Yesterday my son asked me which was the biggest company in the world. I only had a vague idea, so we looked up the Forbes 2000 for 2006. I have a pretty jaundiced view of big business, but even I was shocked by the results. Here are some highlights (I have uploaded a spreadsheet to here):
- Companies that make their money out of handling your money – banks, insurance companies, investment houses, and so on – make up 44 of the Top 100 and 13 of the Top 25. Only 12 of the Top 100 are oil and gas companies, though 6 are in the Top 25.
- Although the money companies make only about a third of the Top 100’s total sales and profits – meaning that they are a little less profitable than average – they control 82% of all the Top 100’s total assets. I’m not sure how this is calculated, given that a lot of these assets are going to be shares in other companies, but this is an astonishing stranglehold on our collective wealth.
- Of the Top 100, 35 are from the USA, 7 from Japan, 50 from Western Europe, 3 from China, 2 from Canada, and one each from Australia, Russia, Brazil and Korea. In other words, with the exception of the sole Brazilian representative, if a major company is not from a core industrial capitalist country, it is from a profoundly undemocratic country. In other words, the vast majority of the people in the world are completely unrepresented even in the most indirect sense that their governments might intervene.
- The highest ranking company that is not from the USA, the European Union, Switzerland or Japan is Samsung Electronics, from South Korea. It comes 48th. It is also the only company not from USA, Western Europe or Japan that is not either in money or oil.
What bothers me about this is the sheer concentration of power and unity of interests. Companies of this magnitude are comparable to whole countries in the rest of the world, and with the backing of their respect governments, a lot more powerful. They are also concentrated in two particular sectors. Oil and gas are among of the most socially and environmentally destructive industries in the world. In the case of the US companies, George W. Bush’s Cabinet is currently awash with their representatives, and the Bush administration’s record on the environment is unutterably dire.
And the money industries are concerned solely with, well, money. They have neither goals nor measures nor interests that are more human than that. Perhaps I should not be so pessimistic. Just this evening I heard an representative of Lehman Brothers (themselves major players in capital markets and in investment banking and management) saying that they would now recommend companies that face up to the implications of global warming and other environmental threats. As I have argued elsewhere, even capitalism can be persuaded to take issues like technical efficiency, human need, environmental impact and even ethical obligation into account when it makes more money than the waste, pollution, incompetence, cheating and murder.
It’s not that capitalists personally prefer either – it’s just that, if they aren’t constantly proving their economic value, then they lose their livelihood. Like you and me, really. However, the only measure businesses really apply is their profitability. At the same time, the higher up you go in business the more effectively you are insulated from the problems your company creates or from any version of reality in which the realities of technical efficiency, human need, environmental impact or ethical obligation are visible in terms other than profit.
On the other hand, today McKinsey published a survey of US CEOs,who say that ‘a comprehensive understanding of public issues and a strong network of peers with a similar interest make it easier for them to play a leadership role, while time constraints keep them from playing an even larger role’. Should we be pleased? As the Forbes data shows, these people exercise immense power, so perhaps we should welcome their greater involvement in wider spheres.
But two things should make us pause at such a prospect. Firstly, who voted for them? Even by the minimal standards of representative democracy, they represent no one but their shareholders, who in turn are often other companies whose interests are represented by other CEOs – so it’s not only absurdly narrow but also conveniently self-serving. And secondly, what do they represent? Society as a whole? The interests of the population at large? Anything but.
To quote Adam Smith – the first and greatest prophet of business – the captains of industry are ‘an order of men, whose interest is never exactly the same with that of the public, who generally have an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it’.
I don’t mind hearing their ‘technical’ advice about how to run a capitalist business. But the very idea that they should have any more say in the government of society – or receive any more respect – than anyone else makes my skin crawl. Meanwhile, here in England the government hands out peerages – which is to say, the right to participate directly in the government of this country – to individuals whose main contribution to the political process is to have bribed the right party.