SMALL IS BEAUTIFUL,BIG IS SUBSIDISEDHow our taxes contr ibute to socialand environmental breakdown

Steven Gorelick, Pr incipal Author
With an Introduction by Helena Norberg-Hodge

ACKNOWLEDGEMENTS
Like many products of non-governmentalorganisations, this report is the result of a teameffort. The core analysis was first presented in aseries of lectures by ISEC’s Director, Helena
Norberg-Hodge. Peter and Mimi Buckleysuggested that we try to find ‘hard data’ tosubstantiate the arguments, and offered to fund thenecessary research. We are extremely grateful tothem for their support.
Special thanks are also due to Andrew Blackwood,
who helped substantially with research and wrote
the first draft. Without him, the project would
never have got off the ground.
We would also like to acknowledge the help of Richard
Douthwaite, who chased up some key facts and figures,and the contributions of Carola Buhse, Les Blomberg,
Beth Burrows, David Edwards, Janey Francis, Suzanna
Jones, David Korten, Todd Merrifield, Julian Oram, John
Page, Andrew Rowell, Miyo Sakashita and Deborah Tull.
Steven Gorelick is ISEC’s US Programmes Director.
October 1998
Second printing July 2002
© ISEC – Please feel free to reproduce and distribute withappropriate credit.
Design & layout by Fiona North, 3 Counties Design Ltd.
Tel: (01305) 259280.
Photograph page 46 by Tim McCabe/USDA.
All other photographs by John Page.
Printed by L. Brown & Sons, Barre,VT.

SMALL IS BEAUTIFUL,BIG IS SUBSIDISEDHow our taxes contr ibute to socialand environmental breakdown

Pr incipal Author

Steven Gorelick

P

Contents
Introduction by Helena Norberg-Hodge – Page 2.
1.		

It’s Evolution, Isn’t It? – Page 5.

2.		

The Big Get Bigger – Page 8.

3.		

Growth Made Easy: Infrastructure and Scale – Page 12.

4.		

Subsidising Long-Distance Transport – Page 15.

5.		

Communicating Globalism – Page 19.

6.		

Finding the Energy – Page 23.

7.		

Learning to Serve the Global Market – Page 27.

8.		

Research: Who Pays, Who Profits? – Page 32.

9.

Expanding Infrastructures: The Race to Nowhere – Page 36.

10.

The Rules of the Game, Free Trade – Page 40.

11.

Lots of Regulations, Little Effect – Page 45.

12.

So why Do They Keep Doing It? – Page 50.

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1S m a l l is B e a u ti f u l , B i g is S u bsi d is e d

INTRODUCTION
by Helena Norberg-HodgeW

ith the demise of communism, it
is generally assumed that the world
has only one option: an unregulated global market dominated by
giant corporations.		

Many people believe that deregulation frees large, transnational
corporations to provide consumers with an unprecedented
variety of produce from every corner of the globe. Thanks to
the global economy, we are able to fill our shopping baskets
with apples from Kenya, cheap butter from New Zealand anda whole range of exotic foods. If this produce is cheaper thanlocally-produced alternatives, then that is because suppliers areoperating on a larger, more efficient scale. Sophisticated PR
and advertising campaigns persuade us that the bigger the company, the safer the food.
In addition to these consumer benefits at home, many people seem to think that the spread of Western-style economic
development will be accompanied by Western-style democracy
abroad. Globalisation has brought about cheap air travel andcloser communication between diverse cultures, and it is hopedthat this will herald the emergence of a peaceful ‘global village’and eliminate warring strife between nations.
Similarly, because environmental crises – from climatechange to species depletion – clearly transcend national boundaries, globalisation is also seen as a necessary step towards international collaboration to solve global problems.
Beyond these supposed beneficial effects, the global economy is declared inevitable – it will continue to grow whether welike it or not. It’s the consequence of an insatiable consumer
culture. It’s what giant corporations want, or, more to the point,
it’s what no one has the power to stop. In the final analysis, globalisation is often portrayed as a kind of economic ‘manifest
destiny’ dictated by ‘economic laws’ beyond the reach of humanintervention. These laws are said to naturally favour large producers over small, centralised global production over dispersed
local production. Big, it turns out, is cheap; big is efficient, big
is better! As we have tried to show in this booklet, however, thetruth of the matter is that ‘efficiencies of scale’ are a myth: big is
not necessarily ‘cheaper’ or more ‘efficient’.
If we allow ourselves to look beyond the assumptions andnarrow confines of this conventional wisdom, it becomes clearthat giant corporations are the product of government support
through a range of both direct and indirect subsidies.

Tilting the Playing Field

For generations now our tax money has been used to create an
economic framework that favours the big over the small. The

2

result is that all of our choices – from education, energy use,transport and communications – are being shaped and distorted
to suit an ever more centralised, ever more globalised economy.
Combined, these costly subsidies and investments make for an
extremely inefficient system. Any appearance of efficiency ismaintained only because our taxes cover many of the costs at
the expense of small, local producers who, left to their own
resources, are thereby made to seem comparatively inefficient.
Large TNCs also benefit from their ability to pressurise
governments into passing regulations favouring large producers
often in the deliberate attempt to destroy smaller competitors.
An additional factor which paradoxically ends up favouring
large over small is the fact that large scale, intensive production
is often inherently more polluting.
Consider the case of factory farming. Where large numbersof animals are made to live in close confinement, conditions areripe for the outbreak of virulent disease. In this situation, more
controls and regulations are required than is the case for smaller producers. The latter, however, are forced to comply withthese same stringent – and, for them, unnecessary – safeguards,‘As we have tried to show in this booklet,
however, the truth of the matter is that‘efficiencies of scale’ are a myth: big is notnecessarily ‘cheaper’ or more ‘efficient’.’
at a cost that few can afford to bear.
Government support for transport and high-tech communications make it possible for multinational corporations todestroy smaller local competitors. A local shop in a village inEngland that buys most of its goods locally, does not need satellites, mainframe computers, large-scale transport infrastructures, container ships, heavily subsidied airplane fuel, and so on.
In contrast, a large hypermarket could not exist without them.
From the point of view of the consumer, it can look as
though goods from the other side of the world are cheaper,
when all of these subsidies are invisible. But we need to start
looking, not only at the money in our pockets, but how ourtaxes are used against us. More and more people are left little
choice but to eat processed, long shelf-life food from far away,
because it is cheaper. The tilted playing field means that theycannot afford fresh local food.
At the heart of the modern industrial economy is the principle of ‘comparative advantage’ according to which it is always
in a nation’s interest to specialise production for export rather
than promote diversified production for local and national
needs. As a consequence, economic policies encouraging trade
have supported trading institutions which have merged to
T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eI n t r o d u c ti o nbecome the giant transnational corporations that we know
today. By now, each of the major commodities on the world
market – e.g.: coffee, cocoa, cotton – is controlled by a handfulof corporations.
This support for international trade has given global players
an unfair advantage over local producers and businesses. The
result is a tilted playing field favouring monopolies which are
growing larger and more powerful every day. In recent years,
their power has been boosted dramatically by a series of ‘freetrade treaties’, such as NAFTA, Maastricht, GATT, and theMultilateral Agreement on Investment (or MAI). Known as the“Multinationals’ Charter”, the MAI will elevate the rights ofcompanies above those of nations and their citizens. This will
give companies the power to sue governments if domestic legislation interferes with trade. These agreements are not about
trade between countries but about the rights of transnational
corporations to move unimpeded into every domestic market.
Negotiated in secret, wrapped in highly complex and technical language, these treaties are rarely read, much less understood, by elected officials. In signing on to them, governments
are, often unwittingly, undermining their own power. In effect,
they are supporting highly mobile global corporations to thedetriment of smaller national and local businesses and in sodoing impoverish themselves.
Whilst smaller companies operating within the national
arena continue to pay taxes, transnationals can shift their assets
at a moment’s notice to evade taxation. Government power isthus diminishing as more and more revenue is lost in this way.
Nation states are therefore getting poorer, forcing governments
to reduce expenditures on health, welfare, education and otherpublic services.
As economic policies force giant corporations to comb the
globe in search of cheaper labour and resources, social andenvironmental standards have been progressively lowered in an
attempt to compete for capital investment.
The result is that we are locked in a race to the bottom inwhich everyone loses: jobs, social cohesion, the environment,even the most basic standards of democracy and freedom, areunder threat. The irony is that, by paying our taxes, we are supporting the very forces that are responsible for eroding ourcommunities, job security and environmental safeguards.
People everywhere find that their jobs are much less secure,that they are being forced to make more rapid changes insearch of employment – in terms of both physical location andskills retraining. Those in employment are increasingly stressed,with ever less time for themselves, their children, or enjoymentof life. Even in the wealthiest of Northern countries – Sweden,
Norway and Canada – where homelessness and outright poverty were previously all but unknown, there are signs of
extreme social deprivation.
As part of the globalisation process, production is being
shifted to low-cost areas in the Third World and Eastern
Europe. The related surge of uncontrolled investment into
these areas has caused financial chaos and resulted in economic
meltdown, as happened in Mexico, the Far East, Latin America
and Russia.
The resulting increase in poverty in the South is dramatic:
millions of people are being pulled off the land into cities in
the hope of a better life. TV, advertising, tourism – all portrayurban Western life and consumer culture as superior. The
young are highly susceptible to these media images and are
persuaded to reject their own culture, in particular any type ofwork on the land – fishing and farming are now consideredprimitive and dirty.
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E c o l o g y & C u lt u r e

As people pour into the city in search of jobs, only a tiny
fraction are successful – usually in a sweat shop, mass-producing
consumer goods for an unstable Western market. The Times ofIndia (26.8.98) describes the process well:“Women and children are emerging as the new ‘human
cash crop’ in South Asia as rapid globalisation drives more andmore villagers to distant cities to make good. But most of themend up providing cheap labour or get caught in the sex trade.“
In addition to the human suffering, the shift of production
from North to South has heralded a massive increase in local
air pollution, toxic waste and other environmental hazards, incities like New Delhi, Bangkok and Mexico City.
Whatever the superficial attractions of a global economy
dominated by giant corporations, the price is high: a deteriorating environment, increasing poverty, greater insecurity andgreater inequality. World-wide, globalisation also leads to a lossof both economic and political control. This disempowerment
inevitably leads to frustration and anger and an increase in ethnic conflict.

Why the Lack Of Political Initiative?

Why, in the face of political disempowerment, social and environmental breakdown and growing opposition, do most policy-makers cling to the economic fatalism that surrounds globalisation?
One answer is that they assume that technological change
is as beneficial as it is inevitable. They recognise that the creation of the global casino economy has been made possible by
the development of high-speed communications. These developments have helped to make that casino extremely difficult tocontrol, monitor and regulate. Because technological change isassumed to be ‘evolutionary’, the political consensus is that wehave no choice but to embrace it and its economic consequences.
This view of the world has many causes, but prime among
them, as mentioned, is an education system which has itself
been moulded to suit these same technological/economic
developments and which provides us with an ever more fragmented, reductionist worldview.
As a result, it becomes difficult to step back and see theconnections linking the whole. While it is true that technology
does affect economic choices, it is economic policy that shapes
technology – through investments, for example in Researchand Development. These cyclical relationships are the productof human policy choices, and are not inevitable in some deterministic way. Once these connections become obvious it
becomes equally clear that nation states could regain control ofthe economic juggernaut.

Seeds of Hope

One of the more hopeful signs today is the willingness of asmall but growing number of senior economic and politicaldecision-makers to look at the big picture and to rethink somebasic assumptions surrounding globalisation. Prompted by thegrowing instability and dramatic collapse of markets, financierssuch as the late Sir James Goldsmith, George Soros and even
Chair of the US Federal Reserve Bank, Alan Greenspan, havewarned of the dangers of unregulated and over-heated markets.
George Soros recently said before the US Congress that“the global capitalist system is coming apart at the seams”.
Similarly, politicians such as Paul Hellyer, Canada’s former
deputy Prime Minister, have powerfully argued that the global3

S m a l l is B e a u ti f u l , B i g is S u bsi d is e deconomy is not about free trade at all:“Globalisation is not about trade. It is about power and control. It is the reshaping of the world into one without borders
ruled by a dictatorship of the world’s most powerful central
banks, commercial banks and multinational companies.”
Equally, if not more encouraging, are recent signs of popular
resistance. At the grassroots, there is growing interest in the local
economy as a counter-weight to globalisation. All over theworld communities are taking steps to reclaim control over theirlives.
One of the key issues relates to food. Today, the average meal
we eat has travelled literally thousands of miles. By encouraging
local production for local consumption, communities are weakening the stranglehold of the global economy. Local food means
not only better health and less wasteful packaging and transportation; it means money staying in the community, an increase inbiological diversity and the revitalisation of rural life. The growing trend towards Community Supported Agriculture aroundthe world provides a direct link between farmers and consumers. More than 40,000 families in the UK now get a regular‘vegetable box’ from a local farm. In the US, there are now
2,400 registered farmers’ markets, with a combined turnover ofbillions of dollars.
In a number of places, community banks and loan funds
have been set up, thereby increasing the capital available to local
residents and businesses and allowing people to invest in theirneighbours and their community, rather than in distant corporations.
At the same time, the creation of local currencies enables
communities to reduce their reliance on the national (and international) economy. In the small American town of Ithaca in
New York, a local currency is accepted by more than 250 businesses.
Local Exchange Trading Systems (LETS), which have sprung
up in more than a dozen countries, allow goods and services tobe marketed without the need for money.There are already over
400 LETS schemes in the UK alone.
“Buy local” campaigns enable smaller businesses to survive
even when pitted against heavily subsidised corporate competitors. These campaigns not only help keep money from “leaking”
out of the local economy, but also help educate people about thehidden costs – to the environment and to the community – inpurchasing cheaper but distantly produced products.
Local and regional land use regulations are also being
amended to protect wild areas, open space and farmland fromdevelopment. In the United States, land trusts have been created,
protecting more than 2.7 million acres of land. In some cases,
local governments have used public money to buy development
rights to farmland, thereby simultaneously protecting the land
from suburban sprawl while reducing the financial pressure on
farmers.
In addition, community-run schools encourage children andtheir parents to feel more connected to the community ofwhich they are a part, helping to strengthen small towns andvillages, while providing much-needed local employment.

Policy Steps

These local initiatives are not enough, however. It is vitally
important that change occurs at the national and international
level as well. Otherwise attempts to return to ‘the local’ in an ageof giant corporate monopolies could leave communities highly
vulnerable and ultimately more disempowered. Unfortunately,
many grassroots groups today are oblivious to the enormous

4

concentrations of power in the hands of TNCs and supranational institutions. Thus many European Greens are happy to dismantle the nation state in favour of Brussels in the mistaken
belief that power can simultaneously be decentralised to theregions.
Nevertheless, increasing numbers of grassroots groups are
beginning to recognise that it would be virtually impossible toreturn power to the local level without the aid of national governments. They are raising awareness about the impact of ‘freetrade’ treaties and have succeeded in alerting the public to theimplications of a single European Currency, ‘fast track’ policies
in the US and the MAI. As a consequence, all of these have been
vigourously opposed.
At the same time voters are becoming aware of the destructive impact of the global economy on their everyday lives andof the failure of mainstream political groupings to respond totheir problems. As a result a new political agenda is beginning toemerge.
This new agenda identifies the need for electing government representatives who are willing to stand up to the powerof the finance markets and TNCs. It also recognises that politicalleaders must return to the negotiating table to convince theircounterparts in other nations of the need to formulate newtreaties that will enable them to cease subsidising corporatemonopolies. A grouping of sovereign nation states can have thepower to create a global economic playing field that not only
prohibits monopolies, but protects both environmental andhuman rights internationally. The details of such a treaty wouldof course need to be formulated with the involvement of civic
society.
As more “miracle” economies collapse, unemployment continues to mount and the impact on the biosphere becomes more
obvious, awareness is sure to grow. Before long, we can expect
to see a group of nations taking the first steps to create an alliance based on protecting their respective economies, rather thancreating trade blocks to try to remain internationally competitive, as is currently the situation.
Perhaps the changes that are required will be boosted by anunderstanding of what is happening on the other side of theworld.
Fifty percent of the world’s population has not yet beenswallowed up by the industrial economy. This half of the humanrace – most of whom live in the villages of the South – is often
ignored by Northern policy-makers who tell us that slowing
down or reversing the process of globalisation is ‘unrealistic’,‘unthinkable’. According to them the global economy is a ‘done
deal’.
However, when we bear in mind that an equally large proportion of humanity is free to choose a different infrastructure,a different economic model, then the decentralist solutions
proposed here seem more realistic. It is vital that when we contemplate options for the future, we do so from a less parochial,
more global perspective. We can reject the centralisation of bothstate-run economies and corporate capitalism.
Decentralisation is about returning to a balance between thelocal economy and dependence on international trade; a balance
between the rural and the urban, and a balance between the
power of communities and distant, anonymous institutions.
Shifting the way our tax moneys are spent in order to return
economic, and therefore political power to communities andtheir elected governments will revive genuine democracy. Thiseconomic decentralisation may also be the only way to create
structures capable of protecting cultural diversity and the richness of biological systems.
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1P

I T ’ S E VO L U T I O N , I S N ’ T I T ?

“The trend toward concentration of economic power is not a response to naturallaw or inexorable technological imperatives. Rather it is the result of institutional
forces which are subject to control, change and reversal...”			

Walter Adams, in Corporate Power in America

1“‘Excuse me ... but what planet are you living on? You talk about participating
in globalization as if it were a choice you had. Globalization isn’t a choice. It’sa reality.... I didn’t start it, I can’t stop it, and neither can you.’”
Thomas L. Friedman, The New York Times

M

ontpelier, capital of the state of Vermont, lies comfortably nestled in the folds of the Green Mountains,
midway between Boston and Montreal. With a population just above 8,000, it is the smallest capital city in North
America. It is also the only one without a McDonald’s restaurant– a noteworthy distinction now that Golden Arches span from
Belgrade and Beijing to Penang and beyond. While Montpelier isunlikely to lose its standing among diminutive capitals, its status asa McDonald’s-free zone recently came under serious threat: thefast-food giant, frenetically opening new outlets at a rate of one
every three hours, decided to put one in Montpelier’s small butbustling centre. Local residents were, for the most part, not pleased.

‘Most people who give it any thought probably
believe that large scale must confer inherent,‘natural’ advantages over anything smaller.’
In an effort to preserve their town’s character and economy, citizens engaged the corporation in a long, hard-fought battle – andeventually succeeded in turning McDonald’s away.Today, there are
no Big Macs in Montpelier, and the only McBusiness in town is alocal bar called McGillicuddy’s.
One might expect that Montpelier businesspeople – for whose
sake much of this battle was waged – would have been all aglow
in the aftermath of victory.The prevailing mood, however, was not
optimism but fatalism. Kent Bigglestone, President of the Montpelier Business Association, explained why: “People are only kidding themselves if they think they can keep all the big chain storesout of Montpelier,” he said.
Mr. Bigglestone, it should be noted, has no reason to lookfavourably on large corporations. His own family-run office- supply store on Main Street is endangered by another corporate giant,Staples, the world’s largest office-product retailer, which has
opened one of its ‘category killer’ stores just two miles away, in amall in an adjoining town. Mr. Bigglestone may not welcome afuture with no place for businesses like his, but he’s resigned to it.
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E c o l o g y & C u lt u r e2After all, “it’s a natural evolution that the national chains are going
to come,” he says.3
Mr. Bigglestone is not alone in blaming ‘nature’ or ‘evolution’for the growing dominance of huge corporations. Most people
who give it any thought probably believe that large scale must
confer inherent, ‘natural’ advantages over anything smaller – thus
explaining trends clearly visible over the last century and more. It’s
not only that giant supermarkets have replaced neighbourhood
grocers or that Wal-Mart is emptying whole towncentres of theirsmall shops. In agriculture, small family farms have all but disappeared throughout the industrialised world, their lands swept up
into huge agribusinesses. Decentralised one-room schoolhouses
have given way to ‘consolidated’ schools the shape and size offactories.While small towns and rural villages are atrophying, cities
and their dependent suburbs relentlessly expand.
But the trend towards ever larger scale seems especially true
within the business world, where a vast amount of economic
power is being distilled into a relative handful of transnational
corporations. Each day brings news of another merger or acquisition – one corporate giant swallowing another, only to be swallowed in turn by one still larger. The scale of these enterprises hasgrown so huge that family-owned High Street businesses seem all
but irrelevant. Ted Turner neatly demonstrated the new standardsof measurement when his Turner Broadcasting System (TBS)merged into Time-Warner. He explained the move by saying,“I’mtired of being little all the time. I want to see what it’s like to be
big for a while”. At the time,Turner’s company had 7,000 employees and annual revenues exceeding $2.8 billion.4
If this is ‘evolution’ at work, then natural selection apparently
finds even the nation-state too small. In thrall to the manic logic
of boundless economic growth and borderless ‘free trade’, governments are systematically erasing barriers between regional andnational economies to clear the way for a trading arena of thelargest scale possible: an all-encompassing global economy. If thismeans destroying diverse local economies and small, self-reliant
communities around the world, it is only to help ‘natural selection’do away with vestigial appendages no longer useful. The apparent

5

S m a l l is B e a u ti f u l , B i g is S u bsi d is e devolutionary goal of all this is the ‘Global Village’ – an oxymoronic phrase which now connotes not only intimacy and community,
but hints at manifest destiny as well.
The trend toward larger scale is clear enough; but any questioning of root causes is stifled by the din of voices emphasising
how natural and inevitable it is: we are being told, in effect, that
Nature itself abhors the small and the local. On the pages of The
New York Times one can read that globalisation is “inevitable”;5
the financial press adds that alternatives like economic localisation
are “simply not possible”.6 Heavily-promoted books like Bill
Gates’ The Road Ahead argue that “because progress will come no
matter what, we need to make the best of it – not try to forestallit”.7 Even in the so-called ‘alternative’ press, corporate-friendly
mega-technologies like bioengineering are described as “an irreversible evolutionary transition” from which “there’s no going Farmers’ market (Vermont, USA.)back”.8
These claims would be unnecessary if the future looked uni- strated by setting out a flat, box-like framework on a table. By
formly bright to everyone – if corporate growth and the ever-ex- pouring a stream of tiny balls over this frame, we find that wepanding scale of the economy were not accompanied by so much eventually, and inevitably, end up with a more or less perfect pyrecological damage, so much social and economic hardship. Bill amid shape.... No one is designing the pyramid, or forcing the balls
Gates’ euphoria cannot hide the fact that the trajectory of ‘pro- into place; the pyramid is simply an inevitable product of thegress’ has been mirrored by that of countless negative indicators framing conditions of round objects falling onto a square wooden– including unemployment, the gap between rich and poor, frame.”9
homelessness, ethnic and racial conflict, wilderness loss, climate
What human-made ‘framing conditions’ make the small andchange, and species extinction. And though economic globalisa- local seem evolutionary dead-ends, promote the growth of evertion has been sold to the world as a means of bringing stability and larger corporations, and make a globalised economy appear ‘inevpeace, it has already given riseitable’?
‘As globalisation critic Jerry Mander has pointed
to an entirely new problem –Since the question is about‘contagious instability’ – inlarge
versus small, it’s not surprisout, the ‘rules of corporate behaviour’ offer little
which economic upheaval ining that one side of the ‘frame’ is
one country rapidly spreads leeway for decision-making based on values other built around power – both thearound the world, leaving
than those of growth and profit; many decisions power of governing institutions
devalued currencies, bankrupt- made by seemingly ruthless CEOs are effectively to make decisions on behalf ofcies, unemployment, even ecosociety as a whole, and the power
dictated by the imperatives of the corporate
nomic collapses in its wake. Allof a wealthy business elite thatof these trends, linked as they
strives to maintain and expand
machine and the rules of finance.’
are to growing scale, might
its economic position. Today, thisunderstandably lead people toelite is defined not just by theseek ways of limiting that growth. But if our course is set by forc- multi-million-dollar salary and stock option packages commanded
es outside human control, then debate is silenced, dissent stifled, by top Chief Executive Officers, but also by the corporate form
and activism pre-empted. How, after all, can we stand in the way itself. As globalisation critic Jerry Mander has pointed out, theof ‘natural evolution’?
‘rules of corporate behaviour’ offer little leeway for decision-making based on values other than those of growth and profit; manydecisions made by seemingly ruthless CEOs are effectively dictatBasic Assumptions
ed by the imperatives of the corporate machine and the rules of
It is the thesis of this publication that the growth of ever larger finance.10 But with rare exceptions, business leaders are not clamcorporations operating in an increasingly globalised economic ouring for more restrictive corporate charters, tighter controls on
arena is not the product of natural or evolutionary processes, but is finance and trade, or limits on corporate power generally – in fact,
very much the result of human decisions – particularly the policy quite the opposite. While acknowledging the central importancechoices made in our names by governments. Such decisions can of the corporate form, it seems fair to assume that the business elite
be changed, and so can the course of our collective social and ultimately sees its own interests served by that model, and would
economic life.
oppose fundamental changes to it.
Though human decisions are the motive force behind corpoAnother part of the frame is aligned along an ideological orrate growth and economic globalisation, this doesn’t mean that an worldview axis, and is made up of society’s dominant economic
overarching conspiracy is at work.The situation is analogous to the and technological beliefs and attitudes. In the industrialised world,
propaganda model described by Noam Chomsky, which explains this ideology is based upon such assumptions as these:
how the media is censored – not through the machinations ofmen meeting secretly in a smoke-filled room – but through amarkets are the best and most rational means of governing social
fairly simple set of conditions that ultimately lead even well-intenand economic affairs;
tioned reporters and editors to play a role in censoring the news.
In his study of this model, David Edwards describes how an initialsince the proper functioning of markets depends on individset of human-made ‘framing conditions’ can make for a predictaualism and competitiveness, these traits should be honoured
ble, inevitable outcome:and cultivated;“The mechanism by which this occurs can easily be demon-••

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E c o l o g y & C u lt u r eI t ’ s E v o l u ti o n I s n ’ t I t ?

•the well-being of both individuals and societies is best measured
in terms of their levels of consumption, and therefore healthysocieties require constant economic growth;•advances in technology are either beneficial or at worst ‘neutral’,and in any event the advance of technology is beyond social control;•whatever their costs, the technological and economic changes
associated with ‘progress’ are an improvement on the past, which
was a time of unrelieved drudgery and deprivation.
The notion that globalisation and corporate growth are inevitable, natural processes is becoming part of this worldview as well.
Like the belief system of any culture, the industrial worldview istightly self-contained.The intrinsic value of technological advanceand economic growth are its basic underpinnings, and simply
cannot be questioned: if problems arise because of technology, still‘If problems arise because oftechnology, still more advanced technologies
must be relied upon to provide the solution;
if economic growth gives rise to social andenvironmental breakdown, the cure is predicatedupon still more economic development.’
more advanced technologies must be relied upon to provide thesolution; if economic growth gives rise to social and environmental breakdown, the cure is predicated upon still more economic
development. In this way the stakes grow ever larger, in a global
game of gambler’s ruin.
Needless to say, these framing conditions are hardly independent. Government decisions, for example, help determine whether
the elite grows in economic power, or diminishes. The businesselite, in turn, has profound influence over government decisions– for example through campaign donations that offer access toelected officials, and via the ‘revolving door’ that links corporateboardrooms and the government bureaucracies that supposedly
oversee them.
The business elite also has the ability to manipulate the mainstream worldview. The billions of dollars spent on advertising, forinstance, consistently portray consumption as the answer to all life’s
problems. Through corporate control of the media, information
contrary to a business-friendly ideology is consistently filtered out.
Corporate-funded think-tanks, meanwhile, work to hone economic theory favourable to corporate interests into establishedgospel.
Much of this territory is not new. Many writers have described
how the ‘free trade’ agreements signed by governments have been
designed by and for corporations; others have revealed in depress1 Walter Adams, “The Antitrust Alternative”, in Corporate Power in America, Ralph
Nader and Mark J. Green, eds. (New York: Grossman Publishers, 1973), pp. 138-9.
2 Thomas L. Friedman, “Excuse Me, Mohamad”, The New York Times, Sept 29, 1997,
sect. A, p. 25.
3 Times Argus (Montpelier,Vermont), Sept. 19, 1996, p. 8.
4 “Too Big or Not Too Big”, Time, Oct. 2, 1995, p. 32.
5 Thomas L. Friedman, “Roll Over Hawks and Doves”, The New York Times, Feb. 2, 1997.
6 International Fund Strategies, no. 1, June 1996, p. 4.
7 Bill Gates, The Road Ahead (New York: Penguin Books, 1995), p. 11.
8 Walter Truett Anderson, “There’s No Going Back to Nature”, Mother Jones, Sept-Oct
1996, pp. 78-9.
9 David Edwards, Free To Be Human (Totnes, UK: Green Books, 1995), p. 9.
10 Jerry Mander, “The Rules of Corporate Behavior”, in The Case Against the Global
T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r e

ing detail how government has in general been captured by Big
Business.11 The role of industry in manipulating public attitudes
through advertising and public relations is also well documented.12 A number of activist organisations in both the US andEurope have focused on ways in which ‘corporate welfare’ subsidies benefit various big businesses and industries.13 And theprominent features of the dominant economic and technologicalideology have been accurately described and critiqued.14
Less frequently discussed, however, is the way many seemingly
neutral government policies intrinsically favour large-scale enterprises over those that are smaller in scale. This is particularly thecase with so-called ‘investments in infrastructure’. Even among
many critics of the status quo, such expenditures are consideredbeneficial to society as a whole, so long as they are planned welland implemented fairly. These sorts of investment, however, haveplayed a key role in promoting the growth of economic scale ingeneral, and the rise of large corporations in particular. Similarly,
many government regulations, whose avowed purpose is to protect the public and the environment from corporate abuse, insteadsystemically serve to support large-scale businesses at the expenseof smaller ones.
This emphasis on the role of government does not mean thatthe trend towards a corporate-run global economy can be reversed
by tinkering with government rules or tightening some regulations. Far more fundamental change is required, and this will
require widespread grassroots efforts – not only to dismantle thepower of vested interests – but also to do the hands-on work ofbuilding communities and economies that are smaller in scale andmore localised, sustainable and equitable.
But while it is unimaginable that fundamental change at the
top will ever occur without significant, widespread pressure frombelow, the fact remains that the policy choices made by virtually
every government currently serve to further the corporate agenda,
and it is vitally important that those policies be changed. Doing sowould represent an important step towards stopping the corporate
juggernaut.
What’s more, understanding the systemic roots of today’s crises
can be helpful even to the most local of grassroots efforts. The
drive towards a global economy has given rise to so many symptoms of breakdown and inequity that focusing on one symptom
or another can easily blind one to the common thread that binds
them all. Recognising that thread can help activists forge otherwise unlikely alliances, making efforts to combat the corporate-industrial system stronger and more effective. From the clearcuttingof old-growth forests to the hazards of genetically engineered
foods, from sweatshop labour in the South to corporate downsizing in the North, from the erosion of democracy to the loss of
indigenous ways of life – all of these (and many more) seemingly
separate problems emanate from the same economic and technological system – one that is becoming ever more divorced fromreal human and ecological needs.

Economy, Jerry Mander and Edward Goldsmith, eds. (San Francisco: Sierra Club,		1996), p. 309-322.
11 See for example Who Will Tell the People?, by William Greider, and Who Rules America
Now?, by G. William Domhoff.
12 See for example Stuart Ewen’s Captains of Consciousness, and John Stauber’s Toxic Sludge isGood for You.
13 In the US, Public Citizen is one of the leading NGOs looking at ‘corporate welfare’issues.
14 For the Common Good, by Herman Daly and John Cobb, effectively demolishes many ofthe premises of conventional economic thinking; The Growth Illusion, by Richard
Douthwaite, does the same for the whole notion of economic growth. 		
Langdon Winner’s The Whale and the Reactor and Jerry Mander’s In the Absence of		the Sacred are excellent critiques of modern attitudes to technology.

7

2

P

THE BIG GET BIGGER“There seems only one cause behind all forms of social misery: bigness....
Wherever something is wrong, something is too big.”			

