally.   

 

The European Commission justifies this call for huge new investments because 

"countries such as the USA and Japan are making significant, targeted efforts 

to renew their infrastructures."   We have now come full circle:  the citizens of 

both the US and Europe are being asked to pay for infrastructure 

improvements, largely because the other is doing so.  If that isn't enough to 

generate support, the EEC adds ominously that threats even lurk from "new 

industrial powers such as Singapore, Taiwan, certain parts of China and 

Argentina [that] are creating networks which integrate the latest technological 

advances."2 6 7     



 

 

 

116 

 

Everyone is in th e race 

 

The infrastructure race is not limited to the US and Europe.  One of Japan's 

recent transport improvements, for instance, is the $9.7 billion Akashi Haikyo 

Bridge, the longest suspension bridge in the world, that makes it possible to 

drive between Kobe and Awaji islands. 2 6 8    

 

Today, virturally every country is being pressed to expand its infrastructure in 

order to facilitate global trade.  In the South, the creation of an industrial 

infrastructure is seen as the route by which Third World economies can 

emulate the rich consumer cultures of the North.  Chapter 6 described a few of 

the many centralized energy installations being planned or built.  In addition: 

 

• Five South American countries -- Brazil, Argentina, Paraguay, Uruguay, and 

Bolivia -- are investing $1 billion to widen, deepen, and straighten 2,100 

miles of river to accomodate convoys of barges carrying soybeans, iron ore, 

and other global commodities.  Known as the Hidrovia Paraguay-Parana, the 

project will require dredging the equivalent of 4 million truckloads of 

material from sensitive ecological areas, thereby threatening the Pantanal, 

the world's largest wetland.2 6 9  

 

• Along with the many energy infrastructure projects mentioned earlier, China 

is also expanding its road infrastructure: the World Bank, for example, is 

extending a $400 million loan for construction of the Jinzhu highway, 

which, the Bank points out, "will improve long-distance travel and promote 

trade..."2 7 0    



 

 

 

117 

 

• In clear violation of Indian law, the state of Maharashtra is joining with P&O 

Australia to build a huge international port in Dahanu Taluka, one of only 

three regions in India that have been set aside as 'ecologically fragile' zones.  

Funding is being sought from the World Bank and the Asian Development 

Bank for the project, which is being opposed by an alliance of fishermen and 

tribal and environmental organisations. 2 7 1  

 

• Despite many years of protests, the Indian government is still planning to 

build the huge Tehri Dam, which will flood 27,000 hectares of prime 

farmland and displace 100,000 people from their homes. 2 7 2   The Dhabol 

Power Project, described earlier, is also at the top of the list.  Among its ot her 

effects, effluent from the Dhabol plant threatens to destroy fisheries and kill 

the coconut and mango trees on which nearby villagers depend. 2 7 3   But with 

Matsushita investing $14 million in new air conditioning and washing 

machine factories, and Fujitsu building a new plant to manufacture 

telecommunication equipment, it's apparent that the energy needs of TNCs 

are more important than the livelihoods of traditional villagers. 2 7 4  

 

• The Asian Development Bank has recently loaned the government of Laos 

funds to build a hydroelectric dam on the Mun River, despite a study 

showing the dam "will result in ecological, sociological, and economic 

damage to the region."2 7 5   Not to be outdone, The World Bank also recently 

agreed to provide Laos with $48 million in financing for a "highway 

improvement project".2 7 6  

 



 

 

 

118 

• Nepal is getting help from the World Bank to build the huge Arun III 

hydroelectric dam project, which includes a 73-mile access road and 300 

miles of transmission lines.  The dam threatens one of the last virgin forests 

in the Himalayas, and even the World Bank admits that the project would 

"bring rapid and irreversible changes" to a remote region currently 

populated by indigenous tribal peoples. 2 7 7  

 

Almost every such large-scale project harms nearby communities.  People's 

livelihoods are wiped out, local ecosystems are damaged beyond repair, entire 

villages often cease to exist.  Although the affected people often fight back, they 

are usually given little support.  The mainstream view is that infrastructure 

projects benefit society as a whole, and that only an unfortunate few are 

negatively affected by them.  But large-scale projects like these have systemic 

impacts that go far beyond their immediate vicinity:  since their main purpose 

is to greatly expand economic scale, they undermine every local economy and 

community they touch.  Meanwhile, the expanded consumption they make 

possible adds to global environmental burdens.   

 

Unfortunately, local elites, governments, corporations, and the media have 

succeeded in convincing people that their basic needs can only be met from 

within the global economy.  Participating in that economy means entering a 

costly infrastructure race.  More energy, faster and more extensive transport, 

more sophisticated communications, more technologically-based educational 

institutions, more high-tech research facilities -- all become necessary to keep 

pace with competitors around the world.  The great irony, of course, is that the 

corporations dictating these infrastructure demands are now tra nsnational, 

and owe no allegiance to the countries or people that pay for them.  When 



 

 

 

119 

rooted citizens must pay for the needs of unrooted corporations, they've entered 

a race only corporations can win. 

 

Table 2:  Trans-Eu ropean Network, priority projects 

 

Name of Project Type Countries involved 

   

Brenner Axis high-speed rail Italy, Austria, Germany 

Paris-Brussels-Cologne-

Amsterdam-London 

high-speed rail France, Germany, Belgium, 

Netherlands, Great Britain 

Madrid-Barcelona-Perpignan high-speed rail Spain, France 

Madrid-Vitoria-Dax high-speed rail Spain, France 

TGV Est high-speed rail France, Germany, 

Luxembourg 

Betuwe Line conventional rail Netherlands, Germany 

Paris-Lyon-Torino high-speed rail France, Italy 

Via Ignatia motorway Greece, Bulgaria 

Patras-Athens-Bulgaria motorway Greece, Bulgaria 

Lisbon-Valladolid motorway Portugal, Spain 

Cork-Stranraer sea crossing, road 

and rail 

Ireland, UK 

Milan Malpensa airport 

improvement 

Italy 

Oresund Bridge strait crossing, road 

and rail 

Denmark, Sweden 

British West Coast line high-speed rail UK 



 

 

 

120 

Nordic Triangle conventional rail Denmark, Finland, Norway, 

Sweden 

Ireland-Britain-Benelux tunnel under 

English Channel*, 

bridge across Irish 

Sea 

Ireland, UK, Belgium, 

Netherlands, Luxembourg 

* completed 



 

 

 

121 

                                                   
1  Walter Adams, "The Antitrust Alternative", in Corporate Power in America, Ralph Nader and Mark J. 

Green, eds. (New York: Grossman Publishers, 1973), pp. 138-9. 
2  Thomas L. Friedman, "Excuse Me, Mohamad", New York Times, Sept. 29, 1997, sect. A, p. 25. 

3  Times Argus (Montpelier, Vermont), Sept. 19, 1996.  p. 8. 

4 "Too Big or Not Too Big", Time, Oct. 2, 1995, p. 32. 

5  Thomas L. Friedman, "Roll Over Hawks and Doves", New York Times, Feb. 2, 1997. 

6  International Fund Strategies, no. 1, June 1996, p. 4. 

7  Bill Gates, The Road Ahead (New York: Penguin Books, 1995), p. 11. 

8  Nicholas D. Kristof, "As Free-Flowing Capital Sinks Nations, Experts Prepare to 'Rethink System'", 

New York Times, Sept. 20, 1998, sect. A, p. 18. 
9  Walter Truett Anderson, "There's No Going Back to Nature",  Mother Jones, Sept-Oct 1996, pp. 78-9. 

10  David Edwards, Free To Be Human (Totnes, UK: Green Books, 1995), p. 9. 

11  Jerry Mander, "The Rules of Corporate Behavior", in The Case Against the Global Economy, Jerry 

Mander and Edward Goldsmith, eds. (San Francisco: Sierra Club, 1996), p. 309-322. 
12  see for example Who Will Tell the People?, by William Greider, and Who Rules America Now?, by G. 

William Domhoff. 
13  see for example Stuart Ewen's Captains of Consciousness, and John Stauber's Toxic Sludge is Good 

for You. 
14  in the US, Public Citizen is one of the leading NGOs looking at 'corporate welfare' issues.  

15  For the Common Good, by Herman Daly and John Cobb, effectively demolishes many of the premises 

of conventional economic thinking; The Growth Illusion, by Richard Douthwaite, does the same for the 

whole notion of economic growth.  Langdon Winner's The Whale and the Reactor and Jerry Mander's In 

the Absence of the Sacred are excellent critiques of modern attitudes to technology.  
16  information on the Amish is largely based on Amish People: Plain Living in a Complex World, by 

Carolyn Meyer (New York: Atheneum, 1977). 
17  cited in Wendell Berry, The Unsettling of America (San Francisco: Sierra Club Books, 1977), p. 152.  

18  Leopold Kohr,  The Breakdown of Nations (New York: E.P. Dutton, 1978), p. xviii. 

19  Campbell's Soup Company, 1994 Annual Report, p. 1. 

20  Coca-cola Corporation, 1993 Annual Report, p. 8. 

21  David Korten, When Corporations Rule the World (East Hartford, CT: Kumarian, 1995), p. 18. 

22  Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 36. 

23  Kirkpatrick Sale, Human Scale, (New York: Coward, McCann and Geoghegan, 1980), pp. 67-8. 

24  Black wood, p. 35. 

25 "Is Bigger Better?", PBS Online, June 2, 1998, www.pbs.org.  

26  Nicholas Hildyard, Colin Hines, and Tim Lang, "Who Competes: Changing Landscapes of Corporate 

Control", The Ecologist, vol. 26, no. 4, Jul/Aug 1996, p. 131. 
27  Peter Truell, "2 Swiss Executives Talk of Benefits of Bank Merger", New York Times, Dec. 10, 1997, 

section D, p. 5. 

28  Black wood, p. 58. 

29  Jan M. Rosen, "Dial MCI for Money", New York Times, Nov. 16, 1997, sect. 3,  p. 2. 

30  "Is Bigger Better?", op. cit. 

31  Peter Passell, "When Mega-Mergers Are Mega-Busts", New York Times, May 17, 1998, sect. 4, p. 

16; Russell Mokhiber and Robert Weissman, "The Big Boys Unite", Aug. 25, 1998, corp-

focus@essential.org 



 

 

 

122 

                                                                                                                                                       
32  "Multibillion-Dollar Deals", New York Times, July 27, 1997, sect. 3, p. 2. 

33  Chakravarthi Raghavan, "TNCs control two-thirds of the world economy", Third World Resurgence, 

no. 65/66, pp. 31-32; Black wood, p. 3. 
34  David Korten, op. cit. , p. 221. 

35  cited in Alan Thein Durning, "Can't Live Without It", Worldwatch, May-June 1993, p. 10. 

36  David Korten,  op. cit., p. 221. 

37  "SBA Profile: Who we are and what we do", Small Business Administr ation, Washington, DC, third 

edition, 1996. 
38  Encyclopedia Americana, 1991 edition, v. 25, p. 48. 

39  Jeremy Rifken, The End of Work (New York: G.P. Putnam, 1996), p. 10. 

40  Kai Mander and Alex Boston, "Wal-Mart: Global Retailer", in The Case Against the Global Economy 

(San Francisco: Sierra Club, 1996), p 337.  
41  Tim Lang and Hugh Raven, "Who Will Tame the Supermarkets?", The Ecologist, vol. 24, no. 4, 

Jul/Aug 1994, p. 123. 
42  Vania Grandi, "Small Grocers Disappearing into History as Superstores Emerge in Italy", Burlington 

Free Press, Jan. 2, 1998, p. 6B. 
43  Jeremy Rifken, op. cit., p.110. 

44  Earl O. Heady, "The Agriculture of the U.S.", Scientific American, Sept. 1976, pp. 107-127, cited in 

Wendell Berry, The Unsettling of America, (San Francisco: Sierra Club Books, 1977), p. 162. 
45  A.V. Krebs, "Farm Subsidies: Myth vs. Reality", The Agribusiness Examiner, Apr-May 1995, p.5. 

46  Graham Harvey, The Killing of the Countryside (London: Jonathan Cape, 1997), p. 9, 47, 70-71; 

Robin Page, "Havoc wrought by the drive for 'efficiency'", Daily Telegraph, June 15, 1996, p. 3. 
47  Graham Harvey, op. cit., p. 9, 15, 40-1, 47. 

48  cited in Kirkpatrick Sale, op. cit., pp. 88-9. 

49  Kai Mander and Alex Boston, op. cit., p. 338. 

50  Barbara Crossette, "Dead Men Don't Wear Bleeding Chennai", New York Times, May 25, 1997, sect. 

E, p. 4. 
51  The Guardian, Nov. 3, 1994, p. 13. 

52  need reference for 440 million; "Preserving Global Cropland", State of the World, 1997 (New York: 

W.W. Norton, 1997), p. 48. 
53  World Urbanization Prospects: the 1992 Revision (New York: United Nations, 1993), table A.11. 

54   David Morris, "Unmanageable Megacities", Utne Reader, Sept-Oct 1994, p. 80. 

55  Breaking into the Trade Game: A Small Business Guide to Exporting (Washington, DC: Small Business 

Administration, 1995), p. i. 
56  "Manila to double infrastructure spending", Financial Times, Apr. 23, 1996. 

57   Office of Technology Assessment, US Congress, Multinationals and the National Interest:  Playing by 

Different Rules (Washington DC:  US Government Printing Office, 1993), pp. 1-4, 10, cited in David 

Korten, p. 126. 
58  Helena Norberg-Hodge, Ancient Futures: Learning from Ladakh (San Francisco: Sierra Club Books, 

1991), pp. 142-3. 
59  cited in "The Infrastructure Lobby", The Ecologist magazine, v. 23, no. 4, July-Aug 1993, p. 123. 

60  Kai Mander and Alex Boston, "Wal-Mart: Global Retailer", in The Case Against the Global Economy, p. 

333. 
61  "Imports Ahoy!", Forbes, Sept. 9, 1996, pp. 100-102. 

62  from Wal-Mart "Data Sheet", updated April, 1997, Wal-Mart Stores, Inc., www. wal-mart.com; and 

"Wal-Mart turns to high-tech", The Santa Rosa Press Democrat, Sept. 23, 1993 



 

 

 

123 

                                                                                                                                                       
63  Jane Holtz Kay, Asphalt Nation:  How the Automobile Took Over America and How We Can Take it 

Back (New York: Crown, 1997), p. 134. 
64  "This Here Toaster's an All-American (Import, That Is, Sort of)", New York Times, May 18, 1997, 

sect. E, p. 7 
65  "Infrastructure an impediment", Financial Times, Mar. 18, 1997. 

66  In any event, even direct costs in the US exceed the user fees for roads and highways by about $8 

billion annually. 
1 "Delivering the goods to you", flyer promoting "The Good Lorry Code", Hermes House, St. Johns Road, 

Tunbridge Wells, Kent TN4 9UZ, UK, undated. 

2  Black wood, p. 27. 

3  "Transportation in the United States:  A Review", (Washington, DC: National Transportation Library), 

p. 1. 
4  National Transportation Statistics, 1996, US Department of Transportation, Bureau of Transportation 

Statistics, Washington, DC, p. 74. 
5  ibid., p. 53.  

6  Stephanie Böge, "Freight Transport, Food Production and Consumption in the United States of America 

and Europe", Wuppertal Papers, no. 56, May 1996 (Wuppertal Institute, Westfalen, Germany), p. 7.  
7  Encyclopedia of American History (New York: Harper & Row, 1961), p. 193. 

8  Many people today believe things would be far better if the nation were divided into much smaller 

entities.  See for example, Downsizing the USA, by William Naylor, and Dwellers in the Land, by 

Kirpatrick Sale. 
9  John Hoyt Williams, A Great and Shining Road (New York: Times Books, 1988), p. 19. 

10  Marc Reisner, Cadillac Desert: The American West and Its Disappearing Water (New York: Penguin, 

1987), p. 39. 
11  John Hoyt Williams, op. cit., p. 286. 

12  Encyclopedia of American History, op. cit., p. 280. 

13  Howard Zinn,  A People's History of the United States (New York: Harper Perennial, 1990), p. 248-9 

14  Marc Reisner, op. cit., pp. 41-2. 

15  Howard Zinn, op. cit., p. 249. 

16 "Highway Profile", National Transportation Statistics, 1996, op. cit., pp. 29-30. 

