THE SILENT COUP
The US, like many
industrialized countries, has undergone a corporate coup d'etat in slow
motion, cementing into place a system of control the political
philosopher, Sheldon Wolin calls "inverted
totalitarianism." Inverted totalitarianism retains the
institution, symbols, iconography, and language of the old
capitalist democracy but internally, corporations have seized all
the levers of power to accrue ever-greater profits and political control. Claire Provost and Matt Kennard in
their book, Silent Coup: How Corporations Overthrew Democracy, chart
the way the corporate coup d'etat was orchestrated. It examines the use
of an international legal system to control and plunder the
resources in the developing world, including the overthrow of
governments that challenge corporate dominance. The authors expose
the nefarious alliance between nonprofit organizations and
corporations, one that prioritizes profit rather than justice.
They document the weakening of labor laws and the
evisceration of workers'
protections and rights. To enforce this predatory behavior,
corporations have not only created, in essence, a global
Supreme Court, but raised and funded private
mercenary militias to
crush labor movements and intimidate, and even murder,
activists. The subversion of democracy abroad is accompanied, the
authors argue, by the subversion of democracy at home. The
mechanisms of control used to plunder the developing world are also
used in the industrial world. Joining me to discuss Silent Coup is Matt
Kennard, a former staff reporter for the Financial Times and
co-founder and chief investigator at Declassified UK: a news outlet
that investigates British foreign policy. Matt, in your first
chapter titled Democracy on Trial, you write about an
international legal case that was launched by a Vancouver
based company called Pacific Rim against the government of El
Salvador. And you use this case as a template throughout the
book for how large corporations loot and pillage developing countries by
forcing them to accept international agreements, investment
treaties, and what you call "corporate courts" that
favor global corporations. So I want you to explain what happened in
El Salvador and how this system works. Well, I'll start with the system itself
and then talk about the El Salvador example. So effectively,
what the system is is a shadow legal system which operates across the
world and affects pretty much every country in the world. And what
it does is enshrines a system
whereby multinational
corporations can sue states for enacting policies they don't
like, which they say infringe on their, quote, unquote,
"investor rights." This was a system that was created in
the heat of the decolonization movement and the end of formal
empire. The main body where these cases are heard is actually an arm of
the World Bank and it's called the International Center for
the Settlement of Investment Disputes, ICSID. Very little knowledge
about it in the developed world, everyone in El Salvador, for example,
knows the name of it. It's called CIADI by its Spanish acronym. And when
we went to El Salvador everyone knew that, but that's
something we can come back to. So this was created in 1966 by the World
Bank. And the '60s, obviously, was the time when many, many countries in
Africa and other places were getting independents and a lot of people who
have been fighting the imperial powers on the ground were now becoming
presidents and prime ministers. Now, in that scenario, the
traditional owners of the world were panicking and they
thought, how are we going to maintain control? How are we
going to ensure our investments are protected when we don't have formal
empire to rely on, we don't have a formal garrison of troops based
in that country where we can take out a leader if he does something we
don't like?
So they came up with
this system. And in fact, it was the brainchild of a German
banker called Hermann Abs who was at Deutsche Bank, and he was actually
associated with the
Nazi regime as well. But
after World War II, he thought that the world needed a system that
he called a "capitalist Magna Carta." And he made this famous --
Well, it's not a famous speech, it should be a famous speech --
But he made this speech in San Francisco in 1957 to a group of
industrialists from all over the world and all the big wigs in America
were there as well. This was 1957, so the context was four
years before, in 1953, MI6 and the CIA had had to take out the
democratically elected prime minister of Iran, Mohammad Mosaddegh,
because he nationalized the Anglo-Iranian Oil Company, was now BP.
