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#567 - The Nature Of World War III -- Part 1, 08-Oct-1997

The social movement created by U.S. toxics activists began in the late
1970s with a concern for place. People were fighting to clean up and
protect specific places: their home, their neighborhood, a valley, a
mountainside, a city block, a community. Specific places were the focus
and toxic materials were the concern.

Over the past 20 years, toxics activists have come to understand that
the problems they face are deeper than just toxic dumping, as bad as
that is. Now people see that toxic wastes are just one aspect of a
larger problem: toxic products, a toxic economy. Furthermore, toxic
chemicals in the economy are just one aspect of an even deeper problem:
the economy is not working for people or communities and most of the
people affected by economic decisions are no longer participating in
those decisions. In communities, people are realizing that the deepest
question of all is, Who gets to decide?

The economy is not working for most people. Plant closings, downsizing,
wage freezes and give-backs, union busting, replacement of full-time,
permanent jobs by part-time and temporary jobs without benefits --these
are the the result of decisions that have taken away the economy
security of at least 100 million people in the U.S.

Real wages for non-supervisory workers --75% to 80% of all workers --
have been declining since 1972.[1] Measured in constant (inflation-
adjusted) dollars, a full-time worker in 1972 took home $315.44 per
week; today that same worker takes home $255.90 per week,[2] a 19%
decline. People are adjusting to this wage decline by having other
members of the household go to work, working longer hours, taking
second and third jobs. Even these heroic efforts have not turned things
around for most families in the 1990s: in the period 1989 to 1995,
median family income dropped in 5 out of 6 years.[3] The total drop in
median family income since 1989 has been 6%. The reality is
unmistakable: the economy is not working for most people the way it
used to.

Meanwhile, inequality is increasing sharply. The rich are getting much
richer and the poor are getting poorer and more numerous. If you break
society into 10 groups, each representing 10%, the incomes of the
richest 10% rose 21% between 1979 and 1987, while the incomes of the
poorest 10% dropped by 12%.[4] Between 1983 and 1992, an astonishing
99% of the increase in the nation's wealth was awarded to the
wealthiest 20% of the people.[5]

In 1949, the richest 1% of the population owned 21% of all assets;
today that richest 1% owns more than 40% of all assets.[6]

Is all this happening because the economy is in a slump? Is business
doing badly? Hardly. During the period 1980-1995 corporate revenues
rose 129.5%, corporate profits rose 127%, and executive pay rose 182%.
[7]

Meanwhile the share of the federal tax burden borne by corporations and
the super-rich has been declining, and the share paid by the middle
class has been increasing. In 1950, taxes on corporate income provided
26.4% of federal tax income. In 1995, that figure had fallen to 11.6%.
[8]

During the same period, the tax burden on individuals has risen. In
1972, the social security tax, a wage tax, was 4.8%; today it is 7.65%,
a 59% increase.[9] Furthermore, in 1972, the median sales tax across
all the states was 3%; today it is 7%.[10] Meanwhile the income tax on
the rich and super-rich has dropped dramatically. In 1950 the top
income tax was 91%; in 1995, it was 39.6%.[11]

Because of phenomenal growth in profits in recent decades, many
corporations are now larger than countries. Of the 100 largest
economies in the world, 51 are now corporations and only 49 are
countries. General Motors --the 22nd largest economy in the world --is
larger than Denmark, larger than Thailand, larger than Hong Kong,
larger than Turkey. Ford Motor is larger than South Africa, larger than
Saudi Arabia, larger than Norway. Exxon is larger than Finland, larger
than Poland, larger than Ukraine. Wal-Mart Stores is larger than
Israel, larger than Greece.[12]

As a result of corporate size and wealth, corporate executives are
calling the shots economically and politically in the U.S. It presently
costs anywhere from $1 million to $25 million to run a successful
election campaign for the federal House or Senate.[See REHW #409, #419,
#421.] Such sums of money are only acquired by appeals to the super-
rich and the super-rich, of course, are tied to corporations. Only 5%
of households own 77% of all corporate stocks.[13] The wealth of
corporate executives and corporate shareholders, and their direct
financial support of political candidates, translate into raw political
power. One result of this power is that Congress, in recent years, has
drastically reduced taxes for the wealthy, and for corporations, but
has increased taxes on the middle class and the working poor.
Furthermore, Congress has embroiled the United States in so-called
"free trade" agreements (NAFTA and GATT) that have diminished the power
of our national government (indeed, all national governments) to
control corporate behavior. In sum, corporations are increasingly out
of control. As Ronnie Dugger (founder of the Alliance for Democracy
[14]) has written,

"We are ruled by Big Business and Big Government as its paid hireling,
and we know it. Corporate money is wrecking popular government in the
United States. The big corporations and the centimillionaires and
billionaires have taken daily control of our work, our pay, our
housing, our health, our pension funds, our bank and savings deposits,
our public lands, our airwaves, our elections and our very government.
It's as if American democracy has been bombed. Will we be able to
recover ourselves and overcome the bombers? Or will they continue to
divide us and will we continue to divide ourselves, according to our
wounds and our alarms, until they have taken the country away from us
for good?"[15]

These realities have not been lost on toxics activists, who have come
to understand that the dumping of toxic materials into their
communities is part of the toxic economy which is, in turn, part of the
same problem as their community's economic decline, and that all these
problems are related to the nature of corporations. Corporations cannot
care about particular places. They cannot even care about human health.
Nor can they care about democracy --corporations are among the most
authoritarian and undemocratic organizations ever created. Corporate
managers can only care about short-term financial gain. It is not a
matter of corporations being run by bad people; they are not. They are
run by ordinary people --most of them good-hearted --who are trapped
within the logic of the corporate form. Corporations must make
decisions that will return a profit to investors. That is all they are
set up to do under the law. If they did otherwise, they would be sued
for breach of fiduciary trust by their shareholders. Until the American
people re-assert their control over corporations and give them a
different purpose in life, corporations will continue to destroy
communities and places, economically and ecologically.