17  ibid., p. 29. 

18 "Truck Profile", National Transportation Statistics, 1996, p. 41. 

19 "Ton-Miles of Freight", National Transportation Statistics, 1996, p. 74. 

20  FHWA By Day, Federal Highway Administration, June, 1996, p. 1.  

21  ibid., p. v. 

88  Jim Klein and Martha Olson, Taken For A Ride (video), 1996, distributed by Films Transit 

International, 402 E. Notre Dame St., Montreal, QC, Canada H2Y 1C8.  
89  ibid. 

90  researcher Bradford Snell, cited in Jim Klein and Martha Olson , op. cit.  

25  cited in Jim Klein and Martha Olson , op. cit. 

92  FHWA By Day, op. cit., p. v, and p.  57.;  Robert B. Reich, The Work of Nations (New York: Alfred 

A. Knopf, 1991)p. 61-2. 
93  Jane Holtz Kay, op. cit., pp. 118-9. 

94  Robert B. Reich, op. cit., p. 61-2. 

95  "Ton-miles of Freight", National Transportation Statistics, 1996, op. cit., p. 74. 



 

 

 

124 

                                                                                                                                                       
96  "Average Length of Haul, Domestic Interstate Freight and Passenger Modes", National Transportation 

Statistics, 1996, op. cit., p. 78. 
97  National Transportation Statistics, 1996, op. cit., p. 72. 

98  Matthew L. Wald, "Speed Hits the Wall", New York Times, Oct. 19, 1997, sect. 4, p. 6. 

99  Alessandra Stanley, "Hold the Jokes, Please: Aeroflot Buffs its Image", New York Times, June 29, 

1997, sect. 3, p. 1. 
100  Patrick J. Spain and James R. Talbot, eds., Hoover's Handbook of World Business, 1995-1996 

(Austin, Texas: Reference Press, 1995). 
101  "Highlights of the FY 1997 Transport Budget", Department of Transportation, Washington, DC, p. 

15. 
102  Mark Zepezauer and Arthur Naiman, Take the Rich Off Welfare (Tucson, AZ: Odonian Press, 1996), 

p. 94. 
103  Philip Shenon, "Top Guns Fleeing the Fold", New York Times, Oct. 26, 1997, sect. 4, p. 2. 

104  "Air Force Pilot Retention", US Air Force, Background Briefing, Aug. 26, 1997.  

105  "Viewpoint:  US Lags in Letting Airports Go Private", Aviation Week & Space Technology, Sept. 23, 

1996, p. 66.  
106  cited in James Kaplan, The Airport (New York: William Morrow, 1994), p. 109. 

107  Stephanie Kraft, "Tax the Jet Set", Springfield Advocate, (Springfield, Massachusetts), June 26, 

1997, p. 7. 
108  cited in Ken Silverstein and Alexander Cockburn, CounterPunch, Mar. 1, 1995, vol. 2, no. 5., p. 2-3. 

109  Susan Schmidt, "Out of Arkansas Chicken Farms, Airport Hopes to Find Its Wings", Washington 

Post, July 9, 1995. 
110  Ken Silverstein and Alexander Cockburn, op. cit., p. 2-5. 

111 "Highlights of the FY 1997 Transport Budget", op. cit., p. 16.  

112  Neil MacFarquhar, "La Guardia Airport Sees Its Future in Shops and Fast Food", New York Times, 

July 13, 1997, pp. 19-20. 
113  Worldwatch, May-June, 1994, p. 39. 

114  Sally Johnson, "When Progress Means Back to Horse and Wagon", New York Times, June 22, 1997, 

p. 10. 
115  Seth Schiesel, "The No. 1 Customer: Sorry, It Isn't You", New York Times, Nov. 23, 1997, sect. 3, 

p. 1. 
116  Patrick J. Spain and James R. Talbot, Hoover's Handbook of Business 1995-1996 (Austin, Texas: 

Reference Press, 1995). 
117  Historical tables of US budget, http://www.wais.access.gpo.gov; budget figures for 1962-1996, p. 

65-69. 
118  Scott Lafee, "Sea Launch is Go", New Scientist, Oct. 19, 1996, pp. 36-39. 

119  ibid. 

120  Nathan Newman, "How Private Business Almost Derailed the Internet", ENODE, Vol. 1, no. 6, Dec. 

15, 1996, enodelist@garnet.berkeley.edu 
121  Thomas A. Fogarty, "Towering trouble: Laws and labor may delay transmission of digital TV", USA 

Today, Nov. 17, 1997, sect. E, p. 1. 
122  Shay Totten, "A Towering Debate", Vermont Times, Nov. 12, 1997, p. 1. 

123  Robert W. McChesney, Corporate Media and the Threat to Democracy (New York: Seven Stories 

Press, 1997), p. 42. 
124  Alexander Cockburn, "The Airwaves: Al Gore's Amazing Gift", The Nation, Mar. 10, 1997, p. 9. 

125  David Korten, When Corporations Rule the World, (East Hartford, CT: Kumarian, 1995), pp. 187-8. 



 

 

 

125 

                                                                                                                                                       
126  Bernard Lietaer (interview), "Beyond Greed and Scarcity", Yes! Magazine, Spring 1997, p. 37. 

127  Stuart Ewen, Captains of Consciousness: Advertising and the Social Roots of the Consumer Culture 

(New York: McGraw -Hill, 1976), p. 25. 
128  Fortune, Dec. 1953, p. 99. cited in  Robert B. Reich, The Work of Nations (New York: Alfred A. 

Knopf, 1991), p. 45. 
129  ibid. 

130  Leslie Savan, The Sponsored Life (Philadelphia: Temple University Press, 1994), p. 1 

131  Michael Specter, "Mir Bobbles Dim the Evil Empire's Aura", New York Times, Aug. 24, 1997, sect. 

E, p. 5; "Pepsi-cola is Filming the World's First Commercial in Space", Peps ico news release, New York, 

May 21, 1996.  
132  David Korten, op. cit., p. 152. 

133  Jerry Mander, In the Absence of the Sacred (San Francisco: Sierra Club, 1991), pp. 97-8 

134  S.M. Mohamed Idris, "The Third World:  A Crisis of Development", in The Future of Progress 

(Totnes, UK: Green Books, 1995), p. 110-111. 
135  cited in Alan Thein Durning, "Can't Live Without It", Worldwatch, May-June 1993, page 13. 

136  Taylor Moore, "Developing Countries on a Power Drive", Electric Power Research Institute (EPRI), 

http://www.epri.com.  
137  Robert W. McChesney, op. cit. , p. 23, 

138  "MTV: Music Television Global Fact Sheet", MTV Networks, Feb 17, 1995.  

139  "CNN/CNN International Country and Territory Client List" revised June 1994, CNN Public Relations, 

One CNN Center, Atlanta, GA 30348. 
140  Robert W. McChesney, op. cit. , p. 34. 

141  Richard Douthwaite, The Growth Illusion (Totnes, UK: Green Books, 1992), p. 200. 

142  Ged R. Davis, "Energy for Planet Earth", in Energy for Planet Earth, (New York: W.H. Freeman, 

1991), p. 2. 
143  Richard Douthwaite, "Energy Use by Sector", op. cit., p. 202.  

144  Ged R. Davis, "Energy for Planet Earth", op. cit., p. 2.  

145  Christopher Flavin, "Fossil Fuel Use Surges to New High", Vital Signs 1997, Lester Brown, et al eds., 

(New York:  W.W. Norton, 1997), p. 46. 
146  Nicholas Lenssen, "Nuclear Power Inches Up", Vital Signs 1997, p. 48. 

147  ibid. 

148  "New Québec River Diversions Threaten Wilderness, Indigenous Lands," Temperate Forest Action 

Alert, Native Forest Network, Missoula, MT, no. 9, Aug. 1997.  
149  Alliance to Save Energy, "Federal Energy Subsidies: Energy, Environmental and Fiscal Impacts", cited 

in Michael Shelby, Robert Shackleton, Malcolm Shealy, and Alexander Cristofaro, "The Climate Change 

Implications of Eliminating U.S. Energy (and Related) Subsidies", 1994, p. 4. 
150  Edwin S. Rothschild, "Oil Imports, Taxpayer Subsidies and the Petroleum Industry", (Washington, 

DC: Citizen Action, May 1995), pp. 9-11. 
151  ibid., p. 15. 

152  ibid., pp. 12-13. 

153  Michael Shelby et al, "The Climate Change Implications of Eliminating U.S. Energy (and Related) 

Subsidies", 1994, p. 5; Terrence R. Fehner and Jack M. Holl, "The United States Department of Energy, 

1977-1994:  A Summary History", (Oak Ridge, TN:  US Department of Energy), p. 3.  
154  Michael Shelby et al, op. cit., pp. 5-6. 



 

 

 

126 

                                                                                                                                                       
155  Gil Friend, "Stranded Assets: Why Can't You Ever Find a Capitalist Around When You Need One?", 

The New Bottom Line:  Strategic perspectives on business and environment, vol. 6, no. 17, Aug. 11, 

1997, http://www.eco-ops.com/eco-ops.  
156  "Taking from the Taxpayer: Public Subsidies for Natural Resource Development", Majority staff 

report of the subcommittee on oversight and investigations, Committee on Natural Resources, US House 

of Representatives, (Washington, DC: US Govt. Printing Office, 1994), pp. 21-28. 
157  Michael Shelby et al, op. cit. 

158  "Taking from the Taxpayer: Public Subsidies for Natural Resource Development", op. cit., pp. 28 -39. 

159  R.A.D. Ferguson, 'Renewable Energy' report  to the UK Parliamentary Select Committee on Energy, 

1991-2 Session, Fourth Report, HMSO, 1992. 
160  Terrence R. Fehner and Jack M. Holl, "The United States Department of Energy, 1977-1994:  A 

Summary History", www.doe.gov. 
161  ibid., p. 10. 

162  Michael Shelby et al, op. cit. 

163  Michael Renner, "R&D Spending Levels Off", Vital Signs 1997, op. cit., p. 113. 

164  Mark Zepezauer and Arthur Naiman, Take The Rich Off Welfare (Tucson, AZ: Odonian Press, 

1996), p.86. 
165  J.A. Durbin and G.S. Rothwell, "Subsidies to Nuclear Power Through Price Anderson Liability 

Limit", Contemporary Policy Issues, vol. VII (1990), pp. 73-79, cited in Michael Shelby et al, op. cit. 
166  Nicholas Lenssen, "Nuclear Power Inches Up", Vital Signs 1997, op. cit., p. 48. 

167  Taylor Moore, op. cit., p. 2. 

168  Amulya K.N. Reddy and José Goldemberg, "Energy for the Developing World", in Energy for Planet 

Earth, op. cit., p. 61. 
169  Taylor Moore, op. cit. 

170  Nicholas Lenssen, op. cit., p. 48. 

171  "Investing in India", Financial Times, Mar. 10, 1997, p. 2. 

172  Nicholas Lenssen, op. cit., p. 48. 

173  Black wood, p. 39 

174  Taylor Moore, op. cit., p. 4. 

175  ibid., pp. 4-5 

176  ibid. 

177  "Financing Disaster: China's Three Gorges Dam", Probe International, 225 Brunswich Ave., Toronto, 

Ontario M5S 2M6, Canada. 
178  Arnold P. Fickett, Clark W. Gellings, and Amory Lovins, "Efficient Use of Electricity", in  Energy for 

Planet Earth, op. cit., p. 23. 
179  Ged R. Davis, op. cit., p. 9. 

180  Richard Douthwaite, op. cit., pp. 194-6. 

181  Langdon Winner, The Whale and the Reactor, (Chicago:  University of Chicago Press, 1986), p. 53.  

1  E.P. Cubberly, Public Education in the United States (Boston: Houghton Mifflin, 1934), cited in Robert 

B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 60. 
183  John Taylor Gatto, "On the Scientific Management of Children", The Journal of Alternative 

Education, vol. XV, no. 3, summer 1998, p.42. 
184  cited in Edward Goldsmith, The Way (Boston: Shambala, 1993), p. 282. 

4  Wendell Berry, The Unsettling of America (San Francisco: Sierra Club, 1977), p. 147. 

186  Helena Norberg-Hodge, Ancient Futures:  Learning from Ladakh (San Francisco:  Sierra Club, 1991), 

pp. 110-111. 



 

 

 

127 

                                                                                                                                                       
187  ibid. 

188  John Taylor Gatto, "A Map, A Mirror, and A Wristwatch", Challenging the Giant (Albany, NY: Down 

to Earth Books, 1996), p. 321. 
189  David Orr, Earth in Mind (Washington, DC:  Island Press, 1994), p. 31. 

190  cited in Rupert Sheldrake, The Rebirth of Nature (Rochester, VT: Park Street Press), p. 40.  

191  Scientific American, Sept. 1989. 

192  Edward Goldsmith, op. cit., p. xiv. 

12  ibid., p. xv. 

194  William Nordhaus, "Greenhouse Economics: Count Before You Leap", The Economist, July 7, 1990, 

cited in Richard Douthwaite, The Growth Illusion, op. cit., p. 199. 
195  New York Times magazine, Dec. 1, 1996, p. 40. 

196  David Orr, op. cit., pp. 32-3. 

197  "Monsanto Environmental Annual Review, 1995", Monsanto Environmental Public Affairs (800 North 

Lindbergh Blvd., St. Louis, MO 63167), p. 20. 
198  Although underwritten by the Monsanto and Pioneer corporations, the book was published under the 

auspices of the National 4-H Council, 7100 Connecticut Ave., Chevy Chase, MD 20815. 
18  Michael F. Jacobson and Laurie Ann Mazur, Marketing Madness (Boulder, CO: Westview Press, 

1995), p. 33. 
19  "Farewell Europe", New Scientist, Nov. 9, 1996, p. 11. 

201  reported on Today programme, Radio 4, England, May 30, 1997. 

202  Lawrence C. Soley, Leasing the Ivory Tower:  The Corporate Takeover of Academia (Boston: South 

End, 1995), p. 71. 
203  David Rampe, "The BankAmerica Dean", New York Times, July 19, 1998, sect. 3, p. 2. 

23  "Testing times for Britain's Students", London Times, Feb. 19, 1997, p. 15. 

24   Bill Gates, The Road Ahead (Penguin:  New York, 1996), p. 294. 

25  "Clinton Hails Internet Use on Line and on Air", New York Times, Apr. 20, 1996. 

26  "Infant Programmers", London Times, Oct. 25, 1996, p. 37. 

208  Jim Yardley, "Why Johnny's Doing Calculus", New York Times, Aug. 2, 1998, sect. 4A, p. 28. 

209  Daniel Cass, spokesperson on international issues, democracy and environment, Australian Greens 

Party, Victoria, Australia, dcass@mov.vic.gov.au 
210  Deborah Stead, "Corporations, Classrooms, and Commercialism", in Education Life, (supplement to 

New York Times), Jan. 5, 1997, p. 31. 
211  Michael F. Jacobson and Laurie Ann Mazur, op. cit., pp. 29-31. 

212  Deborah Stead, op. cit., p. 30. 

213  ibid. 

214  Michael F. Jacobson and Laurie Ann Mazur, op. cit. , p. 34. 

215  ibid., p. 31. 

216  ibid., p. 32. 

217  John Taylor Gatto, "On the Scientific Management of Children", op. cit., p. 24.  

218  John Cushman, "Critics Rise up Against Environmental Education", New York Times, Apr. 22, 1997. 

219  Michael F. Jacobson and Laurie Ann Mazur, op. cit. , p. 35. 

220  David Orr, op. cit., p. 50. 

221  ibid., p. 205. 

222 John Taylor Gatto, "On the Scientific Management of Children", op. cit., pp. 40-41. 

223  ibid., p. 42. 



 

 

 

128 

                                                                                                                                                       
1  Keith Bradsher, "U.S. to Spend $1 Billion to Aid Computer Firms", San Francisco Chronicle, Apr. 24, 

1994, p. A13. 
2  William J. Broad, "Study Finds Public Science Is Pillar Of Industry", New York Times, May 13, 1997, 

sect. C, p. 1. 
226  Michael Renner, "R&D Spending Levels Off", Vital Signs 1997, (New York: W.W. Norton, 1997), 

pp. 112-113. 
227  Jack Kloppenburg, Jr. and Beth Burrows.  "Biotechnology to the Rescue?", The Ecologist, vol. 26, 

no. 2, Mar/Apr 1996, p. 64. 
5  "United Kingdom Report to the Commission on Sustainable Development, 1995", section 2.  

