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environmental laws almost nonexistent.* million per year. GE used the rebates not to create jobs (50,000 To feed themselves, many Mexicans end up working in the were slashed from the payroll), but to acquire companies like 2,000 factories along the border, where US companies pay 89 RCA and NBC. Most new investment by US corporations during cents an hour for industrial jobs that were once filled by union this period occurred in foreign countries. "American taxpayers, in labour in US factories. NAFTA was designed to encourage this other words, were unwittingly subsidizing the globalization of trend and increase the profits of transnational corporations. their own industrial structure.""* During the negotiations between India and the IMF in 1991, one Transnationals also use "transfer pricing" to avoid taxes. With of the IMF's loan "conditionalities", which India resisted, was a operations around the world, it's a simple matter to arrange trans- cut in food subsidies. "It is clear that hunger, if not starvation, has actions so that the profits show up in jurisdictions with lower become an instrument of economic adjustment," writes Jeremy taxes. When California attempted to compute taxes on the basis Seabrook, a critic of development trends.’ of assets in the state rather than the corporations’ declared profits United Nations experts predict that half of the world's popula- in the state, Sony chairman Akio Morita went to work and organ- tion will live in cities by the turn of the millennium, and two- ised campaign contributions to California legislators. Twenty- thirds by the year 2025. Already, these experts say, 500 million seven states had followed California's lead, but all of them people living in cities are homeless or live in inadequate hous- repealed their laws. California kept the law, but added a provi- ing.” Governments are unable to cope with this level of urbanisa- sion to exempt any corporation that paid a modest fee.'° tion, and shanty towns sprout faster than they can be torn down. Although another Federal tax law in 1986 was sold as an As governments are forced by the transnationals to become less attempt to restore the balance between corporations and individu- responsive to the needs of the people, it's als, it didn't work out that way. This new law unclear what will happen over the next sever- allowed corporations to deduct their interest on al decades. Meanwhile, the transnationals debts, while curtailing the same privilege for couldn't care less what happens, as long as consumers. Speculative instruments such as their profits increase. Since no one is ina futures markets, stock options, leveraged buy- position to tell them differently, they claim The economy of outs, and mergers and acquisitions continued, that it's not their problem. . financed with corporate borrowing. Now we The political and economic impact of Ford IS larger than have a 'casino society’, with corporate debt at transnationals in developing countries has i ia! record levels in response to short-term financial been apparent for 25 years, but only recently Saudi Arabia s and considerations and a decline in tangible assets, has this global "rollback", as Noam Chomsky Norway's, and the such as new plant and equipment, relative to calls it, been felt in the US as well. This term wae GNP. comes from Cold War doctrines that annual sales of Philip aimed to destroy Soviet power, bu ' Chomsky uses iito describe today's Morris exceed the war against the social contract that gross domestic product of New Zealand. Governments are unable to steer this juggernaut. Every day over a trillion dol- lars pass through worldwide currency exchanges, and an estimated $150 billion in US Government bonds changes hands. About 10 per cent of these figures involves the normal transfer of goods and services, while the rest is purely specula- tive. "A financial crisis could assume global proportions in the blink of an eye," said Michel Camdessus, managing direc- tor of the IMF, at the June 1996 meeting of G7 leaders in Lyon, France.'* once mediated between public and pri- vate interests. Freedom, democracy, human rights and other threats to authority, which evolved through many decades of social struggle, are being rolled back in favour of the discipline of the unregulated market, resulting in predatory capitalism and the "nanny state" with its welfare for the rich." Only the classical economist from a The tail of US debt is now wagging the corporate-funded think tank, or the lib- dog of US policy. When Bill Clinton ertarian who places property rights above human rights, bothers came into office with plans for a "stimulus package", bond-hold- disputing the accumulated evidence. Bankruptcies, credit card ers considered this inflationary. The threat that they would delinquencies and consumer debt are all at record highs.’? Falling unload their bonds meant that interest rates would be driven up. wages and downsizing are the norm, and Social Security and This would have slowed the economy and cancelled out the stim- Medicare may not be there for the next generation of retirees. The ulus package. Clinton's idea was killed at birth.’ figures are in: the US middle class is rapidly disappearing. RATTIE EAD THE DIIRIIC INTEDECT The economy of Ford is larger than Saudi Arabia's and Zealand. BATTLE FOR THE PUBLIC INTEREST It's clear that our public institutions are unable or unwilling to ask transnationals to operate in the public interest. Thousands of lawyers, lobbyists, trade association employees, think-tank experts, public relations specialists, politicians and prominent journalists are drawing fat fees, on one level or another, by fronting for free trade and the private interests of international speculators and transnationals. Aligned against them are a rapidly-increasing number of activists from around the world. They come from labour move- ments on the left to anti-globalist and anti-immigration move- ments on the right, and include environmentalists as well as inde- CORPORATE TAX PRIVILEGES Less publicised is the shift in taxation from corporations to individuals. In the 1950s, corporations operating in the US paid an average of 39 per cent of all Federal income taxes, but in the 1980s this figure shrank to 17 per cent. The same is true at the local level. In 1957, corporations generated 45 per cent of proper- ty tax revenues, but by 1987 their share dropped to about 16 per cent." Ronald Reagan's 1981 tax cuts were a bonanza for corporations. General Electric had profits of US$6.5 billion from 1981-1983 and saw its tax burden go from $330 million a year to minus $90 APRIL - MAY 1997 NEXUS 15 Morris exceed the gross domestic product of New