A 345238 THE SILENT TAKEOVER Global Capitalism and the Death of Democracy NOREENA HERTZ WILLIAM HEINEMANN : LONDON NOTES Chapter 1 1. Of particular note is the fact that the World Bank's World Development Report 2000 acknowledged that inequality was bad for growth, economic growth does not automatically reduce poverty, and that poverty is not simply an economic problem but also a political one. 2. Interestingly, the Death Row campaign badly misfired. After victims' rights groups picketed a Texas Sean store in February 2000, Sears, the second largest retailer in the US, dropped its contract with Benetton for a private label line. The line had been expected to generate some $100 million in sales in its first year. Olivero Toscani, Benetton's longtime creative director, was another casualty of the campaign. A joint statement with Benetton owner Luciano Benetton implied he left to 'take on new projects'. 3. According to the World Bank's 1999 World Development Indicators, there were 654 television sets per 1000 people in highly developed countries. In the USA this is as high as 847 per 1000. 4. Ben Bagdikian, The Media Monopoly, 4th edn (Boston, 1992) p. 157; 'Buy-nothings discover a cure for afHuenza', The New York Times, 29 November, 1997. 5. E. Herman and R. McChesney, The Global Media: The New Visionaries of Corporate 214 Noreena Hertz Capitalism (London, 1997) 6. www.adbusters.org; see also: www.oneworld.org/ni/issue278/jamming.html 7. 'Shoppers are pigs', Wall Street Journal, 19 November 1997. See also: 'Consumer republic', Adweek, 22 November 1999. 8. Anderson and Cavanagh, 'Top 200: The rise of global corporate power', Institute for Policy Studies (Washington, 1999) 9. Compiled from country and company data from Economist and Fortune 500 lists, 2000. 10. 'Business: Rupert laid bare', The Economist, 20 March 1999. 11. Stephen Byers speech transcript, Mansion House, 2 February 1999. http://www.dti.gov.uk/ministers/archived/byers02021999.html 12. Pulling Apart: A State-by-State Analysis of Income Trends, Center on Budget and Policy Priorities and the Economic Policy Institute (2000). 13. Federal Election Commission Data, 18 December 2000. 14. Robert D. Putnam, Susan J. Pharr, and Russell J. Dalton, 'Introduction: What's Troubling the Trilateral Democracies', in Putnam and Pharr (eds.), Disaffected Democracies, (Princeton, 2000), p. 14. 15. 'Too much corporate power', Business Week, 11 September 2000. 16. Remarks by Eric Hobsbawm in 'Roundtable: The Global Order in the 21st Century', Prospect, Issue 44, August/September 1999. 17. J. Stiglitz, 'The economic consequences of income inequality', Federal Reserve Bank of Kansas City (1999). Chapter 2 1. William Greider, One World, Ready or Not, (1997), p. 362. 2. Chris Pierson, 'Social Policy', in David Marquand and Anthony Seldon, The Ideas that Shaped Post-War Britain, (1996), p. 151. The Silent Takeover 215 3. Desmond S. King, The New Right: Politics, Markets and Citizenship, (1987), p. 58. 4. Nigel Lawson, 'The Frontiers of Privatisation', speech to Adam Smith Institute conference on privatisation (1988), quoted in Peter Riddell, The Thatcher Era and its Legacy, (1991), p. 6. 5. Desmond S. King, The New Right: Politics, Markets and Citizenship, p. 68. 6. David Marquand, 'Moralists and Hedonists', in Marquand and Seldon, The Ideas that Shaped Post-War Britain, p. 14. 7. Ibid., p. 15. 8. 'The Thatcher Record', The Economist, 24 November 1990; Economic Report of the President, January 1993, Table 13-59, p. 462; 'The trouble with theories: Assessing Reaganomics', The Economist, 21 January 1989. 9. John Gray, Beyond the New Right, (1993), p. vii. 10. John Moore, Social Services Secretary, speech in London, 26 September 1987, quoted in Peter Riddell, The Thatcher Era and its Legacy, p. 127. 11. Peter Riddell, The Thatcher Era and Its Legacy, p. 150. 12. Ibid, p. 151. 13. Quoted in Peter Jenkins, Mrs Thatcher's Revolution, (1987), p. 326. 14. Ibid. 15. Chris Pierson, 'Social Policy', in Marquand and Seldon, The Ideas that Shaped Post-War . Britain, p. 140. 16. Desmond S. King, The New Right: Politics, Markets and Citizenship, p. 139. 17. It was former prime minister Harold Macmillan who described it as a sell-off of the family silver: 'First of all the Georgian silver goes, and then all the nice furniture that used to be in the salon. Then the Canalettos go.' Harold Macmillan, first Earl of Stockton, speech to the Tory Reform Group, 8 November-1985, quoted in Peter Riddell, The Thatcher Era and its Legacy, pp. 27-9. 216 Noreena Hertz 18. I am using £61 billion to refer to ^67,104 million. 19. David Butler and Gareth Butler, Twentieth Century British Political Facts, (2000), pp. 430-33. 20. John Gray, False Dawn: The Delusions of Global Capitalism, (New York, 1998), pp. 27-8. 21. Peter Riddell, The Thatcher Era and its Legacy, p. 92. 22. Madsen Pirie, 'Reasons for privatization', in Philip Morgan (ed.), Privatization and the Welfare State, (1995), p. 26. 23. Peter Riddell, The Thatcher Era and its Legacy, pp. 27-9. 