Leopold Kohr, The Breakdown of Nations1C

onstant and rapid growth would be considered ‘national’ in the sense that their shareholders were mainly resiunhealthy – and in the long run impossible – in almost dents of the country in which they were registered. By 1990 the
any realm other than the economic. In that self-con- biggest firms were all international, their shares being held bytained world, growth is considered the very measure of success. investors throughout the world and traded on several stock- marNowhere is this revealed more starkly than in the annual reports kets.
of corporations, which usually announce the prospects for future
growth even more loudly than they trumpet past success. Here,for example, is the CEO of Campbell’s Soup Company breath- Merger Mania
lessly describing his company’s growth potential:
As corporations grow in size, they often approach limits deter“As I look to the future, I shiver with business excitement. mined by the size of their market. One way to sustain further
That’s because Campbell Soup Company is engaged in a ‘Global growth is by taking over or merging with competitors. In theConsumer Crusade’.... The aim is to convert millions of new United States, the first big wave of mergers and acquisitions
customers to Campbell brands
occurred in the early 1900s, when
every year. We are moving acrossapproximately one-third of the‘Based on the conviction that bigger mustthe oceans and into new nationnation’s manufacturing assbe better when competing in global markets, entire
states and blocs.The joy of it is thatests were consolidated into justcorporations that are already huge by any
there is no speed limit on our
318 huge corporations.5 Mergers
progress. We can’t be fined forand takeovers have remained a fact
standard are seeking to grow still larger.’
speeding. Rather, the cheeringof corporate life ever since.
will grow louder and stronger the
Between 1956 and 1968, forfaster we go ... especially from our share-owners. ... The potential example, American oil companies took over more than 200 of
rewards of this Global Consumer Crusade are virtually limit- their smaller competitors.6 The deregulation fervour of the 1980s
less.”2
precipitated another frenzy of takeovers and acquisitions: in the
The Coca-Cola Company has the world’s most familiar food and beverage industry alone, the decade saw over 450 mergbrand name; its products sell in 195 countries, generating annual ers in Europe, and another 400 in the US.7
revenues above $16 billion. But financial markets insist on conEconomic globalisation has now sparked yet another explostant expansion, leaving the company no alternative but to grow sion of mergers and aquisitions. Based on the conviction thatstill larger:
bigger must be better when competing in global markets, corpo“All of us in the Coca-Cola family wake up each morning rations that are already huge by any standard are seeking to growknowing that every single one of the world’s 5.6 billion people still larger.
will get thirsty that day. ... If we make it impossible for these 5.6
In 1997, mergers involving American companies alone
billion people to escape Coca-Cola, ...,then we assure our future totalled a record $1 trillion.8 Among the mega-mergers that year
success for many years to come. Doing anything else is not an were Bell Atlantic and Nynex (at the time, the second largest
option.” 3
merger in US history), between Chase Manhattan and Chemical
If growth is what has been demanded of them, corporations Bank (creating America’s largest bank),9 and between the Swiss
have delivered, in part by expanding markets beyond the borders Bank Corporation and Union Bank of Switzerland (creating anof the nation in which they were founded. While the scale of the even larger bank, and the second largest in the world).10 If MCI
world economy has grown significantly in the last half century, Communications had accepted British Telecom’s merger offer, itinternational trade has increased even more rapidly. Between would have been the largest such deal in British history; instead,1950 and 1992, the value of the goods and services the world MCI accepted nearly twice as much from Worldcom, making it
produced increased by a factor of five; but the value of interna- for a short while the biggest merger in American history.11,12
tional trade grew twice as fast, going up by a factor of more than
By mid-1998, still larger mega-mergers – including four of
eleven.4 Reflecting this steady internationalisation of the econo- the five largest mergers in American corporate history – shatteredmy, companies themselves have changed. In 1950, almost all even 1997’s record pace.13 Banking giant Citicorp announced acompanies, even those involved in international trade, were merger with the Travelers Financial Corporation, creating a

8

T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eThe Big Get Bigger
financial powerhouse with $700 billion in assets. Several car manufacturers also combined: US-based Chrysler was taken over by
Germany’s Daimler-Benz, and British-based Rolls-Roycemerged with Volkswagen. Telecommunications giants SBC andAmeritech merged, a deal worth over $62 billion; aircraft manufacturer Boeing combined with former competitor McDonnell-Douglas; NationsBank and Bank America merged, a $60
billion deal that created America’s first truly nationwide bank;‘When asked how the deal involving his
company’s merger with another came about, theCEO of First Union Corporation replied, “I just
kept stacking billion-dollar bills on the table.’
British Petroleum took over Amoco, forging a company worth
more than $100 billion, the largest industrial combination
ever.14The sums involved in such consolidations are so huge they
are difficult to comprehend. When asked how the deal involving
his company’s merger with another came about, the CEO ofFirst Union Corporation replied, “I just kept stacking billion-dollar bills on the table.”15

When Corporations Rule the Economy

Today there are some 40,000 transnational corporations, most ofthem based in the industrialised countries; among them, theygenerate three-quarters of all the world’s imports and exports,and have sales of $5.5 trillion.16 Not all of these corporations arelarge (at least not by Ted Turner’s standards) but some are verylarge indeed. In his book When Corporations Rule the World, David
Korten cites some sobering statistics:• the 500 largest corporations in the world now control 25%of the entire world’s economic output;• the largest 300 corporations (not including financial insti-

tutions) own roughly 25% of the world’s productive assets;• the 50 largest commercial banks and diversified financial

In this light it is ironic that the United States government has
expended so much self-righteous fury over the lingering survival of Cuba’s ‘planned economy’, when there are more than 50
other planned economies larger, in economic terms, than Cuba.
Of course, all these others are transnational corporations.19

Farewell to Small Businesses

We can also look at the other end of the scale, and see how small
businesses are faring. This is not so easy as it would seem: as thescale of the economy has grown, even the definition of ‘small
business’ has grown along with it. In the United States, for example, the self-proclaimed mission of the U.S. Small Business
Administration (SBA) is to “aid, counsel, assist and protect theinterests of small business concerns.”20 When the agency was
founded in 1953, a small business was defined as a manufacturing
plant that employed fewer than 100 persons, a wholesale establishment with annual sales of less than $200,000, or other businesswith sales or receipts of less than $50,000 per year. At the time,
fewer than 10% of US businesses were larger than this standard.21
Today, however, what the SBA considers a ‘small business’ hasgrown considerably: for manufacturing, the maximum number of
employees has quintupled to 500 – and in certain industries(including ammunition manufacturers, telephone communications and air transport services) a business can have as many as
1,500 employees and still be defined as ‘small’. For most retail andservice businesses, the upper limit of annual sales has grown to $5
million. But if the term ‘small business’ makes you think of thecorner shop, you might be surprised to find that the SBA considers supermarkets with up to $20 million in annual sales ‘small’.
Even a commercial bank with up to $100 million in assets qualifies by today’s yardstick. In practice, the SBA umbrella covers any
business that is “not dominant in its field”, which means that 99%
of all businesses – some of them quite large indeed – qualify.Yet‘Studies in the US have shown that five
years after the opening of a new Wal-Mart, storeswithin a 20-mile radius have lost an averageof 19% in retail sales.’companies control nearly 60% of all global capital.

These numbers underscore Korten’s point that “The global
trend is clearly toward greater concentration of the control ofmarkets and productive assets in the hands of a few firms...” 17The big are getting bigger, much bigger.
The control of so much wealth and power by a few transnational corporations is worrying to those who value democratic
principles. But while the corporate world is certainly not blind
to its unprecedented power, it is more inclined to gloat than fretover the implications for democracy. A two-page spread in theadvertising trade publication Adweek, for example, showed photosof Hitler, Lenin, Napoleon ... and a Coke bottle. The caption
proudly declared, “Only one launched a campaign that conquered the world.”18
Another way to gauge the phenomenal size of the biggest
transnational corporations is to compare their revenues with theGross National Products (GNP) of entire nations. By 1995, 48 of
the 100 largest economies in the world were in fact corporations,
not countries. Within these corporate economies, there is animmense gap between the richest and the poorest; there is no
democracy, nor any goal more important than profit and growth.
T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eeven the largest of these are minnows compared with the really
big fish: the remaining 1% of businesses are so large that among
them they employed over 40% of all US private sector workers
in 1990.22
The growth of these very large businesses has been at least inpart at the expense of the very small. Studies in the US haveshown that five years after the opening of a new Wal-Mart, storeswithin a 20-mile radius have lost an average of 19% in retail sales.
For many local enterprises, survival is impossible in the wake ofsuch losses. The typical result can be gauged from the experiences of a town in Iowa, where the opening of a Wal-Mart was followed in quick succession by the closing of eight smaller businesses – including a hardware store, three clothing stores, a drug
store, a shoe store, a department store, and a variety store.23
Unfortunately, this trend is not limited to the United States.
In England a superstore that opened in 1989 cost the nearest
town centre 70% of its trade within four years; at least ten othertowns in the vicinity also lost business.24 Since 1991, the comingof superstores known as ipermarcati to Italy has resulted in thedemise of 370,000 small, family-run businesses. In less than adecade, half of the country’s corner groceries and a third of its

9S m a l l is B e a u ti f u l , B i g is S u bsi d is e dother small stores have simply been driven out of business.25

Small Farms vs. Agribusiness

The growth of large enterprises at the expense of smaller ones
has been particularly true in agriculture. In the United States,
small farms have been steadily disappearing for generations.
When they do, their land is usually swallowed up by larger farms,
with the result that the average farm size in the US more thantripled between 1935 and 1987.26 Large farms also need fewer
people per acre: between 1950 and 1955 alone, America’s agricultural sector shrank by more than a million workers.27 This
trend has been going on so long that today less than 3% of the
US workforce is directly engaged in farming; yet even with so
few farmers left, small farms have still been disappearing at theple, the British agricultural sector has shed some 88,000 jobs.
With their livelihoods gone, many rural people have little choice
but to migrate to urban centres, leaving behind small towns andvillages sapped of cultural and economic vitality. Rural economic health suffers further injury from the invasion of corporatechains, which displace smaller, locally-owned retail shops. Whilethe latter recycle a high proportion of their revenues back into
the local economy, corporate chains and franchises merely siphon
wealth away and deliver it to corporate headquarters – where it
fuels further corporate growth and adds to the portfolios ofstockholders, but gives little back to the local economy it camefrom. Studies indicate that of the money spent at a typical
McDonald’s restaurant, nearly 75% leaves the local economy.31
Other studies have shown that Wal-Mart, which sites most of its
mammoth stores in rural areas, destroys three jobs for every two
it creates.32

The Rise of the Megalopolis

Small-scale farm (Ladakh, India)

rate of more than 30,000 a year.28
This trend may have proceeded furthest in the United States,
but it is occuring throughout the industrialised world. In Britain,
more than 450,000 farms were in operation at the end of WorldWar II, the majority of them smaller than 50 acres. Today, there
are only half that number. Even as late as 1970, there were over
100,000 dairy farmers in the UK. But more than 30,000 of themdisappeared during the 1970s, and another 20,000 folded in thedecade following. Though their numbers have already been decimated, dairy farmers in England and Wales are still disappearing
at the rate of 100 each month.29
While small British farms are struggling, large-scale farms are
thriving: the biggest 10% of farms today account for half of British output, and some analysts claim that cereal farmers will soonneed 800 acres or more to remain profitable. This trend toward
larger scale is closely related to the industrialisation of agriculture,in which traditions of land stewardship give way to an obsession
with productivity and short-term profits. In fact, many of Britain’s largest farms are now run by contract companies, which takeon the farm’s management and operation in return for a fee anda percentage of profits. One such company,Velcourt, farms a totalof 60,000 acres for large landowning clients. Respected agricultural analysts point to this as the wave of the future, with the
implication that the vast majority of Britain’s agricultural production will soon be in the hands of just 12,000 decision-makers,
few of whom will even reside on the land they farm.30
The loss of small farms goes hand-in-hand with the marginalisation of rural areas in general. In the past ten years, for exam-

10

All over the industrialised world, cities have grown at the expenseof rural areas. Thanks to Japan’s urbanisation, for example, some
2,500 rural villages have been swallowed up by expanding cities.33 The north-east United States has been so intensively
urbanised that the entire 450-mile swathe from Washington to
Boston can be considered a single ‘megalopolis’. Many of theonce-independent and lively small towns in that stretch are now
merely ‘bedroom communities’ – suburban appendages of thenearest large city.
In the Third World most of the population still makes a livingfrom the land, but similar trends are underway there as well. Not
so long ago, farmers in the South typically produced a diversityof crops on their small-holdings, thereby providing most of theirfamily’s needs for food, fibre and fuel, and perhaps generating asmall cash income by selling surpluses in a local market. But­‘Export-led agriculture usually demands
large-scale monocultural plantations,industrial-scale machinery, and heavy chemical
inputs; but it does not require many farmers,
and a large portion of the agriculturallabour force is left redundant.’colonialism, development, and free-trade policies have systematically shifted production from local needs to the requirements ofglobal export markets. A farmer on a two-acre plot can feed hisor her own family quite well, but cannot compete in the global
economy. Export-led agriculture usually demands large-scalemonocultural plantations, industrial-scale machinery, and heavy
chemical inputs; but it does not require many farmers, and a large
portion of the agricultural labour force is left redundant.
This process is occurring rapidly in places like China. Less
than twenty years ago, 92% of China’s population were farmers;
now less than 40% remain on the land. In one recent year alone,
10 million peasants left their farms.34 Agricultural modernisation
is expected to ‘free’ so many people from the land that 440 million will be migrating to China’s urban areas in the next few
decades. While the vitality of rural village life is thereby decimated, 600 new cities will be needed by 2010 to handle the urban
migration, according to China’s Vice-Minister of Construction.35
The population explosions in Third World cities is thus far
more closely linked to modernisation and development than to
T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eThe Big Get Bigger
overall population growth. In fact, cities like Karachi, Manila andLagos, which more than doubled in size between 1970 and 1990,
grew twice as fast as overall population growth in their respective
countries.36 Thanks to the systematic undermining of rural life,
there were 20 more cities with populations over 10 million at theend of the century than there were in 1970. All these additional
megalopolises are in the Third World.37

So What is Small and Local?

The trends described in this chapter all follow a similar pattern:
the growth of the large and global at the expense of the small andlocal. Populations are being drawn into huge urban agglomerations, while rural communities are sapped of economic and cultural vitality. Corporate businesses that have already reached an
unimaginable scale are growing still larger and more powerful,while small, local businesses are struggling to survive. The scopeand scale of the global economy continues to expand, while local
economies almost everywhere are in decline.
But what is small, and what is local? The definitions of theseterms may seem self-evident, but as the Small Business Administration proves, there is much room for interpretation. Take, forexample, an advertising or computer graphics business with justtwo or three employees operating out of a tiny office in the
countryside. On one level this is certainly a small business; but if
it has clients on four different continents, to what degree is it a‘local’ business? Or consider an owner-operated shop selling
fruits and vegetables – surely a small business. But if the produce
comes from dozens of different countries, is grown on industrial-scale farms, and is delivered by large corporate wholesalers
over international transport networks, is it really ‘small’, or is it
just a tiny piece of a gigantic global-scale trading system?
Truly small, truly local businesses are becoming increasingly
rare, especially in the industrialised world. Examples might
include family farmers selling directly to their customers, or
craftsmen and artisans using nearby resources to produce wares
for surrounding towns. One key feature of such enterprises is thatthe distance between producer and consumer is fairly short – agood rule of thumb for ‘local’. But today a wide range of subsi1
2
3
4

Leopold Kohr, The Breakdown of Nations (New York: E.P. Dutton, 1978), p. xviii.
Campbell’s Soup Company, 1994 Annual Report, p. 1.
Coca-Cola Corporation, 1993 Annual Report, p. 8.
David Korten, When Corporations Rule the World (East Hartford, CT: Kumarian, 1995),
p. 18.
5 Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 36.
6 Kirkpatrick Sale, Human Scale, pp. 67-8.
7 A. Blackwood, unpublished manuscript.
8 PBS NewsHour, June 2, 1998.
9 Nicholas Hildyard, Colin Hines and Tim Lang, “Who Competes: Changing
Landscapes of Corporate Control”, The Ecologist, vol. 26, no. 4, Jul.-Aug. 1996, p. 131.
10 Peter Truell, “2 Swiss Executives Talk of Benefits of Bank Merger”, The New YorkTimes, Dec 10,1997, section D, p. 5.
11 A. Blackwood, unpublished manuscript.
12 Jan M. Rosen, “Dial MCI for Money”, The New York Times, Nov. 16, 1997, sect. 3, p.
2.
13 PBS NewsHour, June 2, 1998.
14 Peter Passell, “When Mega-Mergers Are Mega-Busts”, The New York Times, May 17,
1998, sect. 4, p. 16; Russell Mokhiber and Robert Weissman, “The Big Boys Unite”,
Aug.
25,1998, corp-focus@essential.org
15 “Multibillion-Dollar Deals”, The New York Times, July 27, 1997, section 3, p. 2.
16 Chakravarthi Raghavan, “TNCs control two-thirds of the world economy”, Third
World Resurgence, no. 65/66, pp. 31-32; also Blackwood, p. 3.
17 David Korten, When Corporations Rule the World, p. 221.
18 Cited in Alan Thein Durning, “Can’t Live Without It”, Worldwatch,
May-June 1993, p. 10.
19 David Korten, When Corporations Rule the World, p. 221.
20 “SBA Profile: Who we are and what we do”, SBA, Washington DC, third
edition, 1996.
21 Encyclopedia Americana, 1991 edition, v. 25, p. 48.
T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r edies and ignored costs mean that goods transported halfway
around the world and passed through several corporate middlemen can easily be cheaper than goods produced right next-door,
making it hard for truly local producers to survive. Because of
hidden subsidies the cost of local garlic in Spain, for example, istwice that of garlic imported from China; similar distortions
make local butter in Kenya more expensive than butter imported
all the way from Denmark. It is an absurd situation, none the lessso because it is justified by economic logic.
In cases like these the distance between producers and consumers is enormous, with heavy costs to people and ecosystems
at both ends of the transaction. Yet government policies areencouraging this gap to widen still further. Thus, the US government sponsors dozens of programmes to induce even small firms
to “travel along the exciting and profitable road to overseas markets.”38
In countless other ways, governments are actively promoting
trade among goods that could be produced locally, and are systematically encouraging the growth of scale at every level. These
policies are costing people their jobs, and are breaking down thecommunity fabric that depends upon healthy local economies;
they are eroding democracy and widening the gap between richand poor; and they are irreparably damaging ecosystems andhuman health across the planet.
Clearly, a fundamental change in direction is needed.The goal
would not be to shrink the producer-consumer distance to somearbitrarily-defined number of miles, nor would it be to eliminate
all trade. Instead, the aim would be to offer support to the small
producer instead of the corporate giant, to local economies rather than the global.
Truly local economies – where the separation between producers and consumers is minimal – inherently promote small
scale on many levels. Businesses and industries can be smaller, lesscentralised, and less taxing on the environment, and communities
can be less populous but still culturally and economically vibrant.
In that sense, the terms ‘local’ and ‘small’ are intimately related.
Importantly, they define a vision of the future radically different
from that being embraced in our name by governments everywhere.
22 Jeremy Rifkin, The End of Work (New York: G.P. Putnam, 1996), p. 10.
23 Kai Mander and Alex Boston, “Wal-Mart: Global Retailer”, in The Case Against the
Global Economy (San Francisco: Sierra Club, 1996), p. 337.
24 Tim Lang and Hugh Raven, “Who Will Tame the Supermarkets?”, The Ecologist,
vol. 24, no. 4, Jul./Aug. 1994, p. 123.
25 Vania Grandi, “Small Grocers Disappearing into History as Superstores Emerge in
Italy”, Burlington Free Press, Jan. 2, 1998, p. 6B.
26 Jeremy Rifkin, The End of Work, p.110.
27 Earl O. Heady, “The Agriculture of the U.S.”, Scientific American, September 1976, pp.
107-127. Cited in Wendell Berry, The Unsettling of America, p. 162.
28 A. V. Krebs, “Farm Subsidies: Myth vs. Reality”, The Agribusiness Examiner, Apr.-May,
1995, p. 5.
29 Graham Harvey, The Killing of the Countryside (London: Jonathan Cape, 1997), p. 9,
47, 70-71; Robin Page, “Havoc wrought by the drive for ‘efficiency’”, Daily Telegraph,
June 15, 1996, p. 3.
30 Graham Harvey, op. cit.29 , p. 9, 15, 40-1, 47.
31 Cited in Kirkpatrick Sale, Human Scale, pp. 88-9.
32 Kai Mander and Alex Boston, op.cit. 23, p. 338.
33 Barbara Crossette, “Dead Men Don’t Wear Bleeding Chennai”, New York Times, May
25, 1997, Section E, p. 4.
34 The Guardian, Nov. 3, 1994, p. 13.
35 “Preserving Global Cropland”, State of the World, 1997 (New York: W.W. Norton,
1997), p. 48.
36 World Urbanization Prospects: the 1992 Revision (New York: United Nations, 1993),
table A.11.
37 David Morris, “Unmanageable Megacities”, Utne Reader, Sept.-Oct. 1994, p. 80.
38 Breaking into the Trade Game: A Small Business Guide to Exporting (Washington, DC:		
Small Business Administration, 1995), p. i.

11

3
G ROW T H M A D E E A S Y:I N F R A S T RU C T U R E A N D S C A L E

P“International donors, including the International Monetary Fund, have been
urging the Philippines to increase infrastructure spending.... [This] would
strongly improve the country’s chances of being awarded investment grade ratingsby the international credit rating agencies.”
Financial Times1

P

oliticians, economists and business leaders often speakof the need for improvements in ‘infrastructure’; when theydo, no one mistakes their meaning. Images spring to mindof highways and bridges, railway lines, airports, harbours and shipping terminals, dams, power plants, telecommunications facilities,
hospitals, universities, perhaps even the ‘information superhighway’.
None of this is inaccurate, of course, but what is almost neveracknowledged is that these represent a particular kind of infrastructure, suitable to a particular kind of society and economy: onethat is large-scale and centralised, and that encompasses hugemarkets. What’s more, there is no recognition that other viable
forms of infrastructure, suitable to other forms of society andeconomy, even exist.
Faith in the industrial growth model is so deeply embedded
in modern Western thought that membership in a society organised along industrial lines is now considered a basic human right.
In a report to the US Congress, for example, the Office of Technology Assessment declared:“The interests of all nations ought to be fairly straightforward– quality jobs, a rising standard of living, technological and industrial development, ensured rights of workers and consumers, anda high-quality environment at home and globally...”.2
Both ‘technological and industrial development’ are oddly outof place on this list, but since no alternative to a high-tech, industrial way of life is deemed valid, very few people would find it
incongruous.
A monocultural globalised economy depending on endlessgrowth, obsessive trade, and ever-increasing levels of consumption
is not only environmentally unsustainable, it is socially unstableand economically unsound. Rather than continuing to devote
public resources to its creation, it would be far more sensible tosupport economies that are, among other things, smaller in scale
and more localised. Such a shift in policy would in turn require
support for infrastructures appropriate to small scale rather thanlarge. Unfortunately, public monies are rarely invested in ways thatserve anything but large enterprises operating in ever expanding
markets.
Still worse is that locally adapted forms of infrastructure arebeing systematically destroyed wherever they still exist. In recent
years, most of this destruction has occurred in the Third World,
where localised economies are reshaped to industrial contours in

12

a process described as ‘development’. In her book Ancient Futures:
Learning from Ladakh, Helena Norberg-Hodge described this process as she witnessed it in a remote Himalayan kingdom:“The development of Ladakh, as everywhere else in theworld, required a massive and systematic restructuring of societythat presupposed enormous and continual investments in ‘infrastructure’: paved roads, a Western-style hospital, schools, a radio
station, an airport, and, most importantly, power installations. ... At
no point was it even questioned whether or not the result of these
tremendous efforts constituted an improvement on what had
existed before. It was like starting from zero, as if there had been
no infrastructure in Ladakh before development. It was as if there
had been no medical care, no education, no communication, notransport or trade. The intricate web of roads, paths, and traderoutes, the vast and sophisticated network of irrigation canals
maintained over centuries: all these signs of a living, functioning
culture and economic system were treated as though they simply
did not exist.”3
Human-scale, locally-adapted forms of infrastructure work
very well for people and the ecosystems they inhabit, as was clearly the case in Ladakh for many hundreds of years; but being of nouse to a corporate-run global economy, these systems are undermined and ultimately destroyed through the imposition of aheavily-subsidised infrastructure built to industrial standards.

Catering to Growth

The architects of today’s industrial economies are well aware of
their infrastructural needs: a transport network capable of quickly
and reliably delivering raw materials, agricultural commodities
and manufactured goods over long distances; large quantities ofcheap energy, both to fuel manufacturing processes and to enable
household consumption to rise; communications networks topermit central co-ordination of widely dispersed corporate activities; educational institutions to provide a workforce trained forroles in the corporate economy; and research bodies to maintaina rapid rate of technological innovation. There is no doubt that
this is the agenda that drives government policy on infrastructuredevelopment today. A British member of the European Parliament
expressed it this way:
“For British industry to make the most of the business
opportunities presented by the single market, we need to provide theT h e I n t e r n a ti o n a l S o c i e t yfor

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G r o wt h M a d e E a s y : I n f r a st r u c t u r e A n d S c a l e
infrastructure to cater to their demands”.4
This would not be new policy: government-funded infrastructure development has “catered to the demands” of large
corporate enterprises for many years. To see what the result has
been, it’s worth considering one corporation, Wal-Mart, theworld’s largest retail business – and by some projections, soon to
be America’s largest corporation.5 The success of this firm hasoften been noted, and usually ascribed to the business acumen andpersonality of the company’s founder, Sam Walton. Rarely, if ever,does the role of a publicly-funded infrastructure enter into theanalysis. If it did, it would become clear that the ‘everyday low
prices’ the corporation uses to drive small shops out of businessare made possible by a wide range of indirect subsidies.
In a typical week,Wal-Mart serves some 70 million customers,‘Human-scale, locally-adapted forms ofinfrastructure work very well for people and theecosystems they inhabit but being of no use to a
corporate-run global economy, these systems areundermined and ultimately destroyed.’
the vast majority of whom drive their cars to the store, sometimes
from 50 or more miles away. Their journeys are made easier
thanks to Wal-Mart’s preferred location, adjacent to an artery of
the Interstate Highway System or other limited access highway.
Inside the store laser scanners at each cash register read computerbar codes, speeding customers through the checkout lines while
computers track the supply of the 80,000 different items sold.
These computers are connected by satellite communication links
to Wal-Mart’s central headquarters in Arkansas, where sales andinventory at each of the company’s more than 2,300 stores areclosely monitored. Further satellite links connect central headquarters with the company’s 43 distribution centres and with
Wal-Mart’s fleet of trucks – whose location can be pinpointed
using geo-positioning technology. With distribution warehouses
sited adjacent to Interstate highways, travel time is minimised fordelivery trucks just as it is for customers. A growing number of
Wal-Mart’s products are manufactured overseas – including morethan 47,000 container shipments in 1995 alone.6 These shipments
arrive at coastal ports designed for unloading container cargoes,
are transported by rail, and then transferred to trucks for the journey to distribution centres. The entire system enables the company to dispatch trucks loaded with precisely the right stock toevery store as needed, keeping the shelves full at all times.7
In sum, virtually every product Wal-Mart sells has been transported thousands of miles on superhighways paid for by the
public; the shipping terminals where foreign-produced goods
arrive have been built on public land and maintained by publicagencies; the satellites the company relies upon to communicate
with and monitor its stores and trucks are the product of a publicly-funded space programme, and the laser technology thatmakes inventory tracking possible stems from government-funded military research; the journey of virtually every customer has
been facilitated by a massive public highway system; even theworkforce that built, programmed, and maintains the company’s
computers is the product of an educational system, funded largelyby the public, that focuses on training people for such high-techroles.
Such a list could go on and on, but it should already be clearthat public funds have created the infrastructure Wal-Mart requires; moreto the point, even the concept of a corporate retailer on the scale
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Corporate retailers (New York)of Wal-Mart would be impossible without such an infrastructure.
Not only large-scale retailers, but producers, as well, benefit
from these public infrastructure investments: they move raw materials and finished products over the same transport infrastructure,
co-ordinate their geographically-dispersed subsidiaries via similar
communications networks, and rely on a publicly-funded educational establishment for personnel and for sources of technologicalinnovation. This dependence on public transport and communications networks was indirectly revealed in a Toyota advertisementthat recently appeared in American magazines. The Japanesetransnational touted the ‘made-in-America’ content of its Camry
model by claiming, “We buy the best parts in the world, no matter which state they’re from.” The ad diagrammed the car, proudly pointing to the different states where its various components
were manufactured: even though the assembly plant was in Kentucky, the 40 manufacturers involved were scattered from one endof the country to the other, from California to Vermont.8
Toyota’s Camry is not unusual in this regard, and ‘free trade’rules mean that components for many goods are now transported
even further before assembly. US-manufactured goods are so routinely fabricated in several different countries that the Federal
Trade Commission was heavily lobbied by industry to change thedefinition of what it means to be locally produced. The proposed13

S m a l l is B e a u ti f u l , B i g is S u bsi d is e drule change would have allowed businesses to expend as much as
25% of an article’s cost of production outside the US, and stilllabel the product ‘Made in the USA’.9
To build up an economy suitable to the scale at which transnational corporations operate, an industrial infrastructure is anabsolute necessity. Most Third World ‘development’ projects are
devoted to creating exactly that sort of infrastructure, thus enabling those countries to climb onto the bottom rungs of the
global economic ladder, while facilitating corporate access toSouthern resources, labour and markets. A recent conference on“investment opportunities” in less-developed Mediterraneancountries concluded that “Poor infrastructure is a key constraint
on investing in the Middle East and North Africa”. Building up
the energy infrastructure alone in order to encourage investment
would cost as much as £250 billion, most of which would be paidby the public.10 As in the case of Ladakh, the centralised infrastructure envisioned would meet the needs of large-scale industrial enterprises, but would undermine the livelihoods of people
whose needs are now met within more localised economies.

Small Scale, Human Scale

Global economies and the corporations that dominate themrequire an industrial infrastructure, but small-scale economies
built around more localised markets would have very different
needs.There would be far less dependence on long distance transport, reducing the need for motorways, airports and shipping
terminals. Since manufacturers would be producing for a smallermarket, they would likely be smaller themselves, and use morehuman labour and less energy. Communication links to co-ordinate activities across continents would no longer be a high priority. Though schools would still provide information about other‘Even though these smaller-scale options
would cost far less than building according to thecorporate blueprint, governments havesystematically ignored them.’
cultures, they would primarily be diverse reservoirs of location-specific knowledge. Research would likely aim toward thebest use of local resources in a particular environment, rather thanfocusing on high-tech findings with applications anywhere in theworld.
Even though these smaller-scale options would cost far lessthan building according to the corporate blueprint, governments
have systematically ignored them. Like most important choices,
decisions about the kind of infrastructure a society invests in are
inherently political. Unfortunately, real debate on this issue isextremely rare, even in countries described as democratic. What
little debate there is generally focuses on the margins: Whosebackyard will the motorway run through? What safeguards will bein place at the nuclear power plant? How can the communication
tower be built without ruining the aesthetic appeal of the mountain? Meanwhile, small-scale infrastructure options that provide
for people’s needs – not the needs of giant corporations – areignored or dismissed out of hand.
The result is a self-fulfilling prophecy: if public monies arecontinually invested in the infrastructural needs of a large-scale,industrial economy, no one should be surprised if that is the sortof economy that ‘evolves’.

14

The Myth of User Fees

One of the arguments associated with infrastructure development
is that certain investments ‘pay for themselves’. In the UnitedStates, where some $90 billion of local, state, and federal funds are
spent on roads and highways annually, it is often said that thisinfrastructure is not really subsidised, since most of that money
comes from user fees – taxes on fuel, vehicle registration fees, andthe like. In the US, this was the rationale for earmarking those fees
for a Highway Trust Fund, which could only be spent on further
road construction.
The argument is fallacious on at least two grounds. First, theexpenses that these user fees cover are only direct costs, at best.11
Indirect costs, like the pollution caused by car and truck transport,
the long-term costs of global warming, the environmental dam-

‘If the state were to allocate $20 billion to equip
each neighbourhood with a state-run brothel andcrack-cocaine outlet, would it be assumed that thiswas a wise use of public funds just because themoney could be recouped through user fees?’
age caused in drilling for, transporting, and refining oil, the military expense of guaranteeing its supply from the Middle East –and many others – are simply ignored.
Second, the fact that a given form of infrastructure pays foritself in narrow economic terms doesn’t mean that society is better off for having invested in it. If the state were to allocate $20
billion to equip each neighbourhood with a state-run brothel andcrack-cocaine outlet, would it be assumed that this was a wise useof public funds just because the money could be recouped
through user fees? Probably not, but the logic is no different fromthat which justifies other infrastructure investments simply
because they generate enough taxable transactions to pay forthem.
The shape a society takes tomorrow depends in part on thekinds of infrastructure investment it makes today. Any number ofdifferent infrastructures can pay their own way, but citizens mustfirst decide upon the kind of future they want to bring about.
Today almost all infrastructure investments are leading toward
larger scale, greater separation between producers and consumers,
and a world further dominated by corporations.

1 “Manila to double infrastructure spending”, Financial Times, April 23, 1996.
2 Office of Technology Assessment, US Congress, Multinationals and the National Interest:
Playing by Different Rules (Washington DC: US Government Printing Office, 1993), pp.
1-4, 10, cited in Korten op.cit. 4, p. 126.
3 Helena Norberg-Hodge, Ancient Futures: Learning from Ladakh (San Francisco: Sierra
Club Books, 1991), pp. 142-3.
4 Cited in “The Infrastructure Lobby”, The Ecologist , v. 23, no. 4, July-Aug. 1993, p. 123.
5 Kai Mander and Alex Boston, “Wal-Mart: Global Retailer”, in The Case Against the
Global Economy, p. 333.
6 “Imports Ahoy!”, Forbes, Sept. 9, 1996, pp. 100-102.
7 From Wal-Mart “Data Sheet”, updated April, 1997, Wal-Mart Stores, Inc. web site; and“Wal-Mart turns to high-tech”, The Santa Rosa Press Democrat, Sept. 23, 1993
8 Jane Holtz Kay, Asphalt Nation: How the Automobile Took Over America and How We
Can Take it Back (New York: Crown, 1997), p. 134.
9 “This Here Toaster’s an All-American (Import, That Is, Sort of)”, The New York Times,
May 18, 1997, p.7
10 “Infrastructure an impediment”, Financial Times, March 18, 1997.
11 In any event, even direct costs exceed the user fees for roads and highways by about $8
billion annually.
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SUBSIDISINGL O N G - D I S TA N C E T R A N S P O RT

“If you’ve got it, a lorry delivered it.”Tesco leaflet supporting ‘The Good Lorry Code’1		W

hen the typical American family sits down todinner, the food on the table has travelled, on average, some 1,500 miles. America is not particularly
exceptional in this regard among industrialised countries: arecent study in Germany, for instance, revealed that the ingredients in a single container of yoghurt had come from four different countries, and required 1,000 km of transport.2 Clearly,
people in these countries are dependent for food – the mostbasic of all day-to-day needs – not on their local economy, but
on a geographically huge economy that is increasingly international in scope.
As was argued in the last chapter, large-scale economies
depend upon infrastructures suited to that scale. The ways inwhich these infrastructures were created varies from country tocountry, but a detailed look at a particular case reveals the sorts
of forces that have been involved almost everywhere.
The transport system in the United States is a particularly
instructive example, in part because a single national US economy could never have been forged from such a vast expanse
without a reliable and extensive long-distance transport network – one that is today the largest in the world.3“Our Country will be Everywhere”

The decline of railways as a medium for passenger transport inAmerica has led to the mistaken belief that rail is no longer asignificant part of the nation’s overall transport picture. But in1994 alone, railways were responsible for more than 1.2 trillion
ton-miles of freight, more than any other mode of intercity
transport. The use of railways for freight transport is also growing: since 1960, the ton-miles of freight accounted for by rail in
the US have more than doubled.4
America’s rail infrastructure is clearly geared to long-distancetransport, rather than transport within more localised economies. The average length of haul in the US was over 800 miles
in 1994,5 and hauls less than 500 miles are unusual.6
How did this long-distance rail network come about? Partly
responsible was an ideology of growth and expansion that madea cross-country rail link into a national crusade. Vested interests
took advantage of that ideology, but it was government support
that really made a nationwide rail system possible.
Railway building in the US began in the 1820s. Thousandsof miles of track were laid in the next few decades, althoughmost of the lines served only local markets. But by the middle
T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eof the century there were calls for expansion into newly-acquired western lands, a political and commercial urge thatmeshed seamlessly with popular Enlightenment attitudes about
the relationship between Man and Nature. It was considered
America’s God-given duty to subdue and civilise the untamed
wilderness, and her “manifest destiny to overspread the continent allotted by Providence… ”7
There was also a pragmatic awareness of the role rail transport could play in tying together the huge nation, which was
already beginning to fracture along lines of natural geography
and local economic interest.8 If America’s dispersed local economies were to be amalgamated into a single, national economy,a nationwide transport network would be required. An enthusiastic advocate of a trans-continental railway made the argument
this way:“Let this road be constructed, and there will be no Northand no South, no East and no West, but our country will beeverywhere!”9
Immediately following the Civil War, the federal government officially embraced the idea of connecting the eastern andwestern halves of the continent by rail, and put vast resources atthe command of the corporations that would construct the line.
Over 183 million acres – an area larger than California andFlorida combined – were transferred from public ownership
into the hands of railway corporations in just a few decades.10
This land – lying in alternate sections six miles deep on eitherside of the track – was to be sold to settlers, with the proceeds
funding railway construction. Even when sold at a few dollars
per acre, it was a bonanza for the railway companies: land given
to the Union Pacific and Central Pacific railroads for their sections of the transcontinental rail line, for example, generated
over $27 million.11 This was a huge sum, almost four times asmuch as the US government paid Russia two years earlier forthe entire territory of Alaska.12
Powerful monied interests – not only railroad moguls but all
those who stood to gain from economic expansion – pushed
many projects through, often by bribing legislative officials.13
Sometimes politicians were also principals in railroad corporations: Leland Stanford, one of the owners of the Central Pacificrailroad, was at the same time governor of California. Vested
interests also made liberal use of the media of the day to encourage settlers to head for the ‘paradise’ awaiting them further west.
Kansas – well-known today for its shortage of rainfall, scorching
hot summers, winter blizzards, and occasional tornadoes – was15

S m a l l is B e a u ti f u l , B i g is S u bsi d is e dpromoted to unsuspecting settlers as home to the nation’s mostdesirable climate.14
The US government not only subsidised the building ofrailways, but also used its army to protect trains and settlers fromthe native Americans whose lands were being taken. Thus, while
America’s industrial economy was expanding in scale and geographic scope, it was doing so at the expense of countless indigenous cultures, whose ways of life were, for the most part,
obliterated.
Thanks to the railroad boom, a number of business interests
grew enormously in both wealth and power. Railroads were
America’s first Big Business, and many of the original railroad
corporations are still in operation, including Union Pacific,
today one of the world’s largest corporations. Financiers like J.P.
Morgan – whose name survives in another Fortune 500 corporation, the Morgan Stanley Group – also profited handsomely.15
But more significant than the benefits accruing to individual
corporations was the overall expansion of the American market.
Soon, a wide range of raw materials, manufactured goods andagricultural products would be travelling long distances relatively quickly by rail, making it possible for businesses to expand
their scale in tandem with the geographical growth of the market.
America’s railroad system was not designed to meet theinternal needs of localised economies – and in fact one of its
primary goals was to absorb those economies into a single
national one.Today, as in the past, this highly subsidised transport
infrastructure most directly benefits private interests involved inlong-distance trade and huge markets.

