Guest blog: When elephants fight, the grassroots get hurt

Elephants fight. Flickr/Chris Eason. Some rights reserved.

To explain the new and unexpected dynamics we are experiencing, let us consider whether we are witnessing a new three-way economic-ideological battle among global ruling elites.

Harris Gleckman is Senior Fellow at the Center for Governance and Sustainability, UMass-Boston and Director of Benchmark Environmental Consulting.
He is the former Chief of the NY Office of UNCTAD, Senior Officer for the first Financing for Development Conference, and Chief of the Environmental Unit of the Centre on Transnational Corporations. Over a period of 30 years, he undertook policy oriented research on multinational corporations, global environmental management, financing for development, global governance institutions, and the economics of climate change. He is currently working on a handbook on the governance of multistakeholderism.

 New political-economic forces have upended ‘normal’ international and domestic politics in a good number of nations. This past 12 months has seen the confluence of the Trump takeover of the US Government, pressures to dismantle the EU through Brexit, Greek debt negotiations, the Le Pen campaign in France and the proliferation of constitutional coups in  Brazil, Philippines, US and elsewhere. These macro-economic events invite a search for a new framework to explain the new and unexpected dynamics. I want to argue that we are witnessing a new three way economic-ideological battle among global ruling elites.

The explanation posits that the three factions are ‘the old fashioned globalization’ group, the ‘multistakeholderism’ advocates, and the ‘state destruction‘ faction.

State destruction
The starting point is the recognition that the ‘state destruction’ faction in the EU, in the US, and in Brazil is now a separate political force and that it is making a play for real global power.
In the US, this assessment is based on taking seriously Trump Administration statements to ‘get rid of the EPA’, ‘repeal affordable care’, ‘weaken the SEC’ ‘shutdown the Consumer Financial Protection Bureau’, ‘eliminate support for public schools’, and ‘abandon Federal support for affordable housing’.

This view was synthesized by Presidential Counselor Steve Bannon, when he said that a major goal of Trump’s presidency, along with renegotiating trade deals and securing the border, was the total “deconstruction of the administrative state.”

Instead of dismissing such claims as just crazy, one could well see them as indicative of a new economic force, one that focuses not on international markets and technology change for future growth but on markets created by the elimination of the nation-state. The deconstruction of the administrative state would, for example, speed up the privatization of state resources, replace the delivery of state services with private firms, and remove the labor, environmental, and other regulations that constrain domestic production and restrict the marketing of high risk products and services.

In short, the ‘state destruction’ faction sees limited opportunities for stable growth in the global market. The scale of global instability is too great across a wide range of social, environmental, monetary, and cultural spheres to comfortably predict what future returns might be. They want to lay the foundation for market expansion by ‘re-taking’ areas currently excluded from market control by environmental, social, gender, health, and labor regulations. And by disabling the related state institutions, they see a growth opportunity for the domestic private sector to step in and sell that ‘state’ service to the community.

This inward-turning for new markets is consistent with the Trump Administration call for greater ethno-centric nationalism, expanded domestic authoritarianism and reduced commitment to multilateralism. In order to ‘give away’ so much of the public’s health and safety, so much of the public’s assets, and so much Government legitimacy, it is necessary to tighten control over the population and to shift hostility and violence onto those who are relatively weaker and less able to defend themselves.

In Brazil the basis for this assessment is the abrupt rightward shift toward domestic business-interest by the post-impeachment Government; in the UK this ‘state destruction’ faction is represented by those who are actively supporting the Prime Minister’s decision for a hard Brexit from the EU, leaving the EU as a significantly weakened institution. The potential fragmentation of the EU as a regional governmental institution is also being advocated by Marine Le Pen forces in France, by the practice of walling off sections of Europe from regional migrants, and by the continued threats to the functioning of the Greece state. In all of these areas, the call for less state role (e.g. less rules from Brussels ) goes hand in hand with a more nationalistic economic political message and fears directed at various types of ‘foreigners’.

