The Era of Corporate Colonialism

Posted on August 9, 2013

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© Josh Sager – August 2013

 Dollar Flying on Flagpole

In the past, nation-states have set up colonial outposts in less powerful areas of the world in order to build their empire. Colonies facilitated trade, acted as military outposts, and allowed the colonial powers to siphon resources from the indigenous populations.

Such colonial empires formed during the expansion of the 1500s and were sustained by numerous European nations—including the British colonies which eventually became the United States—until the mid-1900s, by which time a variety of geopolitical factors (ex. revolts, over-extension, etc.) had led most “empires” to dissolve.

While colonialism by nations has decreased across the world, it appears that an era of corporate colonialism is upon us. Unlike in the past—when nations would set up physical empires—giant multi-national corporations have started to set up de-facto empires across multiple sovereign nations. This new era of corporate colonialism will be characterized by giant corporate interests capturing power in society through economic and social factors, and then using their power to exploit humanity for a massive profit.

 

Why Would a Corporation Want to be a Colonial Power?

Colonialism is an attractive concept to corporations because it allows the colonial power to extract resources (profits) from the host country without having to worry about giving anything back. Because the colonial power has no stake in the welfare of the indigenous population, they have no need to worry about negative externalities (ex. pollution) or the effects of their exploitation on the local economy—they can simply extract resources and pay poverty wages while living elsewhere and avoiding all of the negative consequences of their conduct.

In addition to not having to worry about externalities, a colonial power doesn’t need to care about social programs or education for the indigenous populations; they simply need enough bodies to facilitate their production and have no interest in the welfare of those who are too young or old to work. If the colonial power needs skilled labor, they can simply hire people from other areas, thus removing the necessity of funding school systems.

As is immediately apparent, this type of high-profit, low-cost operation is ideal for the amoral profit-generating mentality of a corporation.

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How Does a Corporation become a Colonial Power?

In order to set up an empire, an entity—whether it is a private corporation or a nation—needs to establish control over areas that they are not based in and begin exploiting them for position or resources. Such control can happen through military force (as nations did in the past) or through economic/political force (which is what corporations are doing now).

Corporate interests which wish to become a de-facto colonial power need to locate areas with weak or corruptible governments and significant quantities of resources or labor. Once they locate such a location, corporations are able to essentially capture the government through economic pressure and bribery, letting them game the system to gain an advantage. The advantages that these corporations can gain are varied—ranging from tax exemptions and government contracts to weakened labor laws and assistance in dealing with other countries—but they are all aimed at letting the corporation extract the maximum profit from the indigenous population while paying nothing back.

Since the mid-20th century, corporate interests have grown immensely wealthy. Currently, some corporate entities have resources which eclipse the economic power of entire countries. For example, Walmart’s yearly revenue is so large that, if it were considered a country, its gross domestic product would be the 25th largest in the world. To put this into perspective, Walmart has a yearly revenue which is larger than the combined GDP of Pakistan, Israel and North Korea—three of the world’s nine nuclear powers.

By storing up huge amounts of money and “investing” it in political races and policy think-tanks, corporations have gained political influence, particularly in the USA, where weak campaign finance laws allowed wealthy interests to engage in legalized bribery. This economic and political power creates a situation where individual corporations and trade organizations can affect policy and steer governments to do their bidding.

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Once a corporation can influence the government, it can entice the government into giving it perks/contracts while reducing its share of the tax burden. In some cases, these corporations have even used their power over politicians to facilitate international deals that would benefit their interests—this has allowed them to turn some countries into their proxies for negotiating international deals (ex. TPP)

For example: When Haitian politicians attempted to increase the minimum wage to $5 a day, various textile corporations used the US state department as a proxy in order to fight back. They managed to get the US to utilize our diplomatic might in order to suppress this attempt at increasing the minimum wage, all for the benefit of the corporations—currently, the minimum wage of Haiti is $3 a day, all because of the United States’ intervention.

 

What does Corporate Colonialism Look Like?

In short, corporate colonialism is when wages are low, public services are cut so that money can be given to multi-national corporations, and money pools offshore, in the hand of the privileged few. Wealthy interests move between nations, exploiting the common people and buying the cooperation of those in power. Democracies are bought with the very money which is extracted from the people and the government in unresponsive to the needs of those it governs.

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In many ways, corporate colonialism is functionally identical to traditional colonialism but there are three major differences:

The first major difference between corporate and national colonialism is the nature of the colonial power—in one form of colonialism, the colonial power is a private corporation while, in the other, it is a nation-state.

The second major difference is that the corporate colonial power exists within the structures of sovereign governments instead of acting as its own government. Corporate colonial powers influence and control governments, but they do not attempt to set up their own power structures within the country.

The third major difference is that, a variety of corporate colonial powers can exist within a single area—for example, oil and gas companies can co-exist with agricultural and retail interests in a way which is virtually impossible for nation-state colonies (just look at colonial Haiti for an example of that).

Other than these three differences, colonialism remains virtually unchanged when it extends to corporate interests: In both forms of colonialism, democracy is limited and the occupying colonial power retains a great degree of control over the government (instead of taxation without representation, corporate corruption creates democracy without representation). Just as how governments extract resources from colonial outposts, these corporations extract cheap labor and public money from the locales which they have dominated. Finally, both types of colonialism are repressive and immensely damaging for the local population.

Unfortunately, it is rapidly becoming apparent that we, the economic bottom 90% of humanity, are the “local population” and that it is us who will continue to be exploited by corporations in their intractable greed and desire for even more profits.