Roads, Roads, Roads

During the past 75 years, America’s long-distance transport
infrastructure has expanded exponentially, largely because of theconstruction of an immense highway network. By 1994, there
were over 175,000 miles of highways in the federal system alone,including 45,000 miles of interstate highways; various state systems contributed an additional 97,000 miles of ‘principal arterial’ highways.16 This immense system has been built and maintained almost exclusively at public expense. The sums involved
are not insignificant: over $55 billion dollars in state and federal
funds were expended on roads in 1994 alone.17
As the last chapter indicated, major corporations rely heavily on this system: altogether, trucks travelled a total of 182 billion miles in 1994 just on the interstate highways.18 Total
intercity truck transport accounted for 900 billion ton-miles offreight that year. As with rail, the trend is upward: the ton-mileage of truck transport has grown more than three-fold since1960.19
The present form of America’s highway transport infrastructure is not only the product of massive public subsidies: it is also,
to a large degree, the result of a conscious corporate plan.

What’s Good for General Motors

Although a federally-funded macadamised road between Washington and Ohio was built as early as 1817, most roads in the
US remained unpaved and suitable only for fairly short, local
trips until well into the 1900s. In 1893, a headline in the Washington Post read, “Our System of Highways – It is the Worst on
Earth and Should Be Reformed.”20
Despite the Washington Post’s admonition, roads were
not considered a high priority, even by the end of the century:
when the office which later became the Federal Highway

16

Administration was first established, it consisted of just two people with an annual budget of $10,000.21
As late as 1922 only one American in ten owned a car; mostpeople had no compelling need for one either, since electric
streetcar lines were both extensive and reliable, and made travel
possible virtually anywhere within most cities at very low
cost.22 In some cases the ends of one town’s lines even linked
up to that of another – enabling one to travel, albeit slowly, all
the way from New York to Boston and other cities by streetcar.
Even so, the focus of these systems was local, not long-distancetravel.
Starting in the mid-1920s, however, these local systems werebought up and systematically destroyed by a consortium of
automobile-related companies, including General Motors (GM),Standard Oil of California, Firestone Tire, and others. By 1946
National City Lines, the front company for these corporations,controlled public transport systems in over 80 cities. In every
case the local transport system was intentionally allowed todeteriorate. Service was slowed, then cut. Rails were torn up,
streetcars removed from service and burned. Many of these were
replaced by GM’s buses – with public relations campaigns portraying the shift as ‘progress’. But public transport was systematically being made inadequate; cars became no longer a luxury,
but a necessity.
The government may not have directly supported this process, but it certainly did little to stop it. By the time antitrust andconspiracy charges were filed in 1946, it was already too late: thecorporations had destroyed local transportation systems that, by
one estimate, would today cost as much as $300 billion to build.
Although the companies responsible were found guilty of conspiracy, they were each fined only $5,000. For his role in thecrime, the Treasurer of GM was fined the princely sum of one
dollar.23
The destruction of public transportation was a boon for the
automobile and oil interests, but the continued growth of thesecompanies would be limited unless more roads and highways
were built. Lobbying groups were formed, including the
National Highway Users Conference, headed by the Presidentof GM. Slick promotional films and advertising campaigns
pointed to the nation’s increasingly congested roads, and urged
people to support the building of new ones. One GM film
showed people stuck in traffic honking their horns. “What’s acitizen gonna do?” the narrator asks:“Don’t honk your horn; raise your voice. Ask for better
highways and more parking spaces. It’s your country. Give yourself the green light.”24
These efforts had the desired effect: the nation’s highway
infrastructure, including a Federal Highway system composed ofthousands of miles of two-lane roads, was continuously expanded at public expense. Separate state-funded highway systems also
grew rapidly.
But highway building got its biggest boost when General
Motors’ President Charles Wilson was appointed Secretary of
Defense. During his confirmation hearing in 1953, Wilson
argued that since “what’s good for General Motors is good for
the United States”, there was no conflict between his loyalty to
GM and his responsibilities to the nation. Wilson put this belief
into practice by pushing for a nationwide system of motorways,
on the grounds that it was crucial for national security. In 1956,
Congress authorised federal funds for a 41,000 mile Interstate
Highway System. At the time, it was described as “the greatest
public works programme in the history of the world.”25
It may seem that America today is already covered in tarmac,
but road-building continues unabated. With the InterstateT h e I n t e r n a ti o n a l S o c i e t yfor

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S u bsi d isi n g L o n g - D ist a n c e T r a n sp o r t
Highway System nearly complete, a new National Highway
System has been proposed which would make “improvements”
to 156,000 miles of existing highways and add 21 new “highpriority corridors”. The cost will be some $6.6 billion.26 Muchof the federal financing for these roads has come from a Highway Trust Fund into which petrol taxes and other user fees havebeen directed. For many years these funds could only be used tobuild more roads, creating a positive feedback loop: more driving led to more funding for roads, which inevitably led to still
more driving.
Just as the long-distance railroads served the interests oflarge-scale business in general, the highway transport system has
benefited more than just the automotive, oil and road- building
corporations that most actively promoted it. Among their otherimpacts, these public investments make it much easier to transport goods to and from anywhere in the nation, offering advantages to any business large enough to exploit huge markets. In
fact Charles Wilson might have more accurately said, “what’s
good for GM is good for all large corporations.”
As Robert Reich notes, the potential repercussions of heavily subsidised highways were never part of the public debate:“The manifestly real possibility ... that [they] might also
generate sprawling suburbs and shopping malls, harm downtown retailers, fatten the construction industry, boost auto sales,
create an entire trucking industry, displace barges and railroads,
and radically lower the cost of transporting and distributing
goods across America – was not openly discussed.”27
One can be certain, however, that many of these effects werediscussed among the powerful corporate interests that benefited
from them and consciously promoted them.

Corporate-friendly Skies

America’s economy could expand only so far if its transport
infrastructure were limited to rail and highways. As international trade has increased, the importance of air transport has grown
apace. In 1994, over 11 billion ton-miles of freight were carriedby air in the US – more than 20 times what was carried by air
in 1960.28 Obviously geared towards long-distance transport,
the average length of haul by air is now over 1,300 miles.29
A global economy also requires people to travel more, and totravel longer distances. For the US, the number of passenger-miles flown in 1994 was more than 12 times what it was in
1960; in the 1990s alone, passenger-miles flown increased byalmost 40 percent.30 Over half a billion passenger boardings in
the US were expected in 1997, and the airline industry projects
that number to increase by half in the next decade.31
Many countries have built up their national airlines as industries wholly- or partly-owned by the state. This has been thecase not only in the formerly-communist world – the Russian
government, for example, still owns 51% of Aeroflot32 – but incapitalist countries as well: the Dutch government owns 38% of
KLM airlines, and until recently Japan owned 50% of Japan Air
Lines; Germany was once a majority owner of Lufthansa, andBritain owned British Airways until it was ‘privatised’ in 1987.33
Most airlines in the less-industrialised world were built up by
the state, and many are still state-run.
In the US, airlines have always been independent businesses.
Nonetheless, taxpayers have made – and continue to make –huge investments in the infrastructure on which air transport
depends. For example, all major airlines rely on a government-funded air traffic control network – a massive technological infrastructure employing 17,000 people. The annual budget
for the Federal Aviation Agency, whose duties include air traffic
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E c o l o g y & C u lt u r econtrol, safety inspections, and airport improvement, is well over
$8 billion.34
Further subsidies for air transport are embedded in militaryresearch spending and government research and development
funding. These subsidies benefit American aerospace companies,
which in turn provide planes to all major US airlines. The valueof that assistance is estimated at $1 billion annually.35
Another form of hidden subsidy comes with the training ofpilots for commercial air fleets. In 1996 for instance, most of the
500 pilots that resigned from the US Air Force did so because
they were lured to commercial airlines, which pay trained pilots
higher salaries than the military for work that is less demanding.36 The Air Force estimates that over a period of nine years,
the training it has provided each pilot who ‘defects’ to an airline
costs the public $5.9 million.37

Airport Subsidies

Each of America’s 400 or so major airports has received large
public subsidies. Even today, airports pay no federal or state
corporation taxes and are exempt from local property taxes; theyreceive federal grants for capital improvements, and can borrowat subsidised rates.38 In the early days of aviation growth, startup costs for new airports were often paid for by the city where
the airport was located. These expenditures were usually justified on the grounds that an airport would be an economic boon
to the community. This was New York City mayor Fiorello La
Guardia’s rationale for using the city’s tax money to build
Idlewild (later Kennedy) Airport in 1945:“The greatest airport in the world is rising from the meadows at Idlewild in New York City. It will cost $71 million. Filling grading, planting, drainage, field lighting utilities, runways,
taxiways and aprons will cost about $35 million. The administration building, together with loading docks, apron and parking
spaces will cover well over three hundred acres and cost about$10 million.... The airport will bring millions of dollars monthly in commerce, business and traffic to the City of New York....
The airport is a costly undertaking, yet it will be one of the best
investments the City ever made.”39
Even though $71 million was a huge sum – more than halfa billion in today’s dollars – the final cost was over five times La
Guardia’s estimate.
Perhaps air travel today is easier and less expensive for everyone, but the subsidies for air transport have primarily benefited
corporations, particularly those engaged in global trade. The
Washington-based Reason Foundation, for example, has estimated that business jets use about 20% of the capability of thenation’s air traffic control systems, and well over half of the
FAA’s control tower services.40
But nowhere is the air transport subsidy for Big Businessmore starkly exposed than in a rural corner of Arkansas, wherean airport with runways long enough to handle fully-loadedcargo-carrying 747s has been built. The federal government
picked up $90 million of the airport’s $145 million cost.
According to investigative journalists Ken Silverstein and Alexander Cockburn, the beneficiaries of this government subsidy
include Arkansas’ giant poultry companies, Tyson Foods, Hudson Foods and Peterson Industries. According to the feasibility
study approving the project, “If competitive air freight rates wereavailable, these companies estimate that Japan would become aboom market for US fresh chicken products.” Another beneficiary is Wal-Mart, which, “Given dependable air service available
at competitive rates, [can] import a number of electronics, men’s
and women’s fashion apparel product lines by air.” A third major

17

S m a l l is B e a u ti f u l , B i g is S u bsi d is e dbeneficiary is the J. B. Hunt Transport Co., the largest overland
cargo hauler in the United States.41
As for local people living in the rural communities nearby,
this federally-subsidised airport certainly never had their needsin mind: “Most of the people here have never been in a plane”,
according to Jay Fulbright, who owns a farm near the site.42
Meanwhile, about 50 families were forced off their land to makeway for the 2,700-acre airport.43 “Big business interests, that’s
the only reason this is coming about”, Fulbright concluded.
This project is just one of many funded by an Airport
Improvement Programme with an annual budget of over $1.3
billion.44 The subsidy involved seems especially outrageous
since it’s clear that the project benefits only a few big corporations. But even when it can be claimed that a given project will
spur economic growth and help the ‘local economy’, virtually
every such project inherently subsidises long-distance transport,
and the major corporations that depend on huge markets.
Perhaps even La Guardia, were he alive today, would reconsider the wisdom of subsidising New York’s long-distance transport network so heavily. Today New York is a centre for international trade, but its local transport infrastructure is crumbling;
it is home to numerous flourishing Fortune 500 corporations,but many of its citizens have no job and nowhere to live. In any
event, New York’s policymakers are having no such second
thoughts: public agencies will be spending $4.8 billion to “modernise” the city’s airports in the coming years.45

93,000 Missing Cyclists

The advantage that a cheap and reliable long-distance transportsystem gives to large-scale businesses is one reason why they
have been able to supplant so many smaller enterprises; it also
helps explain how the global economy is able to overrun somany diverse local economies around the world.
If society has other goals in mind than promoting corporate

1 “Delivering the goods to you”, flyer promoting ‘The Good Lorry Code’, HermesHouse, St. Johns Road, Tunbridge Wells, Kent TN4 9UZ, UK, undated.
2 A. Blackwood, unpublished manuscript.
3 “Transportation in the United States: A Review”, National Transportation Library, p. 1.
4 National Transportation Statistics, 1996, US Department of Transportation, Bureau ofTransportation Statistics, Washington, DC, p. 74.
5 Ibid., p. 53.
6 Stephanie Böge, “Freight Transport, Food Production and Consumption in the UnitedStates of America and Europe”, Wuppertal Papers, no. 56, May 1996 (Wuppertal Institute,
Westfalen, Germany), p. 7.
7 Encyclopedia of American History (New York: Harper & Row, 1961), p. 193.
8 Many people today believe things would be far better if the nation were divided intomuch smaller entities. See, for example, Downsizing the USA, by William Naylor, andDwellers in the Land, by Kirkpatrick Sale.
9 John Hoyt Williams, A Great and Shining Road (New York: Times Books, 1988), p. 19.
10 Marc Reisner, Cadillac Desert: The American West and Its Disappearing Water (New York:
Penguin, 1987), p. 39.
11 Op.cit.9, p. 286.
12 Encyclopedia of American History, p. 280.
13 Howard Zinn, A People’s History of the United States (New York: Harper Perennial, 1990),
pp. 248-9.
14 Marc Reisner, op.cit. 10, pp. 41-2.
15 Howard Zinn, A People’s History of the United States, p. 249.
16 “Highway Profile”, National Transportation Statistics, 1996, pp. 29-30.
17 Ibid., p. 29.
18 “Truck Profile”, National Transportation Statistics, 1996, p. 41.
19 “Ton-Miles of Freight”, National Transportation Statistics, 1996, p. 74.
20 FHWA By Day, Federal Highway Administration, June, 1996, p. 1.
21 Ibid., p. v.
22 From Taken For A Ride (video), Jim Klein and Martha Olson, 1996.
23 Researcher Bradford Snell, cited in Taken For A Ride (video).
24 Cited in Taken For A Ride (video).
25 FHWA By Day, p. v, and p. 57.; Robert B. Reich, The Work of Nations (New York:
Alfred A. Knopf, 1991) pp. 61-2.

18

growth, then support can still be redirected towards transport
infrastructures that serve the needs of smaller enterprises operating in more localised economies. It’s not too late to shift
course.
A simple exercise in Worldwatch magazine demonstrated
how much less expensive such investments would be. The $300
million budgeted for a single interstate highway interchange in
Virginia, for example, could instead provide each of twenty
different towns and cities with a 100-mile network of paved,
off-street bicycle paths. And the funds intended for a $10 million
highway expansion in Eugene, Oregon, could instead provide
every Eugene resident over the age of eleven – all 93,000 ofthem – with a new bicycle, basket, lights, locks and raingear.46
Some communities are rediscovering transport modes long
ago abandoned in the quest for modernity. Bristol,Vermont, forexample, recently awarded its trash collection contract to a local
citizen who makes the rounds with a horse-drawn wagon. His
bid was competitive with those from contractors using the latest
mechanised equipment, but his horses have many advantages:
they are far quieter on their early-morning rounds than large
trucks; they use local, renewable resources (hay and oats) for fuel,rather than imported oil; and they are non-polluting, since theonly wastes they produce are biodegradeable – and a valuable
source of organic fertiliser for nearby farms.47
This is not necessarily an argument for the use of bicycles orhorses everywhere in the world. If priority is given to the needsof local economies rather than to long-distance trade, and if
locally-available resources are used to their full potential, thentransport systems will tend to differ widely from place to place.
This is only as it should be. It means communities are adapting
to their local environment and their own internal needs, rather
than conforming to the imperatives of a global economy – one
in which the same corporate plan is recklessly followed everywhere.

26 Jane Holtz Kay, Asphalt Nation, pp. 118-9.
27 Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), pp. 61-2.
28 “Ton-miles of Freight”, National Transportation Statistics, 1996, p. 74.
29 “Average Length of Haul, Domestic Interstate Freight and Passenger Modes”, National
Transportation Statistics, 1996, p. 78.
30 National Transportation Statistics, 1996, p. 72.
31 Matthew L. Wald, “Speed Hits the Wall”, The New York Times, Oct. 19, 1997, sect. 4, p. 6.
32 Alessandra Stanley, “Hold the Jokes, Please: Aeroflot Buffs its Image”, The New YorkTimes, June 29, 1997, section 3, p. 1.
33 Patrick J. Spain and James R. Talbot, eds., Hoover’s Handbook of World Business, 19951996 (Austin, Texas: Reference Press, 1995).
34 “Highlights of the FY 1997 Transport Budget”, Department of Transportation,
Washington, DC, p. 15.
35 Mark Zepezauer and Arthur Naiman, Take the Rich Off Welfare (Tucson, AZ: Odonian
Press, 1996), p. 94.
36 Philip Shenon, “Top Guns Fleeing the Fold”, The New York Times, Oct. 26, 1997, sect.
4, p. 2.
37 US Air Force, Background Briefing, “Air Force Pilot Retention”, Aug. 26, 1997.
38 “Viewpoint: US Lags in Letting Airports Go Private”, Aviation Week & Space Technology,
Sept. 23, 1996, p. 66.
39 Cited in James Kaplan, The Airport (New York: William Morrow, 1994), p. 109.
40 Stephanie Kraft, “Tax the Jet Set”, Springfield Advocate, (Springfield, Massachusetts), June
26, 1997, p. 7.
41 Cited in Ken Silverstein and Alexander Cockburn, CounterPunch, Mar. 1, 1995, vol. 2,
no. 5., p. 2-3.
42 Susan Schmidt, “Out of Arkansas Chicken Farms, Airport Hopes to Find Its Wings”,
The Washington Post, July 9, 1995.
43 Ken Silverstein and Alexander Cockburn, op.cit., p. 2-5.
44 “Highlights of the FY 1997 Transport Budget”, Department of Transportation,
Washington, DC, p. 16.
45 Neil MacFarquhar, “La Guardia Airport Sees Its Future in Shops and Fast Food”, The
New York Times, July 13, 1997, pp. 19-20.
46 Worldwatch, May-June, 1994, p. 39.
47 The New York Times, June 22, 1997.
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E c o l o g y & C u lt u r e

5P

C O M M U N I C AT I N G G L O B A L I S M“[Merrill Lynch recently] signed a $400 million contract with the AT&T
Corporation to manage Merrill’s vast communications system. ... As it tries tobuild networks to link its 54,200 employees in 870 locations around the world,[Merrill Lynch] has become an archetype of the customers that are driving theevolution of the high-technology industry.”
The New York Times1“The Defense Satellite Communications System (DSCS) is an essential part of
the global Defense Communications System. It is... designed to provide vitalcommand, control and communications service to the United States and Allied
Forces throughout the world...”US Department of Defense Fact SheetModern communication networks are publicly promoted as a means to ‘bring people together’: advertisements typically show close friendships sustained
thanks to the telephone, or children gaining an understanding of
faraway lands through documentary television programmes or
the Internet. If these were their most important effects, however,
it is unlikely so many billions of dollars would have been invested in them. Far more significant is their ability to expand thereach of industrial economies, transnational corporations, andgovernments.
Effective communications networks are such a linchpin ofindustrial economies that many countries have nurtured thisinfrastructure under the government’s wing. British Telecom wasa state enterprise until 1985, and the company was not fully
privatised until 1993. Japan’s Nippon Telephone and Telegraph,
the world’s most valuable company, was state-owned until 1985.
Other countries still retain partial ownership of their communications infrastructure: Telefonica de España, for example, is 32%
owned by the Spanish government, and the Italian government
owns 53% of STET, the country’s largest telecommunicationcompany.2

Space is the Place

Even in countries like the United States, where the communications infrastructure has largely been in private hands, the public
has provided much of the research and development funding
needed for its expansion and growth. One need only consider
the vast sums spent by advanced nations on their various space
programmes – without which orbiting telecom satellites would
be no more than a fantasy – to comprehend the size of the subsidy involved. The ‘space race’ between the United States and theformer Soviet Union, for example, ended up costing a sizeable
T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r echunk of the budgets of both countries. Before the US had evenachieved suborbital manned flight, the National Aeronautics andSpace Administration (NASA) was already the country’s seventh
largest single department.3 A large portion of the military budgets of both countries was devoted to gaining the ability to launchand guide their arsenals of nuclear-tipped missiles – and to
defend against them. Some of the non-military fruits of that
research include the international reach of satellite television
networks like MTV and Star-TV, banks with ATM ‘branches’ inevery country, and the global proliferation of cellular phones.
Having funded the research and development needed to‘While banning small, local, non-commercial
broadcasting, the FCC is bending over backwards
to corporate communications companies.’
place satellites in orbit, governments are now stepping back andhanding the keys over to corporations. Typical of the trend is a
project called Sea Launch, in which satellites will be launchedfrom a modified oil-drilling platform positioned on the equator.
The project is funded by an international consortium of companies, including the Boeing Commercial Space Company (which
benefited from decades of NASA funding), a Russian aerospacecompany and two Ukrainian rocket makers (all three of which
are products of the former Soviet Union’s space and military
programmes). Sea Launch expects to charge $40 million per
launch, undercutting the $55 million charged by Arianespace (aconsortium heavily subsidised by several European governments), and the $50 million per launch charged by Lockheed
Martin (whose expertise comes from years of military contracts
funded by the US government).419

S m a l l is B e a u ti f u l , B i g is S u bsi d is e d
wer broadcasting station, and brought in a crane to dismantle his
broadcasting tower.”
While banning small, local, non-commercial broadcasting,
the FCC is bending over backwards to grant corporate communications companies rights superseding those of local communities. Having already ruled that all commercial television stations
must eventually be capable of digital broadcasting, the FCC isaware that at least 350 stations will be forced to build new communications towers, ranging in height from 1,000 to 2,000 feet.
Not surprisingly, many of the communities where such towers
are to be located are vigorously protesting. In response, the FCC
is considering a rule that would prevent local planning and zoning boards from restricting the ‘right’ of communications companies to site communications towers where they want.7,8
Telecom advert (Kosice, Slovakia)

By the end of 1996 there were already close to 200 commercial satellites orbiting the Earth. But the world’s giant telecommunications corporations are planning to bring that number toover 1,000 in the next few years. US-based Teledesic plans tolaunch 840 satellites alone to make their mobile communications
network possible. Motorola is planning to launch 66 satellites fortheir ‘pocket telephone’ project.5
Public funding is also behind many of the computer technologies that make global communications possible, including theInternet, originally a US military project. As Nathan Newman ofProgressive Communications points out:
“The Internet is in many ways the product of central planning in its rawest form: planning over decades, large government
subsidies directed from a national headquarters, and experts
designing and overseeing the project’s development. ...The comparison has been at times to the interstate highway system, but
the analogy would hold only if employees of the federal government had first imagined the possibility of cars, subsidised theinvention of the auto industry, invented the technology of concrete and tar, and built the whole system....”6

Regulating the Airwaves
in the Corporate Interest

Governments have also created a regulatory environment within
which corporate-dominated communications enterprises thrive.
In the United States, for example, the Federal Communications
Commission (FCC) co-ordinates and licenses thousands of commercial users of the airwaves, and allots segments of the electromagnetic spectrum to private interests – from radio and television networks to cell phone and pager companies.
Like most regulatory agencies, the FCC is heavily biased
towards the large and global. For example, FCC rules prohibit
any radio station with less than 100 watts of power from broadcasting. Though such low-wattage ‘micro-radio’ stations are ideal
for very localised, decentralised, and inexpensive broadcasting,
the FCC has gone to great lengths to ensure that corporate-funded messages continue to dominate the airways. According to a press release, micro-power broadcaster Jim Brewer’s station in Tampa, Florida was shut down in no uncertain terms by
a 20-person Multi-Jurisdictional Task Force led by the FCC:
“With automatic weapons trained on them [Brewer and hiswife] were ordered to the floor where they were handcuffed facedown with gun muzzles at their head. For the next 12 hours they
were detained in their own home, not even allowed to go to thebathroom alone, while agents stripped their home of anything
remotely related to radio transmission equipment. Police cordoned off the block around their home, the site of the micropo-

20

Public or Private?

In the early years of radio a healthy public discussion ensued
about whether the airwaves should be used commercially or
retained for use in the public interest. Clearly, the corporate
world emerged victorious. In the US, a 1996 Act of Congresssealed that victory by effectively deregulating all communications industries and allowing the market, not the public interest,
to determine how the communications infrastructure develops
in the future. According to media expert Robert McChesney,
this law “is widely considered to be one of the most importantfederal laws of this generation.” And yet,“the debate surrounding the 1996 Telecommunications Act
was a farce. Some of the law was actually written by the lobbyists
for the communication firms it affects. The only ‘debate’ waswhether broadcasters, long-distance companies, local telephone
providers, or cable companies would get the inside track in the
deregulatory race.”9The possibility that the public, not corporations, should control the airwaves was not even considered. One effect of the law
is to hand over to media corporations additional segments of thebroadcast spectrum. Estimates of the value of this giveaway range
from $11 billion to $70 billion.10

Corporate Communications

The ability to communicate instantaneously across continents ishardly necessary in businesses that are small and local. But hugetransnational corporations need to maintain tight central control
over their far-flung enterprises, and so a sophisticated worldwide
communications infrastructure is an absolute necessity. Manufacturers from IBM and Daimler-Benz to Nike and Unilever mustco-ordinate deliveries of raw materials and manufactured components from numerous subsidiaries and independent contractors, as well as arrange shipments of finished products to middlemen, distributors, and corporate sales outlets. Giant retailers like
Home Depot, Tesco, and Continente must monitor inventory at
hundreds of locations, sometimes thousands of miles apart, andcoordinate ship, rail, truck and aircraft deliveries from both
domestic and overseas suppliers. Every transnational corporationneeds to communicate decisions made at corporate headquarters
to subsidiaries and branches in different countries, and quickly
transfer capital back and forth.
High-speed computers linked to satellite communications
networks also enable banks, financial service companies, currency speculators, and others with global investments to shift vast
amounts of capital from continent to continent at the stroke of acomputer key. David Korten describes how “... an individual at acomputer terminal can maintain constant contact with priceT h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eC o m m u n i c a ti n g G l o b a l is m
movements in all major markets and execute trades in any or allof them. A computer can be programmed to do the same without human intervention, automatically excecuting transactions
involving billions of dollars in fractions of a second.”11
Thanks to such technologies, currency valued at $1.3
trillion was exchanged each day in 1995 – 30 times more thanthe daily GDP of all the developed countries in the world combined.12
Do small shopkeepers, small family farmers, or producers for
local markets require such a highly developed communications‘Do small shopkeepers, small family farmers, or
producers for local markets require such a highly
developed communications infrastructure? Hardly
at all, and in fact their livelihoods are threatenedby enterprises that can make use of it.’infrastructure? Hardly at all, and in fact their livelihoods are
threatened by enterprises that can make use of it. While they slip
further and further behind, their taxes continue to help maintainthe infrastructure that is in part responsible for their difficulties.
And as usual, they are told that natural evolution is responsible.
On another level, this is happening to entire cultures as well.
From Chiapas to China, small and local economies are being
pushed aside by governments seeking a more prominent place inthe global economy, more uniformity among their populations,more land to devote to producing for global markets. All too
often, high-tech military technologies – which depend on modern communications networks for intelligence, planning, andexecution – are employed to do so. The US victory in the Gulf
war, aimed at preserving the corporate-led New World Order,
was also largely a product of such high-tech capabilities.

Teaching the World to Sing
(to a Corporate Tune)

A worldwide communications web is crucial for corporations inanother way: it gives them the ability to transmit their commercial messages to hundreds of millions of people, day and night,
from one end of the planet to the other. It has often been
observed that the real purpose of media like television is not todeliver entertainment to the public, but to deliver the public toadvertisers. In the global economy, this is truer than ever.
Advertising is itself a product of industrial economic expansion. When the first model-T rolled off the assembly line atHenry Ford’s factory in Detroit in 1909, the event was a turning
point not only for the automobile industry, but for virtually
every other industry as well. The assembly line made it possible
to mass produce virtually any item faster, more cheaply and ingreater quantities than ever before. American industrialists, who
had previously sought to expand production, now had to thinkin terms of expanding consumption as well. After all, there would
be no point in mass-producing millions of items that could only
be sold in a market with a buying capacity measured in the thousands.
Industrialists thus needed to expand significantly the markets
for their goods. This could be accomplished in part by amalgamating smaller local economies into much larger ones, something
the expanding transport infrastructure was already making possible. Regional differences among those markets, however, had tobe overcome. America was a nation of immigrants and exhibited
little uniformity: local, regional and ethnic tastes and preferences
T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r ediffered widely. But advertising offered businesses the means tohomogenise those tastes. Desires could now be mass-produced
along with the products to satisfy them.
Advertising also enabled industry to make wholesale changes
in popular ideology and worldview. As Stuart Ewen has shownin his important book Captains of Consciousness, advertisingaltered long-standing American values stressing frugality andself-reliance, replacing them with a new cultural norm based onconspicuous consumption and a preference for store-bought
over home-made products. Through increasingly sophisticatedadvertising techniques, “Excessiveness replaced thrift as a social
value”, and entire populations were invested with “a psychic
desire to consume.”13
In less than a generation consumerism had been embraced byvirtually the entire country. This 1953 advertisement for Gimbels, a New York department store, proclaimed the new ideology:“Economic salvation, both national and personal, has nothing
to do with pinching pennies.... Economic survival depends upon
consumption. If you want to have more cake tomorrow, you haveto eat more cake today. The more you consume, the more you’ll
have, quicker.”14
The spread of this ideology was not limited to businesses andtheir advertising allies. That same year, the chairman of President
Eisenhower’s Council of Economic Advisers claimed that theAmerican economy’s “ultimate purpose” was “to produce moreconsumer goods.”15
Over the years, advertising has become more sophisticated,
more effective, and more pervasive. It has been estimated that the
average American is exposed to 16,000 commercial images daily– not only in magazines and newspapers and on television andradio, but plastered to walls, cars and trucks, food packaging,
windows, scoreboards, pens and pencils, sports arenas, supersonic
jets, and anywhere else a commercial message can be embedded.16 The trend has reached absurd levels. One of the sad miracles of modern life is the way children, teenagers, and adults
attempt to express their ‘identity’ by wearing clothes conspicuously emblazoned with corporate logos.The practice has becomeso commonplace in America that The New York Times Magazine
recently ran a ‘style’ article featuring young children modelling
Tide sweatshirts. And while the idea of launching huge ‘billboards’ into Earth orbit was considered slightly mad when it was
proposed a few years ago, the notion may prove to be more
prophecy than lunacy: the Russian space station Mir and its crew
have already been pressed into service promoting such products
as Pepsi-cola and Israeli milk.17

Tele-Consumerism

Today, television is the medium by which the manipulation ofindividual desires is most effectively carried out. In America,
advertisers seek to influence children as young as two with theircommercial messages. Children younger than five years oldwatch an average of three and a half hours of television every day;adults watch nearly five hours. In a year the average American
adult thus sees some 21,000 televised commercials.18
As technology critic Jerry Mander points out, television is
being used by corporations to spread the gospel of consumption
to every corner of the planet:“By its ability to implant identical images into the minds ofmillions of people, TV can homogenise perspectives, knowledge,
tastes, and desires, to make them resemble the tastes and interestsof the people who transmit the imagery. In our world, the transmitters of the images are corporations .... And satellite communications is the mechanism by which television is delivered into21

S m a l l is B e a u ti f u l , B i g is S u bsi d is e dparts of the planet that have, until recently, been spared thisassault.”19
It is not only the specifically commercial content of television that is so effective in assaulting these distant parts of theworld. The consumer culture also invades the Third Worldthrough the way of life shown in between the commercials. As S.
M. Mohamed Idris of the Consumers’ Union of Penang has
written,“The consumer culture of the North now pervades almost
all aspects of life in the South. This culture is in reality a way of
thinking and a way of life generated by advertisements, cinema
shows, pop songs, magazines, comics, and other channels of themass media.... As a result of this bombardment, the consumer ismade to feel insecure unless she smokes a cigarette, unless hebuys a certain brand of haircream, unless she uses a certain brandof lipstick, unless they change motorcars once every two years,
unless the colour of the curtains at home matches the colour ofthe carpet.”20
Corporations looking to homogenise tastes in order toexpand their markets fully understand this power of global
media. Anthony J. F. Reilly, CEO of the H. J. Heinz corporation,accurately declared that, “Once television is there, people ofwhatever shade, culture, or origin want roughly the samethings.”21 According to a development analyst, “India’s markets
seem more accessible” now that corporate messages are arriving
via satellite:“...half of the 35 million television sets now in India receive
satellite or cable channels, providing a new window on the outside world for more than 60 million people and creating a massconsumer market almost overnight.” (emphasis added).22
As Robert McChesney puts it, “the corporate media arecarpet-bombing people with advertising and commercialism.”23
MTV reaches more than a quarter of a billion households on fivecontinents, enabling corporations to globalise the ‘youth market’
for Nike sneakers, Pepsi-cola, and Levi’s jeans.24 American television shows like “Dynasty” and “Baywatch” are broadcast to themost remote corners of the planet, giving people a distorted
impression of modern urban life, and creating a whole new range
of desires for corporations to fill. And CNN, which reaches 145
countries from Bangladesh to Zimbabwe, ensures that every
culture now gets the corporate spin on world events.25

Those who believe the Internet will be a global medium run
by and for the people should think again. As AT&T’s director ofInternet services points out, the Internet may become the best
advertising medium yet: “If it’s done well, you won’t feel there’s
any tension between the consumerism and the entertainment”,
he says.26

1 Seth Schiesel, “The No. 1 Customer: Sorry, It Isn’t You”, The New York Times, Nov. 23,
1997, sect. 3, p. 1.
2 Patrick J. Spain and James R. Talbot, Hoover’s Handbook of Business 1995-1996 (Austin,
Texas: Reference Press, 1995).
3 Historical tables of US budget, http://www.wais.access.gpo.gov; budget figures for
1962-1996, pp. 65-69.
4 Scott Lafee, “Sea Launch is Go”, New Scientist, vol. 152, no. 2052, Oct. 19, 1996, pp.
36-39.
5 Ibid.
6 Nathan Newman, “How Private Business Almost Derailed the Internet”, ENODE,
Vol. 1, no. 6, Dec. 15, 1996, enodelist@garnet.berkeley.edu
7 Thomas A. Fogarty, “Towering trouble: Laws and labor may delay transmission ofdigital TV”, USA Today, Nov. 17, 1997, sect. E, p. 1.
8 Shay Totten, “A Towering Debate”, Vermont Times, Nov. 12, 1997, p. 1.
9 Robert W. McChesney, Corporate Media and the Threat to Democracy (New York: Seven
Stories Press, 1997), p. 42.
10 Alexander Cockburn, “The Airwaves: Al Gore’s Amazing Gift”, The Nation, Mar. 10,
1997, p. 9.
11 David Korten, When Corporations Rule the World, pp. 187-8.
12 Bernard Lietaer (interview), “Beyond Greed and Scarcity”, Yes! Magazine,
Spring 1997, p. 37.
13 Stuart Ewen, Captains of Consciousness: Advertising and the Social Roots of the Consumer

Culture (New York: McGraw-Hill, 1976), p. 25.
14 Fortune, Dec. 1953, p. 99. Cited in Robert B. Reich, The Work of Nations (New York:
Alfred A. Knopf, 1991), p. 45.
15 Ibid.
16 Leslie Savan, The Sponsored Life (Philadelphia: Temple University Press, 1994), p. 1
17 Michael Specter, “Mir Bobbles Dim the Evil Empire’s Aura”, The New York Times,
Aug. 24, 1997, section E, p. 5; “Pepsi-cola is Filming the World’s First Commercial inSpace”, Pepsico news release, New York, May 21, 1996.
18 David Korten, op.cit. 11, p. 152.
19 Jerry Mander, In the Absence of the Sacred (San Francisco: Sierra Club, 1991), pp. 97-8
20 S. M. Mohamed Idris, “The Third World: A Crisis of Development”, in The Future of
Progress (Totnes, UK: Green Books, 1995), p. 110-111.
21 Cited in Alan Thein Durning, “Can’t Live Without It”, Worldwatch, May-June 1993, p. 13.
22 Taylor Moore, “Developing Countries on a Power Drive”, Electric Power ResearchInstitute (EPRI), http://www.epri.com.
23 Robert W. McChesney, Corporate Media and the Threat to Democracy , p. 23,
24 “MTV: Music Television Global Fact Sheet”, MTV Networks, Feb. 17, 1995.
25 “CNN/CNN International Country and Territory Client List” revised June 1994,
CNN Public Relations, One CNN Center, Atlanta, GA 30348.
26 Robert W. McChesney, op. cit. 23 , p. 34.