229  "German Aerospace Research Establishment: Welcome to the DLR", web page. 

7  Lawrence C. Soley, Leasing the Ivory Tower: The Corporate Takeover of Academia (Boston: South 

End, 1995), p. 12. 
8  ibid., p. 40. 

9  ibid., p. 42; and Jack Kloppenburg, Jr. and Beth Burrows, op. cit.,  p. 64. 

233  Lawrence C. Soley, op. cit., pp. 40-41. 

234  Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 124. 

235  "White Paper on Growth, Competitiveness, and Employment", Commission of the European 

Communities, Brussels, Dec. 5, 1993, chapt. 4, pp. 2-3. 
13  cited in William Greider, One World, Ready or Not (New York: Simon and Schuster, 1997), p. 177.  

14  Akio Morita, "Toward a New World Economic Order", The Atlantic Monthly, June 1993, p. 92. 

15  Lawrence C. Soley, op. cit., p. 13. 

239 James Gorman, "Mars Mission Separates the Men from the Toys", New York Times, July 13, 1997, 

sect. 4, p. 2. 
17  cited in Richard Douthwaite, The Growth Illusion, (Totnes, UK: Green Books, 1992), p. 21. 

241  Daniel Neary, Jr., "Silent Hillsides: How the Coming of the Bulk Tank Dispossessed Small Farmers", 

Vermont Sunday Magazine, Feb. 25, 1996, pp. 4-13. 
242  Langdon Winner, The Whale and the Reactor (Chicago:  University of Chicago, 1986), p. 26. 

20  cited in Wendell Berry, The Unsettling of America, (San Francisco: Sierra Club, 1977) p. 144. 

21  Jim Hightower, and Susan DeMarco, "The Land Grant College Complex", in Peter Barnes, ed., The 

People's Land: A Reader on Land Reform in the United States  (Emmaus, PA: Rodale, 1975). 
22  Wendell Berry, op. cit., p. 153. 

23  Jack Kloppenburg, Jr. and Beth Burrows, op. cit., p. 63.  

24  ibid. 

25  "White Paper on Growth, Competitiveness, and Employment", op. cit., chapter 4, p. 5.  

1  "Missing Networks: A European Challenge", ERT, 113 avenue Henri Jaspar, 1060 Brussels, Belgium, 

1991.  p. 5. 
2  Rodney E. Slater, letter to Al Gore, March 12, 1997, p. 2.  

251  "Highlights of the FY 1997 Transportation Budget", US Department of Transportation, Washington 

DC, 1997, pp. 3, 5, 12. 
252  ibid., pp. 5, 16. 

253  Rodney E. Slater, op. cit., p. 2; "Highlights of the FY 1997 Transportation Budget", op. cit., pp. 8-9 

254  "Highlights of the FY 1997 Transportation Budget", op. cit.  

7  Simon Fairlie, "The Theory Behind Toll Roads:  New Clothes for the Road Lobby", The Ecologist, vol. 

24, no. 6, Nov/Dec 1994, p. 214; Nicholas Hildyard, Colin Hines and Tim Lang,"Who Competes: 

Changing Landscapes of Corporate Control", The Ecologist, vol. 26, no. 4, Jul/Aug 1996, p. 140. 



 

 

 

129 

                                                                                                                                                       
8  Maria Green Cowles, "Setting the Agenda for a New Europe:  The ERT and EC 1992", Journal of 

Common Market Studies, vol. 33, no. 4, p. 506. 
9  cited in ibid., p. 505. 

10  from Black wood, p. 21. 

11  "Missing Networks: A European Challenge", ERT, op. cit., p. 9.  

12  Black wood, p. 23. 

13  Black wood, 24, 26, 29, 37.; "White Paper on Growth, Competitiveness and Employment", 

Commission of the European Communities, Brussels, Dec. 5, 1993.  
14  "White Paper on Growth, Competitiveness and Employment", op. cit., Chapter 3, p. 1.  

15  "Ten Questions on TENs", European Federation for Transport and Environment, Rue de la Victoire 

26, 1060, Brussels, Belgium, p. 3-6. 

16  need reference 

265  "White Paper on Growth, Competitiveness and Employment" (Development Theme I: Information 

Networks), op. cit., p. 2. 
18  "Missing Networks: A European Challenge", op. cit., pp. 14-16. 

19  "White Paper on Growth, Competitiveness and Employment", op. cit.  

268  "First Day, and Traffic is Bumper to Bumper", New York Times, Apr. 6, 1998, p. A3. 

21  Black wood, p. 39; Glenn Switkes, "Design Chosen for First Phase of Hidrovia", World Rivers 

Review, June, 1996. 
270  Taylor Moore, "Developing Countries on a Power Drive", Electric Power Research Institute (EPRI), 

http://www.epri.com; "Loan & Credit Summary" (projects approved at World Bank's December 1996 

board meeting.) 
271  dahanu@aol.com 

272  Aleta Brown, "Tehri Stalled by Powerful Fast", World Rivers Review , vol. 11, no. 3, July 1996. 

25  Pratap Chatterjee, "Enron Deal Blows a Fuse", Multinational Monitor, July/Aug. 1995. 

26  "Investing in India", Financial Times, Mar. 10, 1997, p. 2. 

27  Alexis Dinno, "Funding for Laos Dam Approved Despite EIA Criticisms", World Rivers Review , 

September, 1996. 
28  "Loan & Credit Summary" (projects approved at World Bank's April 8, 1997 meeting), 

www.worldbank.org. 
277  "Green Scissors Report, 1995", Public Citizen, Washington, DC. 



 

 

 

130 

Ch apter 10:  Th e Ru les of th e Game: Free Trade 

 

"Bigness is the condition of America ... because ever since World War II it has 

been the function of the national government -- fulfilling, it is presumed, the 

will of the people -- to foster and promote it." 

 

      Kirkpatrick Sale, Human Scale1  

 

Virtually every nation is shaping its economy to match the scale at which 

transnational corporations operate.  The hidden subsidies involved in that 

reshaping have enabled corporations to grow tremendously in economic power; 

entire nations now find themselves dependent upon the same businesses whose 

growth they have so lavishly supported.   

 

More than just investments in an industrial infrastructure have been involved, 

however: societal laws, rules, and regulations have also been rewritten in order 

to respond to and facilitate each corporate colonisation of a new commercial 

niche.  Even such a monumental undertaking as the unification of Europe -- 

involving fundamental changes in monetary and fiscal policies, customs 

procedures, and democratic processes -- has been largely designed by the 

corporate world and its lobbying arm, the ERT. 2     

 

Unfortunately, the co-mingling of government and corporate interests has 

become so normalized that the ERT's role was not viewed by the mainstream as 

the equivalent of a corporate coup d'état, but as the exercise of big business' 

legitimate rights.  Today there is so little out of the ordinary in the notion of 

corporations as institutions of governance that a British think-tank could 



 

 

 

131 

seriously propose 'privatizing' entire African nations -- giving corporations the 

responsibility for running them in exchange for an agreed-upon return to 

earnings.3     

 

To a significant extent, corporate goals were effectively merged with Northern 

governmental priorities as early as 1944, at the Bretton Woods conference.  

Agreements signed at this meeting gave birth to The World Bank, the 

International Monetary Fund, and the General Agreement on Tariffs and Trade 

(GATT) -- institutions that have guided the global economy ever since.  The 

primary functions of these agencies have been the systematic encouragement of 

international trade and the promotion of Third World 'development' along 

industrial/consumerist lines.  Both of these goals guaranteed that the markets 

and resources needed for uninterrupted industrial growth would be available.     

 

In the more than fifty years since they were created, the Bretton Woods 

institutions have pushed virtually every country in the direction of more trade -- 

and have thereby expanded both the power and scale of the trading bodies 

themselves, the transnational corporations. 

 

More recently, the North American Free Trade Agreement (NAFTA), the 

Uruguay Round of GATT negotiations, and the Maastricht Treaty have 

tightened this alliance between government and corporate power.  The goals -- 

economic expansion through increased trade -- have remained largely the same.  

But now virtually any barriers to trade are to be systematically dropped, giving 

corporations access to bigger markets and to even more of the world's resources 

-- all with minimal government or public interference.  The imperatives of 



 

 

 

132 

growth and expanded trade have become institutionalized as fundamental 

goals of government policy.   

 

A recent addition to the framework set up at Bretton Woods is the World Trade 

Organisation (WTO), now a main locus of corporate power.  Through the WTO,  

government decisions restricting corporate activities can be stricken down by 

an unelected panel of 'trade experts' -- largely drawn from the corporate world -

- if it determines those laws are 'barriers to trade'.  There are no opportunities 

for labour representatives, consumer organisations, environmental groups, or 

indigenous people to present their views; the meeting is not open to the public, 

and documents submitted are kept secret. 4    

 

The next phase in the process of economic globalisation is the Multilageral 

Agreement on Investment (MAI), which aims to open up all remaining sectors 

of national economies to transnational corporations.  The ag reement is 

currently being negotiated at the Organisation for Economic Cooperation and 

Development (OECD), which represents the wealthiest industrialised countries.  

If passed into law, it will force governments to treat foreign investors the same 

as local companies, ensuring that no country can favor local producers over 

corporations based in other countries.  The MAI is also likely to prohibit 

'performance' requirements, such as laws that require companies to hire local 

people or pay acceptable wages.  The MAI ensures the mobility of capital, 

allowing it to flow unimpeded to wherever it can get the highest return. 5   

 

Recent economic meltdowns in Asia, Russia, and Latin America are a direct 

consequence of this hyper-mobility of capital.  But the architects of the global 

economy are pressing forward with more of the same, using supra -national 



 

 

 

133 

institutions like the International Monetary Fund to override national efforts to 

insulate their currencies from global pressures.  According to an April IMF 

communique, the Fund's Board of Governors believes that  

 

"it is now time to add a new chapter to the Bretton Woods Agreement by 

making the liberalisation of capital movements one of the purposes of 

the Fund and extend as needed the Fund's jurisdiction for this 

purpose."6  

 

These institutions -- and the WTO and MAI in particular -- have the clear aim 

of eliminating people's ability to define local needs and run their communities 

as they see fit.  Once they are in place, local and even national laws will be 

increasingly subservient to the needs of international commerce.  The 'rules of 

corporate behaviour' will be the rules governing the entire planet.  

 

Depending on corporations 

 

For many years, governments have acted upon the belief that economic vitality 

depends upon the growth of large-scale industries.  Although this belief took 

most dramatic form in the communist world -- where the state controlled and 

supported virtually all industries -- 'free-market' nations have been similarly 

convinced of the importance of supporting industry, even when the firms 

themselves remained largely in private hands.  As Robert Reich notes,  

 

"In return for prosperity, American society accepted the legitimacy and 

permanence of the core American corporation.... [G]overnment officials 



 

 

 

134 

took it as one of their primary responsibilities the continued profitability 

of [these] corporations".7  

 

Many nations outside the communist world formalized this marriage between 

government and industry by owning companies in areas critical to industrial 

development -- energy, transport, communications, and advanced technologies.  

Italy has long nurtured its national holding companies, including IRI (Istituto 

per la Ricostuzione Industriale), which was set up by Mussolini to spur 

industrial growth.  Its several hundred companies include the 

telecommunications giant STET, and the national airline, Alitalia.  Direct 

capital transfers from government to these industries totaled £17 billion in the 

1980s alone, although many are now being privatized. 8   France nurtured and 

only recently divested itself of dozens of industries -- ranging from automaker 

Renault and oil company Elf Aquitane to chemical manufacturer Rhône-

Poulenc and tobacco company Seita, maker of Gauloise cigarettes. 9   Groupe 

Bull, the third largest computer maker in Europe, has been part-owned by the 

French government since 1975, and recently received an additional $2.1 billion 

investment while being readied for privatisation. 1 0   Only in recent years has 

Britain divested itself of its stake in industries like British Telecommunications 

and British Airways, sometimes putting them in private hands at a fraction of 

the cost it took to build them. 

 

Even when such companies are not owned in whole or part by the state, 

governmental intervention on behalf of large-scale industries has long been 

accepted practice -- although such support runs counter to what are supposed 

to be the rules of the free enterprise game.  John Kenneth Galbraith pointed 

this out a quarter century ago: 



 

 

 

135 

 

"In the traditional image of the corporation, a conceptually sharp, even 

immutable line divides the corporation from the state.  There is 

government; there is private enterprise; the two do not meet. ... Only 

someone with an instinct for inconvenience suggests that firms such as 

Lockheed or General Dynamics, which do most of their business with the 

government, make extensive use of plants owned by the government, 

have their working capital supplied by the government, have their cost 

overruns socialized by the government... are anything but the purest 

manifestation of private enterprise.  And this being so of Lockheed, the 

question certainly does not arise with American Telephone & Telegraph, 

or General Electric."1 1    

 

Galbraith's point can be applied in numerous other cases.  For example: 

 

• Germany routinely supports its largest industries through direct subsidies and 

tax incentives.  According to one government official, Volkswagen is to 

Germany "what apple pie is to the Americans", and so VW receives especially 

generous treatment -- such as the recent $62 million subsidy it received from 

the state of Saxony.1 2    

 

• Airbus, the world's number two aircraft manufacturer, is a European 

consortium jointly owned by British Aerospace, Daimler-Benz (Germany), 

Aerospatiale (France), and CASA (Spain).  The company pays no taxes, and it 

is estimated that company has received $20 billion in government subsidies 

since 1970.1 3  

 



 

 

 

136 

• In France, the government bailed out the country's largest bank, Credit 

Lyonnais, after a series of bad loans -- including an investment in the 

Channel Tunnel -- threatened it with insolvency.  The most recent infusion of 

taxpayers' money brings the total in state aid to £7 billion. 1 4    

 

• Overall, the European countries comprising the European Union spend vast 

sums each year supporting various sectors of the industrial economy.  In the 

early 1990s, for example, the nations of the European Union were providing 

the manufacturing sector with some 43 billion ecus annually in public 

assistance.1 5  

 

• Japan is famous for its 'industrial policy', a form of state-supported 

capitalism in which government and industry closely coordinate their efforts.  

A similar "close, complex and productive relationship between government 

and business" has been cited as the reason for the rapid expansion of Asia's 

so-called 'Tiger' economies -- South Korea, Taiwan, Singapore, and Hong 

Kong.1 6    

 

• In the United States, the smallest businesses are forced to sink or swim, while 

the biggest are often rescued from troubled waters by the government:  the 

Chrysler Corporation, for instance, was able to avoid bankruptcy in 1979 

thanks to government-guaranteed loans of $1.2 billion.1 7   The US 

government also has a number of programmes aimed at helping those 

corporations involved in international trade and investment.  The Market 

Access Programme, for example, provides about $100 million annually to 

companies like Sunkist, Miller Beer, Campbell's Soup, McDonald's, and 

M&M Mars to advertise their products abroad.  The Overseas Private 



 

 

 

137 

Investing Corporation (OPIC), meanwhile, provides loans, loan guarantees, 

and risk insurance to companies and individuals that invest in so-called 

'emerging markets', and already protects $3.2 billion in speculative 

investments in Asia, Latin America, Russia, and elsewhere.  If those 

investments go bust, American taxpayers will have to reimburse investors. 1 8   

In general, tax policies in the US favor large corporations: for example, 

deductions for R&D, as well as such programmes as the Foreign Sales 

Corporate Tax Credit, enabled aircraft giant Boeing to avoid paying any 

federal taxes in 1995; instead, the corporation received a $33 million 

rebate.1 9   During the current seven year period, it is estimated that tax 

breaks for transnational corporations will reach $95 billion; an additional $7 

billion in breaks will go to banks and other financial institutions, while 

insurance companies will get $204 billion. 2 0       

 

Supra-national bodies also support and subsidise large scale.  Funding from the 

World Bank, for example, is systemically biased in favor of large projects, as 

Susan George has documented.2 1   And as the global economy grows like a 

house of cards, the International Monetary Fund stands by to prop it up 

whenever it teeters.  Thus, when free trade, market 'liberalisation', and high 

technology combined in 1998 into economic crises that quickly engulfed 

Thailand, Korea, Indonesia, and Russia -- and pummelled stock markets 

everywhere -- billions of dollars in IMF funds were sent into the breach.  These 

funds come from the treasuries of national governments, and ultimately from 

the pockets of taxpayers.  Those that are bailed out include banks, 

corporations, and speculators in international markets.   