The following are some additional characteristics of these three factions and some of the ways that they may be engaging in a very powerful intra-corporate battle over the role of state and the control of globalization. While much of the specifics are drawn from current US political-economic conflicts, there do appear to be parallel developments in other parts of the globe.

Faction A: “Old fashioned globalization” group
Historical context is based on the global economic reality before the start of 2008/2009 financial crisis.

Key characteristics include:-

• Continued domination of the global market by MNCs;
• Supports the EU and other regional economic areas in order to gain the benefits of expanded consumer and worker markets and to have stable rules;
• Cooperates with the rise of China and the other BRICs as important international market actors;
• Rise in the dominance of the financial sector over the productive and service sectors; massive national debt crises continually occurring between the international finance and the nation-states; and the creation of Financial Stability Board as a partial stabilizing force over the international financial sector;
• Advocates for ‘free trade’ and WTO-based rules and dispute settlement procedures;
• By in large, MNCs and their associations exercise whatever governance there is over globalization; there is no analog to a national government for globalization which could balance competing class and social realities.
• At the nation-state level, corporate capture of state agencies and open to privatization of state assets; corporate-related payments can be made to elected state officials; investor-state dispute systems help MNCs manage nation-states;
• Under US and NATO leadership, military open new markets and attempts to quell global and regional dissent;
• Believes that governments should take the lead for managing climate change in a way that leaves the private sector a high degree of market flexibility;
• Seeks to minimize corporate risks from climate change and to maximize investments in potentially remunerative alternate energy sources;
• At the ideological level, the message is ‘globalization is a good thing’ and corporate personhood should be respected;
• At the institutional level, UN system bodies, IMF, World Bank and the WTO are either stepping back from addressing the governance of globalization or internally divided on how to govern globalization;
• Major US media aligned with Faction A include the Wall Street Journal , CNN, Washington Post, and the New York Times

Faction B: “Multistakeholderism” advocates  
Historical context is that the 2008/2009 crisis demonstrated that the international financial system was far too fragile and that the globalization project itself could be delegitimized by the system’s fragility [ii]

Key characteristics include:

• Recognizes that some form of quasi-state function is needed on the international level;   
• Acknowledges that too much poverty, too much illiteracy, too much inequality, too much sexual violence and too much institutional racism is bad for the long term stability of globalization;
• Has an open, but restricted, door for multi-culturalism and ethnic diversity;
• Establishes multistakeholder governance task forces with hand-selected participants to address complex global issues;
• Seeks to institutionalize TNCs as part of the recognized global governance system;
• Incorporates selected international civil society organizations (and celebrities, religious leaders, and academics) into the functioning of global governance system;
• Protects against a too strong quasi-state function by establishing a volunteer opt-in-opt-out approach and a non-institutional foundation for multistakeholder arrangements;
• Moves slowly toward a multipolar political-economic system involving greater distribution of power to regional institutions, the BRICs, and China; China, Russia, and other authoritarian states do not share an interest in participating in the multistakeholder governance;
• Accepts the de-legitimization of government (and by extension the UN system} as effective tools for managing international social and economic conflicts;
• Seeks to move from corporate personhood to multistakeholder governance and to have multistakeholder governance group displace multilateral decision-making on major issues;
• Encourages UN system bodies to be open to active MNC participation (e.g. Global Compact, Gates Foundation leadership in health matters); Governments at UN system bodies, BWI, and the WTO seek out private sector bodies and multistakeholder groups to take over ‘solving’ difficult public interest problems.[iii]    

Faction C: “State Destruction” (except the security services) faction.
Historical context:  The management of the Brexit vote, the treatment of the Greek state, the appeals of Le Pen in France result in a direct challenge to the existence of the EU itself; Trump’s election and constitutional coups.