22

Free Speech for Sale

While today’s modern communication infrastructure is custom-built for the needs of governments, the military, the financial world and corporations, limits on its reach are often seen as
challenges to individual rights. By this twisted logic, advertising
becomes a form of ‘free speech’; bombarding the South with
distorted, culturally-homogenising images becomes the ‘free flowof information’; people chained to their computers, faxes,
modems, cellular phones and beepers become exemplars of the‘convenience of modern life’.
Similarly, the available options are often seen to depend on
purely individual choices: simply turn off your TV, or choose toignore its messages, for example. On some levels, to be sure, personal decisions must be made; but at other levels public policies
are forcing changes on people in which they have no real choiceat all. This is particularly true in the South, where long-standing
cultural traditions can be erased in a generation by a steady dietof Disney, Rambo, CNN, Star-TV, and corporate advertising.
There are other questions to ask, questions whose answers
depend on how much faith we have in the industrial model. Do
corporations have an inalienable right of access to the broadcast
spectrum? Should they be allowed the unlimited right to position their communications satellites where they can reach everyone on Earth? Do cultures – and individuals – have the right todeclare themselves offlimits to the commercial messages others
wish to send them? The answers to these and similar questions
have a significant bearing on the nature of the world we aremaking.

T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r e

6PFINDING THE ENERGY“Economic growth and increased energy use are inseparable....”
Richard Douthwaite, The Growth Illusion1Though modern societies never seem to have enoughenergy, the Earth is actually awash in it. Each year the sun
showers our planet with 15,000 times as much energy as
humans currently use. Much of that energy is reflected back into
space, but the remainder powers photosynthesis, runs the hydrologic cycle, and generates weather systems – thereby creating such
renewable energy supplies as wind energy, hydro-power, biomass
fuels, food for human and animal power – as well as providing
direct solar energy itself.2
If the human need for energy were largely limited to suchtasks as illuminating and heating homes, cooking and refrigerating
food, pumping water, providing local transport, and powering
small-scale farm and manufacturing equipment, then diverse anddecentralised renewable energy supplies would probably be quite
adequate.This was, in fact, the situation everywhere before the eraof fossil fuels. Farmers in the Himalayas, for example, devised‘In Britain, the energy used for transport
is more than ten times that required for food,clothing and shelter combined.’
small water-driven wheels to mill grain; they employed solar
energy for crop drying; and they used draught animals for transport and agricultural needs. In forest-rich New England, wood
was the source of cooking and heating fuel for many generations,while water power provided energy for numerous small-scaleindustries, from milling grain to sawing lumber. Windmills forpumping water and for other agricultural uses once dotted rurallandscapes throughout Europe. In these economies, the demandfor energy was as decentralised as the supply, and the scale wassmall enough that locally available energy could provide for mostneeds.
But industrialised economies demand vastly greater quantities
of energy. International trade and long-distance transport requirehuge fleets of transport vehicles – cars, trucks, trains, ships, aircraft– all of them energy guzzlers. Transport, in fact, is the most energy-intensive sector of industrial economies: in Britain, the energy
used for transport is more than ten times that required for food,clothing and shelter combined.3
Another reason industrialised societies consume so muchenergy is that they are highly urbanised. Almost everything consumed in urban centres – from food and water to building materials and clothing – originates elsewhere, and so it is all embeddedwith a significant amount of transport energy. What’s more, thecentralised millions in today’s urban conglomerates are easier forT h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r emarketers and advertisers to reach, and so the psychological pressure for a high-consumption lifestyle is that much greater.
While small-scale, decentralised economies can take advantage of a wide range of local energy sources, industrial economies
are far more limited in the kinds of energy they can use: every
major form of transport in industrial societies, for example, ispowered by petroleum. Urbanisation, meanwhile, makes the useof decentralised renewable energy sources far more difficult.
Instead cities must depend on centralised power plants that turnfossil fuels, nuclear energy, or hydro-power into easily-deliverable
electricity.
Renewable energies in their various forms are distributed
fairly evenly around the world – one place may have more abundant supplies of biomass but less wind, another more solar but lesshydro-power – but the forms of energy needed for industrialisation and urbanisation are very unevenly distributed. This has not
only been a famous source of international conflict but has
spawned an immense worldwide trade in energy: almost half theworld’s annual consumption of oil, 14 percent of its gas, and 11
percent of its coal are traded internationally. At the start of the
1990s over a million kilometres of trunk pipelines were required
for transporting natural gas, and an additional 400,000 kilometresof pipelines for oil.Transporting crude oil from source to refinery
requires, among other things, some 2,600 tankers plying the highseas.4

Subsidising Fossil Fuels

As industrial economies have expanded and the South has been
‘developed’, energy use worldwide has steadily risen. In 1996 theuse of oil, natural gas and coal all set new records,5 and construction began on more new nuclear reactors than at any time in theprevious decade.6 The link between rising GDP and increased
energy consumption is axiomatic for economies on the industrial development track, and government policies everywhere focus
on ensuring a steady – and rising – energy supply.
Like transport and communications, energy is so vital toindustrialisation that many countries have built up major portionsof their energy infrastructure at public expense. In Britain theelectric industry has long been government-run, although it is
now being sold off to the private sector – often at a loss. In France,
where nuclear generating plants provide much of the country’s
power, the state still controls the electric industry. The Great
Whale project, a river diversion project in Canada that has been
opposed for years by indigenous groups and environmentalists, isa project of Hydro Québec, a huge energy conglomerate wholly23

S m a l l is B e a u ti f u l , B i g is S u bsi d is e dCoal-fired power plant (Kosice, Slovakia)

owned by the Québec government.7 In almost every Third
World country, the domestic energy infrastructure is in government hands.
In the US, the energy sector is largely run by private-sector
corporations, but massive subsidies have been provided to keepcompanies healthy, profitable, and growing. The watchdog group
Alliance to Save Energy has estimated that the energy sector is
subsidised at the rate of $21 billion to $36 billion annually.8 For
the oil industry alone, subsidies and tax breaks have been in place
for some 75 years, and have amounted to many billions of dollars.
Another public interest group, Citizens for Tax Justice, estimatesthat just one tax break – the percentage depletion allowance –will cost the public Treasury $4.2 billion over the 1995-99 period.
This is actually an improvement over earlier years, since the allowance was even greater until 1975: in that year alone, the tax breakamounted to $3 billion.9
While the risks to the overseas operations of US oil companies are covered by taxpayers through the Overseas Private Investment Corporation, the US military further minimises corporaterisk by ensuring that regimes friendly to US interests gain powerand hold onto it in oil-rich parts of the world. Importantly, thisalso ensures the continuous flow of oil. Protecting this source ofenergy does not come cheap. According to Edwin S. Rothschild,
Energy Policy Director of Citizen Action,“the national security
cost of oil is in the area of $57 billion per year; or approximately$9.19 per barrel of oil used in the US.”10
Externalised costs sometimes run even higher. Despite all therhetoric about democracy, the Gulf War was fought to ensure that
the Kuwaiti and Saudi Arabian oil fields continued to supply theindustrialised world with the energy it requires. The direct costsfor ‘Desert Storm’ alone were over $60 billion, spread out among
all the governments that participated.11 This does not include thecost to Iraq, nor does it put any value on the lives lost or thedamage done to Persian Gulf ecosystems. None of these military
costs is internalised in the price of petroleum.

Subsidies for other Energy Sources

The US government provides energy subsidies for more than justthe oil industry: since the goal has been to promote the growthof industry in general, subsidies are provided for all the large-scale,centralised energy forms the industrial system requires. As early asWorld War I, for example, the government was building dams to
supply electric power to the munitions industry, and later to provide reliable power to the Pacific Northwest’s aluminium andaircraft industries.12 Today, government agencies or co-operatives

24

provide roughly one-fourth of all the electricity sold in the US.
These producers benefit from indirect subsidies totalling $2.2
billion annually.13
Major US electric utilities are poised to receive another major
windfall from taxpayers. As deregulation of the industry proceeds,
it seems likely that so-called ‘stranded costs’ will be passed on to
taxpayers and consumers. In large measure these costs are theresult of bad investments – usually nuclear power plants that areuncompetitive with other sources of electricity. Instead of writing
off these losses, there are legislative moves afoot to pass the bill on
to taxpayers. Moody’s Investor Services places the value of thebailout at from $50 billion to $300 billion, while consumer andenvironmental activists say it could reach $500 billion.14
Another way the federal government subsidises a centralised
energy infrastructure is by making sure that public lands are available for energy extraction. Approximately 750,000 acres ofcoal-bearing public lands – containing over 1.5 billion tons ofcoal – are currently leased to mining interests. Oil companies haveacquired leases to explore for oil on some 58,000 federally-owned
sites, including 5,000 offshore sites on the continental shelf, andthe US government has authorised oil drilling in a previously
sacrosanct wilderness area in Alasaka. In total, over 125 million
barrels of oil and 1.7 trillion cubic feet of gas were extracted fromfederal lands in 1993 alone.15
The coal industry has been the recipient of many generous
subsidies. The government sponsors research into technologies
needed by the industry – including the Department of Energy’s$2.5 billion Clean Coal Technology programme. Government
agencies ranging from the National Science Foundation to the
Department of Defense also sponsored research on behalf of thecoal industry – totalling $138 million in 1989. Mitigating thedamage done by surface mining costs the public an additional$800 million a year.16
To these subsidies must be added the externalised costs of coal
extraction and burning. Until 1977, no environmental reclamation of mines was required, and strip-mining operations in particular left behind scarred landscapes and polluted rivers andstreams.17 Coal-fired power plants release heavy metals thatpollute land and water many hundreds of miles downwind. They
are prime culprits in the acid rain problem, and they add significant amounts of greenhouse gases to the atmosphere. The pollutants they discharge also do significant damage to cropland and to
public health. None of these costs is internalised in the price ofcoal: if they were, the price of coal might be ten times what it istoday. Two researchers in England independently estimated theenvironmental costs of electricity produced by coal-fired power
stations: for each kilowatt-hour, priced at less than 10p, estimatesof the environmental costs ranged as high as £1.

The Atomic Industry – Splitting the Cost

Of all the industrial energy sources, not one is so directly the
product of government support as nuclear power. Born of theManhattan Project’s atomic bomb research during World War II,
nuclear power remained in military hands until the 1950s, when
the US Atomic Energy Commission (AEC) began major efforts
to promote the technology’s commercial applications.This quickly became a high priority of US energy policy, representing “theFederal Government’s largest and most significant energy projectfrom the 1950s into the early 1970s.”18
Since the AEC did not believe that private industry would
make the necessary investment in nuclear power research, government funds were used to commission the first full-scale nuclear
reactor. Afterwards, in order to “further spur private industry’s
T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eFinding The Energy
participation in nuclear power development”, the AEC initiated a
programme whereby the government provided funding and otherassistance, but industry would design, construct, and own thereactors.19 US government aid to the nuclear industry has continued unabated, with almost $1 billion budgeted for nuclear
power research and development in 1992,20 and with additional
expenditures hidden in military budgets every year.
The US government is not alone in sponsoring nuclear
research. Michael Renner of the Worldwatch Institute notes that
“Since 1974, OECD governments have invested a cumulative$247 billion in energy R&D. The bulk of these funds went tonuclear programmes – conventional reactors, breeders, and nuclear fusion.”21
Subsidies for nuclear power are not always direct. Since thepotential costs of a major nuclear accident are so high, it would
be extraordinarily expensive to insure fully a nuclear utility’s
potential liabilities. In the US, the 1959 Price-Anderson Act
capped the responsibilities of nuclear utilities, thereby significantly reducing their insurance premiums. Although the $560 million

World Bank analyst,“it’s hard to imagine economic growth in much of the developing world without the use and availability of far more electricity than those countries now have”.25
Building the infrastructure to provide that electricity will costan estimated one trillion dollars;26 even paying for a small portion of that sum will require the South to deliver even more of its
resources to the North. Yet government leaders in the South arebusily signing World Bank loan documents for their splurges inenergy projects. For example:‘If nuclear utilities were forced to coverpotential losses by purchasing liability insurance –instead of passing the bulk of cleanup bills to
taxpayers – it would add an estimated $3 billion
a year to the cost of nuclear power.’

the country’s electric power infrastructure. The largest single
project is the Dhabol Power Project, a $2.8 billion gas-fired
facility, using natural gas piped in from Qatar.29

liability limit for damages due to one accident was raised in 1988
to $7 billion, that amount is still only a small fraction of thepotential costs of a major nuclear accident: the meltdown of theChernobyl reactor, for example, cost an estimated $358 billion (aswell as at least 125,000 lives).22 If nuclear utilities were forced tocover potential losses by purchasing liability insurance – instead of
passing the bulk of cleanup bills to taxpayers – it would add an
estimated $3 billion a year to the cost of nuclear power.23
The federal government has also taken on the responsibility
for ensuring that radioactive wastes will be ‘safely’ disposed of,although no real solution has ever been devised. It is indeed amazing that some 460 grid-connected nuclear reactors have been
built around the world, yet there is no viable method to disposeof the many radioactive wastes they generate. Undeterred, governments have commissioned an additional 37 nuclear plants.24
Government support worldwide for nuclear power stands insharp contrast to the tiny subsidies given to renewable energy.
This is not surprising: nuclear power is an energy source thatmeets the needs of a large-scale industrial economy, while decentralised renewable energies – like rooftop solar water heaters –inherently run against the grain of the centralised industrial
model. An exception that proves the rule is US funding for a hugehigh-tech solar energy project in the American southwest, inwhich hundreds of computerised and motorised mirrors track thesun to focus light on a boiler for producing electricity. Hooked
into the national grid, the electricity can then be used to powera computer chip manufacturer, an aluminium smelter, or the neonlights of Las Vegas.

Energy for “Development”

If Southern countries are to develop along industrial lines, they
too will have to invest heavily in their energy infrastructures.
Although oil refineries and natural gas pipelines are part of themix, electric power plants are the prime focus: they enable industries to expand and individual consumption to rise, and support
the vast cities that development is creating. Thus, according to a
T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r e• China plans to add the equivalent of a medium-sized power

plant to its electric generating capacity every week for the next
several years. Since coal is one of China’s most abundant industrial energy sources, plans include dozens of large coal-fired
power plants and a 500-mile-long coal slurry pipeline.27
Construction also began on two nuclear power plants in 1996;plans call for four more in 1997.28• India’s government intends to spend $170 billion to triple• South Korea is currently the world leader in nuclear power

construction, with 9 plants now being built – adding to the 11
already operating. Despite this commitment to the nuclear
energy path, the government has yet to find a suitable location
for a radioactive waste facility.30• Brazil is undertaking a massive programme of hydroelectric

dam-building, including 18 planned for the Amazon basin
between 1990 and 2010, and 62 more in the 21st century.31• Vietnam, which currently gets most of its energy from hydropower, is building a gas-fired power plant in partnership with
two American corporations, and has also expressed interest in
nuclear power.32• By the end of the century, Latin America will be installing

41,000 MW of capacity, mostly concentrated in Argentina,
Brazil, Chile, Colombia, Mexico and Venezuela.33 And in
Africa, the US Trade and Development Agency cites thepotential for $126 billion in energy projects.34
Such projects are disturbing in part because of the devastation
they cause in the lives and livelihoods of nearby villagers, many ofwhom will be permanently displaced to become industrial refugees in their own countries. Among China’s energy projects, forexample, is the Three Gorges Dam, the world’s largest, which willflood nearly 100,000 hectares of China’s best farmland, dislocate
over a million people from their homes, and threaten the rural
livelihoods of 75 million more.
The negative impact will be felt not only by villagers who are
relocated to make way for huge energy projects. Since it is fareasier to provide electricity to centralised, urban populations thanto dispersed rural villages, most projects serve large cities – whichmakes them still more attractive as the locus of ‘modern’ life. For
example, a huge energy project in Nepal costing more than the
country’s entire annual budget will only provide electricity for
Kathmandu, Nepal’s largest city. In this sense, rural villagers arebeing both pushed into the cities by development processes that
dispossess them of their livelihoods, and pulled into the cities by
the psychological draw of urban life, full of the technological25

S m a l l is B e a u ti f u l , B i g is S u bsi d is e dexcitement for which electric power is a prerequisite.
These huge projects also do irreparable damage to surrounding ecosystems. Despite their own relatively short life expectancies, large-scale dams permanently damage riverine ecosystems;
some are so large they may be responsible for earthquakes andeven for shifting the earth’s axis. Nuclear power plants create
radioactive waste that will be hazardous for thousands of years;
the ‘accidents’ to which these plants are prone regularly releaseradioactive particles into ecosystems worldwide.
But the environmental and social impacts are even more
far-reaching because these energy projects are among the firststeps in a development process that has as its goal the replicationof Northern lifestyles around the world. That process is alreadyleading to family and community breakdown, increases incrime, violence, competition, and ethnic conflict. What’s more,
the rising levels of consumption that are the measure of development success are closely linked to increased fossil fuel consumption, and hence to global warming.
Some analysts argue that ‘techno-fixes’ will increase energy
efficiency so much that economic growth can be sustained
while energy consumption slows.35 But even at current global
levels, energy consumption places an unsustainable burden on
the biosphere. Even if the North’s energy efficiency were toincrease substantially, it is likely that any gains made will be
negated by simultaneous efforts to industrialise the more populous South, where per capita emissions of CO2 are still only
one-tenth what they are in the most industrialised countries.36
The promoters of development claim that their long-termgoal is to raise Third World living standards to near those of theNorth. If this is to be accomplished while reducing greenhouseemissions to levels that stabilise global climate, then the efficiency savings would need to be immense: the US, for example,
would need to cut fossil fuel consumption by 93.5%, Britain by
87%, and the Netherlands by 90.5%.37 Techno-fixes alone, it
seems obvious, will fall far short of these targets. The reality isthat techno-fixes merely allow policymakers to apply an industrial solution to a problem whose source is the industrial systemitself. By its nature, that system requires vast amounts of energy,

and is so centralising that the use of diverse, locally-available
renewable energy forms is largely precluded.

1 Richard Douthwaite, The Growth Illusion (Totnes, UK: Green Books, 1992), p. 200.
2 Ged R. Davis, “Energy for Planet Earth”, in Energy for Planet Earth, (New York: W. H.
Freeman, 1991), p. 2.
3 Richard Douthwaite, “Energy Use by Sector”, op. cit. 1, p. 202.
4 Ged R. Davis, “Energy for Planet Earth”, op. cit. 2, p. 2.
5 Christopher Flavin, “Fossil Fuel Use Surges to New High”, Vital Signs 1997, Lester
Brown, et al. eds., (New York: W. W. Norton, 1997), p. 46.
6 Nicholas Lenssen, “Nuclear Power Inches Up”, Vital Signs 1997, p. 48.
7 “New Québec River Diversions Threaten Wilderness, Indigenous Lands,” Temperate		Forest Action Alert, Native Forest Network, Missoula, MT, no. 9, Aug. 1997.
8 Alliance to Save Energy, “Federal Energy Subsidies: Energy, Environmental and Fiscal
Impacts”, cited in Michael Shelby, Robert Shackleton, Malcolm Shealy and Alexander
Cristofaro, “The Climate Change Implications of Eliminating US Energy (and		
Related) Subsidies”, 1994, p. 4.
9 Rothschild, “Oil Imports, Taxpayer Subsidies and the Petroleum Industry”,
		(Washington, DC: Citizen Action, May 1995), pp. 9-11.
10 Ibid., p. 15.
11 Ibid., pp. 12-13.
12 Michael Shelby et al., “The Climate Change Implications of Eliminating U.S. Energy(and Related) Subsidies”, 1994, p. 5; Terrence R. Fehner and Jack M. Holl, “TheUnited States Department of Energy, 1977-1994: A Summary History”, (Oak Ridge,
TN: US Department of Energy), p. 3.
13 Michael Shelby et al., ibid., pp. 5-6.
14 Gil Friend, “Stranded Assets: Why Can’t You Ever Find a Capitalist Around When You
Need One?”, The New Bottom Line: Strategic perspectives on business and environment, vol.
6, no. 17, Aug. 11, 1997, http://www.eco-ops.com/eco-ops.
15 “Taking from the Taxpayer: Public Subsidies for Natural Resource Development”,
Majority staff report of the subcommittee on oversight and investigations, Committee
on Natural Resources, US House of Representatives, (Washington, DC: US Govt.
		
Printing Office, 1994), pp. 21-28.
16 Michael Shelby et al., op. cit 13.

17 “Taking from the Taxpayer: Public Subsidies for Natural Resource Development”, op.
cit., pp. 28-39.
18 Terrence R. Fehner and Jack M. Holl, “The United States Department of Energy,
1977-1994: A Summary History”.
19 Ibid., p. 10.
20 Michael Shelby et al, op. cit 13.
21 Michael Renner, “R&D Spending Levels Off ”, Vital Signs 1997, p. 113.
22 Mark Zepezauer and Arthur Naiman, Take The Rich Off Welfare (Tucson, AZ:
Odonian Press, 1996), p.86.
23 J.A. Durbin and G.S. Rothwell, “Subsidies to Nuclear Power Through Price Anderson
Liability Limit”, Contemporary Policy Issues, vol. VII (1990), pp. 73-79, cited in Michael
Shelby et al., op. cit 13.
24 Nicholas Lenssen, “Nuclear Power Inches Up”, Vital Signs 1997, p. 48.
25 Taylor Moore, “Developing Countries on a Power Drive”, op. cit., p. 2.
26 Amulya K.N. Reddy and José Goldemberg, “Energy for the Developing World”, in
Energy for Planet Earth, op. cit.4, p. 61.
27 Taylor Moore, “Developing Countries on a Power Drive”, op. cit.
28 Nicholas Lenssen, “Nuclear Power Inches Up”, op. cit., p. 48.
29 “Investing in India”, Financial Times, Mar. 10, 1997, p. 2.
30 Nicholas Lenssen, op. cit., p. 48.
31 A. Blackwood, unpublished manuscript.
32 Taylor Moore, op. cit., p. 4.
33 Ibid., pp. 4-5
34 Ibid., pp. 4-5
35 Arnold P. Fickett, Clark W. Gellings, and Amory Lovins, “Efficient Use of Electricity”,
in Energy for Planet Earth, p. 23.
36 Ged R. Davis, “Energy for Planet Earth”, op. cit., p. 9.
37 Richard Douthwaite, The Growth Illusion, op. cit., pp. 194-6.
38 Langdon Winner, The Whale and the Reactor, (Chicago: University of Chicago Press,
1986), p. 53.

26

Shifting Direction – the Soft Energy Path

It is difficult to imagine the current crop of government leaderssuddenly shifting support away from centralised energy supplies
to embrace instead the full potential of decentralised renewableenergies. Such a change in course would first require a shift inthe vision those policymakers have of the future. In The Whaleand the Reactor, Langdon Winner described the social and political structures inherent in the various energy options under consideration:“Would it be nuclear power administered by a benign priesthood of scientists? Would it be coal and oil brought to you bylarge, multinational corporations? Would it be synthetic fuelssubsidised and administered by the state? Or would it be the soft
energy path brought to you by you and your neighbours?”38
Only if there were intense pressure from below would leaders be convinced to pursue the latter path. But as with all policy
choices, lasting solutions are not possible unless problems aretraced to their root causes. Following a ‘soft energy path’ towards
diverse, decentralised renewable energy sources is not an option
if every other policy choice tends towards centralisation, larger
scale, and high technology.
In the South today, where the energy infrastructure is stilllargely undeveloped, there are tremendous possibilities for promoting and adopting renewable energy strategies. But suchstrategies will be most successful if they go hand-in-hand withefforts to shift away from industrial ‘development’, and to seek agreater degree of self-reliance rather than greater global economic dependency.

T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r e

7P

L E A R N I N G T O S E RV E
THE GLOBAL MARKET“Our schools are, in a sense, factories in which the raw materials are to be shaped
and fashioned into products to meet the various demands of life. The specifications
for manufacturing come from the demands of the twentieth century civilisation,and it is the business of the school to build its pupils to the specifications laid
down.”
E. P. Cubberly, 19341“There can be no doubt that the fantastic wealth of American big business is adirect result of schools training a social mass to be needy, frightened, envious,
bored, talentless, incomplete. A successful mass production economy must havesuch an audience. ... Just as the Amish small business/small farm economy
requires intelligence, competence, thoughtfulness, and compassion, ours needs awell-managed mass. Levelled, spiritless, familyless, friendless, communityless,godless and conforming people are best – people who can believe that thedifference between Coke and Pepsi is a subject worth fighting about.”
John Taylor Gatto, 19982

W

hile the public generally accepts expenditures on
infrastructure as a necessary price of progress, it
often loudly applauds investments in education. Literacy statistics, high school graduation rates, and per capita
spending on schooling are often used as yardsticks of national
enlightenment. Education is considered so crucial to societal
well-being that most countries make the formal schooling of
their children compulsory. Given the importance modern societies attach to education, it is reasonable to ask what its functionis.
First of all, the modern educational system is a homogenizer,
with the goal of ensuring that children are all moulded intoroughly the same shape before leaving school. In a sense this is
not so different from the role education has always played inself-sustaining cultures.Anthropologist Margaret Mead describededucation as “the cultural process ... in which each new-born
individual is transformed into a full member of a specific humansociety”3 ­- a definition that could be applied equally well tohunter-gatherers and to modern urbanites. But Mead’s reference
to specific human societies is crucial: each society is unique in its
environment, local resources, and cultural history, and so anappropriate education will naturally differ from place to place.
But today a single societal model is forcing itself into every
corner of the planet; in the process, it is homogenising culturesand erasing the adaptations that connect people to their local
circumstances. In the monocultural global economy, there islittle room for educational diversity; instead a one-size-fits-all
curriculum is uniformly applied. This homogenization ofT h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eknowledge makes schools into “institutions which more andmore resemble one another, like airports and motels”, in thewords of Wendell Berry.4
This is particularly destructive in the Third World, wheremodern schooling systematically erases centuries of accumulated location-specific knowledge. Helena Norberg-Hodge has
described traditional education in Ladakh, where children
learned from parents and grandparents how to thrive in their
particular environment:“Helping with the sowing, for instance, they would learn
that on one side of the village it was a little warmer, on the otherside a little colder. From their own experience children would
come to distinguish between different strains of barley and thespecific growing conditions each strain preferred. They learned
to recognize even the tiniest wild plant and how to use it, andhow to pick out a particular animal on a faraway mountainslope. ... Education was location-specific and nurtured an intimate relationship with the living world. It gave children an
intuitive awareness that allowed them, as they grew older, to use
resources in an effective and sustainable way.”5Modernisation, on the other hand, brought with it a very
different form of education:“... modern schooling acts almost as a blindfold, preventing
children from seeing the context in which they live. They leaveschool unable to use their own resources, unable to function in
their own world. ... School is a place to forget traditional skills
and, worse, to look down on them. ... The basic curriculum is apoor imitation of that taught in other parts of India, which is27

S m a l l is B e a u ti f u l , B i g is S u bsi d is e d

Masai children (Arusha, Tanzania)

itself an imitation of British education. There is almost nothing
Ladakhi about it.”6
When imposed on largely self-reliant communities and theireconomies, modern schooling severs a link in the chain bywhich knowledge was passed from generation to generation,knowledge that enabled people to sustain themselves from local
resources.
The single, global standard to which modern education
aspires is, however, well-suited to the needs of corporations,which use similar methods to produce goods that are meant tobe purchased by similar consumers everywhere in the world.
Thus, formal schooling in Indonesia teaches students little about
indigenous knowledge and the sustainable use of local resources,
but it does prepare them well enough to assemble sneakers in a
Nike factory, to respond to advertising messages that influence
their spending habits, and to count it all as ‘progress’.
It is not only in the South that formal schooling separates
children from their local context. John Taylor Gatto, who spent
26 years as an award-winning teacher in New York City’s publicschool system, has described what his seventh-grade studentsknow:“My kids don’t know what a mile is, not really, although I
think they could pass a test on it; in similar fashion they don’tknow what democracy is, or what money is, or what an economy is, or how to fix anything.They’ve heard of Mogadishu andSaddam Hussein but they couldn’t tell you the name of the tree
outside their window if their life depended on it. ... Some ofthem can do quadratic equations, but they can’t sew a button ona shirt or fry an egg; they can bubble in answers with a number
two pencil but they can’t build a wall.”7

Learning the Industrial Worldview

Homogenising children worldwide also means imbuing them
all with the worldview of industrialism. Among other things, thatworldview is highly scientific and reductionist, and values
empirical ‘facts’ above all other forms of knowledge. As David
Orr notes,“the architects of the modern worldview, notably Galileo
and Descartes, assumed that those things that could be weighed,measured and counted were more true than those that could
not be quantified. If it could not be counted, in other words, it
did not count.”8This emphasis on the scientifically measurable reduces
nature to clusters of matter randomly interacting in obedience28

to the laws of physics; deprived of intrinsic value, nature’s worth
is determined only by what it provides for human use. This is
the Enlightenment attitude articulated nearly 400 years ago by
Francis Bacon, father of the scientific method, whose goal was“to establish the power and dominion of the human race itself
over the universe.”9 Bacon’s ideological descendents in the scientific/educational establishment continue to pursue that goal
today – in part through oxymoronic disciplines like “Wildlife
Management”, through reputable scientific papers devoted to“Managing Planet Earth”,10 and through concerted efforts toalter, for human ends, the genome of the living world.
An education consistent with the modern worldview iscompartmentalised into disciplines that are separate and seemingly independent. Through the fragmented lens of specialised
knowledge, problems appear as isolated symptoms; root causes,
meanwhile, are obscured – especially when revealing themwould challenge the assumptions underpinning the industrial
model. “In this way”, Edward Goldsmith argues,“the world view of modernism prevents us from understanding our relationship with the world we live in and adapting
to it. ... Instead modernism, and the paradigms of science andeconomics in particular, serve to rationalise economic development or ‘progress’ – the very behaviour that is leading to thedestruction of the natural world…”11
In a similar way, a narrow, fragmented perspective allows
individuals to avoid confronting the consequences of their own
actions. Even well-intentioned people – many of them with anearnest concern for humanity and the environment – nonetheless work for corporations or institutions involved in the rawest
forms of human and environmental exploitation. A Union Carbide employee that looks no further than the increased ‘productivity’ pesticides provide can be blind to the impacts on humanhealth, the environment and the livelihoods of small farmers. A
World Bank employee, focused closely on per capita income or
the availability of electricity, can neglect the breakdown of cultures, communities and ecosystems that Bank policies cause.
Scientific specialists can devote their working lives to technologies ranging from atomic weaponry to cloned sheep, while theconsequences are neatly compartmentalised into subject headings marked ‘national defense’ or ‘scientific curiosity’. For suchpeople, specialised training over many years has narrowed theirfocus so tightly that they cannot see the broader effects of theirwork.