 

Greener pastu res 



 

 

 

138 

 

Corporations have grown fat through government support, but the corporate 

form has no capacity for loyalty.  Trade rules have given them the ability to shift 

production from country to country at will, and corporations are no longer 

'national' in any meaningful sense.  Instead they roam the world seeking low 

wage regimes, lax environmental rules, and even bigger subsidies.  According to 

Dave Phillips of Earth Island Institute, the tuna -canning industry in America 

cut labour costs by more than half by shifting operations from California to 

Puerto Rico, where a labour force was available for $7 per hour.  Puerto Rico 

was abandoned in turn for American Somoa, where $3.50 per hour was the 

going wage.  From there, companies shifted to Ecuador, where workers were 

paid only $1 per hour, then to Thailand where wages were only about half that 

rate.  Some companies are already moving on to Indonesia to cut labour costs 

still further.2 2  

 

The 'race to the bottom' provoked by free trade rules offers far greater 

advantages to large firms than smaller, more locally rooted ones, as David 

Korten explains: 

 

"The more readily a firm is able to move capital, goods, technology, and 

personnel freely among localities in search of such advantage, the greater  

the competitive pressure on localities to subsidize investors by absorbing 

their social environmental, and other production costs.  The larger and 

more open the markets, the greater the profit opportunity they present to 

firms that are sufficiently large and nimble ... and the greater their 

competitive advantage over smaller local firms that remain rooted in a 

particular community and play by its rules."2 3  



 

 

 

139 

 

While massive subsidies are offered in the hopes of luring transnational 

corporations away from other countries, nowhere are governments offering 

similar support for small shops, small-scale farmers, or local producers -- even 

though such businesses provide more jobs than large corporations per unit of 

output.  Meanwhile, the subsidies and tax breaks given large businesses add to 

the tax burden borne by everyone else.  According to Richard Barnet of the 

Institute for Policy Studies, corporations operating in the US in the 1950s paid 

23% of all federal income tax; by 1991 the corporate share had dropped to 

9.2%.2 4   Similarly, the portion of local property tax revenues paid by 

corporations dropped from 45% in 1957 to 16% in 1987.2 5   In both cases, the 

difference has been made up by individuals, family farmers, and small 

businesses. 

 

A recent UN study revealed that at least 59 of the 83 countries surveyed offered 

some form of incentive to transnational corporations. 2 6   An exhaustive list of 

such inducements would be impossible, but a few examples reveals the trend: 

 

• Apparently approving of the maxim that what's good for automobile 

manufacturers is good for the country, governments seem to reserve the 

biggest subsidies for car factories.  Portugal invested over $483 million to 

lure a factory jointly operated by the Volkswagen and Ford corporations; the 

plant only accounted for 1,900 new employees, a public cost of $245,000 per 

job.  Mazda was given incentives worth $48.5 million by the state of 

Michigan for a new plant, while Mercedes-Benz received $250 million in 

1993 from Alabama to set up shop there -- a cost of $166,000 per new job 

created.  BMW received a subsidy package worth £45-50 million from 



 

 

 

140 

national and regional governments to build a new engine plant in Britain; 

but since the corporation's plans included closing an existing engine factory 

near Birmingham, no net jobs were even created.  BMW did even better in 

the United States a few years earlier, when South Carolina of fered subsidies 

totalling $130 million for siting a plant in that state. 2 7  

 

• The Japanese electronics firm JVC received substantial local subsidies to set 

up operations in Nancy, France, in 1995.  In 1996, the company picked up 

and moved everything to Scotland, where labour costs were lower -- and 

received a £300,000 subsidy for the move from the European Union. 2 8  

 

• Local governments within the same country often compete with one another 

for corporate favors.  In the United Kingdom both Scotland and Wales t ried 

to convince Korean electronics giant LG to build an electronics products 

factory in their region.  It appears Wales has won, thanks to subsidies 

totaling £150 million.2 9  

 

• The infamous maquiladoras on the Mexican side of the US border prove that 

direct financial payouts are not always needed to lure corporations.  

Manufacturing wages one-tenth of those in the US have been the major 

draw, along with restrictions on labour rights and union activity, lax 

enforcement of environmental rules, and exemption from property taxes.  By 

1993 some 2,200 factories had been set up by such corporations as GE, 

General Motors, RCA, Westinghouse, Honeywell, and hundreds of others. 3 0  

 

Opening markets 

 



 

 

 

141 

Free trade rules not only enable corporations to site their production fa cilities 

wherever it is most advantageous, they also allow them to market their products 

anywhere in the world.  In the name of "breaking down the barriers to trade", 

for instance, US government officials have been actively working for more than 

a decade to pry open Asian markets for the benefit of American tobacco 

companies -- even while many of those same officials have piously supported 

anti-smoking campaigns at home.   

 

Those efforts were highly successful.  Within a year after Japan's market was 

forced open, cigarettes had become the second-most-advertised product on 

Tokyo television. South Korea had also closed its market to imported tobacco 

products and had outlawed all cigarette advertising.  But 'free trade' 

complaints forced open the market -- and reversed the advertising ban as well.  

In Taiwan, not only was the market to imported cigarettes opened up, but a 

proposed law banning cigarette vending machines, restricting public smoking 

areas, prohibiting tobacco advertising, and funding an anti-smoking campaign 

was scuttled by threats of trade sanctions.  Similar efforts forced open markets 

in Thailand and China.  By 1991, a Boston-based research institute reported, 

sales of American cigarettes were 600 percent higher in those countries thanks 

to US government intervention in the name of 'free trade.'3 1  

 

With the WTO in place, corporations and their patron governments have a 

ready forum for raising objections to the laws of other nations, and they have 

not been shy about using it.  While less than 200 trade complaints were 

handled by GATT in a half-century, the WTO fielded 50 complaints in just its 

first 18 months.3 2   Its first ruling determined that the US Clean Air Act 



 

 

 

142 

discriminated against foreign oil refiners; the US was ordered to change the law 

or face sanctions.3 3       

 

Not only are environmental, food safety, and labour laws threatened by the free 

trade dogma: the WTO will also be used to ensure that nations don't stray from 

the industrial-consumerist fold.  Thus the US and the European Union 

threatened to haul South Korea before the WTO because of its support for a 

'frugality' campaign: the US and the EU argued that efforts to limit luxury 

consumption might reduce South Korea's purchases of imported goods, and 

would therefore be a barrier to trade. 3 4    It is likely that the WTO will also be 

used to ensure that Third World governments are powerless to protect their 

cultures from being bombarded by films, television broadcasts, and other 

media with a western, urban-consumer message.   

 

If, like Coca-cola, the largest corporations in the world need to "make it 

impossible for the earth's billions to escape" their products, national and 

international laws have become their strongest allies.    

 

'Regu lating' th e corporations 

 

The recent free trade agreements are probably the most egregious example of 

the way national and international laws have been rewritten to serve the 

interests of transnational corporations.  Without a doubt, one of the most 

significant positive shifts in public policy would be to renegotiate these 

agreements, this time putting the interests of people and the environment -- 

rather than corporations -- at the forefront.   

 



 

 

 

143 

But even though many activists from the local to the international level are 

aware of the corporate motives behind the trade agreements, their strategies 

often fail to aim at fundamentally shifting course; instead they attempt to 

'regulate' corporate behaviour even while granting them the expanded power a 

globally integrated economic system provides.  Unfortunately, this ap proach 

actually helps to promote the corporate agenda: it lulls people into believing 

that nothing can be done about the 'inevitable' trend toward corporate 

hegemony, while falsely assuring them that communities and the environment 

will nonetheless be protected.  

 

This was clearly the case with NAFTA.  Looked at broadly, the goals of NAFTA 

were to bring still more of North America's population into the industrial -

consumer fold, and thereby expand the markets of corporations large enough to 

engage in international trade.  Nonetheless, many environmental organisations 

supported the treaty once a few 'side agreements' to monitor and regulate 

corporate environmental behaviour were appended.   

 

Unlike the environmental groups that supported NAFTA, the CEO of Camp bell 

Soup Company -- last seen shivering with business excitement -- knew precisely 

what this trade agreement was all about: 

  

"In Mexico, our opportunities have been significantly broadened with 

the passage of NAFTA. With doors open wider to international trade, 

Mexico’s 85 million people beckon as a highly attractive market, where 

nearly 9 billion servings of soup are consumed each year.... Mexican 

consumers are also showing preference for our convenient dry soup 

varieties to replace traditional homemade soup" (emphasis added).3 5   



 

 

 

144 

 

The shift from "traditional homemade soup" to Campbell's "convenient dry 

soup" speaks volumes about the deeper impacts of NAFTA.  Whether or not 

Campbell's facilities in the US, Canada, or Mexico adhere to various 

environmental regulations is of miniscule consequence compared to the 

environmental impact of pulling 85 million people further along the path of 

American-style consumption.  As Alan Thein Durning has pointed out: 

 

"Citizens of [the industrial] nations typically consume 10 times as much 

energy as their developing country counterparts, along with 10 times the 

timber, 13 times the iron and steel, 14 times the paper, 18 times the 

synthetic chemicals, and 19 times the aluminum.  The consumer societies 

take the lion's share of the output of the world's mines, logging 

operations, petroleum refineries, metal smelters, paper mills, and other 

high-impact industrial plants.  These enterprises, in turn, account for a 

disproportionate share of the resource depletion, environmental 

pollution, and habitat degradation that humans have caused worldwide.  

A world full of consumer societies is an ecological impossibility."3 6  

 

NAFTA's side agreements no more address the treaty's systemic impacts than 

picking up trash along highways addresses the systemic impact of cars.  But 

these side agreements duped many environmental organisations into 

supporting NAFTA, and their seal of approval ultimately paved the way for its 

passage.  

 

Corporations have worked successfully for decades to rewrite the rules of trade 

for their own benefit.  Rather than accepting the premise of economic 



 

 

 

145 

globalisation and working to mitigate its worst impacts -- through 'retraining' 

programmes for displaced workers, through environmental 'side-agreements', 

or through outside 'monitors' of conditions in transnational factories -- it is 

time to rewrite the laws themselves.  This time, they should be written for the 

benefit of people in their diverse cultures, and for the sake of the planet itself.  

 

 

 

Ch apter 11:  Ru les of th e Ga me: Regu lations 

 

"Most of us sit idly by, watching the planet's ecosystems being shredded 

by unnecessary 'developments' and unneeded products, its species 

genetically engineered, poisoned and displaced, the vast majority of the 

world's peoples deracinated, impoverished and enslaved.  Most of us sit 

idly by, dreaming of new regulations that never worked and never could 

work." 

 

Peter Montague3 7  

 

In setting up the framework for what has become a corporate-dominated world 

economy, the Bretton Woods Agreement and the treaties that followed are 

obviously tilted in favor of the large and global.  But what of other 'rules of the 

game', like regulations with the avowed purpose of protecting human health 

and the environment?  Since the goals of virtually every national government 

now mesh seamlessly with the corporate agenda, it is not surprising that most 

government regulations do little to limit corporate activities; many regulations, 



 

 

 

146 

in fact, systemically support the large and global at the expense of the small 

and local. 

 

Taken as a whole, environmental regulations have been largely ineffective.  In 

1995, The Center for Economic and Security Alternatives in Washington, DC 

conducted a study to measure changes in environmental health in nine 

industrialised countries. The resulting Index of Environmental Trends, which 

combined 21 indicators of environmental quality into a single numerical 

'index', revealed that despite a quarter century of regulation, environmental 

health was deteriorating in all nine countries. 3 8  (see table X on page Y). 

 

           



 

 

 

147 

 

Table 1 

 

RANKI NG FROM LEAST TO MOST ENVI RONMENTAL 

DETERI ORATI ON, 1970-1995 

 

Denmark:       -10.6% 

Netherlands:   -11.4% 

Britain:       -14.3% 

Sweden:        -15.5% 

West Germany:  -16.5% 

Japan:         -19.4% 

United States: -22.1% 

Canada:        -38.1% 

France:        -41.2% 

 

Data from: Gar Alparovitz and others, INDEX OF ENVIRONMENTAL 

TRENDS (Washington, D.C.: National Center for Economic and Security 

Alternatives, 1995), pg. 2; cited in Rachel's Environment & Health Weekly, 

#613, Aug. 27, 1998. 



 

 

 

148 

Despite this grim record, many people still have faith in those regulations.  They 

point to the difference between much of the industrialised world, where 

regulations are comparatively strong and the environment relatively clean, and 

the Third World, where regulations are much weaker and the environment is 

often heavily polluted. 

 

Even if real progress were being made towards environmental health in the 

North, this sort of comparison neglects the way Northern consumption 

damages ecosystems thousands of miles away, in poorer countries.  Now that 

free-trade rules give companies expanded freedom to site production facilities 

wherever it suits them, the North's stronger regulations have led many heavily-

polluting industries to relocate to the South -- out of view of concerned 

Northern citizens and beyond the reach of their regulatory agencies.  Similarly, 

much of the food consumed in Northern countries comes from the Third World,  

where chemical-intensive, monocultural agriculture leaves behind degraded 

land and pesticide-poisoned farmworkers.  The impact of much of the North's 

consumption is thus felt in the South, where governments all too often sacrifice 

their country's environmental health in exchange for foreign investment.  The 

Philippines government, for example, ran an advertisement in Fortune 

magazine trumpeting the lengths to which they would go in accomodating 

Northern businesses: 

 

"To attract companies like yours... we have felled mountains, razed 

jungles, filled swamps, moved rivers, relocated towns... all to make it 

easier for you and your business to do business here."3 9   

 



 

 

 

149 

Practices like these not only lead to irreparable environmental damage, they 

can make survival impossible for indigenous people whose livelihoods depend 

upon intact ecosystems.  Thus, while many Americans applaud the regulations 

on cars, trucks, and petroleum refineries that have marginally improved air 

quality at home, the car culture weighs heavily even on car-free communities in 

distant countries.  In northeast Colombia, for example, the entire U'wa tribe 

has threatened mass suicide if Occidental Petroleum is granted oil exploration 

leases on their land.4 0   Their plight is largely invisible, and air quality 

standards in the North will not improve it. 

 

Those with faith in the North's regulatory regime argue that if 'development' is 

allowed to proceed unimpeded in the Third World, those nations will eventually 

have the resources to enact and enforce environmental standards as strict as in 

the North, even if the situation worsens in the short term and devastates a few 

unfortunate cultures like the U'wa.  But even the strongest environmental 

regulations cannot make up for the overall impact of industrialising the Third 

World.  Consider just one small measure of that impact, gleaned from State of 

the World 1997: 

 

"In China, domestic car production has been growing at more than 15 

percent annually; the government plans to increase automobile output 

from 1.4 million units in 1994 to 3 million units in 2000.  In Vietnam, 

import quotas for cars tripled in 1996, and sales of four-wheel vehicles 

are projected to increase sixfold between 1995 and 2000.  Vehicle sales 

and registrations are surging in India, Indonesia, Malaysia, and 

Thailand as well.  Around Asia, the shift to transportation systems that 

emphasize private automobiles is in full swing."4 1  



 

 

 

150 

 

Needless to say, this shift is being promoted -- directly and indirectly -- by 

government policies and public subsidies.  Perhaps sometime in the next 

century, when a sufficiently large proportion of Asia's present-day bicycle-

riders have become drivers of sports utility vehicles and minivans, those 

countries will enact 'stiff' regulations to mitigate some small part of the 

environmental damage done.  Meanwhile, corporations, governments, the 

World Bank, the WTO, and other agents of the industrial/consumer system will 

be working to expand the market for cars elsewhere -- in Africa, perhaps -- to 

satisfy their need for growth. 

 

Even with the strongest possible regulations, the notion that industrialisation is 

good for the environment requires a highly developed form of mental conjuring.   

