Empires of Profit - an insider's view of multinationals

Ralph Johansen michele at maui.net
Mon Feb 3 13:30:20 MST 2003


More on local matters - about the friendly face, for instance, of HC&S and
A&B

<You may not care about your friendly local multinational, but as Trotsky
said about foreign policy, it cares about you.>

Fwd by Chris Burford:

Empires of Profit by Daniel Litvin

Christopher Hope's review gives quite a lot of detail about this book on
multinationals "at work and at war". Litvin was an insider working for Rio
Tinto.
http://books.guardian.co.uk/reviews/politicsphilosophyandsociety/0,6121,8863
65,00.html

Hope concedes that Litvin accepts that new multinationals cannot really be
"nice" . He ends:

>There is something fundamentally scary about large corporations practising
>moral virtue - it requires a degree of adjustment that would make an
>accountant blush. Happily no amount of CSR [Corporate Social
>Responsibility] can spoil a good story and Empires of Profit is just that:
>hair-raising accounts of greed, megalomania, conspiracy, coups and armed
>robbery played out by godlike forces. Best take a look, because the new
>giants are not going away. You may not care about your friendly local
>multinational, but as Trotsky said about foreign policy, it cares about
you.


Chris Burford

London

Politics, philosophy and society
Bad company

Greed, megalomania, conspiracy and coups - David Litvin gives an insider's
view of multinationals in Empires of Profit

Christopher Hope
Saturday February 1, 2003
The Guardian

Empires of Profit: Commerce, Conquest and Corporate Responsibility
by Daniel Litvin
340pp, Texere, £18.99
Daniel Litvin had the fine idea of studying multinationals at work and at
war. For a long while the two activities seemed almost interchangeable, and
it was never a pretty sight. Do multinationals, must they, whether they mean
to or not, sooner or later rip off the locals, wreck the countryside and
mess around with politics?

Litvin is well suited to taking a close look at the way these corporations
built up their critical mass, got really heavy - then rolled over whoever
got in the way. He served one of the most notable of these rolling
asset-strippers, Rio Tinto plc, and seems shy about it, although I don't
know why. After all, it is best to read war reports by someone who has seen
action.

Why is it, asks Litvin, that companies which swear they eschew politics and
devote themselves entirely to profit, invariably end up mired in local
politics? His answer seems to be the same for multinationals old and new:
because they can't help themselves. Because with loot comes power and that's
the real turn-on, the true primary ache. The people who run the
mega-corporations secretly dream of running the world. Whether the "Company"
arrives bearing glass beads or Bibles, maxim guns or free software, the
giants on your doorstep tend to act in the same way. Too big, too rich and
too blind. All they can do is to keep promising, like old lags, to go
straight; or to camouflage themselves as friends of the Earth or born-again
greens.

It seems to me that multinationals may be divided into hard and soft -
rather like porn. The old, hard-core transnational traders liked their
profits raw. The British East India Company is the model later corporations
grew to resemble. Litvin shows that the early British traders in India in
the 18th and 19th centuries point up interwoven patterns of profits,
politics, theft and self-deception that characterise big business abroad.
The "Company", and the conscientious rogues who served it, went after
whatever wasn't nailed down: whatever they could ship, sell, barter or
purloin was fair game. Together with the political elite, the Mughal
emperors who ran India, they conspired, without pause or apology, to make
politics pay. This was seen as good and healthy; eventually it was even
something sacred. Corruption, peddling influence, the feathering of nests by
local political elites and a steady build-up of military strength - in the
name of progress and a better life for all - became a useful alibi, a nice
little earner and a powerful new creed whose sacred music was the ringing
till.

It made British merchants in India rich; it also made them unbearable to
their own people - and doubly so to their unwilling hosts. When Clive of
India, who turned the East India Company into a conquering power, found
himself charged with corruption by a parliamentary subcommittee, he could
not contain his exasperation. Did the committee not realise where he'd been
? There he was - in India - surrounded by heaps of gold and hills of jewels.
If he had deigned to take a sliver or two of the loot on offer, he simply
could not see the problem: "I stand astonished at my own moderation."

John Stuart Mill thought the British East India Company one of the most
"beneficent" creations known to mankind, which is an early reminder of how
even the best minds, in the presence of rampant riches, come up with the
strangest notions. Cecil John Rhodes also fascinated and seduced the
respectable renegades who bought his shares, and the toll he took on
southern Africa, in blood and treasure, is still being felt today. Rhodes
helped to engineer the Boer war - a battle waged, it was said, for freedom
and democracy, but in truth fought to make the gold and diamond fields of
South Africa safe for British business. Rhodes collared the gold market,
cornered the diamond fields and the company he founded, De Beers, still
monopolises the gem trade.

His British South Africa Company was the forerunner of multinationals that
have taken stakes in Africa, companies backed by the hunter investors Conrad
saw in the Congo and described as "sordid buccaneers". Their aim was "To
tear treasure out of the bowels of the land... with no more moral purpose at
the back of it than there is in burglars breaking into a safe".

What Litvin has done is to point out how much these corporations resembled
each other. Rhodes pushed on across the Limpopo into what became Rhodesia -
the first known example of a privately owned company pretending to be a
country.

It was to be a method that the United Fruit Company emulated in central
America. Such predatory patterns have repercussions: the United Fruit
Company backed a coup in Guatemala that set the country adrift on a sea of
murderous civil strife that lasted half a century and is still not resolved.
Rhodes laid the ground for the rage that stalks Zimbabwe where white farmers
are being attacked and chased off their farms.

Today the new multinationals have gone soft-core: they deal not in opium but
sports shoes, satellite television and big oil. McDonald's in India, Rupert
Murdoch in China, Aramco oil in the Gulf - they talk principles and
democracy; no hard-core commerce for them, just safe business practised with
consenting consumers. De Beers has said no to blood diamonds. Royal Dutch
Shell has been haunted by mistakes that may have contributed to the judicial
murder of the writer, Ken Saro-Wiwa. "The storm over Saro-Wiwa forced a
fundamental rethink by the company of its approach to social and
environmental issues across the world, not just in Nigeria," writes Litvin.

New multinationals are nice. They put principles before profit. Toppling
governments, wrecking the countryside, relieving the locals of their livings
are no longer desirable or necessary. Nike's founder has even sought to
dispel the grubby ghosts of "hard" business. Nike is not "just a business,
but something more". Nike, in a word, is nice.

Litvin writes quietly, unsensationally and he knows that nothing in this
world is very nice. If anything, he seems too judicious: he aims to
understand how oil companies and mining houses have an impact on the people
among whom they live and who they employ, misunderstand and, often, deceive.

He believes the old lags can't ever really go straight but he is convinced
they can be helped. He thinks someone may start filing the sharks' teeth,
softening the killer instinct. He writes warmly of "compliance" and those
who oversee it, a new army of corporate monitors. He urges the new moguls,
camped in foreign lands, to respect local feelings, to understand why people
may wish to kill them. This is known in the board rooms as Corporate Social
Responsibility, or CSR.

There is something fundamentally scary about large corporations practising
moral virtue - it requires a degree of adjustment that would make an
accountant blush. Happily no amount of CSR can spoil a good story and
Empires of Profit is just that: hair-raising accounts of greed, megalomania,
conspiracy, coups and armed robbery played out by godlike forces. Best take
a look, because the new giants are not going away. You may not care about
your friendly local multinational, but as Trotsky said about foreign policy,
it cares about you.

· Christopher Hope's novel Heaven Forbid is published by Macmillan.





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