Learning to Love Technology

The educational system also reinforces the notion that viable societies must be based upon the industrial model. If ‘alternatives’ areconsidered, they too must be variants of industrialism – such associalism, communism, or even the ‘Global Village’ with its
on-line virtual communities. Despite its fundamental flaws, the‘normalcy’ of the industrial model is rarely questioned by theeducational establishment, as Edward Goldsmith makes clear:“... the modern discipline of economics is based on theassumption that the destructive economic system that is operative
today is normal; the discipline of sociology on the assumptionthat our modern atomised and crime-ridden society is normal;
our political science on the assumption that the elected dictatorships that govern modern nation states are normal; and our agricultural science on the assumption that large-scale, mechanised,chemical-based agriculture (which rapidly transforms arable land
into desert) is normal. It simply does not occur to many academics that what they take to be normal is very atypical in the lightof humanity’s total experience on this planet...”12
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Since its baseline is firmly drawn in the industrial era, mod- report concluding that Europe’s chemical industry would
ern education focuses far more on the workings of the techno- relocate to another part of the world unless research received
sphere than the biosphere. The implicit message is that life itself more government support. One of the report’s authors noted
ultimately depends on technology and human-made institu- that “industry is reliant on universities for its workforce, so
tions, not on the natural world. This delinking is a frequent we must ensure that academic institutions are properly fundfeature of learned treatises on modern problems. A Yale Univer- ed”.19
sity economist thus dismissed the impact of the greenhouse
Having grown wealthier than many governments, corporaeffect on the US, since “climate has little economic impact upon tions are increasingly willing to pay for the right to tailor theadvanced industrial societies”:
educational infrastructure to their specific needs. Corporations“Cities are increasingly becoming climate-proofed by tech- endow university chairs, pay for the construction of buildings
nological changes like air-conditioning and shopping malls. ... and research facilities, and fund whole departments in fields
Studies of the impact of global warming on the United States useful to their commercial enterprises. England’s Loughboroughand other developed regions find that the most vulnerable areas University, for example, is now offering a Bachelor of Science
are those dependent on unmandegree in “Retail Automotive
aged ecosystems – on naturally
Management” – the country’s first‘The second floor of the building
occurring rainfall, run-off anduniversity-level degree in car-sellis named after the Kresge Foundation,
temperatures, and the extremes
ing. Funding for the programme isof these variables.... Most eco- a 350-seat lecture hall is named for the Ford being provided in part by the Fordnomic activity in industrialised Motor Company, the fourth floor is named for Motor Company.20
countries, however, depends very
Since corporations need aa Toyota dealer, the fifth floor is named
little on the climate. Intensive
steady supply of MBAs, businessfor the Chrysler Corporation, and thecare units of hospitals, underschools have little trouble attractground mining, science laboratoing corporate support. In Leasing
MBA lounge is named for theries, communications, heavy
the Ivory Tower, Lawrence SoleyFirst of Michigan Corp.’
manufacturing and microelecdescribes how the funding sourctronics are among the sectors
es for a new building at Michigan
likely to be unaffected by climatic change. In selecting whether State’s business school are documented in the names of various
to set up in, say, Warsaw or Hongkong, few businesses will con- building components:
sider temperature a weighty factor.”13“The second floor of the building is named after the Kresge
In this view, the world inhabited by industrialised peoples is Foundation, a 350-seat lecture hall is named for the Ford Motorso divorced from nature that major disruptions to the biosphere Company, the fourth floor is named for a Toyota dealer, the fifth
would scarcely be noticed. Disruptions to the technosphere, on floor is named for the Chrysler Corporation, and the MBA
the other hand, would be catastrophic: “There is no life today lounge is named for the First of Michigan Corp.”21
without [computer] software”, an executive of a major US-based
Corporate labels go on more than just building parts.Thanks
corporation claimed. Without computers, “the world would to Bank of America’s $3 million donation to the University ofprobably just collapse.”14
California at Berkeley, the new dean of the University’s business
As David Orr has observed about modern schooling, faith school, Laura d’Andrea Tyson, is officially the ‘Bank of America
in technology “is built into nearly every part of the curriculum Dean’.
as a kind of blind acceptance of the notion of progress.”15 But
Though their influence is not always this visible, corporacorporations also use the educational infrastructure to gain tions are quite clear about what they expect from the educaacceptance for the specific technologies they control. This is tional system. In Britain a Graduate Employability Test, which
particularly true in America, where corporations provide cash- “objectively measures and profiles the skills most often specified
starved schools with free study materials and teacher’s kits laden by employers”, focuses on just three areas: “business awareness”,
with corporate-friendly messages. Monsanto, the corporation “personal working style”, and “computer skills”.22 There is
responsible for biotechnologies ranging from Roundup-ready nothing location-specific about these skills, nor is there anything
soybeans to genetically-engineered bovine growth hormone, remotely connected with critical thinking, civic responsibility
recently conferred an ‘environmental’ award on company or moral understanding.
employees who devised a “student education project ... that
Today’s well-trained workers can be ignorant about the local
worked to raise student awareness about environmental benefits ecosystem, but their computer training must be up to snuff.
from biotechnology.”16 Along with seed corporation Pioneer According to Bill Gates, failure to be computer-adept means
Hi-Bred International, Monsanto also underwrote Field of “you risk being ineffective in almost any kind of work you
Genes, a classroom curriculum for teachers that gives an indus- pursue”.23 US government leaders apparently agree, since they
try spin on genetics, biotechnology, and genetic engineering.17 are spending billions of dollars in public funds to equip schools
Similarly, the timber-industry giant Weyerhauser created a with computers and to wire them for Internet access, with theteacher’s guide that suggests students discuss the “innovative goal of providing online access for every 12-year old. As Billpractices”Weyerhauser has introduced to forest management.18 Clinton explained, “This can make all the difference for communities struggling to make sure their students are ready for the
21st century.”24
Training for the Corporate Economy
Thanks to thinking like that, children in the industrialised
A further function of the modern educational system is to pre- world are seated in front of computer terminals earlier and earpare children and young adults for jobs in a corporate-dominat- lier in life. In Britain, parents can send their children to Whized global economy. Even corporations readily admit that they kids, which teaches computer literacy to children under the age
depend on the educational infrastructure to churn out their of five. An organiser of these early-learning centres boasts thatlabour force. Eminent European chemists recently issued a they are teaching ten-finger touch-typing to children as young
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29S m a l l is B e a u ti f u l , B i g is S u bsi d is e das three.25 Meawhile, software ‘suitable’ for children ninemonths old is already being marketed. Manipulated by media
hype and their own workplace fears, parents are thus helping tomould their children to corporate specifications even before
they enter the formal educational system.
Of course, not every child will graduate to a well-paid job,tapping away at a computer keyboard or managing a business
empire. But corporations also need low-paid service employees,
and modern educational systems are churning out these workers
as well. In Australia, in fact, the McDonald’s Corporation hasentered into discussions with the Minister for Education regarding “accreditation” for the training workers receive in the restaurant. Under the plan, students working at McDonald’s would
be given course credit for flipping burgers and dishing out fries– excellent preparation for the only kinds of job many will findin the new global economy.26

Learning to Consume

The corporate economy not only needs to ensure that the slots
on organisational charts are filled, it also needs consumers forthe dizzying array of products it churns out. An expanding role
for modern schooling today is thus to familiarise children with theconsumer world they will inhabit the rest of their lives. Nowhereis this more true than in the United States, where spending byschool-age children, combined with the influence they wieldover parental buying habits, adds up to $485 billion annually.27
In order to create and tap this market, corporations are insinuating themselves deeper into the educational system, where
they have a captive audience for any commercial messages they
can introduce. In many schools corporate advertising now
adorns school hallways, cafeterias, school buses and computer
screens.
Perhaps the most insidious example of this trend is Channel
One, a commercial-laden television ‘news’ programme thatnearly 40% of American secondary schools compel students towatch. Whittle Communications, the for-profit corporation thatdreamed up this scheme, provides schools with video equipment
and a satellite dish permanently tuned to Channel One inexchange for a contract guaranteeing that students will spend
twelve minutes each day watching the network’s programming– including two minutes of commercials. In the course of a year,
students spend the equivalent of one whole day watching advertising. One study found that a majority of students thought theadvertised products must be good for them, since they were
promoted in school.28
The negative impact of commercial television in the classroom goes well beyond the advertising messages themselves:children are also taught that television is a reliable source of
information and a viable educational medium. Any parents
wanting to eliminate television from their children’s lives haveto contend not only with peer pressure, but with the educational establishment’s implicit endorsement as well.

Corporate ‘Teaching Aids’

Corporations today ‘generously’ offer teachers free study guides,
magazines, posters, and other products for classroom use. As
educational materials their value may be dubious, but as vehicles
for corporate messages they are quite effective. Kellogg’s produces ‘nutrition’ posters that feature the company’s cereals; theHershey Food Corporation distributes a video on geography,
nutrition and science prominently featuring Hershey’s chocolate; Nike hands out free book covers plastered with its logo.

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Today, virtually every Fortune 500 company has a school projectof a similar nature.29
Several companies have found a lucrative niche creatingthese classroom materials. Often the goal is simply to familiarise
impressionable children with commercial products – as whenthird graders learn to solve arithmetic problems by counting
Tootsie Rolls, or learn to read using the corporate logos ofKmart, Coke, Pepsi, or Cap’n Crunch.
Other times, more sophisticated ideas are implanted. Procter
and Gamble’s teaching aid about labour issues, ‘Coping with
Growth’, essentially encourages children to accept corporate
rule as a benevolent part of the social order. Thus a role-playing
game within the curriculum asks students to see events from thepoint of view of corporate management during a series ofstrikes against the company in 1886:“Whenever the employees start a walkout you feel there
ought to be some way of kindling among the workers a stronger feeling of respect for and loyalty to [the company]. ... How
can they be convinced that their overall interests are truly inseparable from those of Procter and Gamble?”30
According to Michael Jacobson and Laurie Ann Mazur,
authors of Marketing Madness, similar materials have been created for industry public relations arms ranging from the American
Nuclear Society to the National Frozen Pizza Institute. They
also point out that the companies producing these materials areclear about their purpose when soliticing business:“‘Let Lifetime Learning Systems bring your message to theclassroom, where young people are forming attitudes that will
last a lifetime,’ purrs the company’s sales kit. ‘Whatever yourobjective, we can help you meet it. ... Coming from school ... allthese materials carry an extra measure of credibility that gives
your message added weight’. Another ad asks potential clients to‘IMAGINE millions of students discussing your product in class.
IMAGINE their teachers presenting your organisation’s point ofview.’”31
Not even pre-schoolers are safe from this corporate assault.
Lifetime Learning Systems notes that by the age of four children
are making “brand decisions”, and – in an unintentionally profound statement – points out that “preschool prepares children
to become consumers”.32
In sum, modern education serves to turn children into adults
who are passive consumers and workers. John Taylor Gatto lists
some of the learning required of Americans:“The American economy depends on school teaching usthat status is purchased and that others run our lives; we learn
there that the sources of joy and accomplishment are external,that contentment comes with possessions, seldom from within.
School cuts our ability to concentrate to a few minutes duration, creating a life-long craving for relief from boredom
through outside stimulation. In conjunction with television andcomputer games which employ the same teaching methodology,
these lessons are permanently inscribed.”33
Educating children for roles in the corporate economy,
indoctrinating them with an industrial worldview and an
uncritical faith in technology, subjecting them to corporate
manipulation in the classroom – all these are considered reasonable functions of the educational system. But even the fairly
mild environmental programmes underway in many schools
have come under attack from an industry-led backlash. Turning
reality on its head, critics claim that “unlike most schooling fromkindergarten through 12th grade, environmental education
often expressly encourages students to change their own behaviour and that of their society.”34

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Re-localising Education

books. Apprenticeships in those fields or in local artisanry
should also be accorded their due as real and valuable forms ofeducation. Such a shift would not only return children to theirtraditional place as important members of the local economy,
but would also impart a sense of responsibility to children at an
early age.
On a deeper level, a questioning of the industrial worldview
that modern education now implants in children is in order. As
David Orr points out, the products of an educational system
based on that worldview are a cosmic embarrassment:“Overflowing landfills, befouled skies, eroded soils, polluted
rivers, acidic rain, and radioactive wastes suggest ample attainments for admission into some intergalactic school for learning-disabled species.”36
Instilling instead a worldview that emphasises humanity’sconnection with all life would be far healthier for both people
and the planet:“That affinity needs opportunities to grow. ... Education thatbuilds on our affinity for life would lead to a kind of awakeningof possibilities and potentials that lie largely dormant in theindustrial-utilitarian mind.”37
Among those potentials is a future in which people are free
to create and nurture systems of knowledge as diverse as theplaces they inhabit.
But since education serves the function of perpetuating aparticular form of society, it would be naive to think that fundamental changes in education will occur without an equally
deep reordering of overall societal priorities. John Taylor Gatto,
referring to American schooling in particular, argues that modern education does not allow children to grow into fully
responsible, self-reliant adults, nor does it allow for their diversity:“As our economy is rationalised into automaticity and globalisation, it becomes more and more a set of interlocking subsystems co-ordinated centrally by mathematical formulae whichcannot accommodate different ways of thinking and knowing.
Our profitable system demands radically incomplete customers
and workers to make it go.38“To re-humanise schooling”, he adds, “we would need to
re-humanise the economy and abandon our dreams of
empire.”39

1 E. P. Cubberly, Public Education in the United States (Boston: Houghton Mifflin, 1934),
cited in Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 60.
2 John Taylor Gatto, “On the Scientific Management of Children”, The Journal of		
Alternative Education, vol. XV, no. 3, summer 1998, p. 42.
3 Cited in Edward Goldsmith, The Way (Boston: Shambala, 1993), p. 282.
4 Wendell Berry, The Unsettling of America (San Francisco: Sierra Club, 1977), p. 147.
5 Helena Norberg-Hodge, Ancient Futures: Learning from Ladakh (San Francisco: Sierra
Club, 1991), pp. 110-111.
6 Ibid., pp. 110-111.
7 John Taylor Gatto, “A Map, A Mirror, and A Wristwatch”, Challenging the Giant		(Albany, NY: Down to Earth Books, 1996), p. 321.
8 David Orr, Earth in Mind (Washington, DC: Island Press, 1994), p. 31.
9 Cited in Rupert Sheldrake, The Rebirth of Nature (Rochester,VT: Park Street Press), p. 40.
10 Scientific American, Sept. 1989.
11 Edward Goldsmith, The Way, op. cit., p. xiv.
12 Ibid., p. xv.
13 William Nordhaus, “Greenhouse Economics: Count Before You Leap”, The Economist,
July 7, 1990, cited in Richard Douthwaite, The Growth Illusion, op. cit., p. 199.
14 The New York Times Magazine, Dec. 1, 1996, p. 40.
15 David Orr, Earth in Mind, op. cit. 8, pp. 32-3.
16 “Monsanto Environmental Annual Review, 1995”, Monsanto Environmental Public
Affairs (800 North Lindbergh Blvd., St. Louis, MO 63167), p. 20.
17 Although underwritten by the Monsanto and Pioneer corporations, the book was
published under the auspices of the National 4-H Council, 7100 Connecticut Ave.,
Chevy Chase, MD 20815.
18 Michael F. Jacobson and Laurie Ann Mazur, Marketing Madness (Boulder, CO:

Westview Press, 1995), p. 33.
19 “Farewell Europe”, New Scientist, Nov. 9, 1996, p. 11.
20 Reported on Today programme, Radio 4, England, May 30, 1997.
21 Lawrence C. Soley, Leasing the Ivory Tower: The Corporate Takeover of Academia (Boston:South End, 1995), p. 71.
23 “Testing times for Britain’s Students”, London Times, Feb. 19, 1997, p. 15.
24 Bill Gates, The Road Ahead (Penguin: New York, 1996), p. 294.
25 “Clinton Hails Internet Use on Line and on Air”, The New York Times, April 20, 1996.
26 “Infant Programmers”, London Times, Oct. 25, 1996, p. 37.
26 Daniel Cass, spokesperson on international issues, democracy and environment,		Australian Greens Party, Victoria, Australia, dcass@mov.vic.gov.au
27 Deborah Stead, “Corporations, Classrooms, and Commercialism”, in Education Life,(supplement to The New York Times), Jan. 5, 1997, p. 31.
28 Michael F. Jacobson and Laurie Ann Mazur, Marketing Madness, op. cit., pp. 29-31.
29 Deborah Stead, “Corporations, Classrooms, and Commercialism”, op. cit., p. 30.
30 Michael F. Jacobson and Laurie Ann Mazur, op. cit., p. 34.
31 Ibid., p. 31.
32 Ibid., p. 32.
33 John Taylor Gatto, op. cit., p. 24.
34 John Cushman, “Critics Rise up Against Environmental Education”, The New YorkTimes, Apr. 22, 1997.
35 Michael F. Jacobson and Laurie Ann Mazur, op. cit. , p. 35.
36 David Orr, Earth in Mind,, p. 50.
37 Ibid., p. 205.
38 John Taylor Gatto, “On the Scientific Management of Children”, op. cit., pp. 40-41.
39 Ibid., p. 42.

It is a commonplace observation that the average child in theindustrialised world can recognise hundreds of corporate logos,
but not more than a few local plant species. Though this state ofaffairs cannot be blamed entirely on formal education, it nonetheless reveals how children are systematically disconnectedfrom the places where they live, and measures how successfully
the architects of the corporate economy have done their job.
Educational systems can still be redirected to serve the needsof communities rather than corporations, and to enable individuals to participate in diversified local economies rather thanbecoming specialised, blinkered cogs in a global economy. What
this would require is more educational diversity – systems ofschooling that reflect local circumstances and teach ways ofusing nearby resources to meet local needs. This does not imply
that the flow of information from other cultures should be shut
off; in fact an emphasis on local adaptation would give students
a positive framework for understanding and respecting culturaldifferences.
Some shifts in the educational system could be fairly
straightforward. Direct experience of nature could replace muchof the learning that now comes from books, videos and computers. Some of this knowledge might be imparted better byparents and neighbours with an intimate knowledge of the local
ecosystem than by formally-trained teachers. Food for school
lunches could be provided by local farmers – and students could
even grow some of their own – thereby providing a vital link tolocal resources and the local economy. This would be a radical
departure from current practice in places like the United States,
where Taco Bell has outlets in more than 3,000 schools andPizza Hut delivers to 4,000.35
Rather than segregate children into factory-like same-age
classrooms that inherently foment competitiveness, a return tomixed-age classrooms – similar to the neighbourhood oneroom school houses still found in some rural areas – would bea great improvement. Experience has shown that when children
are in a position to help younger students and learn from older
ones, co-operation rather than competition becomes the norm.
Erasing the many regulatory obstacles to homeschoolingwould also be beneficial, particularly where parents are involvedin agriculture, forestry, and other means of local production –using skills that cannot be taught in classrooms or learned fromT h e I n t e r n a ti o n a l S o c i e t yfor

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P

R E S E A R C H : W H O PAY S ,W H O P RO F I T S ?

“... the White House has approved a proposal to spend up to $1 billion to help
US companies compete with Japan in making sophisticated computer display
screens ... The plan builds on current research programmes paid for by thePentagon and the Energy Department, for which Congress already has authorised$100 million.”
San Francisco Chronicle1

I

ndustrial growth depends in part upon a steady stream oftechnological innovations. These advances improve the productivity of corporations, provide them with better access togeographically dispersed markets and resources, and expand therange of products they sell.
Corporations rely heavily on publicly funded research forthese innovations. In the United States alone, government
expenditures on research total some $65 billion a year. A recent
study on the origins of technological innovation demonstrated
that such research is a “fundamental pillar of industrial advance”.

‘Nearly three-quarters of Americanindustrial patents in recent years were based on
research financed by the public.’
The study showed that for the most part corporations do not relyon themselves for the research that fuels their growth: nearly
three-quarters of American industrial patents in recent years werebased on research financed by the public — either directly, bygovernments, or indirectly, through non-profit agencies.2
The governments of industrialised countries are the biggest
sources of funds for research and development. Among them, theUS, Japan, Germany, France, Britain, Italy and Canada provided
more than $170 billion for research annually in the early 1990s.3
More than a third of that total went towards military spending,with spinoffs that eventually reach industry in general. Little ofthis spending generates anything of fundamental use to smallscale producers or locally-based economies, but instead adds tothe technological treadmill that undermines rural life.
In agriculture and health, much of the research funding isbeing poured into biotechnology. The $3 billion the US government earmarked for the human genome project garnered themost publicity, but numerous other biotech projects have also
been funded. The US Department of Energy, the National Institutes of Health, and the National Science Foundation teamed up
to provide $100 million for researching the genome of a small
mustard-like plant that has emerged as a key model for genetic
engineering. This research will ultimately benefit pharmaceuticaland agricultural biotech firms.4 Similarly, the UK’s Department

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of Trade and Industry (DTI) provided businesses with £7.5 million in biotechnology R&D grants in 1994 alone. This researchwent hand-in-hand with DTI’s Biotechnology Means Businessprogramme, which “promotes the use of modern biotechnology
by companies which have not previously used it within theiroperations.”5
Germany also earmarks considerable amounts of public funds
for high-tech research. The German Aerospace Research Establishment (DLR), for example, employs more than 4,000 people
in seven research centres, working on aviation, space flight, andenergy technologies. According to information provided by theorganisation, “results from this research and development work ...
plays a significant role towards securing the industrial and technological position of Germany’’.6 Such public investments inresearch pay off handsomely for corporations, which can improvetheir efficiency and obtain marketable innovations at little or nocost.

A Cosy RelationshipThough geared towards the needs of corporations, much of theresearch conducted today occurs on university campuses. The
universities themselves are willing participants in this system,
since the flow of grant money from governments increasingly
depends on performing research that corporations want. Universities can even make out at both ends by receiving payments forthe fruits of research conducted at public expense.
Lawrence Soley describes how this works at the Massachusetts Institute of Technology. For a small fee, some 300 corporations are provided with M.I.T. research reports, invited to symposia and seminars, and given personal access to M.I.T.’s faculty. As
the catalogue for the university’s Industrial Liaison Program
unabashedly points out, M.I.T. places “at the disposal of industry
the expertise and resources of all the schools, departments andlaboratories of M.I.T.” The $10,000 to $50,000 per year corporations pay is a pittance, considering that they are being given
access to the half-billion dollars in research done at M.I.T. annually — almost all of which is funded by the US government.7
Similarly, the University of Wisconsin at Milwaukee licenses
research findings to corporations and works directly with themT h e I n t e r n a ti o n a l S o c i e t yfor

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effectively a public subsidy.9
The marriage of corporate industry and publicly funded
research institutions is now commonplace: a research centerplanned for Harvard University’s Institute of Medicine, for example, will devote almost half its space to corporate offices andresearch facilities. Harvard will own the patents to any discoveries
made at the institute, while the corporations will be allowed tomarket them. As usual, substantial funding will come from the US
government, which currently provides more than half the $650
million annual budget of Harvard’s Medical School and its affiliates.10
Even research funded by the former Soviet Union is now
being exploited by corporations: in 1990, Monsanto paid
$500,000 to a team of Russian biological scientists at Moscow’s
Shemyakin Institute in return for the right to market their discoveries in the West.11
European universities and corporations are similarly intertwined, but the European Commission is concerned that therelationship is not intimate enough. Thus, Europe’s “limited
capacity to convert scientific breakthroughs and technologicalachievements into industrial and commercial success [stems from]the still inadequate links between universities and businesses ...
and the lack of co-ordinated strategies between businesses, universities and the public authorities ...”In the future, therefore, Europe will be taking steps to further
facilitate “the transfer of technologies from university laboratories
to companies ...” 12High Technology, Big Scale

Billboard (Bombay, India)

on product development. The aim of its Office of Industrial
Research and Technology Transfer is to help “business and industry... convert research results obtained in the university into commercial products, processes and services.”8 As at M.I.T., most of
those research results are the product of public funding.

‘The marriage of corporate industry
and publicly funded research institutions is now
commonplace: a research center planned forHarvard University’s Institute of Medicine, forexample, will devote almost half its space tocorporate offices and research facilities.’
Sometimes corporations pay substantially more than bargain
basement rates for the research they require. But Monsanto’s $62
million arrangement with Washington University, Hoescht’s $70
million deal with Harvard, and Ciba-Geigy’s $20 million payoff
to the University of California at San Diego effectively turn thoseinstitutions into appendages of the corporations that fund them.
For their dollars, the companies get exclusive licenses, patentrights, early access to research results, and access to the labs themselves. Despite the relatively large sums involved, the corporations
are paying only a fraction of the cost of research; the difference is
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These trends are troubling not only because they reveal anotherlayer of corporate welfare, but more importantly because of theinherent nature of the technologies that are being created withpublic funds. For the most part, the research infrastructure is creating technologies suitable only for the needs and purposes ofhuge corporations, thus propelling society still further in the
direction of the large and global.
Even funding for basic research – which is thought to simply‘expand the frontiers of knowledge’ – inherently promotes larger
scale: as scientific knowledge has grown, so has the scale of technology needed for further expansion. Probing the outer reachesof the solar system or the inner workings of the gene require
technological infrastructures far beyond the small laboratories
and backyard workshops of earlier scientists and inventors. The
scale and the cost involved have already grown so large that only
huge enterprises have the ability to conduct basic research or
apply the findings.
Applied research is now so expensive in high-tech fields thateven the largest businesses have difficulty financing it on theirown – which helps explain the many mergers and partnerships
among technology firms. When Toshiba entered into an agreement with rival Siemens, a spokesperson for the former said,“The objective is to share the costs and the risks ... because
the development of the next generation of semiconductors
requires huge costs – huge costs – and it is very difficult for any
one company to do it alone.”13
The expanding scale of technology also requires a parallel
expansion in economic scale. Akio Morita, head of the Sony
Corporation and a member of the Trilateral Commission, argued
that “making the whole of the developed world essentially one
big market” was necessary if industries were to sustain their
growth curves:“This is particularly true for the increasingly technology-intensive manufacturing sector, which requires global markets to justify

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S m a l l is B e a u ti f u l , B i g is S u bsi d is e d
its huge investment needs” .14
In other words, today’s technologies are so expensive they are
only viable in the context of a huge, globalised economy.
The main beneficiaries of technologies created by publicly-funded research are corporations. If individuals can be said tobenefit at all from these innovations, it is only in their role asconsumers of an expanding line of corporate products. The technologies themselves remain firmly in the hands of corporations,adding to their power while furthering everyone else’s dependence on the corporate world.
Some innovations help provide the infrastructure needed by‘The main beneficiaries of technologies createdby publicly-funded research are corporations. If
individuals can be said to benefit at all from these
innovations, it is only in their role as consumersof an expanding line of corporate products.’
large-scale economies: more efficient and higher speed transport,
faster and more reliable telecommunications networks, newmeans of extracting energy from the Earth. Research in otherareas – pharmaceuticals and biomedical products, agriculturalchemicals and machinery, building products, etc. – is giving corporations tighter control over people’s everyday needs.
Some research merely enables corporations to encourage
consumers to buy new products – part of the ‘new and improved’
treadmill that keeps consumption high by creating new needs.
One heralded achievement of Rensselaer Polytechnic Institute’s
Center for Product Innovation, for example, was a redesigned
coffee-pot for the Norelco Corporation.15 And the US Jet Propulsion Laboratory (JPL) has teamed up in a “strategic alliance”
with toymaker Mattell on a “Hot Wheels JPL Sojourner Mars
Rover Action Pack Set” – described in a press release as “oneexample of how the Jet Propulsion Laboratory Technology Affiliates Program works with industry”.16 Your tax dollars at work.

Undermining Small Scale

Most new technologies inherently benefit larger-scale operators
at the expense of smaller ones. Nowhere has this been more true
than in agriculture. In his book The Growth Illusion, ecologicaleconomist Richard Douthwaite describes how the introductionof diesel and electric irrigation pumps to a small village in India
favoured the farmers who had the capital to invest in them, while
those who remained with traditional methods – based on oxen
– were irreparably harmed. The new pumps allowed more water
to be pumped, and raised the yields of the farmers that used them.
But the increased production ultimately led to a drop in crop
prices; the water table also fell, adding to the burden on farmers
using traditional irrigation methods.17
Thus, this one new technology increased the gap between therichest and poorest in the village, ultimately driving some farmers
off the land; it also undermined the long-term sustainability of
the agricultural system by depleting ground water supplies; and it
siphoned money from the village to industrial pump manufacturers and energy firms.Yet the technology was no doubt introduced
to the village by the agents of ‘development’ as a great step forward.
A similar pattern of events has unfolded in the industrialised
world as well, as new technologies centred on machinery andchemical inputs increased labour productivity, but hurt small pro-34

ducers and ultimately decimated rural life. In Vermont, for example, half the dairy farmers in the state were driven out of business
when refrigerated bulk tanks replaced the old 40-quart milk cansin the 1950s. The cost of adopting the new technology was too
great for farms with less than 30 cows, and 20,000 small family
farm workers were driven off the land.18 The mechanical tomato-picker had a similar impact in California. The machine
reduced the cost of harvesting tomatoes by $5-7 per ton, but the$50,000 price tag meant that only the largest farms could use it
profitably. This one technology, developed at public expense by
researchers at the University of California, led to a decline in thenumber of tomato farms from 4,000 in the early 1960s to about
600 in 1973.19

Land Grant Colleges

In the United States, much of the country’s agricultural researchtakes place at land grant colleges, institutions that were createdspecifically to strengthen and serve small farmers and rural life.
Looking at that infrastructure reveals much about the impact ofpublicly-funded research.
The land grant system – created by a series of legislative actsin the late 19th and early 20th centuries – consists of agricultural colleges, experiment stations, and extension services. The language of the acts setting up the system leaves little doubt that it
was intended to help maintain an agricultural way of life and arural economy. Reference was made to “a sound and prosperous
agriculture and rural life”, and the “development and improvement of the rural home”. The system was meant to “assure agriculture a position in research equal to that of industry, which willaid in maintaining an equitable balance between agriculture andother segments of the economy.” It would also help disseminate“useful and practical information on subjects relating to agriculture and home economics.”20
If the land grant colleges had stayed true to these goals, theymight have helped small farmers survive. Instead, the system
ended up treating agriculture like any other industry, in which
the primary goal is to increase production in general and labour
productivity in particular. Most of the meaningful research andteaching in the land grant system was eventually devoted to technological innovations – primarily machinery and chemical inputs‘Most of the meaningful research and teachingin the land grant system was eventually devoted
to technological innovations that improved‘efficiency’ so well that the vast majority offarmers were made redundant.’– that improved ‘efficiency’ so well that the vast majority of farmers were made redundant. In a description that sounds similar totrends in universities today, Jim Hightower and Susan DeMarcopoint out who this research has really helped:“It is the largest-scale growers, the farm machinery andchemicals input companies and the processors who are the primary beneficiaries. Machinery companies such as John Deere,
International Harvester, Massey-Ferguson, Allis-Chalmer and J.I.
Case almost continually engage in co-operative research efforts atland grant colleges. These corporations contribute money andsome of their own research personnel to help land grant scientists
develop machinery. In return, they are able to incorporate technological advances in their own products. In some cases theyT h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eR e s e a r c h : W h o P a y s , W h o P r o f its ?
actually receive exclusive licenses to manufacture and sell the
products of tax-paid research.”21
As a result of research conducted at the land grant colleges,
millions of farmworkers lost their jobs, hundreds of thousands ofsmall farms went out of business, and the vitality of rural life wasdecimated.

Local Knowledge for Local Economies

None of this was inevitable at the time, nor is it now. There is
no reason why these colleges — or any other research facility— must continue turning out a “technological arsenal suited toa large-scale of operation”, in the words of Hightower and
DeMarco. Wendell Berry, for example, lists some of the roles theland grant colleges could fill that would be helpful for small farmers and their local, rural economies. These include developing
small-scale technologies and methods appropriate to the family
farm; promoting co-operatives and other means of protecting
small farmers from corporate suppliers and purchasers; strengthening local markets for poultry, eggs, butter, cream, milk, andother farm products; and working to overturn the regulations
that have destroyed such markets.22
Agricultural researchers Jack Kloppenburg and Beth Burrows
point out that if the goals are to feed people, to revitalise ruralcommunities and local economies, and to maintain the stabilityof ecosystems, then public money for agricultural research might
1 Keith Bradsher, “US to Spend $1 Billion to Aid Computer Firms”, San Francisco		Chronicle, Apr. 24, 1994, p. A13.
2 “Study Finds Public Science Is Pillar Of Industry”, The New York Times, May 13,
1997, Section C, p. 1.
3 Michael Renner, “R&D Spending Levels Off ”, Vital Signs, 1997 (New York: W.W.
		
Norton, 1997), pp. 112-113.
4 Jack Kloppenburg, Jr. and Beth Burrows. “Biotechnology to the Rescue?”, The		
Ecologist, vol. 26, no. 2, Mar/Apr 1996, p. 64.
5 “United Kingdom Report to the Commission on Sustainable Development, 1995”,
section 2.
6 “German Aerospace Research Establishment: Welcome to the DLR”, web page.
7 Lawrence C. Soley, Leasing the Ivory Tower: The Corporate Takeover of Academia (Boston:South End, 1995), p. 12.
8 Ibid., p. 40.
11 Ibid., p. 42; and Jack Kloppenburg, Jr. and Beth Burrows, “Biotechnology to the		Rescue?”, op. cit., p. 64.
10 Lawrence C. Soley, op. cit. 7, pp. 40-41.
11 Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 124.
12 “White Paper on Growth, Competitiveness, and Employment”, Commission of theEuropean Communities, Brussels, December 5, 1993, Chapter 4, pp. 2-3.
13 Cited in William Greider, One World, Ready or Not (New York: Simon and Schuster,1997), p. 177.

T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r e

be devoted to such small-scale farming techniques as rotationalgrazing of dairy herds, or gaining a better understanding of thestructure of Amish farming. If, however, the primary goal is tomeet the growth requirements of corporations, then researchfunding will go towards such technologies as genetic engineering,which promises to give corporations an even tighter strangleholdon the world’s food supply.23
A similar argument can be made for research in other areas oflife: rather than pouring billions into nuclear power and fossil-fuel research, funding could go towards making diverse and decentralised renewables more readily available; rather than research
into high-speed rail and “intelligent transportation systems” thatenable cars to drive themselves, money could be spent improving
small-scale and locally-appropriate transport modes.
The choices made by governments clearly favour larger scale,and no significant funding has been available for small-scaletechnologies adapted to local environments. Emblematic of thetrend is a university in the US which provided $27 million for a
new biotechnology centre, while housing its Family Farm Institute and other sustainable agriculture facilities in a tiny, remodelled furnace building.24 And in Europe, the EEC praises biotechnology as a field offering a “rich source of growth”, one
which should therefore be supported.25 About the future ofsmall-scale, truly sustainable farming and rural life in general,they are quite silent.

14 Akio Morita, “Toward a New World Economic Order”, The Atlantic Monthly, June		
1993, p. 92.
15 Lawrence C. Soley, op. cit. 7, p. 13.
16 James Gorman, “Mars Mission Separates the Men from the Toys”, The New York Times,
July 13, 1997, sect. 4, p. 2.
17 Cited in Richard Douthwaite, The Growth Illusion, p. 21.
18 Daniel Neary, Jr., “Silent Hillsides: How the Coming of the Bulk Tank Dispossessed
Small Farmers”, Vermont Sunday Magazine, Feb. 25, 1996, pp. 4-13.
19 Langdon Winner, The Whale and the Reactor (Chicago: University of Chicago, 1986),
p. 26.
20 Cited in Wendell Berry, The Unsettling of America, (San Francisco: Sierra Club, 1977)
p. 144.
21 Jim Hightower and Susan DeMarco, “The Land Grant College Complex”, in Peter
Barnes, ed., The People’s Land: A Reader on Land Reform in the United States (Emmaus,
PA: Rodale, 1975).
22 Wendell Berry, The Unsettling of America, p. 153.
23 Jack Kloppenburg, Jr. and Beth Burrows, “Biotechnology to the Rescue?”, op. cit., p. 63.
24 Ibid.
25 “White Paper on Growth, Competitiveness and Employment”, Chapter 4, p. 5.