Additional sleights of mind are needed to dispense with the question of whether 

the planet has sufficient resources for the Third World to develop along 

industrial-consumerist lines in the first place. 

 

Regu latory myth s 

 

In the most industrially-advanced nations, massive bureaucracies have been 

created to monitor and protect the environment and food supply.  In the US, for  

example, the presence of the Food and Drug Administration (annual budget 

more than $1 billion) and the Environmental Protection Agency (more than $6 

billion) lead most Americans to believe that their health and the nation's 

environment are adequately safeguarded.  But current regulations are simply 

inadequate to the task, given the scale at which industry is now manipulating 

nature.     



 

 

 

151 

 

Peter Montague of the Environmental Research Foundation has studied the 

regulatory system for toxic chemicals in the United States, and what he has 

found would shake the confidence of the most jingoistic American.  Some 

70,000 chemicals are now in use in the US, and new technologies add 1,000 

more chemicals to commercial markets every year.  Although most people 

assume that the government has tested all of these for their safety, the agency 

responsible, the National Toxicology Program (NTP), only has the capacity to 

study about 25 new chemicals each year -- and even then considers only their 

carginogenicity, ignoring effects on immune systems, reproductive functions, 

and major organs.  What's more, these chemicals are studied in isolation -- 

despite the fact that combinations of just two or three common pesticides have 

been found to cause up to 1,600 times more damage to human health than any 

one of the pesticides by itself.4 2  

 

Given its limitations, it is not surprising that the NTP has only removed nine 

chemicals from the market in 21 years.  The fact is, neither the NTP nor any 

other agency has the ability to fully evaluate the dangers of 1,000 new 

chemicals every year.  A study in the journal Science points out that testing the 

commonest 1,000 toxic chemicals in unique combinations of three would 

require approximately 166 million experiments.  Even if just one hour were 

devoted to each experiment and 100 laboratories worked 24 hours a day, seven 

days a week, the process would take over 180 years to complete. 4 3   At current 

rates of industrial 'progress', another 180,000 new chemicals would have 

entered the market in the meantime.  

 



 

 

 

152 

The notion that the government effectively regulates the chemical industry is 

clearly a myth.  Corporations introducing new chemicals are, in fact, largely 

'self-regulated' in America: they are required to report to the EPA any 

information indicating that their chemicals "present a substantial risk to 

human health or the environment."  Although penalties are assessed for non-

compliance, corporations neither comply with the law, nor does the 

government have the ability to force them to.  Montague points out that when 

the Chemical Manufacturers Association negotiated an "amnesty" to allow 

companies to submit data they had previously withheld,  

 

"more than 120 companies sent EPA 11,000 studies or reports of adverse 

health effects from chemicals on the market that had never been 

reported in scientific literature.  The DuPont corporation alone 

submitted 1,380 studies; the Ciba-Geigy corporation submitted 580; 

Shell Oil corporation submitted 351; Hoescht Celanese corporation 

submitted 200....  Clearly, any taxpayer, or any member of the publ ic 

hoping their government is going to protect them from toxic chemicals, 

will be greatly disheartened by these revelations."4 4  

 

Although the 'revolving door' between industry and regulatory agencies calls 

into question the validity of many regulatory decisions, simple malfeasance on 

the part of EPA is not the reason for its shortcomings in this instance:   

 

"the EPA ... is powerless against the chemical corporations, who have 

bigger staffs, much bigger budgets, and many many more lawyers than 

EPA will ever have."4 5  

 



 

 

 

153 

This is another demonstration of the absurdity of public policy today: even as 

corporations outstrip governments in wealth and power, those same 

governments continue to support further corporate growth; and while 

governments spend billions of dollars 'regulating' the products churned out in 

corporate laboratories, additional billions in government funds are spent to 

help corporations develop still more new products.  The public, which pays for 

both, must suffer the health and environmental consequences as well.   

 

Biotechnology will no doubt provide major new opportunities for creating 

regulatory mechanisms at public expense.  After many years of support for 

genetic engineering from governments around the world, the technology 

reached a new level with the cloning of the first mammal by scientists in 

Scotland.  The cloned sheep set off a wave of public hand -wringing, and US 

President Clinton was sufficiently moved to form a blue-ribbon Ethics 

Commission to consider the moral implications of this latest advance.  

Meanwhile, the government he heads continues to funnel billions of tax dollars 

into further biotechnology research, and the US patent office is busily doling 

out commercial patents on new life forms.   

 

Bigger scale needs more regu lations 

 

A commonly heard complaint from Big Business is that regulations are costly 

and meddlesome, interfering with the ability of companies to function and even 

hampering the smooth operation of an otherwise perfect free market.  What is 

never acknowledged, however, is that most regulations and the agencies that 

administer them would be unnecessary if the scale of industry and its 

technological manipulations of nature were not so large.  A National Toxicology 



 

 

 

154 

Program, for example, would not be required if 1,000 new c hemicals weren't 

being developed each year; nor would a Nuclear Regulatory Agency be 

necessary if nuclear power were banned outright.  In that sense, money spent 

on regulatory agencies are actually a form of indirect subsidy to large-scale 

industry.   

 

Many other large-scale activities create problems -- and then require 

government regulation -- simply because of their scale.  When small farmers 

raise animals, for instance, the manure produced is beneficial, since it can be 

used to replenish the fertility of fields and pastures.  But the industrialisation of 

agriculture separates animal husbandry and feed production into two large-

scale, intensive activities:  huge feedlots with hundreds, thousands, or even 

millions of caged and penned animals on the one hand, and vast monocultural 

tracts for growing animal feed on the other.  The first of these produces tonnes 

upon tonnes of manure that become a serious pollution problem (requiring 

regulatory oversight); the other requires factory-produced chemical fertilisers 

and pesticides that are hazardous to the health of factory workers and can 

poison soil, groundwater, and food itself (and so also requires regulatory 

oversight).  As Wendell Berry aptly remarks, 

 

"The genius of American farm experts is very well demonstrated here: 

they can take a solution and divide it neatly into two problems." 4 6   

 

Far from hampering corporate interests, regulatory agencies provide 

corporations with valuable benefits.  Though these agencies are often 'captured'  

by the corporations they are meant to regulate -- and in the best of 

circumstances have only a limited ability to enforce their own rules -- they 



 

 

 

155 

nonetheless serve to convince the public that their interests are being protected.  

The stamp of approval given by agencies like the EPA and FDA is like a public 

sedative, calming nerves that might be jittery over corporate involvement in 

nuclear technologies, pesticides, food additives, genetic engineering, and more.  

In this way, the American public's widespread opposition to biotech foods was 

largely defused by the FDA's endorsement of rBST -- Monsanto's genetically 

engineered hormone that increases milk production in cows -- despite lingering 

questions about its impact on human and animal health. 4 7  

 

Many years of government agency oversight of industrial practices have had a 

remarkably soporific effect on the American public.  When a researcher in New 

Hampshire went into a coma and died several months after spilling a single 

drop of a highly toxic mercury compound on her gloved hand, newspaper 

reports implied that the public was safe simply because the compound is in the 

hands of industry: 

 

"The general public doesn't have to worry about encountering 

dimethylmercury, [a chemistry professor] said.  While small amounts of 

it do occur naturally in rare cases, usually it has to be manufactured by a 

chemical company" (emphasis added). 

 

Despite this odd disclaimer, the article later notes that dimethylmercury was 

responsible for the death of two secretaries who worked near a warehouse 

where this compound was "improperly" stored.4 8   

 

Regu lations penalise small scale 

 



 

 

 

156 

As Helena Norberg-Hodge has argued, government regulations not only 

indirectly benefit the largest enterprises, they also penalise smaller ones.4 9   The 

cost of complying with mounting layers of regulations often becomes so onerous 

that it can represent a barrier to entry for all but the largest and most highly 

capitalized companies.  It is therefore not surprising that biotech giant 

Monsanto opposed a bill in the US Congress that would ha ve eased EPA 

regulations on genetically-engineered plants.  According to Henry Miller of the 

Hoover Institution, "Monsanto has had a policy of trying to keep regulatory 

barriers high" so other companies -- even large seed companies -- will find 

compliance too expensive to enter the market.5 0      

 

While many regulations are needed because of large-scale production, they 

burden small producers disproportionately.  Large-scale food-processing, for 

example, takes place in factory-like facilities; the foods usually contain 

numerous artificial preservatives, flavorings, and colorings, and even traces of 

pesticides; they are transported long distances, and often stored for weeks, 

months or even years before consumption.  Such foods do require substantial 

monitoring and regulating to ensure public health.  One consequence of 

America's increasingly mass-produced food supply, for example, is that 

salmonella cases have more than doubled in the past 20 years, and the Center 

for Disease Control warns that "industry consolidation and mass distribution of 

foods may lead to large outbreaks of food-borne disease".5 1    

 

But when the regulations imposed because of the hazards of mass-produced 

foods are applied to small-scale producers, it can be financially ruinous for 

them -- even though their products are often far safer, and are sold in face-to-

face transactions unseparated by layers of corporate anonymity.  Because of 



 

 

 

157 

European Commission food processing regulations, for instance, countless 

small-scale cheese producers -- whose traditional varieties have for centuries 

been made in home kitchens or cheese rooms attached to barns -- have been 

forced to give up their livelihoods rather than meet the exorbitant costs of 

installing stainless steel kitchens, tile floors, industrial pasteurisers, and other 

requirements for marketing according to EC rules.    

 

In the US, similar health rules hurt small producers while benefiting larger 

ones.  For example, the FDA is proposing that all apple cider be pasteurised, or 

else carry a label that warns consumers that the product "might contain 

harmful bacteria known to cause serious illness."  In the state of Vermont, 

where cider has never been linked to any illness, such a warning label would 

turn away so many consumers that most of the state's small cidermakers would 

be put out of business.  The two largest cider producers -- which account for 

80% of production -- already pasteurise their product and would benefit from 

the losses of their 45 smaller competitors.5 2  

 

Laini Fondiller, an organic goat cheese maker in Vermont, has been fighting the 

state Agriculture Department over similar rules.  Since no commercial 

pasteurisers are available for small-scale producers like her nine-goat 

operation, she pasteurises the milk by hand on a stove-top.  Although her 

methods are more than adequate, the department argued that she was a "food 

safety risk", and threatened to prohibit her from selling her cheeses unless she 

installed an industrial pasteuriser -- one costing more than her annual income 

from selling cheese.  Her angry response is worth quoting at length: 

 



 

 

 

158 

"You say I'm a food safety risk, when there are large megafarms dumping  

pesticides, herbicides, fungicides, in untold amounts, not only on their 

fields, but also on the workers in the fields.  I'm a food safety risk, when 

farmers can inject hormones to make the animals grow faster or make 

them milk more.  I'm a food safety risk and large industrial food 

processors slosh chemicals and germicides all over their equipment and 

then pump food through this equipment.  I'm a food safety risk when 

some farms have to change antibiotics every couple of months because of 

resistance.  We allow the production of genetically altered vegetables.... 

We can sterilize, irradiate, and pour tons of preservatives into our 

'foods', but I'm a food safety risk."5 3  

 

All of the processes she describes are needed in order to produce food on an 

industrial scale; it is likely that they are inherently unhealthy, and many layers 

of regulatory oversight are needed to ensure that they a re not even more so.  

When small-scale producers selling in a local market must abide by the same 

regulations, it can easily make it impossible for them to survive.   

 

Wendell Berry, among others, is aware of the role such regulations have played 

in the decline of rural economies.  As he points out, "Sanitation laws have 

almost invariably worked against the small producer, destroying his markets or 

prohibitively increasing the cost of production."5 4   As a result, 

 

"... nowhere now is there a market for minor produce:  a bucket of 

cream, a hen, a few dozen eggs.  One cannot sell milk from a few cows 

anymore; the law-required equipment is too expensive.  Those markets 

were done away with in the name of sanitation -- but, of course, to the 



 

 

 

159 

enrichment of the large producers.  We have always had to have 'a good 

reason' for doing away with small operators, and in modern times the 

good reason has often been sanitation, for which there is apparently no 

small or cheap technology.  Future historians will no doubt remark upon 

the inevitable association, with us, between sanitation and filthy lucre.  

And it is one of the miracles of science and hygiene that the germs that 

used to be in our food have been replaced by poisons."5 5  

 

Ironically, even America's grassroots organic foods movement -- which aims to 

remove the poisons in food -- is threatened by a regulatory system biased 

towards large scale.  Over the years, numerous standards have been adopted in 

different regions to define what practices are allowable on certified organic 

farms.  In the name of harmonising these varying local standards, the US 

Department of Agiculture (USDA) has released a 600-page proposed national 

organic foods standard.  Largely because the proposal would allow the organic 

label to go on foods that had been genetically engineered, irradiated, or grown 

with sewage sludge as fertiliser, the record 200,000 comments the USDA 

received were overwhelmingly negative.     

 

Although this firestorm has caused the USDA to back off temporarily, it is clear 

that the goal of a national organics standard served the needs of large-scale 

agribusinesses, which are seeking to exploit the rapidly growing demand for 

organic products, and which hope to market those products in the global 

economy.  If the organic standard in the US ever includes practices -- like 

genetic engineering and irradiation -- that are banned in other parts of the 

world, the 'race to the bottom' will begin, as Ronnie Cummins of the Pure Food 

Campaign points out: 



 

 

 

160 

 

"if the USDA gets away with this in the United States, their eventual 

strategy will be to use the legal hammer of the GATT World Trade 

Organization (WTO) to force European and other nations to lower their 

organic standards as well."5 6  

 

Redefining corporate limits 

 

Corporations have steadily colonised more and more spheres of life.  Through 

advertising and media control they manipulate individual tastes, desires, and 

opinions.  They own a large portion of the planet's resources, including the 

seeds on which much of the world's food supply depends.  They have patented 

new life forms, and claim ownership to segments of the electromagnetic 

spectrum.  They dominate agriculture, healthcare, education, communication, 

and entertainment throughout much of the world.  

 

Attempting to regulate each of those realms in turn has been a failing endeavor.  

This is especially so because corporations -- with their lobbyists, campaign 

contributions, think-tanks, and the 'revolving door' -- exert tremendous 

influence over the government bodies that would regulate them.   

 

Corporations -- many of which are larger and more powerful than national 

governments -- cannot be expected to wield responsibly the tremendous power 

they now have:  no matter how well-intentioned the people working within 

them may be, corporations themselves are inherently without conscience, and 

have no loyalty to anything beyond their own survival and growth.   

 



 

 

 

161 

Civil society can not much longer survive ever wider corporate intrusion into 

social and economic life, nor will nature tolerate continued industrial assaults 

on the biosphere.  Put simply, corporations have far exceeded what ought to be 

their limits.  It is time to define those limits and enforce them, with a clear 

understanding that the right and responsibility for doing so rests with citiz ens, 

not with the invisible hand of a supposedly infallible market.   

 

As Richard Grossman of the Program on Corporations, Law, and Democracy 

argues, 

 

"If we do not redefine corporations... we will continue to struggle against 

every corporate intrusion one at a time, just as we have been struggling 

against every industrial poison, toxic dump and lethal product one battle 

at a time."5 7  

 

Grossman is right in arguing that citizens must stand up and reclaim the rights 

that corporations have taken as their own.  But corporations have become so 

powerful and so mobile and have garnered so many legal protections that this 

path will not be easy.  Stripping corporations of the advantages mobility 

confers, for example, will require cross-border alliances among activists; only if 

pressure is simultaneously placed on governments everywhere will they be 

forced back to the negotiating table to rewrite the trade treaties that now give 

corporations such free rein. 

 

Since corporate power extends out of the boardrooms and into the offices of 

elected officials, heavy grassroots pressure will also be needed to compel 

officials to look after the interests of all their constituents, not just those who 



 

 

 

162 

make the largest campaign contributions or employ the slickest lobbyists.  

Strict laws prohibiting any corporate involvement in electoral processes would 

go a long way towards whittling down the power corporations now wield.  

 

As Grossman points out, few people will initially agree that "excercising 

soverign authority over all the institutions we create", including corporations, is 

"a practical way to think and act": 

 

"Why?  Because corporations will take away our jobs? Our food?... Our 

hospitals?  Because we don't know how to run our towns and cities and 

nations without global corporations?  Because they will run away to 

another state, to another country?...  Because it's too late to learn to act 

as sovereign people?... How long shall we the people, the sovereign 

people, stand hat in hand outside corporate boardrooms waiting to be 

told our fate?"5 8  

 

Without steps to dramatically limit the power of the corporate world, attempts 

to regulate their products and practices will be largely doomed to failure.   

