It is commonly assumed, nowadays, that the state and the market are two opposed forces. People tend to think, that the essence of the neo-liberal policies in the last decades has been an urge to lessen state power. This is a misunderstanding. Big business does not want a weaker state. It wants a stronger state, a state that is strong enough to do without welfare schemes and other concessions to the demands of working people.
To achieve that aim, big business has to weaken the democratic institutions regulating the governing of state power. That is the major reason, why leading businessmen all over Europe are so fond of the European Union.
In 1975 the Trilateral Commission, a top-level organization for politicians, academics and company leaders from North America, Europe and Japan, created by David Rockefeller, published a famous report: ”Crisis of Democracy”. The main point was that a ”surplus of democracy” had developed in Western societies. Irresponsible groups, the authors said, were assaulting governments with demands for better welfare, social equality, peace in Vietnam and other horrible things. In order to strengthen ”authority” in society some ”restraint in democracy” was necessary.(1)
A few years later 17 of Western Europe’s most powerful businessmen created their own private club, the European Round Table of Industrialists (ERT). The problem they set themselves to deal with was this ”crisis of democracy”.
”If we wait for our governments to do anything, we will be waiting for a long time”, explained Wisse Dekker, the director of Philips, and later chairman of the group. ”You can’t get all tied up with politics. Industry has to take the initiative. There is no other way.”(2)
Leaders of industry were demanding a change of policy away from the welfare state, but it seemed like governments could not deliver. Progress was only possible by freeing state power from the shackles of national democracy. That is, by making a new major thrust in the development of the European Union.
The EU is well suited to deal with the ”surplus of democracy”.
First of all, decision-making power is not even formally located in a publicly elected parliament. Major decisions are instead made in secret diplomacy by ministers from different governments.
Secondly, the bureaucracy of the EU has a unique position. It is much more powerful than bureaucracies at the national level. Making proposals for decisions is the prerogative of an un-elected body of administrators, the Commission, and with the European Monetary Union (EMU) a major part of economic policy – adjustments of interest rates and money supply – has been transferred to bankers, who by law are not allowed to take advice from democratically elected institutions.
Thirdly, the basic treaties of the European Union assure the pre-eminence of big business interests, cloaked as ”free trade” and ”free markets”. With the euro and its stability pact, the Union has introduced major legal obstacles to the re-emergence of the welfare state. Percy Barnevik, chairman of ABB and member of a consulting group for competitiveness which the EU established, declared in the Stockholm daily, Dagens Nyheter, 10 July 1995: ”The greatest value of EMU for industry is perhaps the fact that external pressure is put on national governments to take necessary, though not always popular measures.”
Thousands of peddlers of different business interests have noticed the possibilities opening up in Brussels, but the main problem is not the lobbyists but the insiders. Leaders of large corporations do not have to wait in the lobby for a chance to influence decision makers. They are, quite often, sitting behind the closed doors themselves.
”This is not just another lobby organization”, Pehr G. Gyllenhammar, then president of Volvo, said while establishing the ERT in 1983.(3) The Roundtable group works in symbiosis with the bureaucracy in Brussels. It is regularly consulted on important issues and represented in committees and working groups. It wrote the script for the Internal market, and its members have been instrumental in the launching of the common currency.
In December 1993, then-president of the EU Commission, Jacques Delors, presented a White Paper on employment and competitiveness. It claimed that unemployment now topped the EU agenda.
The White Paper was for the most part a slightly revised copy of proposals from the Roundtable directors. Delors had regularly met with the ERT, and in a press conference he himself pointed out the similarities between his White Paper and the ”wish lists” of large corporations. The key word in the ERT’s program for the labour market is ”flexibility”; flexible salaries, flexible working hours, and flexible terms of employment, which actually means that working people should forgo increases in salaries, fixed working hours and job security.
The public sector and the small and medium-sized companies, employing two-thirds of the workers in the EU, are to be starved for the sake of the corporate giants. The rationale can be read between the lines in ERT documents: ”Positive policies to improve the viability of small and medium sized businesses are supported by all large firms, which need to focus on their core business and to an ever increasing extent depend on a large number of subcontractors.”(4)
In competition with other large corporations, European concerns are dependent on extracting as much capital as possible from subservient suppliers. They demand that their subcontractors deliver ever cheaper and better components ”just-in-time”, but this demand conflicts with government and trade union regulations. The small and medium-sized companies find it difficult to serve the large corporations, unless they are allowed to lower salaries, extend working hours and fire people as they wish. From another perspective, the more flexible the regulations regarding salaries, working hours and general conditions of employment, and the lower the taxes and social welfare contributions, the further the large corporations can push their demands. Thus, using their suppliers as ”front men”, the giants demand ”positive policies” to their own advantage.
At the Lisbon Council Meeting, 23-24 March this year, leaders of the EU proclaimed an agenda for economic renewal and ”modernization” of social protection systems, driven by ”the new knowledge economy”.