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E X PA N D I N G I N F R A S T RU C T U R E S :T H E R A C E T O N OW H E R E“The modernisation of Europe’s infrastructure is ... a precondition for carryingout the whole of Europe’s ambitious political, economic, and social agenda.”
European Round Table of Industrialists1A

s the preceding chapters have shown, governments
have for many years subsidised large-scale infrastructuresthat benefit the largest enterprises at the expense of small-er ones.
But the growth imperative is relentless, and even the mostmodern infrastructures must constantly be improved. When US
Transportation Secretary Rodney Slater presented Congress withhis agency’s five-year, $175 billion budget for ground transportation, he justified this vast sum with a familiar argument:“Our economy is rapidly changing and so must our transportation system.The global marketplace is now as close as next door.
By improving access to markets worldwide ... we will provide thefoundation for American businesses to flourish in the 21st Century.
“Nations throughout the world are making massive investments in transportation infrastructure, often in an effort to catch
up with the United States. The failure to meet these growing
challenges could slow our economic growth and reduce our ability to compete effectively.”2“Improving access to markets worldwide” will require new
infrastructure investments in:• Rail transport, including $290 million towards high-spead
rail service between Washington DC and Boston, and $35 million in research into technologies to “reduce the cost of highspeed rail systems to $2-$3 million per mile”.3• Air transport, including $1.35 billion for new airports andimprovements to existing ones; $39 million for research in aircraft structures and materials; $80 million for satellite-based
global positioning systems; $90 million for improving the air
traffic control system; and another $1.8 billion to “modernise
the infrastructure of the national airspace system”.4• Highways, including $17 billion for the Federal-aid Highway

programme, and $100 million to leverage state resources “forprojects of national significance, such as interstate and international trade corridors”; $612 million for research into “Intelligent Transportation Systems”; and $630 million for highway
demonstration projects.5• Miscellaneous other trade-related projects, including $1.5
billion for “shipyard modernisation projects”; and $40 million
in loan guarantees for export ship construction.6

36

The Race is on

When Secretary Slater argued that these expenditures werenecessary because of the “massive investments” other nations aremaking, he may well have had the nations of the European Union
in mind. As in the US, long-distance transport networks in
Europe are already highly developed, thanks to many years ofsubsidies from national governments. In Britain, for example, thegovernment has paid for virtually every trunk road built since1919, and has heavily subsidised the construction of canals, waterways and railways.7 But Europe’s corporate planners are awarethat globalised markets and expanded trade require still faster andmore extensive transport networks, and they have used theirinfluence to place transportation high on the agendas of theEuropean Commission and individual European governments.

‘Europe’s corporate planners are aware that
globalised markets and expanded trade require still
faster and more extensive transport networks.’
Much of this corporate lobbying has been undertaken by theEuropean Roundtable of Industrialists (ERT), composed ofCEOs and other executives from Europe’s most powerful corporations – Volvo, Fiat, Olivetti, Philips, Bosch, Siemens, ICI, Unilever, Renault, BSN, Nestlé, Ciba-Geigy, and others.8 At its initial
meeting in 1983, this group was described by the Financial Times
as a “Who’s Who of European industrial heavyweights.”9 The
group has since grown, and now includes representatives from 45
of Europe’s largest transnational corporations.
The ERT pushed not just for better transport, but for thecomplete integration of Europe’s national economies, on the
grounds that separate national markets “prevent many firms fromreaching the scale necessary to resist pressure from non-European
competitors.”10 Unbelievably, the ERT believes that too muchattention is being lavished on local needs:“...perhaps the greatest problem lies in changing the mind-setof planners who, still today, work in a context dominated by theneed to satisfy local and national requirements.”11
For the ERT, the goal is a single European market of 360
million people, larger than that of either North America or Japan,
giving European corporations an edge in global competition.The
means to that end includes a greatly expanded transport and communications network, along with the political and monetarychanges needed to eliminate all trade barriers between European
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E c o l o g y & C u lt u r e

E x pa n d i n g I n f r a st r u c t u r e s : T h e R a c e T o N o w h e r enations. The latter steps are already well underway.
The infrastructure additions were described in “Missing
Links”, in which the ERT called for $60-billion-worth of new
highway and high-speed rail projects that would complete a
European-wide transport network. “Missing Networks” expanded on the earlier document, and refers not only to transport, but
to an expanded communications infrastructure – including digitaltelecom exchanges and a high-capacity fibre optic network.
The European Roundtable of Industrialists’ ‘recommendations’ were accompanied by a warning: if these infrastructure‘The European Roundtable of Industrialists’‘recommendations’ were accompanied by awarning: if these infrastructure investments were
not made, Europe’s corporations “might have toreconsider their long-term strategies... withthe possibility of redirecting industrial investments
to other parts of the world.’
investments were not made, Europe’s corporations “might have toreconsider their long-term strategies... with the possibility of
redirecting industrial investments to other parts of the world” –another example of the not-so-subtle blackmail corporations now
routinely employ.12
Not surprisingly, the ERT’s infrastructure recommendations
have been largely embraced by the European Commission, which
incorporated a masterplan for a Trans-European Network (TEN)
into the Maastricht Treaty. This network encompasses much ofEurope’s existing transport infrastructure, plus some 200 additional projects – from rail links and motorways to sea crossings, airports and natural gas pipelines. Priority projects include seven
new high-speed rail links in and between France, England, Italy,
Austria, Germany and Spain; motorways in Greece, Bulgaria,
Portugal, Spain, Ireland, Great Britain and all the Scandinavian
countries; rail or road crossings over the Oresund Strait separating
Denmark and Sweden, across the Irish Sea between Britain and
Ireland, and under the English Channel. This latter project, the‘Chunnel’, has already been built.
The TEN also includes investments for a satellite-based network of mobile telecommunications for the European truck fleet,a unified European air traffic control system, and over 40 energy
infrastructure projects.The new communications infrastructure inparticular “will enable companies to globalise their activities ... ona scale never before possible”.13
The fourteen priority TEN projects are listed on the chart on
page 38. An additional 150 or so projects are lower priority, but
are still part of the network.
All told, it is a massive undertaking, threatening the status of
the US Interstate Highway system as the ‘world’s largest public
works project’. The estimated cost of this network is some $465
billion to $580 billion over the next 15 years; the fourteen highest
priority projects alone are expected to cost some $100 billion.
The European Union will provide up to 10% of the cost, as well
as feasibility studies, loan guarantees and interest rate subsidies. In
some high priority projects, EEC financing might reach 90 percent of the total.14 The rest is ultimately the responsibility ofnational governments. Although the European Commission
claims that funding for most of the projects can come from theprivate sector, this seems unlikely. The Channel Tunnel between
Britain and France, which was 100% privately financed, hasturned into a financial nightmare for investors, who will be wary
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E c o l o g y & C u lt u r e

Safeway distribution centre (Bristol, England)of funding future projects.15 To whatever extent these networks
are built, they will most likely be built the old-fashioned way:with public funds.

Destroying Small Scale

If completed, the Trans-European Network will not only help big
businesses get bigger, it will promote the growth of big cities aswell.Take, for instance, the high-speed rail lines that represent halfof the priority projects in the planned network.Unlike many of
the train lines that now criss-cross European countries, highspeed trains stop only at the largest cities. The smaller towns andcities that are bypassed become reduced in economic importance,
while resources, jobs and economic power are further centralisedin the most urbanised areas.
The same is true of the multi-lane, ‘limited access’ motorways
that are planned. Any town or village not served by an exit fromthe highway will be bypassed by commerce. New development‘The mainstream view is that
infrastructure projects benefit society as awhole, and that only an unfortunate few arenegatively affected by them. But large-scale
projects like these have systemic impacts that go
far beyond their immediate vicinity: since theirmain purpose is to greatly expand economic
scale, they undermine every local economy
and community they touch.’
will tend to cluster near motorway exits (as has already been thecase with existing European motorways) threatening the vitalityof urban cores even among those cities served by the motorways.
Large-scale retailers – with lower prices that are partially the
product of transport subsidies – will draw customers from everfurther away, and dependence on the car will grow. No doubt theconsequent increase in traffic will elicit calls for additional roads.
People in the United States are all too familiar with this pattern. Urban planners and environmentalists in America havealready witnessed the destructive impact of the car culture, andcan only watch in amazement as they see the same pattern
imposed on Europe – promoted by corporate interests similar to
those that helped set America on its current sprawling course.
The premise behind government investments in the Tran-Eu-

37

S m a l l is B e a u ti f u l , B i g is S u bsi d is e dTable 2: Trans-European Network, priority projects
Name of ProjectType	Countries involved			Brenner Axis
high-speed rail
Italy, Austria, Germany
Paris-Brussels-Cologne-Amsterdam-London
high-speed rail
France, Germany, Belgium, 		Netherlands, Great Britain			Madrid-Barcelona-Perpignan
high-speed rail
Spain, France
Madrid-Vitoria-Dax
high-speed rail
Spain, France
TGV Esthigh-speed rail
France, Germany, Luxembourg
Betuwe Line
conventional rail
Netherlands, Germany
Paris-Lyon-Torino
high-speed rail
France, Italy
Via Ignatia
motorway
Greece, Bulgaria
Patras-Athens-Bulgaria
motorway
Greece, Bulgaria
Lisbon-Valladolid
motorway
Portugal, Spain
Cork-Stranraer
sea crossing, road and rail
Ireland, UK
Milan Malpensa
airport improvement
Italy
Oresund Bridgestrait crossing, road and rail
Denmark, Sweden
British West Coast line
high-speed rail
UK
Nordic Triangle
conventional rail
Denmark, Finland, Norway,
Sweden		
Ireland-Britain-Benelux

tunnel under English Channel*,bridge across Irish Sea

Ireland, UK, Belgium,
Netherlands, Luxembourg* completed
ropean Network is that trade, and consequently long-distancetransport, are necessary for economic growth. But that growth
will be largely limited to those businesses whose scale is large
enough to participate in trans-European trade. Small, local businesses will reap no benefits; in fact, they may not be able to survive the further advantages given to their large-scale competitors.
The demise of such small, locally-owned businesses will further
impoverish small towns, villages and rural life. Even the European
Commission is aware of this impact: the planned doubling of the
motorway system alone is expected to lead to the demise of 1,000
small villages throughout Europe.
Valid concerns about the environment, about the further concentration of power in huge corporations, about the sapping of
local economic vitality – not to mention the erosion of nationalsovereignty and identity – might convince people that their bestinterests are not served by these projects. Corporate planners arewell aware of this possibility, and are devoting considerable energy
to “obtaining the consensus of citizens”. For the ERT, this meanssponsoring a centre to provide “authoritative views” that support
the corporate agenda. As for concerns about the jobs that would
be lost to high-technologies, the European Commission finds that“it is difficult to assess this factor precisely”, and so it is an issue
best ignored:“In any event, it would be fruitless to become embroiled in a
fresh dispute about the ‘machine age’, as was the case with the firstindustrial revolution. Worldwide dissemination of new technologies is inevitable”.16
Likewise, people’s objections on environmental grounds “cannot simply be granted a power of veto”, according to the ERT:
“If Europe is to escape from the effects of the sterile veto, theincreasingly effective organisation of those arguing for environmental citizens’ rights must be matched by a more effective
organisation of the advocates of change, adaptation and growth.”17“Change, adaptation and growth”: once again the language of38

evolution is being employed in the service of changes consciously planned by and for corporations.
Rather than ‘evolution’, a better analogy is an arms race. European nations and their citizens are being asked not only to abandon their sovereignty, but to pick up the tab for an immense
expansion of the industrial infrastructure so that European corporations can “reach the scale necessary” to compete globally.
The European Commission justifies this call for huge newinvestments because “countries such as the USA and Japan are
making significant, targeted efforts to renew their infrastructures.”
We have now come full circle: the citizens of both the US andEurope are being asked to pay for infrastructure improvements,
largely because the other is doing so. If that isn’t enough to generate support, the EEC adds ominously that threats even lurk
from “new industrial powers such as Singapore, Taiwan, certain
parts of China and Argentina [that] are creating networks which
integrate the latest technological advances.”18

Infrastructure Everywhere

The infrastructure race is not limited to the US and Europe. One
of Japan’s recent transport improvements, for instance, is the $9.7
billion Akashi Haikyo Bridge, the longest suspension bridge inthe world, that makes it possible to drive between Kobe and Awaji
islands.19
Today, virtually every country is being pressed to expand its
infrastructure in order to facilitate global trade. In the South, thecreation of an industrial infrastructure is seen as the route bywhich Third World economies can emulate the rich consumer
cultures of the North. Chapter 6 described a few of the many
centralised energy installations being planned or built. In addition:• Five South American countries – Brazil, Argentina, Paraguay,

Uruguay and Bolivia – are investing $1 billion toT h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r e

E x pa n d i n g I n f r a st r u c t u r e s : T h e R a c e T o N o w h e r ewiden, deepen and straighten 2,100 miles of river to accomodate convoys of barges carrying soybeans, iron ore and otherglobal commodities. Known as the Hidrovia Paraguay-Parana,
the project will require dredging the equivalent of 4 million
truckloads of material from sensitive ecological areas, thereby
threatening the Pantanal, the world’s largest wetland.20• Along with the many energy infrastructure projects m e n -tioned earlier,China is also expanding its road infrastructure: theWorld Bank, for example, is extending a $400 million loan for
construction of the Jinzhu highway, which, the Bank points
out, “will improve long-distance travel and promote trade ...”21• In clear violation of Indian law, the state of Maharashtra isjoining with P&O Australia to build a huge international port
in Dahanu Taluka, one of only three regions in India that havebeen set aside as ‘ecologically fragile’ zones. Funding is beingsought from the World Bank and the Asian Development Bankfor the project, which is being opposed by an alliance of fishermen and tribal and environmental organisations.22• Despite many years of protests, the Indian government is stillplanning to build the huge Tehri Dam, which will flood 27,000
hectares of prime farmland and displace 100,000 people fromtheir homes.23 The Dhabol Power Project, described earlier, isalso at the top of the list. Among its other effects, effluent fromthe Dhabol plant threatens to destroy fisheries and kill thecoconut and mango trees on which nearby villagers depend.
But with Matsushita investing $14 million in new air-conditioning and washing-machine factories, and Fujitsu building a
new plant to manufacture telecommunication equipment, it isapparent that the energy needs of TNCs are more important
than the livelihoods of traditional villagers.24
The Asian Development Bank has recently loaned the government of Laos funds to build a hydroelectric dam on the
Mun River, despite a study showing the dam “will result in
ecological, sociological, and economic damage to the region.”25
Not to be outdone, The World Bank also recently agreed toprovide Laos with $48 million in financing for a “highway
improvement project”.26•

1 “Missing Networks: A European Challenge”, ERT, 113 avenue Henri Jaspar, 1060
		Brussels, Belgium, 1991. p. 5.
2 Rodney E. Slater, letter to Al Gore, March 12, 1997, p. 2.
3 “Highlights of the FY 1997 Transportation Budget”, US Department of 				Transportation, Washington DC, 1997, pp. 3, 5, 12.
4 Ibid., pp. 5, 16.
5 Rodney E. Slater, op. cit., p. 2; “Highlights of the FY 1997 Transportation Budget”, op.
cit., pp. 8-9
6 “Highlights of the FY 1997 Transportation Budget”, op. cit.
7 Simon Fairlie, “The Theory Behind Toll Roads: New Clothes for the Road Lobby”,
The Ecologist, vol. 24, no. 6, Nov/Dec 1994, p. 214; Nicholas Hildyard, Colin Hines and
Tim Lang,”Who Competes: Changing Landscapes of Corporate Control”, The		
Ecologist, vol. 26, no. 4, Jul/Aug 1996, p. 140.
8 Maria Green Cowles, “Setting the Agenda for a New Europe: The ERT and EC		1992”, Journal of Common Market Studies, vol. 33, no. 4, p. 506.
9 Cited in Ibid., p. 505.
10 A. Blackwood, unpublished manuscript.
11 “Missing Networks: A European Challenge”, ERT, 1991. p. 9.
12 A. Blackwood, unpublished manuscript.
13 A. Blackwood, unpublished manuscript; “White Paper on Growth, Competitivenessand Employment”, Commission of the European Communities, Brussels, Dec. 5, 1993.
14 “White Paper on Growth, Competitiveness and Employment”, op. cit., Chapter 3, p. 1.

T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r e• Nepal is getting help from the World Bank to build the huge
Arun III hydroelectric dam project, which includes a 73-mileaccess road and 300 miles of transmission lines. The dam
threatens one of the last virgin forests in the Himalayas, andeven the World Bank admits that the project would “bring rapid
and irreversible changes” to a remote region currently populated by indigenous tribal peoples.27

Almost every such large-scale project harms nearby communities. People’s livelihoods are wiped out, local ecosystems aredamaged beyond repair, entire villages cease to exist. Although theaffected people often fight back, they are usually given little support. The mainstream view is that infrastructure projects benefit
society as a whole, and that only an unfortunate few are negatively affected by them. But large-scale projects like these have systemic impacts that go far beyond their immediate vicinity: since
their main purpose is to greatly expand economic scale, they
undermine every local economy and community they touch.
Meanwhile, the expanded consumption they make possible adds
to global environmental burdens.
Unfortunately, local elites, governments, corporations and the
media have succeeded in convincing people that their basic needs
can only be met from within the global economy. Participating inthat economy means entering a costly infrastructure race. Moreenergy, faster and more extensive transport, more sophisticatedcommunications, more technologically-based educational institutions, more high-tech research facilities – all become necessary tokeep pace with competitors around the world. The great irony, ofcourse, is that the corporations dictating these infrastructure
demands are now transnational, and owe no allegiance to thecountries or people that pay for them.When rooted citizens must
pay for the needs of unrooted corporations, they’ve entered a race
only corporations can win.

15 “Ten Questions on TENs”, European Federation for Transport and Environment, Ruede la Victoire 26, 1060, Brussels, Belgium, pp. 3-6.
16 “White Paper on Growth, Competitiveness and Employment” (Development Theme
I: Information Networks), op. cit., p. 2.
17 “Missing Networks: A European Challenge”, op. cit., pp. 14-16.
18 “White Paper on Growth, Competitiveness and Employment”, op. cit.
19 “First Day, and Traffic is Bumper to Bumper”, The New York Times, Apr. 6, 1998, p. A3.
20 Blackwood, unpublished manuscript; Glenn Switkes, “Design Chosen for First Phaseof Hidrovia”, World Rivers Review, June, 1996.
21 Taylor Moore, “Developing Countries on a Power Drive”, EPRI; “Loan & Credit
Summary” (projects approved at World Bank’s December 1996 board meeting.)
22 dahanu@aol.com
23 Aleta Brown, “Tehri Stalled by Powerful Fast”, World Rivers Review, vol. 11, no. 3,
July 1996.
26 “Investing in India”, Financial Times, Mar. 10, 1997, p. 2.
27 Alexis Dinno, “Funding for Laos Dam Approved Despite EIA Criticisms”, World Rivers
Review, Sept., 1996.
28 “Loan & Credit Summary” (projects approved at World Bank’s Apr. 8, 1997 meeting).
“Green Scissors Report, 1995”, Public Citizen, Washington, DC.

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T H E RU L E S O F T H E G A M E :FREE TRADE“Bigness is the condition of America ... because ever since World War II it has
been the function of the national government – fulfilling, it is presumed, the willof the people – to foster and promote it.”
Kirkpatrick Sale, Human Scale1

V

irtually every nation is shaping its economy to matchthe scale at which transnational corporations operate.The
hidden subsidies involved in that reshaping have enabled
corporations to grow tremendously in economic power; entire
nations now find themselves dependent upon the same businesses
whose growth they have so lavishly supported.
More than just investments in an industrial infrastructure havebeen involved, however: societal laws, rules, and regulations havealso been rewritten in order to respond to and facilitate each corporate colonisation of a new commercial niche. Even such amonumental undertaking as the unification of Europe – involving
fundamental changes in monetary and fiscal policies, customs procedures and democratic processes – has been largely designed by
the corporate world and its lobbying arm, the ERT.1‘Today there is so little out of the ordinary
in the notion of corporations as institutions ofgovernance that a British think-tank could
seriously propose ‘privatising’ entire African
nations – giving corporations the responsibility
for running them in exchange for anagreed-upon return from earnings.’
Unfortunately, the commingling of government and corporate interests has become so normalised that the ERT’s role was
not viewed by the mainstream as the equivalent of a corporate
coup d’état, but as the exercise of big business’s legitimate rights.
Today there is so little out of the ordinary in the notion of corporations as institutions of governance that a British think-tank
could seriously propose ‘privatising’ entire African nations – giving corporations the responsibility for running them in exchange
for an agreed-upon return from earnings.2
To a significant extent, corporate goals were effectively
merged with Northern governmental priorities as early as 1944,
at the Bretton Woods conference. Agreements signed at this meeting gave birth to The World Bank, the International Monetary
Fund, and the General Agreement on Tariffs and Trade (GATT)– institutions that have guided the global economy ever since.The
primary functions of these agencies have been the systematic

40

encouragement of international trade and the promotion of Third
World ‘development’ along industrial/consumerist lines. Both ofthese goals guaranteed that the markets and resources needed foruninterrupted industrial growth would be available.
In the more than fifty years since they were created, the Bretton Woods institutions have pushed virtually every country in the
direction of more trade – and have thereby expanded both thepower and scale of the trading bodies themselves, the transnational corporations.
More recently, the North American Free Trade Agreement(NAFTA), the Uruguay Round of GATT negotiations and theMaastricht Treaty have tightened this alliance between government and corporate power. The goals – economic expansion
through increased trade – have remained largely the same. But
now virtually any barriers to trade are to be systematically
dropped, giving corporations access to bigger markets and to evenmore of the world’s resources – all with minimal government or
public interference. The imperatives of growth and expanded
trade have become institutionalised as fundamental goals of government policy.
A recent addition to the framework set up at Bretton Woods
is the World Trade Organisation (WTO), now a main locus ofcorporate power. Through the WTO, government decisions
restricting corporate activities can be stricken down by an unelected panel of ‘trade experts’ – largely drawn from the corporate
world – if it determines those laws are ‘barriers to trade’. There
are no opportunities for labour representatives, consumer organisations, environmental groups or indigenous people to present
their views; the meeting is not open to the public, and documents
submitted are kept secret.3
The next phase in the process of economic globalisation is theMultilateral Agreement on Investment (MAI), which aims toopen up all remaining sectors of national economies to transnational corporations. The agreement is currently being negotiatedat the Organisation for Economic Co-operation and Development (OECD), which represents the wealthiest industrialised
countries. If passed into law, it will force governments to treat
foreign investors the same as local companies, ensuring that nocountry can favour local producers over corporations based inother countries. The MAI is also likely to prohibit ‘performance’
requirements, such as laws that require companies to hire local
people or pay acceptable wages.The MAI ensures the mobility ofT h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eThe Rules Of The Game: Free Trade
capital, allowing it to flow unimpeded to wherever it can get thehighest return.4
Recent economic meltdowns in Asia, Russia and Latin America are a direct consequence of this hyper-mobility of capital. But
the architects of the global economy are pressing forward withmore of the same, using supra-national institutions like the International Monetary Fund to override national efforts to insulate
their currencies from global pressures. According to a 1998 IMF
communique, the Fund’s Board of Governors believes that “it is
now time to add a new section to the Bretton Woods Agreementby making the liberalisation of capital movements one of the
purposes of the Fund and extend as needed the Fund’s jurisdiction for this purpose.”5
These institutions – and the WTO and MAI in particular –have the clear aim of eliminating people’s ability to define local
needs and run their communities as they see fit. Once they are inplace, local and even national laws will be increasingly subservientto the needs of international commerce. The ‘rules of corporate
behaviour’ will be the rules governing the entire planet.
Depending on Corporations
For many years, governments have acted upon the belief that
economic vitality depends upon the growth of large-scale industries. Although this belief took most dramatic form in the communist world – where the state controlled and supported virtually all industries – ‘free-market’ nations have been similarly
convinced of the importance of supporting industry, even when
the firms themselves remained largely in private hands. As Robert
Reich notes,“In return for prosperity, American society accepted the legitimacy and permanence of the core American corporation. ...
Government officials took as one of their primary responsibilities
the continued profitability of [these] corporations”.6
Many nations outside the communist world formalised thismarriage between government and industry by owning companies in areas critical to industrial development – energy, transport,
communications and advanced technologies. Italy has long nurtured its national holding companies, including IRI (Istituto perla Ricostuzione Industriale), which was set up by Mussolini tospur industrial growth. Its several hundred companies include the‘Airbus, the world’s number two aircraft
manufacturer, pays no taxes, and it is estimatedthat company has received $20 billion ingovernment subsidies since 1970.’
telecommunications giant STET and the national airline, Alitalia.
Direct capital transfers from government to these industries
totalled £17 billion in the 1980s alone, although many are now
being privatised.7 France nurtured and only recently divested
itself of dozens of industries – ranging from car manufacturer
Renault and oil company Elf Aquitane to chemical manufacturer
Rhône-Poulenc and tobacco company Seita, maker of Gauloise
cigarettes.8 Groupe Bull, the third largest computer maker inEurope, has been part-owned by the French government since1975, and recently received an additional $2.1 billion investment
while being readied for privatisation.9 Only in recent years has
Britain divested itself of its stake in industries like British Telecommunications and British Airways, sometimes putting them inprivate hands at a fraction of the cost it took to build them.
Even when such companies are not owned in whole or partT h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r e

by the state, governmental intervention on behalf of large-scaleindustries has long been accepted practice – although such support runs counter to what are supposed to be the rules of the freeenterprise game. John Kenneth Galbraith pointed this out a quarter of a century ago:
“In the traditional image of the corporation, a conceptually
sharp, even immutable line divides the corporation from the state.
There is government; there is private enterprise; the two do not
meet. ... Only someone with an instinct for inconvenience suggests that firms such as Lockheed or General Dynamics, which domost of their business with the government, make extensive useof plants owned by the government, have their working capital
supplied by the government, have their cost overruns socialised by
the government, ... are anything but the purest manifestation ofprivate enterprise. And this being so of Lockheed, the question
certainly does not arise with American Telephone & Telegraph, orGeneral Electric.”10 Galbraith’s point can be applied in numerous other cases. For example:• Germany routinely supports its largest industries throughdirect subsidies and tax incentives. According to one government official,Volkswagen is to Germany “what apple pie is to
the Americans”, and so VW receives especially generous treatment – such as the recent $62 million subsidy it received fromthe state of Saxony.11• Airbus, the world’s number two aircraft manufacturer, is a

European consortium jointly owned by British Aerospace,
Daimler-Benz (Germany), Aerospatiale (France), and CASA
(Spain). The company pays no taxes, and it is estimated thatcompany has received $20 billion in government subsidies since1970.12• In France, the government bailed out the country’s largest

bank, Credit Lyonnais, after a series of bad loans – including an
investment in the Channel Tunnel – threatened it with insolvency. The most recent infusion of taxpayers’ money brings thetotal in state aid to £7 billion.13• Overall, the European countries comprising the European
Union spend vast sums each year supporting various sectors of
the industrial economy. In the early 1990s, for example, thenations of the European Union were providing the manufacturing sector with some 43 billion ecus annually in public
assistance.14• Japan is famous for its ‘industrial policy’, a form of state-sup-ported capitalism in which government and industry closely
co-ordinate their efforts. A similar “close, complex and productive relationship between government and business” has been
cited as the reason for the rapid expansion of Asia’s so-called‘Tiger’ economies – South Korea,Taiwan, Singapore and HongKong.15• In the United States, the smallest businesses are forced to sinkor swim, while the biggest are often rescued from troubled
waters by the government: the Chrysler Corporation, forinstance, was able to avoid bankruptcy in 1979 thanks to government-guaranteed loans of $1.2 billion.16 The US government also has a number of programmes aimed at helping those
corporations involved in international trade and investment.
The Market Access Programme, for example, provides about$100 million annually to companies like Sunkist, Miller Beer,
Campbell’s Soup, McDonald’s, and M&M Mars to advertise41

S m a l l is B e a u ti f u l , B i g is S u bsi d is e dtheir products abroad. The Overseas Private Investing Corporation (OPIC), meanwhile, provides loans, loan guarantees, andrisk insurance to companies and individuals that invest in
so-called ‘emerging markets’, and already protects $3.2 billionin speculative investments in Asia, Latin America, Russia andelsewhere. If those investments go bust, investors don’t have toworry: American taxpayers will reimburse them.17 In general,tax policies in the US favour large corporations: for example,
deductions for R&D, as well as such programmes as the Foreign
Sales Corporate Tax Credit, enabled aircraft giant Boeing to
avoid paying any federal taxes in 1995; instead, the corporation
received a $33 million rebate.18 During the current seven year
period, it is estimated that tax breaks for transnational corporations will reach $95 billion; an additional $7 billion in breaks
will go to banks and other financial institutions, while insurancecompanies will get $204 billion.19
Supranational bodies also support and subsidise large scale.
Funding from the World Bank, for example, is systemically biased
in favour of large projects. And as the global economy grows likea house of cards, the International Monetary Fund stands by toprop it up whenever it teeters. Thus, when free trade, market‘liberalisation’, and high technology combined in 1998 into economic crises that quickly engulfed Thailand, Korea, Indonesia,
and Russia – and pummelled stock markets everywhere – billionsof dollars in IMF funds were sent into the breach. These funds
come from the treasuries of national governments, and ultimatelyfrom the pockets of taxpayers. Those that are bailed out include
banks, corporations, and speculators in international markets.
Greener Pastures
Corporations have grown fat through government support, but
the corporate form has no capacity for loyalty. Trade rules havegiven them the ability to shift production from country to country at will, and corporations are no longer ‘national’ in any meaningful sense. Instead they roam the world seeking low-wage
regimes, lax environmental rules and even bigger subsidies.
According to Dave Phillips of Earth Island Institute, the tuna-canning industry in America cut labour costs by more than half byshifting operations from California to Puerto Rico, where alabour force was available for $7 per hour. Puerto Rico was abandoned in turn for American Samoa, where $3.50 per hour was
the going wage. From there, companies shifted to Ecuador, where‘While massive subsidies are offered in thehopes of luring transnational corporations awayfrom other countries, nowhere are governments
offering similar support for small shops,
small-scale farmers or local producers.’
workers were paid only $1 per hour, then to Thailand wherewages were only about half that rate. Some companies are alreadymoving on to Indonesia to cut labour costs still further.20
The ‘race to the bottom’ provoked by free trade rules offers
far greater advantages to large firms than smaller, more locallyrooted ones, as David Korten explains:“The more readily a firm is able to move capital, goods, technology, and personnel freely among localities in search of such
advantage, the greater the competitive pressure on localities tosubsidise investors by absorbing their social, environmental, andother production costs.The larger and more open the markets, the42

Corporations invade Eastern Europe (Budapest, Hungary)greater the profit opportunity they present to firms that are sufficiently large and nimble ... and the greater their competitive
advantage over smaller local firms that remain rooted in a particular community and play by its rules.”21
While massive subsidies are offered in the hopes of luringtransnational corporations away from other countries, nowhereare governments offering similar support for small shops, smallscale farmers or local producers – even though such businesses
provide more jobs than large corporations per unit of output.
Meanwhile, the subsidies and tax breaks given large businesses add
to the tax burden borne by everyone else. According to Richard
Barnet of the Institute for Policy Studies, corporations operatingin the US in the 1950s paid 23% of all federal income tax; by1991 the corporate share had dropped to 9.2%.22 Similarly, theportion of local property tax revenues paid by corporations
dropped from 45% in 1957 to 16% in 1987.23 In both cases, thedifference has been made up by individuals, family farmers andsmall businesses.
A recent UN study revealed that at least 59 of the 83 countries surveyed offered some form of incentive to transnational
corporations.24 An exhaustive list of such inducements would be
impossible, but a few examples reveal the trend:• Apparently approving of the maxim that what’s good forautomobile manufacturers is good for the country, governments seem to reserve the biggest subsidies for car factories.
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E c o l o g y & C u lt u r eThe Rules Of The Game: Free Trade
Portugal invested over $483 million to lure a factory jointly
operated by the Volkswagen and Ford corporations; the plant
only accounted for 1,900 new employees, a public cost of$245,000 per job. Mazda was given incentives worth $48.5
million by the state of Michigan for a new plant, while
Mercedes-Benz received $250 million in 1993 from Alabama
to set up shop there – a cost of $166,000 per new job created.
BMW received a subsidy package worth £45-50 million fromnational and regional governments to build a new engine plantin Britain; but since the corporation’s plans included closing an
existing engine factory near Birmingham, no net jobs wereeven created. BMW did even better in the United States a few
years earlier, when South Carolina offered subsidies totalling$130 million for siting a plant in that state.25• The Japanese electronics firm JVC received substantial local

subsidies to set up operations in Nancy, France, in 1995. In
1996, the company picked up and moved everything to Scotland, where labour costs were lower – and received a £300,000
subsidy for the move from the European Union.26• Local governments within the same country often competewith one another for corporate favours. In the United Kingdom both Scotland and Wales tried to convince Korean electronics giant LG to build an electronics products factory intheir region. It appears Wales has won, thanks to subsidies totaling £150 million.27• The infamous maquiladoras on the Mexican side of the US

border prove that direct financial payouts are not always needed to lure corporations. Manufacturing wages one-tenth of
those in the US have been the major draw, along with restrictions on labour rights and union activity, lax enforcement ofenvironmental rules and exemption from property taxes. By
1993 some 2,200 factories had been set up by such corporations as GE, General Motors, RCA,Westinghouse, Honey-well,and hundreds of others.28
Opening Markets
Free trade rules not only enable corporations to site their production facilities wherever it is most advantageous, they also allow
them to market their products anywhere in the world. In thename of “breaking down the barriers to trade”, for instance, US
government officials have been actively working for more than adecade to pry open Asian markets for the benefit of American
tobacco companies – even while many of those same officials
have piously supported anti-smoking campaigns at home.
Those efforts were highly successful.Within a year after Japan’s
market was forced open, cigarettes had become the second-most-advertised product on Tokyo television. South Korea
had also closed its market to imported tobacco products and hadoutlawed all cigarette advertising. But ‘free trade’ complaints
forced open the market – and reversed the advertising ban as well.
In Taiwan, not only was the market to imported cigarettes openedup, but a proposed law banning cigarette vending machines,
restricting public smoking areas, prohibiting tobacco advertising,and funding an anti-smoking campaign was scuttled by threats oftrade sanctions. Similar efforts forced open markets in Thailand
and China. By 1991, a Boston-based research institute reported,
sales of American cigarettes were 600% higher in those countries
thanks to US government intervention in the name of ‘free
trade’.29
With the WTO in place, corporations and their patron govT h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eernments have a ready forum for raising objections to the laws ofother nations, and they have not been shy about using it. Whileless than 200 trade complaints were handled by GATT in a
half-century, the WTO fielded 50 complaints in just its first 18
months.30 Its first ruling determined that the US Clean Air Act‘In Taiwan, not only was the market to imported
cigarettes opened up, but a proposed law banningcigarette vending machines, restricting public
smoking areas, prohibiting tobacco advertising,and funding an anti-smoking campaign was
scuttled by threats of trade sanctions.’
discriminated against foreign oil refiners: the US was ordered tochange the law or face sanctions.31
Not only are environmental, food safety and labour laws
threatened by the free trade dogma: the WTO will also be used
to ensure that nations don’t stray from the industrial-consumeristfold. Thus the US and the European Union threatened to haul
South Korea before the WTO because of its support for a ‘frugality’ campaign: the US and the EU argued that efforts to limit
luxury consumption might reduce South Korea’s purchases ofimported goods, and would therefore be a barrier to trade.32 It is
likely that the WTO will also be used to ensure that Third World
governments are powerless to protect their cultures from being
bombarded by films, television broadcasts and other media with awestern, urban-consumer message.
If, like Coca-Cola, the largest corporations in the world needto “make it impossible for the Earth’s billions to escape” theirproducts, national and international laws have become indispensable tools.
‘Regulating’ the Corporations
The recent free trade agreements are probably the most egregious
example of the way national and international laws have beenrewritten to serve the interests of transnational corporations.
Without a doubt, one of the most significant positive shifts inpublic policy would be to renegotiate these agreements, this time
putting the interests of people and the environment – rather thancorporations – at the forefront.
But even though many activists from the local to the international level are aware of the corporate motives behind the trade
agreements, their strategies often fail to aim at fundamentallyshifting course; instead they attempt to ‘regulate’ corporate behaviour even while granting them the expanded power a globally
integrated economic system provides. Unfortunately, this approach
actually helps to promote the corporate agenda: it lulls people
into believing that nothing can be done about the ‘inevitable’
trend toward corporate hegemony, while falsely assuring themthat communities and the environment will nonetheless be protected.
This was clearly the case with NAFTA. Looked at broadly, thegoals of NAFTA were to bring still more of North America’s
population into the industrial-consumer fold, and thereby expand
the markets of corporations large enough to engage in international trade. Nonetheless, many environmental organisations
supported the treaty once a few ‘side agreements’ to monitor andregulate corporate environmental behaviour were appended.
Unlike the environmental groups that supported NAFTA, theCEO of Campbell Soup Company – last seen shivering with43

S m a l l is B e a u ti f u l , B i g is S u bsi d is e dbusiness excitement – knew precisely what this trade agreement
was all about:“In Mexico, our opportunities have been significantly
broadened with the passage of NAFTA. With doors open wider
to international trade, Mexico’s 85 million people beckon as ahighly attractive market, where nearly 9 billion servings of soup
are consumed each year.... Mexican consumers are also showing
preference for our convenient dry soup varieties to replace traditional homemade soup”.33
The shift from “traditional homemade soup” to Campbell’s“convenient dry soup” speaks volumes about the deeper impactsof NAFTA. Whether or not Campbell’s facilities in the US, Canada or Mexico adhere to various environmental regulations is ofminuscule consequence compared with the environmental
impact of pulling 85 million people further along the path ofAmerican-style consumption. As Alan Thein Durning has pointed
out:“Citizens of [the industrial] nations typically consume 10
times as much energy as their developing country counterparts,
along with 10 times the timber, 13 times the iron and steel, 14
times the paper, 18 times the synthetic chemicals, and 19 times
the aluminium.The consumer societies take the lion’s share of theoutput of the world’s mines, logging operations, petroleum refineries, metal smelters, paper mills, and other high-impact industrial plants.These enterprises, in turn, account for a disproportionate
share of the resource depletion, environmental pollution, andhabitat degradation that humans have caused worldwide. A world
full of consumer societies is an ecological impossibility.”34
NAFTA’s side agreements no more address the treaty’s systemic impacts than picking up trash along highways addresses thesystemic impact of cars. But these side agreements duped manyenvironmental organisations into supporting NAFTA, and theirseal of approval ultimately paved the way for its passage.
Corporations have worked successfully for decades to rewrite
the rules of trade for their own benefit. Rather than accepting thepremise of economic globalisation and working to mitigate its
worst impacts – through ‘retraining’ programmes for displaced
workers, through environmental ‘side agreements’, or throughoutside ‘monitors’ of conditions in transnational factories – it istime to rewrite the laws themselves. This time, they should be
written for the benefit of people in their diverse cultures, and forthe sake of the planet itself.