 

In his book Earth in Mind, David Orr retells the story of an eighteenth-century 

"protopsychiatrist" who developed a means of distinguishing the sane from the 

insane:   

 

"Those to be diagnosed he locked in a room with water taps on one side 

and a supply of mops and buckets on the other.  He then turned on the 

taps and watched:  Those he considered mad ran for the mops and 

buckets; the sane walked over and turned off the taps."5 9  



 

 

 

163 

 

The taps have been running too long, and the mops and buckets can't keep up 

with the rising waters.  It's time to demonstrate our sanity, and turn off the 

taps. 



 

 

 

164 

 

 
                                                   
1  Kirkpatrick Sale, Human Scale, (New York: Coward, McCann and Geoghegan, 1980), p. 66 

2  Maria Green Cowles, "Setting the Agenda for a New Europe:  The ERT and EC 1992", Journal of 

Common Market Studies,, vol. 33, no. 4, Dec. 1995. 
3  "Big Biz to Run Small Countries?", Earth Island Journal, Winter 96-97, p. 12. 

4  David Korten, When Corporations Rule the World, (East Hartford, CT: Kumarian, 1995), p. 176.  

5  "Friends of the Earth-USA Fact Sheet on the OECD Multilateral Agreement on Investment". 

6  cited in Walden Bello, "IMF's Role in Asian Crisis", IFG News, no. 3, summer 1998 (International 

Forum on Globalization, 1555 Pacific Ave, San Francisco, CA 94109.)  
7   Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 51. 

8  Patrick J. Spain and James R. Talbot, eds., Hoover's Handbook of World Business 1995-1996 (Austin, 

TX: Reference Press, 1995), p. 276; Lucy Kellaway, "Brittan on the trail of aid to state companies", Daily 

Telegraph, Nov. 19, 1990. 
9  Lucy Kellaway, op. cit.; Chen, Roger, "France's Allegiance: To Things French, Like Hypocrisy", New 

York Times, Aug. 24, 1997, sect. E, p. 5. 
10  Patrick J. Spain and James R. Talbot, op. cit., p. 322.  

11  John Kenneth, Galbraith, "On the Economic Image of Corporate Enterprise", in Ralph Nader and Mark 

J. Green, eds., Corporate Power in America (New York: Grossman, 1973), pp. 3-4. 
12  Michael Lindermann, "Germany warned on subsidy culture", Financial Times, Sept. 6, 1996, p. 2; 

Wolfgang Münchau,"VW aid fight part of wider battle", Financial Times, Sept. 6, 1996, p. 2. 
13  Patrick J. Spain and James R. Talbot, eds., Hoover's Handbook of World Business 1995-1996, p. 98. 

14  Charles Gresser, "Banking on another bailout", Daily Telegraph, Sept. 28, 1996. 

15  Fifth Survey on State Aid, European Commission, cited in "State Aid: Worried Commission Proposes 

Stricter Rules", www.cc.cec/rapid/cgi/rapcgi.ksh?reslist 
16  Peter Montagnon, "Government action 'key to Tiger success'", Financial Times, Mar. 10, 1997, p. 4. 

17   Robert B. Reich, op. cit., p. 126. 

18   David E. Rosenbaum, "Corporate Welfare's New Enemies", New York Times, Feb. 2, 1997; Leslie 

Wayne, "Spreading Global Risk to American Taxpayers", New York Times, Sep. 20, 1998, sect. 3, p. 1. 
19  Martin Walker, "Air-raid warning for Europe", Guardian Weekly, July 13, 1997, p. 6. 

20  "The Hidden Entitlements", Citizens for Tax Justice,  cited by Corporate Welfare Project, Center for 

Study of Responsive Law, P.O. Box 19367, Washington, DC  20036.  

21 need reference 

22  Chris Brazier, "State of the World Report", New Internationalist, Jan-Feb 1997, p. 7. 

23  David Korten, op. cit., p. 126. 

24  Richard Barnet, "Lords of the Global Economy", The Nation, Dec. 19, 1994. 

25  David Korten, op. cit., p. 126. 

26  Black wood, p. ? 

27  David Korten, op. cit., p. 130; Black wood ? 

28  Black wood, p. ? 

29  Antony Barnett, "The Government's regional industrial policy has led to agencies spending too much 

time and money wooing foreign firms", The Observer, June 16, 1996. 
30  David Korten, op. cit., p. 129. 



 

 

 

165 

                                                                                                                                                       
31  ibid., pp. 175-6; National Bureau of Economic Research, cited in Glenn Frankel, "US Aided Tobacco 

Firms in Asia Conquest", Guardian Weekly, Dec. 1, 1996, p. 15 (article originally appeared in Washington 

Post). 

32  Black wood, p. 46. 

33  David E. Sanger, "World Trade Group Orders U.S. to Alter Clean Air Act", New York Times, Jan 18, 

1996, p. C1. 
34  John Burton, "'Unpatriotic' buyers lie low", Financial Times, Mar. 10, 1997, p. 7. 

35  Campbell Soup Company 1994 Annual Report, p. 6. 

36  Alan Thein Durning, "All Consuming Passion", Worldwatch, May-June 1993, p. 12. 

37  Peter Montague, "Is Regulation Possible?", The Ecologist, vol. 28, no. 2, Mar./Apr. 1998, pp. 59-61. 

38  cited in Rachel's Environment & Health Weekly, #613, Aug. 27, 1998. 

39  cited in David Korten, When Corporations Rule the World, (East Hartford, CT: Kumarian, 1995), p. 

159. 
40  Reuters wire service, "Occidental Offers to Meet with Indians", Apr. 26, 1997.  

41  Lester Brown, et al, eds., State of the World, 1997 (New York: W.W. Norton, 1997), p. 47. 

42  Steven F. Arnold, et al, "Synergistic Activation of Estrogen Receptor with Combinations of 

Environmental Chemicals," Science, vol. 272, June 7, 1996, pp. 1489-1492; cited in Dr. C.V. Howard, 

"Chemical Mixtures and Synergism... The End of Traditional Toxicology", University of Liverpool. 
43  ibid. 

44  Peter Montague, Rachel's Environment & Health Weekly,  Environmental Research Foundation, #538, 

Mar. 20, 1997. 
45  ibid. 

46  Wendell Berry, Unsettling of America, (San Francisco: Sierra Club, 1976), p. 62.  

47  Jennifer Ferrara, ---------------- (ecologist issue on Monsanto) 

48  Olivia F. Gentile, "Chemist Dies of Mercury Poisoning", Rutland Herald, June 10, 1997. 

49  Helena Norberg-Hodge, "Localization Steps", memo to the International Forum on Globalization, Feb. 

15, 1995; also "From Global Dependence to Local Interdependence", International Society for Ecology 

and Culture (ISEC), July 1995. 
50  cited in Rachel Burnstein, "Paid Protection", Mother Jones, Jan-Feb 1997, p. 42. 

51  "Report: Mass production promotes food poisoning",  Burlington Free Press, Dec. 10. 1997, p.1. 

52  Helen J. Simon, "Cider Pasteurization Urged:  Regulations could hurt small Vt. firms", Burlington Free 

Press, Aug. 27, p. 1. 
53  Laini Fondiller, "Laini and the Vermont Ag Department", Rural Vermont Report, Summer 1996, p. 19-

20. 
54  Wendell Berry, op. cit., p. 221. 

55  ibid., p. 41. 

56  Ronnie Cummins, "Whose Organic Standards? USDA Prepares for an 'Unfriendly Takeover' of the 

Natural Foods Industry", Pure Food Campaign, Little Marais, MN, July 9, 1997, alliance@MR.Net 
57  Richard Grossman, "Corporate Security: Monsanto's 'First Amendment' Right to Lie", Earth Island 

Journal, Winter 1996-7, p. 25. 
58  Richard Grossman, "The Relationship of Humans to Corporations", Program on Corporations, Law, 

and Democracy", Feb. 27, 1997. 
59  David Orr, Earth in Mind (Washington, DC: Island Press, 1994) p. 49. 



 

166 

 

166 

Ch apter 12:  Wh y Policymakers Promote th e Large and Global  

 

"Senators, if your vision of our agricultural future is one of corporate 

agribusinesses with no family farms, you must vote to give the Commissioner 

another term in office.  If on the other hand you envision a community of 

productive rural people and the beauty of place which is its natural offshoot, 

you cannot in good conscience confirm him.  You need to urge the governor to 

appoint someone with a basic concept of sustainability, who values the local  

economy, and who will encourage us to enrich the land rather than the 

corporations." 

 

Karen Shaw, Vermont dairy farmer, at confirmation hearing  

of Agriculture Commissioner Leon Graves1  

 

 

"...the Senate Agriculture Committee voted unanimously to give [Agriculture 

Commissioner] Graves another two years on the job." 

 

Burlington Free Press2  

 

 

 

The preceding sections have outlined some of the ways that policymakers are 

tailoring the places they govern -- their physical infrastructures, their 

educational and research institutions, their rules of trade, their laws and 

regulations -- to support the large and global instead of the small and local.  

Since the trend towards larger, more global scale is the product of human 



 

167 

 

167 

choices, it is neither inevitable nor irreversible.  But if our course is to be 

shifted, it's important to understand why policymakers so often make the 

choices they do. 

 

The most obvious reason has to do with money.  Global trade and economic 

concentration are the wellsprings of vast money flows, some of which can be 

easily diverted for personal gain by influential elites -- both within the 

government and outside it.  More localised economies, on the other hand, are 

composed of a multitude of widely dispersed small shops, farms, and local 

producers -- often with fewer monetised relationships -- and so present fewer 

opportunities for those in positions of power to add to their wealth.  In the 

South for example, dictators like Mobuto Sese Soko or Ferdinand Marcos were 

able to siphon off their millions only because there were billions flowing into 

the country for development projects and for direct foreign investment.   

 

The same was true in Indonesia, where almost every major domestic company 

was tied through complex financial webs to the family of former President 

Suharto.  Thirty years of Suharto's dictatorial rule -- which decimated 

Indonesia's forests, endangered its native plant and animal species, and 

devastated indigenous groups like the East Timorese, the Dayak, the Acehnese, 

and the Papua -- provided Suharto's family a fortune estimated at some $6.3 

billion.3 ,4   For such rulers, not only wealth, but power itself depends on money 

flows only the large and global can provide. 

 

Corruption is by no means limited to the least developed countries.  The over-

development and hyper-speculation that led to the 1997 meltdown of South 

Korea's economy was exacerbated by a system of bribery and politically 



 

168 

 

168 

motivated loans that earned one former president hundreds of millions of 

dollars in graft -- as well as a life sentence in prison before the inevitable 

pardon by his successor.5    In Mexico, former President Carlos Salinas de 

Gortari -- who championed NAFTA and once nurtured dreams of heading the 

WTO -- now lives in self-imposed exile while his imprisoned brother attempts to 

explain the source of the $110 million he stashed in Swiss bank accounts. 6    

 

Even the most developed countries have their fair share of corruption.  In the 

US, President Clinton's former Agriculture Secretary was indicted in 1997 on 

charges that he regularly accepted gifts and favors from executives of some of 

the big agribusiness companies regulated by his department. 7   Until recently, 

'bribery' was even considered a legitimate tax-deductible business expense in 

many European countries.   

 

One dollar, one vote 

 

In countries with 'free elections', it is unusual for money given to political 

leaders to go directly into their pockets; instead it goes into the bank accounts 

that fund their political campaigns.  Television advertising is now a prerequisite 

for victory at the polls in many countries, a development that not only limits 

political debate to simplistic soundbites and narrowly compartmentalised 

themes, but makes the electoral process so expensive that only those with access 

to vast sums of money can compete.  As a result the principle of 'one man, one 

vote' is rapidly giving way to 'one dollar, one vote'.  American oil entrepreneur 

Roger Tamraz, who contributed $300,000 to the Democratic National 

Committee in the hopes of getting Administration support for an oil project, 

succinctly expressed the new reality of money-driven democracy:  in testimony 



 

169 

 

169 

before Congress, he admitted that he doesn't bother to vote since election 

outcomes are ultimately decided by money, not by voters. 8    

 

While large corporations and their business elite are able to funnel the 

necessary funds to candidates friendly to their cause, representatives of the 

small and local are unable to match them.  It is no surprise, then, that even 

'democratically-elected' governments are so biased towards concentrated 

wealth. 

 

This trend has been growing for years in the United States, as demonstrated in 

the way campaign contributions go hand in hand with subsidies to the 

contributing corporations.  The US Public Interest Research Group, for 

example, recently reported that Congressional candidates received more than 

$89 million in contributions from various polluting industries between 1991 

and 1996; Congress in turn bestowed $19 billion in subsidies on those same 

industries over the same period -- a return of $213 for every dollar 'invested' in 

campaign donations.9    

 

The elected officials that are the recipients of corporate largesse are quick to 

point out that there is no quid pro quo: in other words, the granting of 

campaign contributions is not out-and-out bribery.  What is admitted, 

however, is that campaign donations give donors 'access' to public officials.  If 

an ordinary citizen telephones or writes an elected representative to offer an 

opinion on a critical issue, the message is unlikely to reach the official directly, 

and the response will probably be a computer-generated form letter.  On the 

other hand a major campaign contributor is all but guaranteed a personal 

reply, and can often arrange face-to-face meetings with the official.  The 



 

170 

 

170 

difference is significant, and is a measure of the way money is dividing the 

citizenry into two distinct and politically unequal classes.   

 

The wealthier of those two classes regularly use 'access' to bend public policy.  

In the wake of US Senate committee hearings on campaign finance abuse, 

Elizabeth Drew, author of Whatever It Takes, a book about the role of money in 

the 1996 elections, pointed out that 

 

"money can buy access, but the transaction doesn't stop there....  Access 

can lead to influence, which can lead to a policy result.  This can be an 

amendment that is pushed, a regulatory ruling, a contract, or special 

attention from a Cabinet officer."1 0    

 

It can also buy even more.  In North Carolina, a contractor seeking an 

appointment to the state Department of Transportation board contributed 

$30,000 to the governor's re-election campaign.  Failing to understand the 

'wink-and-a-nod' subtleties of modern corruption, he asked for his money back 

when he was passed by for a seat on the board.  Among his gripes was that 

someone else on the board "only gave $19,000". 1 1  

 

In another case, a legislative bill that would have scrapped major provisions of 

the Endangered Species Act turned out to have been written by an organisation 

representing timber, mining, ranching, and utility interests, including such 

companies as Chevron and the Kaiser Aluminum and Chemical Corporation.  

The industry-backed group provided the senator sponsoring the bill $34,000 in 

campaign contributions the previous year. 

 



 

171 

 

171 

Even where cash contributions are not involved, large and global firms now 

wield so much economic clout that political leaders ignore them at their own 

peril.  This lesson was ruthlessly driven home to the leaders of Asian economies 

following the region's late-1997 economic meltdown.  For a number of years 

South Korea, for example, resisted opening up its financial markets to foreign -

based TNCs.  Once the economic crisis hit and the nation needed billions of 

dollars to stave off collapse, Korea was ripe for blackmail.  Within days of the 

won's collapse, South Korea agreed to let transnational banks like Citibank buy 

up local banks, and allowed huge insurance corporations like New York Life to 

exploit local insurance markets. 

 

According to US Trade Representative Charlene Barshefsky, who negotiated the 

deal under the auspices of the WTO, 

 

"These negotiations have been going on for years, and we've had to try to 

wear down governments one at a time....  [I]n they end, they knew that 

they would compound their own problems if they... continue to close off 

parts of their markets to foreign investors."1 2  

 

This is not simply another case of the North riding roughshod over the South: 

the influence of huge, global corporations on sovereign governments is just as 

pervasive within the North.  In Europe, for example, the corporate CEOs that 

make up the ERT have almost unlimited access to the corridors of national and 

European power.  ERT Secretary-General Keith Richardson defined 'access' this 

way: 

 



 

172 

 

172 

"Access means being able to phone Helmut Kohl and recommend that he 

read a report.... Access also means John Major phoning... to thank the 

ERT for its viewpoints, or having lunch with [the] Swedish Prime 

Minister just prior to the Swedish decision to apply for EC 

membership".1 3  

 

While those advancing the corporate agenda have the ear of policymakers, 

those who speak for small businesses, small farmers, or the environment are not  

so fortunate.  As Ann Doherty and Olivier Hoedeman of ASEED have reported: 

 

"Eurogroup, a lobby group representing small businesses... has to wait 

weeks for an appointment with a civil servant, and the highly-regarded, 

Brussels-based European Environmental Bureau has mangaged to meet 

only once in two decades with the Commission President."1 4  

 

In the United States, access is similarly skewed towards moneyed interests.  