As David Korten has written,

"It is no exaggeration to say that local communities everywhere are on
the front lines of what might well be characterized as World War III.
It is not the nuclear confrontation between east and west, between the
Soviet Union and the United States, that we once feared. It is a very
different kind of conflict. There is no clash of competing military
forces and the struggle is not defined by national borders. But it does
involve an often violent struggle for control of physical resources and
territory that is destroying lives and communities at every hand. It is
a struggle between the forces and institutions of economic
globalization and communities such as yours that are trying to reclaim
control of their economic lives. It is a contest between the competing
goals of economic growth to maximize profits for absentee owners versus
creating healthy communities that are good places for people to live.
It is a competition for the control of markets and resources between
global corporations and financial markets, on the one hand, and locally
owned businesses serving local markets, on the other."[16]

Toxics activists now find themselves wanting to think more broadly than
they ever have before. To gain control of toxics in a particular place,
they now know they must think in terms of asserting their influence
over the economy of that place. What are the components of the local
economy? How do we analyze a place to find out what its resources are -
- especially its unused or presently-wasted resources? How do we
prevent big, outside corporations from wrecking locally-owned
businesses? How do we measure well-being so we'll know whether things
are getting better or getting worse? How DO decisions get made in this
place? How DO we control corporate behavior?

All of this is forcing toxics activists to look for allies who are
prepared to help them think about community economic development and,
ultimately, about controlling the behavior of corporations. Specific
allies come to mind: the organization known as Sustainable America for
local and regional-scale economic development,[17] and the Alliance for
Democracy[14] for controlling corporations.

What also comes to mind is that there are some principles that have
been worked out by toxics activists during the past 20 years, which can
provide guidance for ALL activists. These are principles that can be
used in local toxics fights, or can be used in local economic
reconstruction. They can even provide some guidance as we try to devise
ways to control corporate behavior. More next week.

--Peter Montague (National Writers Union, UAW Local 1981/AFL-CIO)

=====

[1] Ravi Batra, THE GREAT AMERICAN DECEPTION (New York: John Wiley,
1996). Batra is an economics professor at Southern Methodist University
in Dallas, Texas.

[2] Batra, cited above, Table 2.1, pg. 10, citing ECONOMIC REPORT OF
THE PRESIDENT (Washington, D.C.: The Council of Economic Advisors,
1996), pg. 330. The figures given are in constant 1982 dollars.

[3] Batra, cited above, Table 10.2, pg. 164, citing ECONOMIC REPORT OF
THE PRESIDENT (Washington, D.C.: The Council of Economic Advisors,
1996), pg. 314.

[4] Paul Krugman, THE AGE OF DIMINISHED EXPECTATIONS (Cambridge,
Massachusetts: MIT Press, 1992), pg. 20.

[5] Robert B. Reich, U.S. Secretary of Labor, speech entitled, "The
Unfinished Agenda," delivered to the Council on Excellence in
Government, Washington, D.C., January 9, 1997; the data appear in the
"Technical Appendix" to Secretary Reich's speech.

[6] Batra, cited above, pg. 14.

[7] Jan M. Rosen, "Unions Gather Strength But So Do Executives," NEW
YORK TIMES September 7, 1997, Section 3, pg. 2.

[8] Batra, cited above, Table 4.5, pg. 54, citing the 1987 and 1996
editions of the ECONOMIC REPORT OF THE PRESIDENT.

[9] Batra, cited above, pg. 9, and Table 5.2, pg. 64, and Appendix A.2,
pg. 258.

[10] Batra, cited above, pg. 9.

[11] Batra, cited above, pg. 43.

[12] Ward Morehouse, "Multinational Corporations and Crimes Against
Humanity," in Trent Schroyer, editor, A WORLD THAT WORKS (New York:
Bootstrap Press, 1997), pgs. 49-61. This outstanding book is available
from Intermediate Technology Group of North America, Suite 3C, 777
United Nations Plaza, New York, NY 10017; telephone/fax: (800) 316-
2739. $19.50 plus $3.50 for shipping. Data on comparative sizes of
economies appear on pg. 51 and are taken from FORTUNE August 7, 1995,
and from the World Bank's 1996 publication, WORLD DEVELOPMENT REPORT.

[13] David Korten, "Economic Globalization: The War Against Markets,
Democracy, People and Nature," in Trent Schroyer, cited above, pgs.
229- 236.

[14] The Alliance for Democracy is an organization whose members "are
setting forth to reject the economic and political power of large
corporations as illegitimate in a self-governing democracy." The
Alliance can be reached by phone in Cambridge, Massachusetts: (617)
259- 9395, or by E-mail: peoplesall@aol.com.

[15] Ronnie Dugger and Ruth Caplan, "Toward a Global Populist Movement:
Accepting the Challenge of Worldwide Corporate Domination," in Trent
Schroyer, cited above, pgs. 341-351.

[16] David Korten, cited above.

[17] Sustainable America (SA) is a national umbrella organization of
local people and groups who are responding to decline by organizing
locally and coming together nationally to promote policy alternatives
that offer a greater degree of citizen control, economic stability,
prudent use of ecological resources, and a greater degree of economic
equity. SA can be reached by phone in New York City: (212) 239-4221; of
by E-mail: sustamer@sanetwork.org; web: http://www.sanetwork.org.

Descriptor terms: economy; wages; labor; wealth; inequality; taxes;
taxation; corporations; free trade; nafta; gatt; wto; ronnie dugger;
david korten; alliance for democracy; sustainable america; democracy;
globalization; world war iii; ravi batra;