1 Kirkpatrick Sale. Human Scale, p. 66.
2 Maria Green Cowles, “Setting the Agenda for a New Europe: The ERT and EC		1992”, Journal of Common Market Studies, vol. 33, no. 4, Dec. 1995.
3 “Big Biz to Run Small Countries?”, Earth Island Journal, Winter 96-97, p. 12.
3 David Korten, When Corporations Rule the World, p. 176.
4 “Friends of the Earth-USA Fact Sheet on the OECD Multilateral Agreement on		Investment”.
5 Cited in Walden Bello, “IMF’s Role in Asian Crisis”, IFG News, no. 3, summer 1998
(International Forum on Globalization, 1555 Pacific Ave, San Francisco, CA 94109.)
6 Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 51.
7 Patrick J. Spain and James R. Talbot, eds., Hoover’s Handbook of World Business 19951996 (Austin, TX: Reference Press, 1995), p. 276; Lucy Kellaway, “Brittan on the trailof aid to state companies”, Daily Telegraph, Nov. 19, 1990.
8 Lucy Kellaway, “Britain on the trail of aid to state companies”, Daily Telegraph,Nov. 19, 1990; Roger Chen, “France’s Allegiance: To Things French, Like Hypocrisy”,
The New York Times, Aug. 24, 1997, section E, p. 5.
9 Patrick J. Spain and James R. Talbot, eds., Hoover’s Handbook of World Business1995-1996, p. 322.
10 John Kenneth, Galbraith, “On the Economic Image of Corporate Enterprise”, in		Ralph Nader and Mark J. Green, eds., Corporate Power in America (New York:		
Grossman, 1973), pp. 3-4.
11 Michael Lindermann, “Germany warned on subsidy culture”, Financial Times, Sept. 6,
1996, p. 2; Wolfgang Münchau, “VW aid fight part of wider battle”, Financial Times,
Sept. 6, 1996, p. 2.
12 Patrick J. Spain and James R. Talbot, eds., Hoover’s Handbook of World Business1995-1996, p. 98.
13 Charles Gresser, “Banking on another bailout”, Daily Telegraph, Sept. 28, 1996.
14 Fifth Survey on State Aid, European Commission, cited in “State Aid: WorriedCommission Proposes Stricter Rules”, www.cc.cec/rapid/cgi/rapcgi.ksh?reslist
15 Peter Montagnon, “Government action ‘key to Tiger success’”, Financial Times, Mar. 10,
1997, p. 4.

16 Robert B. Reich, The Work of Nations (New York: Alfred A. Knopf, 1991), p. 126.
17 David E. Rosenbaum, “Corporate Welfare’s New Enemies”, The New York Times,
Feb. 2, 1997; Leslie Wayne, “Spreading Global Risk to American Taxpayers”, The New
York Times, Sept. 20, 1998, sect. 3, p. 1.
18 Martin Walker, “Air-raid warning for Europe”, Guardian Weekly, July 13, 1997, p. 6.
19 “The Hidden Entitlements”, Citizens for Tax Justice, cited by Corporate Welfare
Project, Center for Study of Responsive Law, P.O. Box 19367, Washington, DC 20036.
20 Chris Brazier, “State of the World Report”, New Internationalist, Jan.-Feb. 1997, p. 7.
21 David Korten, When Corporations Rule the World, p. 126.
22 Richard Barnet, “Lords of the Global Economy”, The Nation, Dec. 19, 1994.
23 David Korten, When Corporations Rule the World, p. 126.
24 A. Blackwood, unpublished manuscript.
25 David Korten, When Corporations Rule the World, p. 130; A. Blackwood, unpublishedmanuscript.
26 A. Blackwood, unpublished manuscript.
27 Antony Barnett, “The Government’s regional industrial policy has led to agencies
spending too much time and money wooing foreign firms”, The Observer,
June 16, 1996.
28 David Korten, When Corporations Rule the World, p. 129.
29 David Korten, When Corporations Rule the World, pp. 175-6; National Bureau of
Economic Research, cited in Glenn Frankel, “US Aided Tobacco Firms in Asia
Conquest”, Guardian Weekly, Dec. 1, 1996, p. 15 (article originally appeared in		Washington Post).
30 A. Blackwood, unpublished manuscript.
31 David E. Sanger, “World Trade Group Orders US to Alter Clean Air Act”,
The New York Times, Jan. 18, 1996, p. C1.
32 John Burton, “‘Unpatriotic’ buyers lie low”, Financial Times, Mar. 10, 1997, p. 7.
33 Campbell Soup Company 1994 annual report, p. 6.
34 Alan Thein Durning, “All Consuming Passion”, Worldwatch, May-June 1993, p. 12.

44

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11P

L O T S O F R E G U L AT I O N S ,LITTLE EFFECT“Most of us sit idly by, watching the planet’s ecosystems being shredded byunnecessary ‘developments’ and unneeded products, its species geneticallyengineered, poisoned and displaced, the vast majority of the world’s peoples
deracinated, impoverished and enslaved. Most of us sit idly by, dreaming of new
regulations that never worked and never could work.”
Peter Montague1

I

n setting up the framework for what has become a corporate-dominated world economy, the Bretton Woods Agreement and the treaties that followed are obviously tilted infavour of the large and global. But what of other ‘rules of thegame’, like regulations with the avowed purpose of protecting
human health and the environment? Since the goals of virtually
every national government now mesh seamlessly with the corporate agenda, it is not surprising that most government regulations
do little to limit corporate activities; many regulations, in fact,systemically support the large and global at the expense of thesmall and local.
Taken as a whole, environmental regulations have been largely ineffective. In 1995, The Center for Economic and Security
Alternatives in Washington, DC conducted a study to measurechanges in environmental health in nine industrialised countries.
The resulting Index of Environmental Trends, which combined
21 indicators of environmental quality into a single numerical‘index’, revealed that despite a quarter century of regulation, environmental health was deteriorating in all nine countries.2 (seetable 1 below ).
Table 1RANKING FROM LEAST TO MOSTENVIRONMENTAL DETERIORATION, 1970-1995

Denmark 					10.6%
Netherlands 				11.4%
Britain 					14.3%
Sweden					15.5%
West Germany 				16.5%
Japan					19.4%
United States 				22.1%
Canada					38.1%
France 					41.2%
Data from: Gar Alparovitz and others, INDEX OF ENVIRONMENTAL TRENDS(Washington, DC: National Center for Economic and Security Alternatives, 1995), p.
2; cited in Rachel’s Environment & Health Weekly, No.613, Aug. 27, 1998.

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E c o l o g y & C u lt u r e

Despite this grim record, many people still have faith in thoseregulations. They point to the difference between much of theindustrialised world, where regulations are comparatively strong
and the environment relatively clean, and the Third World, where
regulations are much weaker and the environment is often heavily polluted.

‘ The impact of much of the North’s
consumption is felt in the South, where
governments all too often sacrifice their country’s
environmental health in exchange
for foreign investment.’
Even if real progress were being made towards environmental
health in the North, this sort of comparison neglects the way
Northern consumption damages ecosystems thousands of miles
away, in poorer countries. Now that free-trade rules give companies expanded freedom to site production facilities wherever itsuits them, the North’s stronger regulations have led many heavily-polluting industries to relocate to the South – out of view ofconcerned Northern citizens and beyond the reach of their regulatory agencies. Similarly, much of the food consumed in Northern countries comes from the Third World, where chemical-intensive, monocultural agriculture leaves behind degraded land andpesticide-poisoned farmworkers. The impact of much of theNorth’s consumption is thus felt in the South, where governments all too often sacrifice their country’s environmental healthin exchange for foreign investment. The Philippines government,
for example, ran an advertisement in Fortune magazine trumpetingthe lengths to which they would go in accommodating Northernbusinesses:“To attract companies like yours... we have felled mountains,razed jungles, filled swamps, moved rivers, relocated towns... all tomake it easier for you and your business to do business here.”3
Practices like these not only lead to irreparable environmental
damage, they can make survival impossible for indigenous people
whose livelihoods depend upon intact ecosystems. Thus, while45

S m a l l is B e a u ti f u l , B i g is S u bsi d is e dmany Americans applaud the regulations on cars, trucks, andpetroleum refineries – regulations that have marginally improved
air quality at home – the car culture weighs heavily even on carfree communities in distant countries. In north-east Colombia,
for example, the entire U’wa tribe has threatened mass suicide if
Occidental Petroleum is granted oil exploration leases on theirland.4 Their plight is largely invisible, and air quality standards in
the North will not improve it.
Those with faith in the North’s regulatory regime argue thatif ‘development’ is allowed to proceed unimpeded in the Third
World, those nations will eventually have the resources to enact
and enforce environmental standards as strict as in the North,even if the situation worsens in the short term and devastates a
few unfortunate cultures like the U’wa. But even the strongest
environmental regulations cannot make up for the overall impact
of industrialising the Third World. Consider just one small measure of that impact, gleaned from State of the World 1997:“In China, domestic car production has been growing at morethan 15% annually; the government plans to increase automobile
output from 1.4 million units in 1994 to 3 million units in 2000.
In Vietnam, import quotas for cars tripled in 1996, and sales offour-wheel vehicles are projected to increase sixfold between
1995 and 2000.Vehicle sales and registrations are surging in India,
Indonesia, Malaysia, and Thailand as well. Around Asia, the shift totransportation systems that emphasise private automobiles is infull swing.”5
Needless to say, this shift is being promoted – directly andindirectly – by government policies and public subsidies. Perhaps
sometime in the coming decades, when a sufficiently large proportion of Asia’s present-day bicycle-riders have become driversof sports utility vehicles and minivans, those countries will enact‘stiff ’ regulations to mitigate some small part of the environmental damage done. Meanwhile, corporations, governments, theWorld Bank, the WTO, and other agents of the industrial/consumer system will be working to expand the market for cars
elsewhere – in Africa, perhaps – to satisfy their need for growth.
Even with the strongest possible regulations, the notion thatindustrialisation is good for the environment requires a highly
developed form of mental conjuring. Additional sleights of mind
are needed to dispense with the question of whether the planet
has sufficient resources for the Third World to develop alongindustrial-consumerist lines in the first place.

Regulatory Myths

In the most industrially-advanced nations, massive bureaucracies
have been created to monitor and protect the environment andfood supply. In the US, for example, the presence of the Food andDrug Administration (annual budget more than $1 billion) andthe Environmental Protection Agency (more than $6 billion) leadmost Americans to believe that their health and the nation’s environment are adequately safeguarded. But current regulations are
simply inadequate to the task, given the scale at which industry is
now manipulating nature.
Peter Montague of the Environmental Research Foundation
has studied the regulatory system for toxic chemicals in the United States, and what he has found would shake the confidence ofthe most jingoistic American. Some 70,000 chemicals are now in
use in the US, and new technologies add 1,000 more chemicals
to commercial markets every year. Although most people assume
that the government has tested all of these for their safety, theagency responsible, the National Toxicology Program (NTP), has
the capacity to study only about 25 new chemicals each year – andeven then considers only their carginogenicity, ignoring effects on

46

Industrial tomato farm (Florida, USA)immune systems, reproductive functions, and major organs.What’smore, these chemicals are studied in isolation – despite the factthat certain combinations of just two or three common pesticides
have been found to cause up to 1,600 times more damage tohuman health than any one of the pesticides by itself.6
Given its limitations, it is not surprising that the NTP has only
removed nine chemicals from the market in 21 years. The fact is,neither the NTP nor any other agency has the ability to evaluate
fully the dangers of 1,000 new chemicals every year. A study inthe journal Science points out that testing the commonest 1,000
toxic chemicals in unique combinations of three would requireapproximately 166 million experiments. Even if just one hour
were devoted to each experiment and 100 laboratories worked 24
hours a day, seven days a week, the process would take over 180
years to complete.7 At current rates of industrial ‘progress’, another 180,000 new chemicals would have entered the market in themeantime.
The notion that the government effectively regulates thechemical industry is clearly a myth. Corporations introducing‘A study in the journal Science points
out that testing the commonest 1,000 toxic
chemicals in unique combinations of three would
require approximately 166 million experiments.
Even if just one hour were devoted to eachexperiment and 100 laboratories worked
24 hours a day, seven days a week, the process
would take over 180 years to complete.’new chemicals are, in fact, largely ‘self-regulated’ in America: they
are required to report to the EPA any information indicating that
their chemicals “present a substantial risk to human health or theenvironment.” Although penalties are assessed for non-compliance, corporations neither comply with the law, nor does thegovernment have the ability to force them to. Montague points
out that when the Chemical Manufacturers Association negotiated an “amnesty” to allow companies to submit data they had
previously withheld, “more than 120 companies sent EPA 11,000
studies or reports of adverse health effects from chemicals on themarket that had never been reported in scientific literature. The
DuPont corporation alone submitted 1,380 studies; the Ciba-Geigy corporation submitted 580; Shell Oil corporation submitted
T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eL o ts o f R e g u l a ti o n s , L itt l e E f f e c t351; Hoechst Celanese corporation submitted 200. ... Clearly, any
taxpayer, or any member of the public hoping their governmentis going to protect them from toxic chemicals, will be greatly
disheartened by these revelations.”8
Although the ‘revolving door’ between industry and regulatory agencies calls into question the validity of many regulatory
decisions, simple malfeasance on the part of the EPA is not thereason for its shortcomings in this instance:“the EPA ... is powerless against the chemical corporations,who have bigger staffs, much bigger budgets, and many many morelawyers than EPA will ever have.”9This is another demonstration of the absurdity of public pol-‘This is another demonstration of theabsurdity of public policy today: even as
corporations outstrip governments in wealth andpower, those same governments continue tosupport further corporate growth.’icy today: even as corporations outstrip governments in wealthand power, those same governments continue to support further
corporate growth; and while governments spend billions of dollars ‘regulating’ the products churned out in corporate laboratories, additional billions in government funds are spent to help
corporations develop still more new products. The public, whichpays for both, must suffer the health and environmental consequences as well.
Biotechnology will no doubt provide major new opportunities for creating regulatory mechanisms at public expense. Aftermany years of support for genetic engineering from governments
around the world, the technology reached a new level with thecloning of the first mammal by scientists in Scotland. The cloned
sheep set off a wave of public hand-wringing, and US President
Clinton was sufficiently moved to form a US Ethics Commission
to consider the moral implications of this latest advance. Meanwhile, his government continued to funnel billions of tax dollars
into further biotechnology research, and the US patent officebusily doled out commercial patents on new life forms.

Bigger Scale, More Regulations

A commonly heard complaint from Big Business is that regulations are costly and meddlesome, interfering with the ability ofcompanies to function and even hampering the smooth operationof an otherwise perfect free market. What is never acknowledged,
however, is that most regulations and the agencies that administerthem would be unnecessary if the scale of industry and its technological manipulations of nature were not so large. A National
Toxicology Program, for example, would not be required if 1,000
new chemicals weren’t being developed each year; nor would a
Nuclear Regulatory Agency be necessary if nuclear power werebanned outright. In that sense, funds spent on regulatory agencies
are actually a form of indirect subsidy to large-scale industry.
Many other large-scale activities create problems – and thenrequire government regulation - simply because of their scale.
When small farmers raise animals, for instance, the manure produced is beneficial, since it can be used to replenish the fertilityof fields and pastures. But the industrialisation of agriculture separates animal husbandry and feed production into two large-scale,intensive activities: huge feedlots with hundreds, thousands, oreven millions of caged and penned animals on the one hand, andT h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r evast monocultural tracts for growing animal feed on the other.
The first of these produces tonnes upon tonnes of manure that
becomes a serious pollution problem (requiring regulatory oversight); the other requires factory-produced chemical fertilisers andpesticides that are hazardous to the health of factory workers andcan poison soil, groundwater, and food itself (and so also require
regulatory oversight). As Wendell Berry aptly remarks,“The genius of American farm experts is very well demonstrated here: they can take a solution and divide it neatly into two
problems.”10
Far from hampering corporate interests, regulatory agencies
provide corporations with valuable benefits. Though these agencies are often ‘captured’ by the corporations they are meant toregulate – and in the best of circumstances have only a limited
ability to enforce their own rules – they nonetheless serve toconvince the public that their interests are being protected. The
stamp of approval given by agencies like the EPA and the FDA islike a public sedative, calming nerves that might be jittery overcorporate involvement in nuclear technologies, pesticides, foodadditives, genetic engineering, and more. In this way, the American public’s widespread opposition to biotech foods was largely
defused by the FDA’s endorsement of rBST – Monsanto’s genetically engineered hormone that increases milk production incows – despite lingering questions about its impact on humanand animal health.
Many years of government agency oversight of industrial
practices have had a remarkably soporific effect on the American
public. When a researcher in New Hampshire went into a coma

‘While many regulations are needed becauseof large-scale production, they burden small
producers disproportionately.’and died several months after spilling a single drop of a highly
toxic mercury compound on her gloved hand, newspaper reports
implied that the public was safe simply because the compound isin the hands of industry:“The general public doesn’t have to worry about encountering dimethylmercury, [a chemistry professor] said. While small
amounts of it do occur naturally in rare cases, usually it has to be
manufactured by a chemical company”.
Despite this odd disclaimer, the article later notes that dimethylmercury was responsible for the death of two secretaries who
worked near a warehouse where this compound was “improperly” stored.11

At the Expense of Small ScaleAs Helena Norberg-Hodge has argued, government regulations
not only indirectly benefit the largest enterprises, they also penalise smaller ones.12 The cost of complying with mounting layersof regulations often becomes so onerous that it can represent abarrier to entry for all but the largest and most highly capitalised
companies. It is therefore not surprising that biotech giant Monsanto opposed a bill in the US Congress that would have eased
EPA regulations on genetically engineered plants. According toHenry Miller of the Hoover Institution, “Monsanto has had apolicy of trying to keep regulatory barriers high” so other companies – even large seed companies – will find compliance too
expensive to enter the market.13
While many regulations are needed because of large-scale
production, they burden small producers disproportionately.

47

S m a l l is B e a u ti f u l , B i g is S u bsi d is e dLarge-scale food-processing, for example, takes place in factory-like facilities; the foods usually contain numerous artificial
preservatives, flavourings and colourings, and even traces of pesticides; they are transported long distances, and often stored forweeks, months or even years before consumption. Such foods do
require substantial monitoring and regulating to ensure publichealth. One consequence of America’s increasingly mass-produced food supply, for example, is that salmonella cases have morethan doubled in the past 20 years, and the Center for Disease
Control warns that “industry consolidation and mass distributionof foods may lead to large outbreaks of food-borne disease.”14
But when the regulations imposed because of the hazards ofmass-produced foods are applied to small-scale producers, it canbe financially ruinous for them – even though their products areoften far safer, and are sold in face-to-face transactions unseparated by layers of corporate anonymity. Because of European Commission food-processing regulations, for instance, countless smallscale cheese producers – whose traditional varieties have for
centuries been made in home kitchens or cheese rooms attached
to barns – have been forced to give up their livelihoods rather
than meet the exorbitant costs of installing stainless steel kitchens,
tile floors, industrial pasteurisers, and other requirements for marketing according to EC rules.
In the US, similar health rules hurt small producers while
benefiting larger ones. For example, the FDA is proposing that allapple cider be pasteurised, or else carry a label that warns con-

‘Nowhere now is there a market forminor produce: a bucket of cream, a hen,a few dozen eggs. One cannot sell milk from a
few cows anymore; the law-required
equipment is too expensive.’sumers that the product “might contain harmful bacteria known
to cause serious illness.” In the state of Vermont, where cider has
never been linked to any illness, such a warning label would turnaway so many consumers that most of the state’s small cider-makers would be put out of business. The two largest cider producers– which account for 80% of production – already pasteurise theirproduct and would benefit from the losses of their 45 smaller
competitors.15
Laini Fondiller, an organic goat cheese maker in Vermont, hasbeen fighting the state Agriculture Department over similar rules.
Since no commercial pasteurisers are available for small-scale
producers like her nine-goat operation, she pasteurises the milkby hand on a stove-top. Although her methods are more thanadequate, the department argued that she was a “food safety risk”,
and threatened to prohibit her from selling her cheeses unless she
installed an industrial pasteuriser – one costing more than her
annual income from selling cheese. Her angry response is worth
quoting at length:“You say I’m a food safety risk, when there are large megafarms dumping pesticides, herbicides, fungicides, in untold
amounts, not only on their fields, but also on the workers in thefields. I’m a food safety risk, when farmers can inject hormones
to make the animals grow faster or make them milk more. I’m afood safety risk, and large industrial food processors slosh chemicals and germicides all over their equipment and then pump food
through this equipment. I’m a food safety risk, when some farms
have to change antibiotics every couple of months because ofresistance. We allow the production of genetically altered vegetables. ... We can sterilise, irradiate, and pour tons of preservatives

48

into our ‘foods’, but I’m a food safety risk.”16
All the processes she describes are needed in order to produce
food on an industrial scale; it is likely that they are inherently
unhealthy, and many layers of regulatory oversight are needed toensure that they are not even more so. When small-scale producers selling in a local market must abide by the same regulations, it
can easily make it impossible for them to survive.
Wendell Berry, among others, is aware of the role such regulations have played in the decline of rural economies. As he points
out, “Sanitation laws have almost invariably worked against thesmall producer, destroying his markets or prohibitively increasing
the cost of production.”17 As a result,“... nowhere now is there a market for minor produce: a bucket of cream, a hen, a few dozen eggs. One cannot sell milk froma few cows anymore; the law-required equipment is too expensive. Those markets were done away with in the name of sanitation – but, of course, to the enrichment of the large producers.
We have always had to have ‘a good reason’ for doing away withsmall operators, and in modern times the good reason has often
been sanitation, for which there is apparently no small or cheap
technology. Future historians will no doubt remark upon theinevitable association, with us, between sanitation and filthy lucre.
And it is one of the miracles of science and hygiene that thegerms that used to be in our food have been replaced by poisons.”18
Ironically, even America’s grassroots organic foods movement– which aims to remove the poisons in food – is threatened by aregulatory system biased towards large scale. Over the years,
numerous standards have been adopted in different regions todefine what practices are allowable on certified organic farms. In
the name of harmonising these varying local standards, the US
Department of Agriculture (USDA) has released a 600-page proposed national organic foods standard. Largely because the proposal would allow the organic label to go on foods that had been
genetically engineered, irradiated, or grown with sewage sludge as
fertiliser, the record 200,000 comments the USDA received were
overwhelmingly negative.
Although this firestorm has caused the USDA to back off
temporarily, it is clear that the goal of a national organics standard
served the needs of large-scale agribusinesses, which are seeking
to tap into the rapidly growing demand for organic products, andwhich hope to market those products in the global economy. If
the organic standard in the US ever includes practices – likegenetic engineering and irradiation – that are banned in otherparts of the world, the ‘race to the bottom’ will begin, as Ronnie
Cummins of the Pure Food Campaign points out: “if the USDA
gets away with this in the United States, their eventual strategy
will be to use the legal hammer of the GATT World Trade
Organization (WTO) to force European and other nations tolower their organic standards as well.”19

Redefining Corporate Limits

Corporations have steadily colonised more and more spheres oflife.Through advertising and media control they manipulate individual tastes, desires and opinions.They own a large portion of theplanet’s resources, including the seeds on which much of theworld’s food supply depends. They have patented new life forms,
and claim ownership to segments of the electromagnetic spectrum. They dominate agriculture, healthcare, education, communication and entertainment throughout much of the world.
Attempting to regulate each of those realms in turn has beena failing endeavour. This is especially so because corporations –with their lobbyists, campaign contributions, think-tanks, and theT h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eL o ts o f R e g u l a ti o n s , L itt l e E f f e c t‘revolving door’ – exert tremendous influence over the government bodies that would regulate them.
Corporations – many of which are larger and more powerfulthan national governments – cannot be expected to wield responsibly the tremendous power they now have: no matter how
well-intentioned the people working within them may be, corporations themselves are inherently without conscience, and have
no loyalty to anything beyond their own survival and growth.
Civil society cannot much longer survive ever wider corporate intrusion into social and economic life, nor will nature tolerate continued industrial assaults on the biosphere. Put simply,
corporations have far exceeded what ought to be their limits. It istime to define those limits and enforce them, with a clear under-‘Corporations have far exceeded what
ought to be their limits. It is time to define
those limits and enforce them. The right andresponsibility for doing so rests withcitizens, not with the invisible hand of a
supposedly infallible market.’standing that the right and responsibility for doing so rests withcitizens, not with the invisible hand of a supposedly infallible
market.
As Richard Grossman of the Program on Corporations, Law,
and Democracy argues, “If we do not redefine corporations ... wewill continue to struggle against every corporate intrusion one ata time, just as we have been struggling against every industrial
poison, toxic dump and lethal product one battle at a time.”20
Grossman is right in arguing that citizens must stand up andreclaim the rights that corporations have taken as their own. But
corporations have become so powerful and so mobile and havegarnered so many legal protections that this path will not be easy.
Stripping corporations of the advantages mobility confers, forexample, will require cross-border alliances among activists; only
if pressure is simultaneously placed on governments everywhere
will they be forced back to the negotiating table to rewrite thetrade treaties that now give corporations such free rein.
1 Peter Montague, “Is Regulation Possible?”, The Ecologist, vol. 28, no. 2, Mar.-Apr. 1998,
pp. 59-61.
2 Cited in Rachel’s Environment & Health Weekly, No. 613, Aug. 27, 1998.
3 Cited in David Korten, When Corporations Rule the World, p. 159.
4 Reuters wire service, “Occidental Offers to Meet with Indians”, Apr. 26, 1997.
5 Lester Brown, et al, eds., State of the World 1997, p. 47.
6 Steven F. Arnold, et al, “Synergistic Activation of Estrogen Receptor with 		Combinations of Environmental Chemicals,” Science, vol. 272, June 7, 1996, pp. 14891492; cited in Howard, Dr. C.V. “Chemical Mixtures and Synergism... The End of
Traditional Toxicology”, University of Liverpool.
7 Ibid.
8 Peter Montague, Rachel’s Environment & Health Weekly, Environmental Research		Foundation, No. 538, Mar. 20, 1997.
9 Ibid.
10 Wendell Berry, The Unsettling of America, p. 62.
11 Olivia F. Gentile, “Chemist Dies of Mercury Poisoning”, Rutland Herald, June 10, 1997.
12 Helena Norberg-Hodge, “Localization Steps”, memo to the International Forum on
Globalisation, Feb. 15, 1995; also “From Global Dependence to Local 		Interdependence”, International Society for Ecology and Culture (ISEC), July 1995.

T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r e

Since corporate power extends out of the boardrooms andinto the offices of elected officials, heavy grassroots pressure will
also be needed to compel officials to look after the interests of all
their constituents, not just those who make the largest campaign
contributions or employ the slickest lobbyists. Strict laws prohibiting any corporate involvement in electoral processes would goa long way towards whittling down the power corporations now
wield.
As Grossman points out, few people will initially agree that“exercising sovereign authority over all the institutions we create”, including corporations, is “a practical way to think and act”:“Why? Because corporations will take away our jobs? Our
food? ... Our hospitals? Because we don’t know how to run ourtowns and cities and nations without global corporations?
Because they will run away to another state, to another country?
... Because it’s too late to learn to act as sovereign people? ... Howlong shall we the people, the sovereign people, stand hat in handoutside corporate boardrooms waiting to be told our fate?”21
Without steps to dramatically limit the power of the corporate world, attempts to regulate their products and practices will
be largely doomed to failure.
In his book Earth in Mind, David Orr retells the story of aneighteenth-century “protopsychiatrist” who developed a meansof distinguishing the sane from the insane:“Those to be diagnosed he locked in a room with water taps
on one side and a supply of mops and buckets on the other. He
then turned on the taps and watched: Those he considered madran for the mops and buckets; the sane walked over and turned
off the taps.”22
The taps have been running too long, and the mops andbuckets can’t keep up with the rising waters. It’s time to demonstrate our sanity, and turn off the taps.

13 Cited in Rachel Burnstein, “Paid Protection”, Mother Jones, Jan.- Feb. 1997, p. 42
14 “Report: Mass production promotes food poisoning”, Burlington Free Press, Dec. 10,
1997, p. 1.
15 Helen J. Simon, “Cider Pasteurization Urged: Regulations could hurt small Vt. firms”,
Burlington Free Press, Aug. 27, p. 1.
16 Laini Fondiller, “Laini and the Vermont Ag Department”, Rural Vermont Report,		
Summer 1996, pp. 19-20.
17 Wendell Berry, The Unsettling of America, p. 221.
18 Ibid., p. 41.
19 Ronnie Cummins, “Whose Organic Standards? USDA Prepares for an ‘Unfriendly
Takeover’ of the Natural Foods Industry”, Pure Food Campaign, Little Marais, MN,
July 9, 1997, alliance@MR.Net
20 Richard Grossman, “Corporate Security: Monsanto’s ‘First Amendment’ Right to Lie”,
Earth Island Journal, Winter 1996-7, p. 25.
21 Richard Grossman, “The Relationship of Humans to Corporations”, Program on		Corporations, Law, and Democracy, Feb. 27, 1997.
22 David Orr, Earth in Mind (Washington, DC: Island Press, 1994) p. 49.

49

12

P

SO WHY DO THEY KEEPDOING IT?

“Senators, if your vision of our agricultural future is one of corporate agribusinesses
with no family farms, you must vote to give the Commissioner another term in
office. If on the other hand you envision a community of productive rural people
and the beauty of place which is its natural offshoot, you cannot in good
conscience confirm him. You need to urge the governor to appoint someone witha basic concept of sustainability, who values the local economy, and who willencourage us to enrich the land rather than the corporations.”
Karen Shaw, Vermont dairy farmer, at confirmation hearingof Agriculture Commissioner Leon Graves1“...the Senate Agriculture Committee voted unanimously to give [Agriculture
Commissioner] Graves another two years on the job.”
Burlington Free Press2

T

he preceding chapters have outlined some of the waysthat policy-makers are tailoring the places they govern– their physical infrastructures, their educational andresearch institutions, their rules of trade, their laws and regulations – to support the large and global instead of the small andlocal. Since the trend towards larger, more global scale is the
product of human choices, it is neither inevitable nor irreversible.
But if our course is to be shifted, it is important to understandwhy policy-makers so often make the choices they do.
The most obvious reason has to do with money. Global tradeand economic concentration are the wellsprings of vast money
flows, some of which can be easily diverted for personal gain by
influential elites – both within the government and outside it.
More localised economies, on the other hand, are composed ofa multitude of widely dispersed small shops, farms and local producers – often with fewer monetised relationships – and sopresent fewer opportunities for those in positions of power to
add to their wealth. In the South for example, dictators like
Mobuto Sese Soko or Ferdinand Marcos were able to siphon off
their millions only because there were billions flowing into thecountry for development projects and for direct foreign investment.
The same was true in Indonesia, where almost every majordomestic company was tied through complex financial webs tothe family of former President Suharto. Thirty years of Suharto’s
dictatorial rule – which decimated Indonesia’s forests, endangered its native plant and animal species, and devastated indigenous groups like the East Timorese, the Dayak, the Acehnese and50

the Papua – provided Suharto’s family a fortune estimated atsome $6.3 billion.3,4 For such rulers, not only wealth, but power
itself depends on money flows only the large and global can
provide.
Corruption is by no means limited to the least developed
countries. The over-development and hyper-speculation that led
to the 1997 meltdown of South Korea’s economy was exacerbated by a system of bribery and politically motivated loans thatearned one former president hundreds of millions of dollars ingraft – as well as a life sentence in prison before the inevitablepardon by his successor.5 In Mexico, former president Carlos
Salinas de Gortari – who championed NAFTA and once nurtured dreams of heading the WTO – now lives in self-imposed
exile while his imprisoned brother attempts to explain the sourceof the $110 million he stashed in Swiss bank accounts.6
Even the most developed countries have their fair share ofcorruption. In the US, President Clinton’s former Agriculture
Secretary was indicted in 1997 on charges that he regularly
accepted gifts and favours from executives of some of the big
agribusiness companies regulated by his department.7 Until
recently, ‘bribery’ was even considered a legitimate tax-deductible business expense in many European countries.