President Clinton's practice of 'renting' White House bedrooms in exchange for 

campaign contributions made tabloid headlines for a while, but the connection 

between big money and government policy is far more systemic.  When a large 

proportion of the economy depends on a few key industries, the principals who 

control those industries do not require a night in the Lincoln bedroom to make 

their needs known.  For instance, the arms industry still accounts f or 2.5 

percent of the US economy -- even after the end of the Cold War arms race -- 

giving the CEOs of Boeing and Lockheed significant leverage over government 

policy.1 5   Similarly, auto-related industries account for an estimated 20 percent 

of the American economy, giving oil companies and auto manufacturers even 

greater clout.1 6    



 

173 

 

173 

 

The way this influence is wielded was revealed in a letter sent to Bill Clinton by 

the heads of some 200 major US-based corporations, shortly before the Kyoto 

conference on global warming.  The letter warned the President against  

 

"premature agreements that will severely disadvantage the US 

economy...  The US must take care to avoid commitments that will cost 

US jobs, retard economic growth or damage US competitiveness. 1 7  

 

Thus, despite the clear evidence that industrial processes are altering the global 

climate and putting the health of the entire biosphere at risk, these CEOs 

recommended doing nothing -- unless, of course, it provides further fuel for the 

industrial engine: 

 

"... there is time to determine optimum strategies that are economically 

sound, comprehensive, market-based, and can be adjusted over time as 

new data and technologies become available.  For example, a policy of 

accelerated research and development efforts leading to breakthrough 

technologies..."1 8  

 

Signed by the heads of Exxon, Occidental Petroleum, Mobil, Chevron, Texaco, 

General Motors, Ford, Chrysler, Boeing, and scores of other corporations that 

profit from fossil fuel use, the letter is patently self -serving.  Nonetheless, 

economic dependency on these huge corporations leads political leaders to treat 

such corporate-friendly documents as though they were impeccably logical, 

impartial, and civic-minded.   

 



 

174 

 

174 

The near-term focus of electoral politics only exacerbates the problem:  if a 

policy might lead to an economic downturn or stock market slump in the short 

run, it can mean political suicide for any leader with the temerity to support it -

- even if the policy would have significant social, environmental, and economic 

benefits in the long term.  

 

Th e revolving door 

 

Appointees as well as elected officials are influenced by the corporate sector's 

wealth.  The 'revolving door' -- which leads in one direction to government 

positions and in the other direction to lucrative corporate jobs -- helps explain 

the policy bias in favor of the largest enterprises among their supposed 

regulators.  The intimate relationship between biotech corporation Monsanto 

and the the US government is not unusual.  Mickey Kantor, close a dvisor to 

President Clinton, later became Secretary of Commerce and later still US Trade 

Representative; today Mr. Kantor is on Monsanto's board of directors. 1 9    

Marcia Hale went from being an assistant to President Clinton to working for 

Monsanto in Europe; she is now slated to return for another stint in the 

government.2 0    The door between Monsanto and the Food and Drug 

Administration -- the agency responsible for overseeing many of the 

corporation's products -- has been spinning so fast it's difficult to keep track of 

all the comings and goings.  Margaret Miller, for a while Monsanto's chief 

researcher, later obtained a job with FDA reviewing research -- including her 

own.  Michael Taylor, a former staff attorney at Monsanto's law firm, later took 

over as FDA's policy chief and used his position to craft the labelling language 

for milk produced with Monsanto's rBGH. 2 1    And one prominent candidate for 



 

175 

 

175 

the next head of the FDA is Virginia Weldon, currently a Monsanto Vice 

President.2 2   

 

Worlds in common  

 

The revolving door between government and Big Business highlights the fact 

that more than purely economic differences distinguish ordinary citizens from 

those promoting the global economy.  Politicians and the business elite often 

come from similar backgrounds, have similar educations, and travel in similar 

social circles.  As a consequence, their worldviews -- invariably modern and 

industrial -- are closely allied.  It is therefore much easier for politicians to 

understand and promote policies based on economic growth, for example, than 

on the need for community or the intrinsic value of nature.  When other 

cultures are involved -- as when policies threaten the livelihoods of traditional 

villagers in the Third World -- the worldview gulf is all but unbridgeable.   

 

It is not only corporate executives and western politicians who share the 

worldview of industrialism.  China's communist leadership, for example, has 

long equated 'bigness' with 'greatness', a notion that any corporate CEO worth 

his salt would agree with.  When the Yangtze River was recently diverted to 

allow construction of the largest dam in the world, Chinese leaders at the 

riverside ceremonies revealed not only their pride in gigantic engineering 

projects, but also the belief -- common to capitalist and communist alike -- that 

size itself symbolises success.  Prime Minister Li Peng, the dam's chief 

promoter, thus claimed that diverting the river "demonstrates the greatness of 

the achievement of China's development," while Chinese President Jiang Zemin 



 

176 

 

176 

declared that it "vividly proves once again that Socialism is superior in 

organising people to do big jobs."2 3    

 

Th e secu rity of power  

 

Policy-makers and the world's elite are usually well-insulated from the 

problems created by their own policies.  Crime is largely eliminated from their 

gated and guarded communities, while hired gardeners ensure that 'nature' is 

represented by healthy trees, weed-free lawns, and opulent flower gardens.  It is 

unlikely that they will have to contend with a hazardous chemical site or a 

nuclear facility in their neighborhoods or near their children's schools.  The 

varied wastes from their consumer lifestyles are transported so efficiently to 

other parts of town (or the world) that it can easily seem that recycling has 

solved the problem of waste and pollution.  They may be aware of the hazards 

of chemical pesticides and additives in foods, but if so they can easily afford to 

eat more expensive organic foods, all the while celebrating the consumer 

'choice' that enables the less fortunate to eat cheaper, poisoned food.   

 

In some cases, the privileged livelihoods of the influential elite may literally 

depend on the suffering of others.  An entire multi-billion dollar industry has 

been built around cancer, for example, which creates respectable and lucrative 

niches for those seeking a high-tech cure for the cancer epidemic.  While this 

approach fits in well with the industrial paradigm, those seeking to eliminate 

the environmental causes of cancer -- and who thereby call into question many 

of the processes on which the entire industrial system depends -- are considered 

radical crackpots.  They must struggle for funding, and their voices often go 

unheard.  



 

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This is true in other fields as well.  As Wendell Berry points out with reg ard to 

agriculture,  

 

"To turn an agricultural problem over to the developers, promoters, and 

salesmen of industrial technology is not to ask for a solution; it is to ask 

for more industrial technology and for a bigger bureaucracy to handle 

the resulting problems of social upset, unemployment, ill health, urban 

sprawl, and overcrowding.  Whatever their claims to 'objectivity', these 

people will not examine the problem and apply the most fitting solution; 

they will reverse that procedure and define the problem to fit the solution 

in which their ambitions and their livelihoods have been invested.  They 

are thriving on the problem and so can have little interest in solving it." 2 4  

 

I ndu strial solu tions only 

 

As Berry suggests, the industrial worldview -- combined with training in the 

compartmentalised thinking that is a hallmark of modern education -- 

effectively limits choices to those that further the expansion of the industrial 

model.  This process is at work everywhere.  For instance in the United States, 

rates of teenage suicide have tripled since the 1950s; severe depression affects 

an estimated 5 percent of children between the ages of 5 and 12, and 10 percent 

of adolescents2 5 ; still more have been diagnosed with such emotional 

disturbances as hyperactivity and Attention Deficit Disorder.  If such problems 

are really so common among American children, something must be 

fundamentally amiss:  perhaps the sea of industrial chemicals in which they 

have spent their lives has disrupted vital fetal or childhood devel opment 



 

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processes; perhaps the breakdown of the extended (and even the nuclear) 

family has left an emotional void that television and computer games cannot 

fill; perhaps the flesh-and-blood role models that communities once provided 

have been supplanted by idealized media images that no child can live up to.   

 

Many such explanations come to mind, but these lines of inquiry might call into 

question the industrial system itself, and so they are rarely pursued with vigor.  

Instead an industrial solution -- in this case behaviour-altering drugs -- is 

sought, promoted, and widely applied.  Ritalin is now taken by an estimated 

1.25 million school-age boys to 'control' their hyperactivity. 2 6   Selective 

serotonin reuptake inhibitors like Prozac, Zoloft, and Paxil have been 

prescribed for 600,000 more children to 'combat' their depression. 2 7    

 

Pharmaceutical corporations are now seeking to formalise the government's 

tacit approval for the childhood use of such anti-depressants, though they have 

never been fully tested in children; this would pave the way for direct marketing 

campaigns to expand their use even further.   

 

All this is quite alarming when seen from the perspective of overall societal 

health.  But when viewed from the industrial model's narrow focus on the 

health of the corporations that dominate economic life, it is seen as "a positive", 

in the words of one market analyst: "The [pharmaceutical] companies are 

looking for expanded markets", he explained, revealing how completely the 

industrial system has reduced even children to just another marketing niche. 2 8   

 

In a similar way even overpopulation must have a solution that emanates from 

the industrial model -- despite the fact that industrialisation is itself a root 



 

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cause of the problem.  Almost every policymaker believes that further industrial 

development (often sugar-coated with western-style 'education' for women) will 

end the Third World's population explosion, based on the observation that 

population growth in industrialised countries slowed or stopped once certain 

levels of affluence were reached.  The South is therefore being encouraged to 

continue developing along the industrial-consumerist track, in the belief that 

population growth will stabilize when consumption levels rise sufficiently.  

 

Since this theory takes the industrial era as the baseline, the role of 

modernisation in initiating population explosions in the first place is 

completely ignored.  As Edward Goldsmith points out,  

 

"the experience has been the same everywhere.  As soon as a traditional 

society embarks on the path of economic development, its population 

simply explodes.  It happened in Britain, where the population was 

under 8 million when the Industrial Revolution began, and where it 

increased by more than 7 times before it eventually stabilized.  It is 

happening today wherever economic development occurs..."2 9  

 

Wedded to the notion that viable societies must be based on the industrial 

model, policymakers have no qualms about hooking the planet's few remaining 

traditional societies into the global industrial system.  If such cultures survive 

the transition, their populations, too, will explode, but policymakers will have a 

ready solution: more development.      

 

The 'development-as-solution' theory also ignores the fact that overpopulation 

is primarily a problem because the planet has a limited capacity to absorb the 



 

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impact of human activities -- an impact that multiplies exponentially with 

rising levels of consumption.  One might ask which is the bigger problem: that 

the world population has doubled since 1950, or that the number of cars -- and 

everything that goes with them -- has increased tenfold in the same period?3 0   

Stabilising the world's population by encouraging more industrial development 

is like 'solving' the problem of overfishing by building more and bigger trawlers.  

This absurd population policy can only seem rational when viewed through the 

fragmented lens of the industrial worldview. 

 

Th e sway of dead economists 

   

When government leaders promote the large and global, they have the 

dominant economic ideology on their side.  Within that ideological framework, 

economic growth and increasing levels of consumption are the sine qua non of 

societal success, and increased 'efficiency' is the means of achieving it.  If a 

reason is needed to promote larger scale and higher technology, Adam Smith 

and his famous pin factory are always available.  Smith's Wealth of Nations 

extolled the virtues of the division of labour at the dawn of the industrial era, 

and posited that the bigger the production unit, the more specialised -- and 

therefore more efficient -- its labour could become.  Since large production 

units required large markets, they too became synonymous with increased 

efficiency. 

 

However valid Smith's theories may have been, they break down when the scale 

at which they are applied is as large as it is today.  There are limits past which 

'efficiency' no longer means providing needed goods with less effort, but means 

replacing millions of people with automated machines to produce goods for 



 

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which there is so little real need that a vast brainwashing apparatus -- the 

advertising industry -- is required.  Smith also undervalued the importance of 

meaningful work, which is often as important to people as the products the 

industrial machine churns out, and which many of today's specialised and 

numbingly repetitive jobs fail to provide.  For Smith, 'efficiency' largely meant 

economizing on human labour, but he could not have forseen that 200 years 

later the industrial system would have consumed so much of the earth's 

resources and regenerative capacities that the need would be to slow 

production and consumption, not to increase it indefinitely.  

 

Comparative advantage   

 

Policymakers today also lean heavily on David Ricardo's 18th century conc ept of 

comparative advantage, which, at its simplest, means that if a nation 

specialises in those goods which are cheaper to produce compared with other 

products, and then trades with countries that likewise specialise their 

production, both countries will be able to consume more than if they did not 

trade.  In Ricardo's day, cheaper relative production costs depended on such 

natural attributes as climate and local resources, as well as locally-available 

capital, technologies, and skills. 

 

Comparative advantage has been taken up by promoters of the global economy 

as a fundamental justification for free trade.  Unfortunately, they overlook 

important assumptions underlying the model.  According to economist Herman 

Daly, 

 



 

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"The problem is not the logic of [comparative advantage].  It is the 

relevance of Ricardo's critical but often forgotten asusmption that 

factors of production (especially capital) are internationally immobile.  

In today's world, where billions of dollars can be transferred between 

nations at the speed of light, that essential condition is not met.  

Moreover, free traders encourage such foreign investment as a 

development strategy.  In short, the free traders are using an argument 

that hinges on the impermeability of national boundaries to capita l to 

support a policy aimed at making those same boundaries increasingly 

permeable to both capital and goods!"3 1  

 

Daly has described other shortcomings of the faith in comparative advantage.  

For trade to increase efficiency, its costs must be internalized -- another 

condition which is not met.  Trade clearly depends on transport, for example, 

and most transport costs are externalized:  petroleum dependency requires tax 

breaks, military expenditures, government research funding, and significant 

externalized health and environmental costs, not to mention a huge publicly 

financed transport infrastructure.  In fact, if economic efficiency is the goal, 

then today's highly subsidized trade is actually highly inefficient.  As Daly 

facetiously but accurately points out, 

 

"Americans import Danish sugar cookies, and Danes import American 

sugar cookies.  Exchanging recipes would surely be more efficient." 3 2  

 

While Ricardo's economic argument is held aloft by the promoters of the global 

economy as though it were the holy grail itself, warnings from equally 



 

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prominent economists on the same subject are largely ignored.  John Maynard 

Keynes, for example, wrote: 

 

"I sympathize... with those would would minimize, rather than those 

who would maximize, economic entanglement between nations.  Ideas, 

knowledge, art, hospitality, travel -- these are the things which should of 

their nature be international.  But let goods be homespun whenever it is 

reasonably and conveniently possible; and, above all, let finance be 

primarily national."3 3  

 

This warning is faithfully ignored by mainstream economists, even when the 

real world invades the rarified atmosphere of economic theory.  For example 

the International Monetary Fund -- with over 1,000 PhD economists on the 

payroll -- gave the governments of Thailand and South Korea high marks for 

"sound macroeconomic management" in the months before the collapse of their 

economies.  In the aftermath, the IMF approved a multi-billion dollar bailout 

of the foreign banks that had flooded the countries with bad loans; to 

recommend limiting the economic "entanglement between nations" that was at 

the root of the problem would have made far more sense. 3 4  

 

I gnored costs 

 

The externalized costs that call into question the 'efficiency' of international 

trade also apply to the entire industrial model.  Planners and decision makers 

often point to rising levels of Gross Domestic Product (GDP) as proof of the 

success of their policies, while failing to recognise that GDP is woefully 



 

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inadequate as a measure of societal well-being.  Redefining Progress, a group 

seeking to replace GDP with a more realistic set of indicators, argues that  

 

"The GDP is simply a gross measure of market activity, of money 

changing hands. It makes no distinction whatsoever between the 

desirable and the undesirable, or costs and gain.  On top of that, it looks 

only at the portion of reality that economists choose to acknowledge -- 

the part involved in monetary transactions....  This [leaves] out two large 

realms:  the functions of family and community on the one hand, and the 

natural habitat on the other....  During this century, those assumptions 

have become increasingly untenable.  It is not accidental that both the 

habitat and the social structure have suffered severe erosion in recent 

years:  these are precisely the realms that eighteenth- and nineteenth-

century assumptions precluded from the reckoning of national well-

being -- in capitalist and socialist economies alike."3 5  

 

When the services provided by the biosphere are excluded from the acc ounts, it 

becomes easier to see why corporate arguments against vigorous action on 

global climate change are accepted by technosphere-bound policy-makers.  The 

economic 'contribution' made by a coal-fired power plant or the long-distance 

transport of goods enters the accounts, while the far more important but non-

monetized contributions made by a healthy ecosystem are ignored.   