Key characteristics:

• Believes that the State with the exception of the security services is an obstacle to market growth;

Expects to obtain new wealth from the destruction of the administrative structure of state by the:
(1)   Expansion of the delivery of former state services (e.g. Trump’s infrastructure projects for bridges, roads, and ports; support for-profit educational businesses; privatization of prisons) Removing the state from these functions also transfers long term control of these ‘state’ functions to the private sector;
(2)   Growth of domestic production from the removal of government environmental, social, worker, and gender restrictions (e.g. increased and lower-cost domestic production from elimination of restricting regulations, reduction in need to disclose and report activities, and cut costs from fewer civil and criminal court cases);
(3)   The projected jump in contracts for the domestic military industrial complex as a result of the sharp budget shift toward the military budget (e.g. the planned 20% increase in military budget without a change in war plans; the call to other NATO Governments to move to 2% of GDP for their military expenditures);
(4)   The planned increase in the rate of privatization of state assets (e.g. more aggressive exploitation of formerly government protected natural resources, which are both nearer to final domestic markets and resources that can be easily exported);
(5)   Regards mixing state functions and private business activities as not ‘corruption’ but the correct way that the private sector should be using government institutions to find new sources of income;
(6)   Greater retained earnings by firms which file US taxes and a faster circulation of private savings thru the state into corporate hands [iv].

• Considers that a strong corporate-controlled and militarized state can avoid global compromises, like the recognition of the ascension of China as a superpower, any limitations imposed by ‘fairness’ in trade agreements, and expectations of other OECD Governments for mutual military cooperation ;
• Verbally attacks ‘globalization’ while aggressively supporting national-based MNCs at home and in the global market; seeks to replicate the lack of rules in globalization in the domestic market;
• Seeks to exclude selected nationalities and races as legitimate participants in the national or international political processes; -
• ‘Solves’ a wide range of global environmental and social issues by simply denying that the issue is real (consistent with their effort to destroy national governmental agencies dealing with these and related issues. No real issue means no real reason to have a government agency);
• Believes that ‘climate change’ is dangerous to corporate investment returns and that pushing it off the political agenda has enormous short-term advantages;  
• Without a socially-focused state, increasingly dependent on the expanded use military, para military, and police forces to control domestic populations (e.g. trying to use the US national guard as immigration/ deportation officers);
• Seeks to minimize NATO or other long-standing military alliances, which would result in the implosion of US military global dominance;-
• Believes that UN system bodies, IMF, and WTO are unnecessary institutions, as MNCs can solve for themselves any inter-country, inter-sectorial or market crises;
• Seeks major budget cuts to UN system bodies and development-oriented programs, as these activities are either not needed or should be open to privatization; 
• Major media aligned with Faction C include Brietbart News and InfoWars
• The characteristics of the three political economic forces represent distinct and competing approaches for maintaining and expanding control by different sectors of the global elite. At any one time a specific firm, corporate executive, or trade association may behave more in line with one force than another. This is expected as the intra-corporate factions explore which avenue or avenues are best from their own perspective.
• Force A, the current status-quo globalization force, is in a way the old guard; Force B, the multistakeholder group, is the group that is attempting to recuperate the globalization project and formalizing MNCs as global governors; Force C, the state-destruction force, in this explanation is clearly the insurgent force. 

Collisions Involving Forces A, B, and C

These divergent directions result in some quite significant collisions of interests.    
For Force A and B, Force C represents a fundamental threat to the legitimization of the globalization project, however it is defined.

For Force C, Force A and B have failed to manage climate change and it is now important to divert the quite appropriate fears of the impacts of climate change onto fear of others before it is too late (a quite different approach to ‘climate change adaptation’).

For Force B, Force A is on a self-destructive course as inter-competitive pressures are undermining the economic foundation of the international economy (an internationalized version of the old rationale for domestic anti-monopoly rules)

For Force B and Force A, Force C misunderstands the necessity for a quasi-state world government to counter-balance what are now economically and socially useless territorial boundaries. The world is now a global inter-connected economy and no nation-state can rule alone as the overlord of the planet.