One Dollar, One Vote

In countries with ‘free elections’, it is unusual for money given
to political leaders to go directly into their pockets; instead itgoes into the bank accounts that fund their political campaigns.
T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r eSo Why Do They Keep Doing It?
Television advertising is now a prerequisite for victory at thepolls in many countries, a development that not only limits political debate to simplistic soundbites and narrowly compartmentalised themes, but makes the electoral process so expensive that
only those with access to vast sums of money can compete. As aresult the principle of ‘one man, one vote’ is rapidly giving way
to ‘one dollar, one vote’. American oil entrepreneur Roger Tamraz, who contributed $300,000 to the Democratic National
Committee in the hopes of getting Administration support foran oil project, succinctly expressed the new reality of money-driven democracy: in testimony before Congress, he admitted
that he doesn’t bother to vote, since elections are not decided by
the voters anyway.8‘Congressional candidates received morethan $89 million in contributions from various
polluting industries between 1991 and 1996;
Congress in turn bestowed $19 billion in
subsidies on those same industries over the same
period – a return of $213 for every dollar‘invested’ in campaign donations.’
While large corporations and their business elite are able tofunnel the necessary funds to candidates friendly to their cause,
representatives of the small and local are unable to match them.
It is no surprise, then, that even ‘democratically-elected’ governments are so biased towards concentrated wealth.
This trend has been growing for years in the United States,
as demonstrated in the way campaign contributions go hand inhand with subsidies to the contributing corporations. The US
Public Interest Research Group, for example, reported that Congressional candidates received more than $89 million in contributions from various polluting industries between 1991 and1996; Congress in turn bestowed $19 billion in subsidies on thosesame industries over the same period – a return of $213 for every
dollar ‘invested’ in campaign donations.9
The elected officials that are the recipients of corporate largesse are quick to point out that there is no quid pro quo: in otherwords, the granting of campaign contributions is not out-andout bribery. What is admitted, however, is that campaign donations give donors ‘access’ to public officials. If an ordinary citizen
telephones or writes an elected representative to offer an opinion
on a critical issue, the message is unlikely to reach the official
directly, and the response will probably be a computer-generated
form letter. On the other hand, a major campaign contributor isall but guaranteed a personal reply, and can often arrange faceto-face meetings with the official. The difference is significant,and is a measure of the way money is dividing the citizenry into
two distinct and politically unequal classes.
The wealthier of those two classes regularly use ‘access’ tobend public policy. In the wake of US Senate committee hearings on campaign finance abuse, Elizabeth Drew, author of Whatever It Takes, a book about the role of money in the 1996 elections, pointed out that“money can buy access, but the transaction doesn’t stop
there.... Access can lead to influence, which can lead to a policy
result. This can be an amendment that is pushed, a regulatory
ruling, a contract, or special attention from a Cabinet officer.”10
It can also buy even more. In North Carolina, a contractor
seeking an appointment to the state Department of TransportaT h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r etion board contributed $30,000 to the governor’s re-election
campaign. Failing to understand the ‘wink-and-a-nod’ subtletiesof modern corruption, he asked for his money back when he
was passed by for a seat on the board. Among his gripes was thatsomeone else on the board “only gave $19,000”.11
In another case, a legislative bill that would have scrappedmajor provisions of the Endangered Species Act turned out tohave been written by an organisation representing timber, mining, ranching and utility interests, including such companies as
Chevron and the Kaiser Aluminum and Chemical Corporation.
The industry-backed group provided the senator sponsoring thebill $34,000 in campaign contributions the previous year.
Even where cash contributions are not involved, large andglobal firms now wield so much economic clout that politicalleaders ignore them at their own peril. This lesson was ruthlessly
driven home to the leaders of Asian economies following theregion’s late-1997 economic meltdown. For a number of years
South Korea, for example, resisted opening up its financial markets to foreign-based TNCs. Once the economic crisis hit andthe nation needed billions of dollars to stave off collapse, Korea
was ripe for blackmail. Within days of the won’s collapse, South
Korea agreed to let transnational banks like Citibank buy up
local banks, and huge insurance corporations like New York Lifeto exploit their insurance markets.
According to US Trade Representative Charlene Barshefsky,
who negotiated the deal under the auspices of the WTO,
“These negotiations have been going on for years, and we’ve
had to try to wear down governments one at a time. ... In theend, they knew that they would compound their own problems
if they ... continue to close off parts of their markets to foreign
investors.”12This is not simply a North-South issue: the influence of huge,
global corporations on sovereign governments is no less pervasive within the North. In Europe, for example, the corporate
CEOs that make up the ERT have almost unlimited access to thecorridors of national and European power. ERT Secretary-General Keith Richardson defined ‘access’ this way:
“Access means being able to phone Helmut Kohl and recommend that he read a report. ... Access also means John Major
phoning ... to thank the ERT for its viewpoints, or having lunchwith [the] Swedish Prime Minister just prior to the Swedish
decision to apply for EC membership”.13
While those advancing the corporate agenda have the ear ofpolicy-makers, those who speak for small businesses, small farmers or the environment are not so fortunate. As Ann Doherty andOlivier Hoedeman of ASEED have reported:“Eurogroup, a lobby group representing small businesses...
has to wait weeks for an appointment with a civil servant, andthe highly-regarded, Brussels-based European Environmental
Bureau has managed to meet only once in two decades with theCommission President.”14
In the United States, access is similarly skewed towards moneyed interests. President Clinton’s practice of ‘renting’ WhiteHouse bedrooms in exchange for campaign contributions madetabloid headlines, but the connection between big money andgovernment policy is far more systemic.When a large proportionof the economy depends on a few key industries, the principals
who control those industries do not require a night in the Lincoln bedroom to make their needs known. For instance, the arms
industry still accounts for 2.5% of the US economy – even after
the end of the Cold War arms race – giving the CEOs of Boeing
and Lockheed significant leverage over government policy.15
Similarly, car-related industries account for an estimated 20% of
the American economy, giving oil companies and car manufac-

51

S m a l l is B e a u ti f u l , B i g is S u bsi d is e dturers even greater clout.16
The way this influence is wielded was revealed in a letter sent
to Bill Clinton by the heads of some 200 major US-based corporations, shortly before the Kyoto conference on global warming. The letter warned the President against“premature agreements that will severely disadvantage the
US economy. ... The US must take care to avoid commitmentsthat will cost US jobs, retard economic growth or damage US
competitiveness.17
Thus, despite the clear evidence that industrial processes arealtering the global climate and putting the health of the entire
biosphere at risk, these CEOs recommended doing nothing –unless, of course, it provides further fuel for the industrial engine:“... there is time to determine optimum strategies that areeconomically sound, comprehensive, market-based, and can be
adjusted over time as new data and technologies become available. For example, a policy of accelerated research and development efforts leading to breakthrough technologies ...”18
Signed by the heads of Exxon, Occidental Petroleum, Mobil,
Chevron, Texaco, General Motors, Ford, Chrysler, Boeing, andscores of other corporations that profit from fossil-fuel use, theletter is patently self-serving. Nonetheless, economic dependency on these huge corporations leads political leaders to treat suchcorporate-friendly documents as though they were impeccably
logical, impartial and civic-minded.
The near-term focus of electoral politics only exacerbates the
problem: if a policy might lead to an economic downturn orstock-market slump in the short run, it can mean political suicide
for any leader with the temerity to support it – even if the policy would have significant social, environmental and economic
benefits in the long term.

Revolving Doors

Appointees as well as elected officials are influenced by the corporate sector’s wealth. The ‘revolving door’ – which leads in one
direction to government positions and in the other direction tolucrative corporate jobs – helps explain the policy bias in favourof the largest enterprises among their supposed regulators. The
intimate relationship between biotech corporation Monsantoand the the US government is not unusual. Mickey Kantor, close
adviser to President Clinton, later became Secretary of Commerce and later still US Trade Representative; today Mr. Kantor‘The ‘revolving door’ – which leads
in one direction to government positions and in
the other direction to lucrative corporate jobs –helps explain the policy bias in favourof the largest enterprises.’is on Monsanto’s board of directors. Marcia Hale went frombeing an assistant to President Clinton to working for Monsantoin Europe; she is now slated to return for another stint in thegovernment.19 The door between Monsanto and the Food andDrug Administration – the agency responsible for overseeing
many of the corporation’s products – has been spinning so fast
it’s difficult to keep track of all the comings and goings. Margaret
Miller, for a while Monsanto’s chief researcher, later obtained a
job with the FDA reviewing research – including her own.
Michael Taylor, a former staff attorney at Monsanto’s law firm,
later took over as the FDA’s policy chief and used his position tocraft the labelling language for milk produced with Monsanto’s

52

Advert for television programme (Bombay, India)

rBGH. And Virginia Weldon, currently a Monsanto Vice-President, has been prominently mentioned as a future head of the
FDA.20Worlds in Common

The revolving door between government and Big Businesshighlights the fact that more than purely economic differencesdistinguish ordinary citizens from those promoting the global
economy. Politicians and the business elite often come from similar backgrounds, have similar educations, and travel in similarsocial circles. As a consequence, their worldviews – invariably
modern and industrial – are closely allied. It is therefore mucheasier for politicians to understand and promote policies basedon economic growth, for example, than on the need for community or the intrinsic value of nature. When other cultures are
involved – as when policies threaten the livelihoods of traditional villagers in the Third World – the worldview gulf is all but
unbridgeable.
Policy-makers and the corporate elite are usually well-insulated from the problems created by their own policies. Crime islargely eliminated from their gated and guarded communities,
while hired gardeners ensure that ‘nature’ is represented byhealthy trees, weed-free lawns and opulent flower gardens. It is
unlikely that they will have to contend with a hazardous chemical site or a nuclear facility in their neighbourhoods or near
their children’s schools. The varied wastes from their consumer
lifestyles are transported so efficiently to other parts of town (orthe world) that it can easily seem that recycling has solved the
problem of waste and pollution. They may be aware of the hazards of chemical pesticides and additives in foods, but if so, theycan easily afford to eat more expensive organic foods, all thewhile celebrating the consumer ‘choice’ that enables the lessfortunate to eat cheaper, poisoned food.
In some cases, the privileged livelihoods of the influential
elite may literally depend on the suffering of others. An entire
multi-billion dollar industry has been built around cancer, forexample, which creates respectable and lucrative niches for thoseseeking a high-tech cure for the cancer epidemic. While thisapproach fits in well with the industrial paradigm, those seeking
to eliminate the environmental causes of cancer – and who thereby call into question many of the processes on which the entire
industrial system depends – are considered radical crackpots.
They must struggle for funding, and their voices often go
unheard.
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E c o l o g y & C u lt u r eSo Why Do They Keep Doing It?
This is true in other fields as well. As Wendell Berry points
out with regard to agriculture,“To turn an agricultural problem over to the developers,
promoters, and salesmen of industrial technology is not to ask fora solution; it is to ask for more industrial technology and for abigger bureaucracy to handle the resulting problems of social
upset, unemployment, ill health, urban sprawl, and overcrowding.
Whatever their claims to ‘objectivity’, these people will not
examine the problem and apply the most fitting solution; they
will reverse that procedure and define the problem to fit thesolution in which their ambitions and their livelihoods have been
invested. They are thriving on the problem and so can have little
interest in solving it.”21

Industrial Solutions Only

As Berry suggests, the industrial worldview – combined withtraining in the compartmentalised thinking that is a hallmark ofmodern education – effectively limits choices to those that further the expansion of the industrial model. This process is atwork everywhere. For instance in the United States, rates ofteenage suicide have tripled since the 1950s; severe depression
affects an estimated 5% of children between the ages of five andtwelve, and 10% of adolescents22; still more have been diagnosed
with such emotional disturbances as hyperactivity and Attention
Deficit Disorder. If such problems are really so common among
American children, something must be fundamentally amiss:perhaps the sea of industrial chemicals in which they have spent
their lives has disrupted vital foetal or childhood development
processes; perhaps the breakdown of the extended (and even the
nuclear) family has left an emotional void that television andcomputer games cannot fill; perhaps the flesh-and-blood rolemodels that communities once provided have been supplanted
by idealised media images that no child can live up to.

‘Many such explanations come to mind,
but these lines of enquiry might call into question
the industrial system itself, and so they are
rarely pursued with vigor.’
Many such explanations come to mind, but these lines ofenquiry might call into question the industrial system itself, andso they are rarely pursued with vigor. Instead an industrial solution – in this case behaviour-altering drugs – is sought, promoted and widely applied. Ritalin is now taken by an estimated 1.25
million school-age boys to ‘control’ their hyperactivity.23 Selective serotonin reuptake inhibitors like Prozac, Zoloft and Paxil
have been prescribed for 600,000 more children to ‘combat’ theirdepression.24
Pharmaceutical corporations are now seeking to formalise
the government’s tacit approval for the childhood use of suchanti-depressants, though they have never been fully tested onchildren; this would pave the way for direct marketing campaigns
to expand their use even further.
All this is quite alarming when seen from the perspective of
overall societal health. But when viewed from the industrial
model’s narrow focus on the health of the corporations that
dominate economic life, it is seen as “a positive”, in the words of
one market analyst: “The [pharmaceutical] companies are looking for expanded markets”, he explained, revealing how completely the industrial system has reduced children to just anothermarketing niche.25
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In a similar way even overpopulation must have a solutionthat emanates from the industrial model – despite the fact thatindustrialisation is itself a root cause of the problem. Almost every
policy-maker believes that further industrial development (often
sugar-coated with western-style ‘education’ for women) will end
the Third World’s population explosion, based on the observationthat population growth in industrialised countries slowed or
stopped once certain levels of affluence were reached. The Southis therefore being encouraged to continue developing along theindustrial-consumerist track, in the belief that population growth
will stabilise when consumption levels rise sufficiently.
Since this theory takes the industrial era as the baseline, therole of modernisation in initiating population explosions in thefirst place is completely ignored. As Edward Goldsmith points
out, “the experience has been the same everywhere. As soon as a
traditional society embarks on the path of economic development, its population simply explodes. It happened in Britain,
where the population was under 8 million when the Industrial
Revolution began, and where it increased by more than seventimes before it eventually stabilised. It is happening today wherever economic development occurs...”26
Wedded to the notion that viable societies must be based on
the industrial model, policy-makers have no qualms about hooking the planet’s few remaining traditional societies into the global industrial system. If such cultures survive the transition, their
populations, too, will explode, but policymakers will have a readysolution: more development.
The ‘development-as-solution’ theory also ignores the factthat overpopulation is primarily a problem because the planet
has a limited capacity to absorb the impact of human activities– an impact that multiplies exponentially with rising levels of
consumption. One might ask which is the bigger problem: thatthe world population has doubled since 1950, or that the numberof cars – and everything that goes with them – has increased
tenfold in the same period?27 Stabilising the world’s population
by encouraging more industrial development is like ‘solving’ theproblem of overfishing by building more and bigger trawlers.
This absurd population policy can only seem rational whenviewed through the fragmented lens of the industrial worldview.

Times Have Changed

When government leaders promote the large and global, they
have the dominant economic ideology on their side. Within that
ideological framework, economic growth and increasing levels of
consumption are the sine qua non of societal success, and increased‘efficiency’ is the means of achieving it. If a reason is needed topromote larger scale and higher technology, Adam Smith and his
famous pin factory are always available. Smith’s The Wealth of
Nations extolled the virtues of the division of labour at the dawnof the industrial era, and posited that the bigger the production
unit, the more specialised – and therefore more efficient – itslabour could become. Since large production units required large
markets, they too became synonymous with increased efficiency.
However valid Smith’s theories may have been, they break
down when the scale at which they are applied is as large as it istoday. There are limits past which ‘efficiency’ no longer means
providing needed goods with less effort, but means replacing
millions of people with automated machines to produce goods
for which there is so little real need that a vast brainwashingapparatus – the advertising industry – is required. Smith also
undervalued the importance of meaningful work, which is often
as important to people as the products the industrial machine
churns out, and which many of today’s specialised and numbing-53

S m a l l is B e a u ti f u l , B i g is S u bsi d is e dly repetitive jobs fail to provide. For Smith, ‘efficiency’ largely
meant economising on human labour, but he could not haveforeseen that 200 years later the industrial system would haveconsumed so much of the Earth’s resources and regenerative
capacities that the need would be to slow production and consumption, not to increase it indefinitely.

Comparative Advantage

Policy-makers today also lean heavily on David Ricardo’s
18th-century concept of comparative advantage, which, at its
simplest, means that if a nation specialises in those goods which
are cheaper to produce compared with other products, and thentrades with a country that likewise specialises its production, bothcountries will be able to consume more than if they did nottrade. In Ricardo’s day, cheaper relative production costs depended on such natural attributes as climate and local resources, aswell as locally-available capital, technologies and skills.
Comparative advantage has been taken up by promoters of
the global economy as a fundamental justification for free trade.
Unfortunately, they overlook important assumptions underlying
the model. According to economist Herman Daly,“The problem is not the logic of [comparative advantage]. It
is the relevance of Ricardo’s critical but often forgotten assumption that factors of production (especially capital) are internationally immobile. In today’s world, where billions of dollars canbe transferred between nations at the speed of light, that essentialcondition is not met. Moreover, free traders encourage such foreign investment as a development strategy. In short, the free
traders are using an argument that hinges on the impermeabilityof national boundaries to capital to support a policy aimed atmaking those same boundaries increasingly permeable to both
capital and goods!”28
Daly has described other shortcomings of the faith in comparative advantage. For trade to increase efficiency, its costs must
be internalised – another condition which is not met. Trade‘Policy-makers have no qualms abouthooking the planet’s few remaining traditionalsocieties into the global industrial system. If such
cultures survive the transition, their populations,too, will explode, but policymakers will have aready solution: more development.’clearly depends on transport, for example, and most transport
costs are externalised: petroleum dependency requires tax breaks,
military expenditures, government research funding, and significant health and environmental costs, not to mention a huge
publicly financed transport infrastructure. In fact, if economic
efficiency is the goal, then today’s highly subsidised trade is actually highly inefficient. As Daly facetiously but accurately points
out, “Americans import Danish sugar cookies, and Danes import
American sugar cookies. Exchanging recipes would surely bemore efficient.”29
While Ricardo’s economic argument is held aloft by thepromoters of the global economy as though it were the holygrail itself, warnings from equally prominent economists on thesame subject are largely ignored. John Maynard Keynes, forexample, wrote:“I sympathise ... with those would would minimise, rather
than those who would maximise, economic entanglement54

between nations. Ideas, knowledge, art, hospitality, travel – these
are the things which should of their nature be international. But
let goods be homespun whenever it is reasonably and conveniently possible; and, above all, let finance be primarily national.”30
This warning is faithfully ignored by mainstream economists,even when the real world invades the rarefied atmosphere of‘Americans import Danish sugarcookies, and Danes import American sugarcookies. Exchanging recipes would
surely be more efficient.’
economic theory. For example, the International Monetary Fund
– with over 1,000 PhD economists on the payroll – gave thegovernments of Thailand and South Korea high marks for“sound macroeconomic management” in the months before thecollapse of their economies. In the aftermath, the IMF approveda multi-billion dollar bailout of the foreign banks that had flooded the countries with bad loans; to recommend limiting the
economic “entanglement between nations” that was at the rootof the problem would have made far more sense.31

Hidden Costs

The externalised costs that call into question the ‘efficiency’ ofinternational trade also apply to the entire industrial model.
Planners and decision-makers often point to rising levels ofGross Domestic Product (GDP) as proof of the success of theirpolicies, while failing to recognise that GDP is woefully inadequate as a measure of societal well-being. Redefining Progress, agroup seeking to replace GDP with a more realistic set of indicators, argues that:“The GDP is simply a gross measure of market activity, ofmoney changing hands. It makes no distinction whatsoever
between the desirable and the undesirable, or costs and gain. On
top of that, it looks only at the portion of reality that economists
choose to acknowledge – the part involved in monetary transactions. ... This [leaves] out two large realms: the functions of family and community on the one hand, and the natural habitat on
the other. ... During this century, those assumptions have become
increasingly untenable. It is not accidental that both the habitat
and the social structure have suffered severe erosion in recent
years: these are precisely the realms that eighteenth- and nineteenth-century assumptions precluded from the reckoning of
national well-being – in capitalist and socialist economies
alike.”32
When the services provided by the biosphere are excluded
from the accounts, it becomes easier to see why corporate arguments against vigorous action on global climate change are
accepted by technosphere-bound policy-makers. The economic‘contribution’ made by a coal-fired power plant or the long-distance transport of goods enters the accounts, while the far more
important but non-monetised contributions made by a healthy
ecosystem are ignored.
The industrial worldview is so self-contained that even whenmonetary values are placed on the costs of climate change, thesecan be interpreted as new and profitable niches for high-techcommercial enterprises to exploit – and which will in turn add
to GDP. Within the industrial model the possibility of solving
problems at their root by ‘turning off the taps’ is less desirable
than purchasing more mops and buckets.
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Not only environmental costs are excluded from the economic reckoning, but social costs as well. While wealth, narrowly measured and unevenly distributed, has increased in the industrialised world, the social price has been high. Robert Reichobserves that,“For all its riches, the United States now has a greater percentage of its citizens in prison or on the streets, and moreneglected children, than any other advanced nation.”33
As further measures of social breakdown, Reich could havementioned the proportion of older people whose final years are
spent useless and neglected in nursing facilities or ‘retirement
homes’ rather than with their families; the rates of bulemia andanorexia among young women; the number of families that areheaded by a single-parent; the rising rates of teenage suicide; anddozens more.
The US may be worst among ‘advanced nations’, but it is notalone. In Japan’s highly competitive society, businessmen are so
renowned for their over-dedication to work that certain
stress-related illnesses have been named after them. In Englandand Finland, countries whose cities were until recently relatively
crime-free and non-violent, children under the age of ten wererecently charged with killing other children. Even in remote
Greenland, where the standard of living has risen to a par with
the industrialised world in the past 40 years, the price has beenhigh: alcoholism and drug abuse are now rampant, and frequent
waves of violence strike the island’s villages; one in seven malescommit suicide, usually in their teens or twenties.
As the Third World ‘develops’, people there, too, are falling‘When the services provided by the biosphere
are excluded from the accounts, it becomes easierto see why corporate arguments against vigorous
action on global climate change are accepted’victim to the same forces: according to health activists in India
and Africa, there is a direct link between the arrival of MTV andother satellite stations that spread Western culture, and accelerating rates of depression, suicide, violence, and drug abuse among
young people.
Such problems were quite rare in traditional cultures, as
anthropologists have consistently noted. After spending several
years in Ladakh’s pre-development culture, for example, Helena
Norberg-Hodge concluded that she “had never met people whoseem so healthy emotionally, so secure.”34. Another researcher
tried to study depression among pre-industrial peoples in New
Guinea, but found no sign of it.
The appearance of serious emotional problems among people within or suddenly exposed to the industrial model can be
explained in part by the psychological pressures to live up to
idealised standards of wealth, beauty and lifestyle. There may beeven deeper reasons. As biologist Hugh Iltis has pointed out,
“Corn and cows, concrete and cars are not enough to sustain
and empower a human psyche that until only a few generations
ago lived in daily contact with a variety of plants and animals, a
psyche that, winnowed and sifted by natural selection, is genetically programmed to respond positively to nature and its patterns.
By destroying so much of the natural environment, we humans
are now destroying crucial parts of our own psychological as well
as physical habitat. ... It is a gloomy picture indeed.”35
Needless to say, classical economics has no meaningful way to
account for such psychological costs. Instead, it will add to GDP
the money spent on mood-enhancing prescription drugs, therapeutic counselling and drug abuse rehabilitation, and will countT h e I n t e r n a ti o n a l S o c i e t yfor

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the addition as a sign of progress.

Dissolving Democracy

Classical economics also has no means to measure the undermining of democratic processes, another symptom of the growing
scale of the economy. In many small-scale societies – even those
whose systems of governance are not ‘democratic’ in the narrow
sense of regular, secret-ballot elections – people had a significant
degree of control over their own lives and their own community. Helena Norberg-Hodge described this traditional pattern in
Ladakh, and the changes brought when the region was hooked
into much larger economies:“In the decentralised village-scale economy, individuals had areal influence on the important decisions affecting them. They
depended on people they knew, and on local resources they
controlled themselves. Nowadays, as they are drawn ever more
tightly into the socio-economic structure of India, each individual becomes just one of 800 million; as part of the global economy, one of over 5 billion. Their influence over the political andeconomic forces that affect them is being so reduced that they
are essentially powerless.”36
Today, even those modern systems of governance describedas ‘democratic’ are being subverted by the increased scale ofeconomies and the businesses that dominate them. When the
campaign contributions and lobbying arms of huge businesses
determine public policy, is this really democracy? When the
WTO – comprised of unelected bureaucrats meeting secretly inBrussels – can overturn national and local environmental, healthand labour standards, is the will of sovereign people really being
represented?
Adam Smith, contemplating the efficiency of an early pin
factory, could not have foreseen a world in which businesses like
General Motors and Mitsubishi dwarf the economies of entire
nations. But the impact of large businesses on political processes
is not the province of classical economics. In that discipline, overlarge businesses are primarily a problem because they can exert
too much influence on markets, which require perfect competition to function properly. Thus, the only ‘acceptable’ reason forintervening in the growing scale of businesses is to limit theirmonopoly power, not their impact on democratic processes.
While anti-trust statutes were occasionally used to limit the scaleof certain businesses, economic globalisation has largely removed
even that limited rationale: today the assumption is that large
scale is required of businesses competing globally.
The rapid expansion and spread of the industrial model has
many other costs as well. But the only way any of these entersthe economic calculus is when the industrial system finds a commercially viable ‘solution’. The widespread pollution of air andwater, for example, appears as lucrative niches for companies
selling air filters and bottled water. If crime is up, so are revenues
for prison construction, private security firms and companies
selling burglar alarms and anti-theft devices - all of which add
to economic growth. Depression in the United States may be anincreasing problem, but the Prozac ‘solution’ adds $1.7 billion to
the nation’s GDP.37 The cancer industry is such a large part ofthe economy of industrialised countries – providing commercial
niches in research, drug development and marketing, hospitals
and clinics, self-help books, non-profit agencies, and more – thatpreventing it could be economically disastrous; ‘cures’, on theother hand, would generate immense sales and create an entire
new profit centre for the drug industry, and would be a boon to
the economy.
Given the way economic accounting is everywhere conduct-55

S m a l l is B e a u ti f u l , B i g is S u bsi d is e ded, it is no wonder that government leaders are so unanimous in
the policies they promote. While policy-makers are mesmerisedby the upward trajectory of GDP, a more accurate set of economic indicators developed by Redefining Progress – one that
separates losses from gains, accounts for the depletion of natural
resources as a drawing down of capital, and accounts fornon-monetised parts of the economy – shows that real economic welfare has been declining for decades.

In Hope of a Future

The previous pages have described some of the ways that public
policies consistently aim towards the large and global, and has
hinted at ways the small and local might be supported instead.
As stated at the outset, bringing about such changes will
mean overcoming powerful vested interests, and will require
fundamentally rethinking the worldview of industrialism. This
may seem a depressingly daunting task, especially since thosepromoting corporate globalism have so much entrenched power.
But the industrial juggernaut threatens everyone: not even the
cloistered, gated communities of the rich can shield them forever from the impact of a degraded biosphere or from social collapse.
Many of the steps toward smaller scale can seem tiny andinsignificant: when massive government bureaucracies, for example, work hand-in-hand with powerful corporations to build
multi-billion dollar transport infrastructures suited to international trade, the possibility of replacing them with bicycle paths
or animal power seems absurdly far-fetched. In isolation, such
steps will always be inadequate to stop the momentum of the
1 Karen Shaw, testimony before the Senate Agriculture Committee, State of Vermont,
Apr. 25, 1996
2 Jeffrey Good, “After Criticism, Panel OKs Graves’ Term”, Burlington Free Press, May 1,
1997, p. 1.
3 Barbara Crossette, “The 21st Century Belongs to ...”, The New York Times, Oct. 19,
1997, sect. 4, p. 3.
4 George Aditjondro, “Dictators United: The Suharto-SLOEC Business Connection”,
Multinational Monitor, vol. 18, no. 9, Sept. 1997, p. 11.
5 Seth Faison, “One Korean Certainty: No more Business as Usual”, The New YorkJan. 4, 1998, sect. 4, p. 4.
Times,
6 Geri Smith, “Catching Up with Carlos Salinas”, Business Week, July 15, 1996, pp. 4446; Geri Smith “New Revelations – And New Pressure on Zedillo”, Business Week,
July 15, 1996, p. 46.
7 Stephen Labaton, “Agriculture Chief in ‘93-’94 Cabinet is Indicted by US”, The New
York Times, Aug. 28, 1997, sect. A, p. 1.
8 Christopher Hitchens, “In the Pipeline”, The Nation, Oct. 13, 1997, p. 9.
9 “Feeding at the Trough”, US PIRG, Apr. 15, 1997.
10 Jill Abramson, “Money Buys a Lot More Than Access”, The New York Times, Nov. 9,
1997, sect. 4, p. 4.
11 Pat Arnow, “No Money Back Guarantee”, In These Times, Nov. 23, 1997, p. 6.
12 David E. Sanger, “Asia’s Surrender”, The New York Times, Dec. 14, 1997, pp. 1, 12.
13 Cited in Ann Doherty and Olivier Hoedeman, “Misshapen Europe: The European
Round Table of Industrialists”, The Ecologist, vol. 24, no. 4, July/Aug. 1994, p. 135.
14 Ibid., p. 136.
15 Martin Walker, “Air-raid warning for Europe”, Guardian Weekly, July 13, 1997, p. 6.
16 Jane Holtz Kay, Asphalt Nation, (New York: Crown, 1997), p. 123.
17 Letter to President Clinton, signed by Lee F. Raymond, CEO of Exxon, et al.
18 Ibid.
19 Al Kamens, “Clinton Assistant Going Private”, Washington Post, Apr. 21, 1997.
20 Beth Burrows, personal communication.

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industrial juggernaut.
The problem is that modern societies are systemically headed
towards larger scale and economic globalisation; small, localised
alternatives in one area of life or in one part of the world simply
cannot flourish if every other part of the system continues its
destructive course. Just as indigenous cultures have little protection against the global rapaciousness of industrialism, even thebest-conceived steps towards localisation are unlikely to survive
if simultaneous steps are not taken on many other levels, in manyother parts of the world.
Seen in the context of co-ordinated efforts to shift current
policy, however, small local steps can take on a much larger significance. Groups from the grassroots can work together worldwide to elect representatives and compel governments to renegotiate the trade treaties. These steps can create the conditions inwhich communities will be better able to define themselves inlocation-specific ways that lead toward sustainability and equity,
and will have the opportunity to support themselves without
depending on global corporations. If countries link together to
set limits beyond which corporations cannot go, their rape of theenvironment may cease, and ecosystems will have a chance toheal. If corporations are stripped of rights they should not have,then their corrosive influence on political life can be eliminated,
and the constant din of commercialism can be quieted.

21 Wendell Berry, The Unsettling of America, p. 219.
22 Mary Crowley, “Do Kids Need Prozac?”, Newsweek, Oct. 20, 1997, pp. 73-4.
23 Kristen Leutwyler, “Paying Attention”, Scientific American, Aug., 1996, p. 12; “Resident
Populations by Age and State, 1995”, Statistical Abstract of the United States, (Washington,
DC: Bureau of the Census, 1996), p. 33.
24 Barbara Strauch, “Use of Antidepression Medicine for Young Patients Has Soared: To
Bolster Market, Makers Seek FDA Sanction”, The New York Times, Aug. 10, 1997,
section A, p. 1, 24.
25 Ibid. , section A, p. 1.
26 Edward Goldsmith, “Development Fallacies”, in The Future of Progress, Norberg-Hodgeet al., eds. (Totnes, UK: Green Books, 1995), p. 74.
27 Lester Brown et al., eds., Vital Signs 1997, (New York: W.W. Norton, 1997), p. 74.
28 Herman Daly, “The Perils of Free Trade”, Scientific American, Nov. 1993, p. 51.
29 Ibid., p. 51.
30 Ibid., p. 50.
31 David E. Sanger, “New World Audit: Fail-Safe Stategies in a Market Era”, The New
York Times, Jan. 4, 1998, sect. 4, p. 1.
32 Clifford Cobb, Ted Halstead, and Jonathan Rowe, “If the GDP Is Up, Why Is America
Down?”, Atlantic Monthly, Oct. 95, pp. 60-62.
33 Robert Reich, “For Richer, for Poorer”, The New York Times Book Review, July 6,
1997,
p. 11.
34 Helena Norberg-Hodge, Ancient Futures: Learning from Ladakh (San Francisco: Sierra
Club, 1991), p. 85.
35 Hugh H. Iltis, “Serendipity in the Exploration of Biodiversity: What Good Are Weedy
Tomatoes”, in E.O. Wilson, ed., Biodiversity (Washington, DC: National Academy Press,
1988), p. 99.
36 Helena Norberg-Hodge, “Ancient Futures”, in D. Chiras, ed. Voices for the Earth: Vital
Ideas from America’s Best Environmental Books, (Boulder, CO: Johnson Books, 1995).
37 Barbara Strauch, “Use of Antidepression Medicine for Young Patients Has Soared: To
Bolster Market, Makers Seek FDA Sanction”, op. cit., section A, pp. 1, 24.

T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r e

S m a l l is B e a u ti f u l , B i g is S u bsi d is e d

L o c a l Fu t u r e s is an in t e r n a t i o n a l no n - p r o f i t or g a n i z a t i o n de d i c a t e d tor e n e w i n g ec o l o g i c a l an d so c i a l we l l b e i n g by st r e n g t h e n i n g co m m u n i t i e s
a n d lo c a l ec o n o m i e s wo r l d w i d e .
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C o n t a c t us : in f o @ l o c a l f u t u r e s . o r g00

T h e I n t e r n a ti o n a l S o c i e t yfor

E c o l o g y & C u lt u r e