 

The industrial worldview is so self-contained that even when monetary values 

are placed on the costs of climate change, these can be interpreted as new and 

profitable niches for high-tech commercial enterprises to exploit -- and which 

will in turn add to GDP.  Within the industrial model the possibility of solving 



 

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problems at their root by 'turning off the taps' is less desirable than purchasing 

more mops and buckets.  

 

Not only environmental costs are excluded from the economic reckoning, but 

social costs as well.  While wealth, narrowly measured and unevenly 

distributed, has increased in the industrialised world, the social price h as been 

high.  Robert Reich observes that, 

 

"For all its riches, the United States now has a greater percentage of its 

citizens in prison or on the streets, and more neglected children, than 

any other advanced nation."3 6  

 

As further measures of social breakdown, Reich could have mentioned the 

proportion of older people whose final years are spent useless and neglected in 

nursing facilities or 'retirement homes' rather than with their families; the rates 

of bulemia and anorexia among young women; the number of families that are 

headed by a single-parent; the rising rates of teen-age suicide; and dozens 

more. 

 

The US may be worst among 'advanced nations', but it is not alone.  In Japan's 

highly competitive society, businessmen are so renowned for their over-

dedication to work that certain stress-related illnesses have been named after 

them.  In England and Finland, countries whose cities were until recently 

relatively crime-free and non-violent, children under the age of ten were 

recently charged with killing other children.  Even in remote Greenland, where 

the standard of living has risen to a par with the industrialised world in the past 

40 years, the price has been high:  alcoholism and drug abuse are now 



 

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186 

rampant, and frequent waves of violence strike the isla nd's villages; one in 

seven males commit suicide, usually in their teens or twenties. 3 7    

 

As the Third World 'develops', people there, too, are falling victim to the same 

forces:  according to health activists in India and Africa, there is a direct link 

between the arrival of MTV and other satellite stations that spread Western 

culture, and accelerating rates of depression, suicide, violence, and drug abuse 

among young people.3 8  

 

Such problems were quite rare in traditional cultures, as anthropologists have 

consistently noted.  After spending several years in Ladakh's pre-development 

culture, for example, Helena Norberg-Hodge concluded that she "had never 

met people who seem so healthy emotionally, so secure."3 9 .  Another researcher 

tried to study depression among pre-industrial peoples in New Guinea, but 

simply couldn't find any.4 0     

 

The appearance of serious emotional problems among people within or 

suddenly exposed to the industrial model can be explained in part by the 

psychological pressures to live up to idealized standards of wealth, beauty, and 

lifestyle.  There may be even deeper reasons.  As biologist Hugh Iltis has pointed  

out,  

 

"Corn and cows, concrete and cars are not enough to sustain and 

empower a human psyche that until only a few generations a go lived in 

daily contact with a variety of plants and animals, a psyche that, 

winnowed and sifted by natural selection, is genetically programmed to 

respond positively to nature and its patterns.  By destroying so much of 



 

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187 

the natural environment, we humans are now destroying crucial parts of 

our own psychological as well as physical habitat.... [I]t is a gloomy 

picture indeed."4 1  

 

Needless to say, classical economics has no meaningful way to account for such 

psychological costs.  Instead, it will add to GDP the money spent on mood-

enhancing prescription drugs, therapeutic counseling, and drug abuse 

rehabilitation, and will count the addition as a sign of progress.  

 

Losing democracy 

 

Classical economics also has no means to measure the undermining of 

democratic processes, another symptom of the growing scale of the economy.  

In many small-scale societies -- even those whose systems of governance are not 

'democratic' in the narrow sense of regular, secret-ballot elections -- people had 

a significant degree of control over their own lives and their own community.   

Helena Norberg-Hodge described this traditional pattern in Ladakh, and the 

changes brought when the region was hooked into much larger economies:  

 

"In the decentralised village-scale economy, individuals had a real 

influence on the important decisions affecting them.  They depended on 

people they knew, and on local resources they controlled themselves.  

Nowadays, as they are drawn ever more tightly into the socio-economic 

structure of India, each individual becomes just one of 800 million; as 

part of the global economy, one of over 5 billion.  Their influence over the 

political and economic forces that affect them is being so reduced that 

they are essentially powerless."4 2  



 

188 

 

188 

 

Today, even those modern systems of governance described as 'democratic' are 

being subverted by the increased scale of economies and the businesses that 

dominate them.  When the campaign contributions and lobbying arms of huge 

businesses determine public policy, is this really democracy?  When the WTO -- 

comprised of unelected bureaucrats meeting secretly in Brussels -- can overturn 

national and local environmental, health, and labour standards, is the will of 

sovereign people really being represented?  

 

Adam Smith, contemplating the efficiency of an early pin factory, could not 

have forseen a world in which businesses like General Motors and Mitsubishi 

dwarf the economies of entire nations.  But the impact of large businesses on 

political processes is not the province of classical economics.  In that discipline, 

over-large businesses are primarily a problem because they can exert too much 

influence on markets, which require perfect competition to function properly.  

Thus, the only 'acceptable' reason for intervening in the growing scale of 

businesses is to limit their monopoly power, not their impact on democratic 

processes.  While anti-trust statutes were occasionally used to limit the scale of 

certain businesses, economic globalisation has largely removed even that 

limited rationale: today the assumption is that large scale is required of 

businesses competing globally.   

 

The rapid expansion and spread of the industrial model has many other costs as 

well.  But the only way any of these enters the economic calculus is when the 

industrial system finds a commercially viable 'solution'.  The widespread 

pollution of air and water, for example, appear as lucrative niches for 

companies selling air filters and bottled water.  If crime is up, so are revenues 



 

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189 

for prison construction and private security firms and companies selling 

burglar alarms and anti-theft devices -- all of which add to economic growth.  

Depression in the United States may be an increasingly serious problem, but 

the Prozac 'solution' adds $1.7 billion to the nation's GDP. 4 3   The cancer 

industry is such a large part of the economy of industrialised countries -- 

providing commercial niches in research, drug development and marketing, 

hospitals and clinics, self-help books, non-profit agencies, and more -- that 

preventing it could be economically disastrous; 'cures', on the other hand, 

would generate immense sales and create an entire new profit center for the 

drug industry, and would be a boon to the economy.  

 

Given the way economic accounting is everywhere conducted, it is no wonder 

government leaders are so unanimous in the policies they promote.  While 

policymakers are mesmerized by the upward trajectory of GDP, a more 

accurate set of economic indicators developed by Redefining Progress -- one 

that separates losses from gains, accounts for the depletion of natural resources 

as a drawing down of capital, and accounts for non-monetized parts of the 

economy -- shows that real economic welfare has been declining for decades.     

 

A different fu tu re 

 

This special edition of The Ecologist has described some of the ways that public 

policies consistently aim towards the large and global, and has hinted at ways 

the small and local might be supported instead.  Many of the steps toward 

smaller scale can seem tiny and insignificant: when massive government 

bureaucracies, for example, work hand-in-hand with powerful corporations to 

build multi-billion dollar transport infrastructures suited to international 



 

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190 

trade, the possibility of replacing them with bicycle paths or animal power 

seems absurdly far-fetched.  In isolation, such steps will always be inadequate 

to stop the momentum of the industrial juggernaut.   

 

The problem is that modern societies are systemically headed towards larger 

scale and economic globalisation; small, localised alternatives in one area of life 

or in one part of the world simply cannot flourish if every other part of the 

system continues its destructive course.  Just as the sustainability of indigenous 

cultures within their own ecosystems offers them little protection against the 

global rapaciousness of industrialism, even the best-conceived step towards 

localisation is unlikely to survive if simultaneous steps are not taken on many 

other levels, in many other parts of the world.    

 

Seen in the context of coordinated efforts to shift current policy, however, such 

small local steps can take on a much larger significance.  If groups from the 

grassroots to the international level can work together to compel governments 

to renegotiate their trade treaties, then communities will be better able to 

define themselves in location-specific ways that lead toward sustainability and 

equity, and will have the opportunity to support themselves without depending 

on global corporations.  If limits can be set beyond which corporations cannot 

go, their rape of the environment may cease, and ecosystems will have a chance 

to heal.  If corporations are stripped of rights they should not have, then their 

corrosive influence on political life can be eliminated, and the constant din of 

commercialism can be quieted.    

 

As stated at the outset, bringing about such changes will mean overcoming 

powerful vested interests, and will require fundamentally rethinking the 



 

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191 

worldview of industrialism.  This may seem a depressingly daunting task, 

especially since those promoting corporate globalism have so much entrenched 

power.  But the industrial juggernaut threatens everyone: not even the 

cloistered, gated communities of the rich can shield them forever from the 

impact of a degraded biosphere or from social collapse.  

 

Time is too short, however, to wait for this awareness to reach the elites of the 

world.  Halting the juggernaut will instead depend upon those most affected by 

it today: family farmers, small producers and shopkeepers, indigenous people, 

the poor and dispossesed, and people whose affinity for the natural world is still  

strong.  Each of these groups is under attack in varying ways and to varying 

degrees, but for all of them the source is the same: an industrial system that has 

grown so large that it is no longer compatible with life.  Alliances between such 

groups will be needed, since separately they have little hope of changing the 

trajectory of the entire system.   

 

Unfortunately, these goups often fail to see their commonality of interest, and 

frequently see themselves as competing for a larger share of the industrial pie.  

But long term solutions will not be found by dividing up the industrial pie 

differently -- nor by enlarging it, nor by tinkering with its edges.  The problem is 

with the industrial pie itself, and new recipes must be tried.   

 

Steven Gorelick is the US Program Director of the International Society for 

Ecology and Culture (ISEC), and teaches Economics at Sterling College, in 

Craftsbury, Vermont.  He is the co-director of the documentary film The 

Economics of Happiness (ISEC, 2011), author of Small is Beautiful, Big is 

Subsidized (ISEC, 1998), and co-author of Bringing the Food Economy Home: 



 

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192 

Local Alternatives to Global Agribusiness (Kumarian Press, 2002).  He lives 

with his wife and two children on a small organic farm in South Walden, 

Vermont. 
                                                   
1  Karen Shaw, testimony before the Senate Agriculture Committee, State of Vermont, Apr. 25, 1996  

2  Jeffrey Good, "After Criticism, Panel OKs Graves Term", Burlington Free Press, May 1, 1997, p. 1. 

3  Barbara Crossette, "The 21st Century Belongs to...", New York Times, Oct. 19, 1997, sect. 4, p. 3. 

4  George Aditjondro, "Dictators United: The Suharto-SLOEC Business Connection", Multinational 

Monitor, vol. 18, no. 9, Sept. 1997, p. 11. 
5  Seth Faison, "One Korean Certainty: No more Business as Usual", The New York Times, Jan 4, 1998, 

sect. 4, p. 4. 
6  Geri Smith,"Catching Up with Carlos Salinas", Business Week, July 15, 1996, pp. 44-46; Geri Smith 

"New Revelations -- And New Pressure on Zedillo", Business Week, July 15, 1996, p. 46. 
7  Stephen Labaton, "Agriculture Chief in '93-'94 Cabinet is Indicted by US", New York Times, Aug. 28, 

1997, sect. A, p. 1. 
8  Hitchens, Christopher, "In the Pipline", The Nation, Oct. 13, 1997, p. 9. 

9  "Feeding at the Trough", US Public Interest Research Group, Apr. 15, 1997.  

10  Jill Abramson, "Money Buys a Lot More Than Access", New York Times, Nov. 9, 1997, sect. 4, p. 4. 

11  Pat Arnow, "No Money Back Guarantee", In These Times, Nov. 23, 1997, p. 6. 

12  David E. Sanger, "Asia's Surrender", New York Times, Dec. 14, 1997, pp. 1, 12. 

13  cited in Ann Doherty and Olivier Hoedeman, "Misshapen Europe: The European Round Table of 

Industrialists", The Ecologist, vol. 24, no. 4, July/Aug 1994, p. 135. 
14  ibid., p. 136. 

15  Martin Walker, "Air-raid warning for Europe", Guardian Weekly, July 13, 1997, p. 6. 

16  Jane Holtz Kay, Asphalt Nation, (New York: Crown, 1997), p. 123. 

17  Letter to President Clinton, signed by Lee F. Raymond, CEO of Exxon, et al.  

18  ibid. 

19  Burrows, Beth, "Government Workers Go Biotech", The Edmonds Institute, 20319-92nd Avenue 

West, Edmonds, Washington, USA 98020 
20  Al Kamens, "Clinton Assistant Going Private", Washington Post, Apr. 21, 1997. 

21  "Hormones in Milk: No Right to Know", Rachel's Environment & Health Weekly,#381, Mar. 17, 1994; 

Paige St. John, "GAO finds no impropriety in approval of milk hormone," The Detroit News, Oct. 30, 

1994. 
22  Beth Burrows, personal communication. 

23  "Gigantism on the Yangtze", New York Times, Nov. 15, 1997 

24  Wendell Berry, The Unsettling of America, p. 219. 

25  Mary Crowley, "Do Kids Need Prozac?", Newsweek, Oct. 20, 1997, pp. 73-4. 

26  Kristen Leutwyler, "Paying Attention", Scientific American, Aug, 1996, p. 12;  "Resident Populations 

by Age and State, 1995", Statistical Abstract of the United States , (Washington, DC: Bureau of the 

Census, 1996), p. 33.  
27  Barbara Strauch, "Use of Antidpression Medicine for Young Patients Has Soared: To Bolster Market, 

Makers Seek F.D.A. Sanction", New York Times, Aug. 10, 1997, sect. A, p. 1, 24. 
28  Barbara Strauch, "op. cit. 

29  Edward Goldsmith, "Development Fallacies", in The Future of Progress, Norberg-Hodge et al, eds. 

(Totnes, UK:  Green Books, 1995), p. 74. 



 

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193 

                                                                                                                                                       
30  Lester Brown et al, eds., Vital Signs 1997, (New York:  W.W. Norton, 1997), p. 74. 

31  Herman Daly, "The Perils of Free Trade", Scientific American, Nov. 1993, p. 51. 

32  ibid. 

33  ibid., p. 50. 

34  David E. Sanger, "New World Audit: Fail-Safe Stategies in a Market Era", New York Times, Jan 4, 

1998, sect. 4, p. 1. 
35  Clifford Cobb, Ted Halstead, and Jonathan Rowe, "If the GDP Is Up, Why Is America Down?", 

Atlantic Monthly, Oct. 95, pp. 60-62. 
36  Robert Reich, "For Richer, for Poorer", New York Times Book Review , July 6, 1997, p. 11. 

37  New York Times, Sept. 17, 1995, p. 6. 

38  New York Times, Sept. 24, 1995, international section, p. 5. 

39  Helena Norberg-Hodge, Ancient Futures: Learning from Ladakh (San Francisco: Sierra Club, 1991), p. 

85. 
40  Time magazine, Aug. 28, 1995, p. 53 

41  Hugh H. Iltis, "Serendipity in the Exploration of Biodiversity: What Good Are Weedy Tomatoes", in 

Wilson, E.O., ed., Biodiversity (Washington, DC: National Academy Press, 1988), p. 99.  
42  Helena Norberg-Hodge, "Ancient Futures", in Chiras, D., ed. Voices for the Earth: Vital Ideas from 

America's Best Environmental Books, (Boulder, CO: Johnson Books, 1995). 
43  Barbara Strauch, op. cit.