For Force C, Force A is the old order and is premised on cross-boundary economic interests that cannot manage the maintenance of white ethno-centric role in the world economy.    

For Force A and B, Force C is needlessly provoking a military and economic conflict with China, as these two Forces are quite comfortable dealing with the opportunities and challenge of China’s role in the world economy;

For Force C, Force B is a misguided naïve attempt – and a bad compromise – to coopt social forces of international civil society as a partner in corporate control.

For Force C in the US, the attacks on the intelligence services, which are an integral component of Force A and B, may explain part of Force C’s campaign to break the internationally oriented market leaders in Forces A and B.

Force A and Force B, which employ – and sell to – a wide range of ethnicities and multi-country markets, will contest the extreme ethno-centric programs of Force C.

If this analysis is correct, the battle between the three elite Forces is likely to impact a wide range of institutions and communities, particularly those grassroots institutions and communities around the world where the consequences of the three way battle will be most difficult to contain. However, while the Elephants fight it out, one can take parallel efforts to develop a sound counter-strategy – one that takes the grassroots as the ecological and social foundation for a new order and seeks to minimize societal-wide collateral damage. In different countries and regions, one should expect that specific political-economic impacts will be quite different.

Teasing out the political-economic consequences from the three-way elites battle

Force C’s abandonment of US leadership in global military and economic institutions means that the Pax Americana period of global leadership since World War II may have come to an unexpected end.

The leadership of international civil society and domestic NGOs, which now lack a potential government ally in their campaigns, may also migrate toward Force B with its possibility of direct engagements with TNCs to address a range of issues, many of which are caused by actions of TNCs.
Force B has not gained sufficient acceptance to present itself as the new global norm. However, Force C is fighting to claim ‘normalization’ of political-economic reality away from the ‘normalized’ global realities of Force A.

Mainline media and other commentators are restrained in acknowledging the extent of Force C’s authoritarianism, as they assume that Force A will prevail in the contest with Force C.

Mainline political parties will struggle internally to re-align their party messages and party alliances in order to position themselves with the more multi-cultural Force B, with Force C as the party in power, or with the old guard Force A.

The UN system will continue to highlight SDGs and Human Rights, as counter-weight to Force C, as they will in general assume that Force A or Force B will prevail over Force C
Concluding observations

There are other possible political-economic explanations for these abrupt global and national changes. First there is the no-rationale political economic hypothesis for the current direction. The situation may be so confusing, so unstable, or so different in different parts of the globe that no one scenario can provide a plausible hypothesis.

Second is that the real power drivers today are sharply enhanced national authoritarianism, ethnic domination, and gender control and that whatever happens in the political economy will flow from the dynamic assertion of these multiple forms of elite domination. In this alternative, the argument is that social and cultural control is central and that they will be atypically drivers for the underlying political economy.

Third that the Trump Administration sharp swing to far higher state-expenditures for military matters in the US and in other NATO countries is an effort to restore the military-industrial complex as the key domestic political-economic force. In this circumstance the militarism combined with nationalism would create a drive to seize oil and other natural resources abroad while enhancing domestic public fears of the Other in order to use military forces inside the country.  

Many are still struggling with shell shock from the scope and violence of the political changes in their country and around the globe, most of which have occurred in just the past year. Consequently it may well be too early to formulate a political-economic assessment of these changes or even to assess arguments for and against this particular three competing forces framework. The examples used to explain the Three Forces framework has been drawn heavily from the US experience. The author would welcome alternative interpretations of these events and any evidence – or counter-evidence – to this three way assessment, particularly by those in other countries or regions. In the end, the goal is to move from shell-shock realities to a sound analysis and then to a counter-strategy as soon as possible.

The title of this article is based on an old African saying.