[PEN-L:34258] empires of profit

["Ian Murray" <seamus2001@xxxxxxxxx>]

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
megacorporations 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.