24. Richard P. Nathan, 'The Reagan Presidency in Domestic Affairs', in The Reagan Presidency: An Early Assessment, Fred. I. Greenstein (ed.), (1983), p. 49. 25. Philip Morgan, 'The privatization of the welfare state: A case of back to the future?', in Phillip Morgan (ed.), Privatization and the Welfare State, p. 12. 26. Ibid., p. 152. 27. See for example Peter Huber, 'Technology: the great deregulator', Forbes, vol. 15, no. 6, (1995). 28. Desmond S. King, The New Right: Politics, Markets and Citizenship, p. 155. 29. Ibid., p. 139. 30. John Burton, 'Taxation Policy and the New Right', in Grant Jordan and Nigel Ashford (eds.), Public Policy and the Impact of the New Right, (1993), p. 103. 31. Riddell, Peter, The Thatcher Era and its Legacy, pp. 112-3. 32. Friedrich Hayek, Law, Legislation and Liberty, (1979), p. 139. 33. David A. Stockman, The Triumph of Politics, (London, 1986), p. 6. 34. Michael Moran and Tony Prosser, 'Introduction: Politics, Privatization and Constitutions', in Michael Moran and Tony Prosser (eds.), Privatization and Regulatory Change in Europe, (1994), p. 1. 35. John Gray, False Dawn: The Delusions of Global Capitalism, p. 39. The Silent Takeover 211 36. Francis Fukuyama, The End of History and the Last Man, (1992), p. 42. 37. See for example J. Toye, Dilemmas of development: Reflections on the counter-revolution in development theory and policy, (Oxford, 1987). 38. Vincent Wright, 'Industrial Privatization in Western Europe: Pressures, Problems and Paradoxes', in Vincent Wright (ed.), Privatization in Western Europe, (1994), p. 3. 39. 'Twilight of a god', The Economist, 17 September 1994. 40. Edward Carr, 'Survey of Business in Europe: What the ministry managed', The Economist, 23 November 1996. 41.. 'The Future Surveyed: The future of capitalism', The Economist, 11 September 1993. 42. 'The Post-Soviet world: The resumption of history', The Economist, 26 December 1992. 43 Francis Fukuyama, The End of History and the Last Man, p. 41. 44. For a comprehensive review of dependency theory literature, see Robert A. Packenham, The Dependency Movement: Scholarship and politics in development studies, (Cambridge MA, 1992). 45. Robert Skidelsky, 'Bring back Keynes', Prospect, May 1997, p. 30. 46. Tony Blair, leader of the opposition, speech to the News Corporation Leadership Conference, Hayman Island, Australia, 17 July 1995. 47. Martin Walker, 'No argument', Prospect, March 2000, p. 35. 48. John Gray, False Dawn: The Delusions of Global Capitalism. 49. Martin Rhodes, 'The Welfare State', in Martin Rhodes, Paul Heyward and Vincent Wright (eds.), Developments in West European Politics, (London 1997). 50. 'Europe's New Left: Free to bloom', New Economist, 12 February 2000. 51. Ibid. 52. Ibid. 53. John Gray, False Dawn: The Delusions of Global Capitalism, p. 29. 218 Noreena Hertz 54. 'Europe wheels to the right', The Economist, 10 May 1997. 55. John Gray, False Dawn: The Delusions of Global Capitalism, p. 87. 56. 'The left's new start: a future for socialism', The Economist, 11 June 1994. 57. 'Displaced, defeated and not sure what to do next: The plight of Europe's right', The Economist, 23 January 1999. 58. Robert Taylor, 'The social democrats come roaring back', New Statesman, 20 December 1999, p. 26. 59. 'Europe's new left: Free to bloom', The Economist, 12 February 2000. 60. Madsen Pirie, 'Reasons for privatization', in Philip Morgan (ed.), Privatization and the Welfare State, p. 26. 61. Michael Maclay, 'A mission for Britain', Prospect, March 2000, p. 24. 62. Margaret Thatcher, chief opposition spokesman on power, Conservative Political Centre address, Blackpool, 10 October 1968, quoted in Peter Riddell, The Thatcher Era and its Legacy, (1991), p. 1. 63. Kenichi Ohmae, The Borderless World: Power and strategy in the global marketplace, (London, 1990). 64. 'One world?: The growing integration of national economies', The Economist, 18 October 1997. '65. Astonishingly, more than 50 per cent of Britain's net investment went abroad in 1885-94 (Kevin O'Rourke and Jeffrey Williamson). 66. This is redolent of the Barings crisis of 1890 when the merchant bank had to be rescued by the Bank of England after dabbling in South American securities. The same Barings, that is, that went under in 1995 after their Singapore-based trader Nick Leeson bet the wrong way on Japanese equity futures. 67. Globalisation theorists like R. Barnet and J. Cayanaugh, Global Dreams: Imperial Corporations and the New World Order (New York, 1995), and Raymond Vernon, The Silent Takeover 219 Sovereignty at Bay: The Multinational Spread of U.S. Enterprises (1971), see the current pattern of MNC expansion to be qualitatively new, whereas globalisation sceptics like Hirst and Thompson, Globalisation in Question: The International Economy and the Possibilities of Governance (Cambridge, UK, 1996) take a contrary view and claim that an internationalised economy is not unprecedented, that multinationals are not new and that markets are not necessarily more open or more expansive than they have been through history.