This hype about an information society, where most people will have pleasant, creative and well-paid jobs, hides a type of production that depletes working people and the environment even more than before. Contrary to common belief, monotonous, production-line work in manufacturing industry is on the increase. The conveyor belt is not on the way out. It is being introduced into stages of production where it has not been used before, and its principles are being extended to more and more areas of the economy. The stockpiles that were buffers during swings of supply and demand are being eliminated. With deliveries between companies being made ”just-in-time”, the production process from subcontractors to assembling factories and market outlets functions like a huge conveyor belt.
Similar pressures on workers are introduced in the service sector, with call centres and fast food restaurants as the most glaring examples.
The model is called ”lean production” by business consultants. Trade unionists in the US have given it another name. They call it ”management by stress”.
In lean production, work is intensified while places of refuge are fewer since peripheral activities are transferred to other firms. Overtime and under-staffing are the rule. Thus, it is hard to find time for personnel enrichment. The ERT has noticed a growing conflict between the short-term demands of competition and the long-term needs of industry.(5) The physical wear-and-tear of the labour force is greater than before and corporations find it more difficult to make use of and develop the knowledge of their staff. They soon find themselves in a situation where they have employees who both physically and intellectually are unfit for their needs.
For these reasons, the Roundtable businessmen have for a long time promoted the concept of ”life-long learning”. This is now a hot topic on the EU-agenda for an ”eEurope”.
Life-long learning has nothing to do with any general increase in the knowledge requirements of working life. Of course, the large corporations need researchers, specialists and skilled workers, but the workers they are most interested in have other aptitudes. Schools should deliver ”large numbers of very adaptable individuals able to tackle anything”, writes ERT. When these flexible, standard educated blue- and white-collar workers have been worn out, the corporations want to be able to exchange them for a fresh, updated batch.
”The new ways of structuring and managing business to ride through times of economic recession have… rendered obsolete the concept of life-long employment in large companies”, states ERT. ”Life-long learning, on the other hand, opens the door to allow people to move easily to another job…”(6)
Lifelong learning is not a life of all-round, creative work. It is a few decades of rushing between temporary employments and re-training, ending in unemployment and premature retirement from working life.
Coupled to the talk about a new knowledge economy are the promises of green capitalism. Large corporations are promoting themselves as environmentally conscious information enterprises, and new environmentally safe products and systems for emission control and recycling seem to confirm the picture. However, while the multi-billion dollar market for green goods develops in the rich countries, the corporations continue their destructive activities on a global scale.
European infrastructure is increasingly designed to meet the interests of industry. The members of the ERT are behind the bridge between Denmark and Sweden, as well as the Eurotunnel under the English Channel. These projects are part of a programme of Trans-European networks (TEN), promoted by the association since the mid-1980s, and together with the Commission in Brussels, guided all the way to the decision-makers in the Council of Ministers. A total of 55,000 km of new roads are to be built, 12,000 km of which are to be motorways.
Car companies and other industries dependent on private car transport dominate the ERT. Traffic congestion threatens their cash flow, but new transport links, particularly motorways, are also a precondition for lean production. The relocation of peripheral parts of production to specialized subcontractors results in shipping increasing amounts of components ever-longer distances, and just-in-time deliveries to shops and factories with minimal stockpiles multiply the number of shipments.
The programme of the Roundtable businessmen is a programme for growth, but growth in a special sense: the large corporations grow bigger and more powerful. The struggle for new markets in the South and East is a key element in the strategy, formulated both in ERT documents and in Delors’ White Paper.
The Roundtable corporations are worried they are lagging behind in the chase. The US has an edge on the EU, with its bilateral arrangements, the NAFTA trade agreement and its control over institutions like the World Bank and the International Monetary Fund. Japan is working hard, particularly in Asia, and is demanding more influence in international aid agencies. However, the Roundtable businessmen complain, the EU’s sphere of influence does not extend beyond its immediate surroundings.(7)
The weakness is not economic but political. The global economic interests of the EU-based corporations are vulnerable, unless they are accompanied by a comparable political influence. Thus, the ERT calls for the EU to develop a capability to defend its interests globally: ”Industry and the people working in industry … expect their [political] leaders to exercise a proper influence on the world and cannot accept that their Community should be relegated to the margins of international politics…”(8)
European-based corporations see military rearmament and a common European military force as a means to secure their global interests. This demand is now on top of the EU agenda. With the Common European and Defence Policy the freeing of state power from democracy will get a familiar imperial touch.
1. Michel Crozier, Samuel P. Huntington & Joji Watanuki: The Crisis of Democracy. Report on the Governability of Democracies to the Trilateral Commission (New York 1975).
2. Newsweek, 28 March 1983.
3. Newsweek, 18 April 1983.
4. ERT, European Competitiveness (15 November 1995), p. 6.
5. ERT, Lifelong Learning (June 1992), p. 6.
6. ERT, Education for Europeans (November 1994), p. 9 and 13; and Lifelong Learning, p. 6.
7. ERT, Survey on improvements of conditions of investment in the developing world (May 1993), p. 10.
8. ERT, Reshaping Europe (September 1991), p. 58.
Mikael Nyberg, 2000