When Barack Obama referred to a major UK-based criminal organisation by its former name, British Petroleum, a storm of outrage followed in the UK’s corporate press and in the statements of Britain’s Liberal and Conservative politicians. They strenuously denied the US President’s outrageous implication that BP, the destroyer of lives, livelihoods and the environment, is a British company; while at the same time they insisted that the British government must bravely stand up for BP, Britain’s most lucrative company in terms of shareholder dividends and the lifeline of the UK’s pension funds.
The real problem is that trans-nationals like BP are so big and powerful they aren’t really beholden to governments the way small corporations are. Somehow we need to make them more responsive to the needs of society at large and less focused on profits above everything else. So, how do we do this?
Tip: Another Green World
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Adam Smith described capitalism in terms of having a government string enough and independent enough to enforce laws, regulate markets when necessary, and provide those things the market cannot efficiently provide. In a globalized economy, we don’t have that. Instead, we have corporations that are bigger than most governments. This has been made possible by the age of global electronics, but also by the age of cheap petroleum.
The reason we want fuel prices low is not only so the electorate doesn’t vote incumbents out of office. It’s so Wal-Mart can run a fleet of 6,500 trucks for 900 million miles per year– and Wal-Mart just announced that it’s expanding its fleet to take over transportation services from its vendors.
And we want to continue the flow of cheap goods from China, peaches from Chile, beef from Brazil and New Zealand, electronics from China, Singapore, and Israel, cotton from India, clothing from Sri Lanka and Bangladesh, and bottled water from Italy, France, and Fiji.
As the age of cheap petroleum inevitably ends, there will be a contraction in global marketing. Sure, they can transfer money around the globe, but the markets for real goods will become more localized. It will once again become cheaper to make something close to home, and (horror of horrors!) cheaper to repair something than to throw it in the trash and buy a new one.
The only way to control the markets is to have a government bigger than the markets. That means either government goes global, or markets become smaller. I sure hope rising oil prices bring us the latter, because I’m no fan of global government.