The following year, the CIA had to take out the democratically elected
president of Guatemala, Jacobo Arbenz because he had the temerity
to redistribute a bit of fallow land back to landless
peasants. And then, in 1956 there was a Suez crisis where President
Nasser nationalized the Suez Canal and there was an invasion by
France, the UK, and Israel. And he was saying, look, we're
going to keep coming up against this problem. We don't want to have
to have a system where we have to go in hard, overthrow
governments, assassinate leaders, whatever it may be. We need
a legal system, an infrastructure in place where we can exercise
power above the heads of these people, so even if we get a Nasser in
power, an Arbenz, or a Mohammad Mosaddegh, they can't move. So his
idea was to say, we need a legal system that operates above states,
it's a supranational institution where investor rights can
be enforced. He then joined with a British Lord called Lord
Shawcross, he was actually a Labor Lord, and they wrote this
document called the Abs-Shawcross Draft Convention, and it
basically was a template for this system. Nothing happened until it
was taken up by the World Bank in the '60s and then created,
as I said, as ICSID in 1966. Now, we went to the World Bank Archives, as
part of the reporting, in Washington DC and they were quite
open on the inside about what it was about. It was about enshrining
corporate power around the world, and also, it was a geopolitical
tool during the Cold War because it was a way of enforcing
corporate rule in countries that might be at risk of going to communism.
But anyway, it didn't take off as a system until the end of
the Cold War. And we mapped out and analyzed the number of cases,
and it exploded after the end of the Cold War. And a lot of cases
have been taken against Eastern European countries actually because
it's a major system that's enforced on countries that are
reintegrated into the Western-backed economic system. When a
country comes in from the cold -- And we went to Myanmar Burma when it
was coming in from the cold or they thought it was. It was
moving towards democracy. Tthis obviously hasn't happened but at
that time, they thought it was -- And when we were
there, ISDS, which is what the system is called, investor-state
dispute settlement, was a large part of the menu of policies that
are pushed on governments that are being reintegrated into
the
system. Because the
Western states, the Western corporations know that it's a vital tool for
them to use to make sure that new states can't move and can't
go against corporate power around the world. The book started with this
story in El Salvador. We got a call, myself and Claire. I'd
previously been at Financial Times, she'd been at The
Guardian. She'd been covering the aid industry and development and
in the Financial Times, I'd been in Washington, so I'd been
looking at the World Bank. We were both talking about... We
got this amazing fellowship where the director of the organization
-- An amazing American investigative journalist called Gavin
MacFadyen, who was actually a mentor to Julian Assange and
Bernie Saunders back in the '60s -- But anyway, he said to us, look, you
can do whatever you want for two years and you have a travel
budget. So we thought we should be as ambitious as possible. And we
both agreed that from the reporting we'd been doing, and I know
you've done a lot of great work on this as well, Chris, we
believe that the biggest political story in the world today is the fact
that the corporate form, the economic instrument of corporations,
has eaten the state that created it. And this has been a battle
that's been waged over 400 or more than 400 years from the
first joint-stock company, which they say was created in the
middle of the 16th century in London, but there's been this battle
waged. We decided that was it. And we wanted to think of a way of
doing it... And we got a call from an activist at that
point and Claire had been doing a bit of work on ICS and one
of her colleagues or one of her sources said, you should go to El
Salvador. They've got this really... I say amazing
case; Amazing in the sense of the resistance to it. Because
she was saying, look, ISDS is one of
these arcane, obscure
systems that no one knows about and no one talks about, but in El
Salvador, everyone knows about it. And everyone knows what
ICSID is, it's called CIADI in the Spanish acronym. And she said
you've got to come and talk to the activists. And the government were
willing to fight this case, which a lot of governments aren't
as well. At the time it was FMLN in power, the party that came out
of the Marxist gorillas in the 1980s. So we went along and we saw
what this system means and what this system allows to happen because
the people in El Salvador understood that this was a massive attack on
their sovereignty. This mining company had not been given a
permit to dig for gold because it was a massive risk to the
local population. Now, you would think that a government, its role, and
its priorities, should be to enact policies which fundamentally
protect the security and health of their citizenry;
That's what the system
is about stopping. So this corporation said, well, you can't
revoke our permit. And we're going to take you to ICSID for $300
million. And the government publicized it and it became this big
[inaudible 00:10:43]. Everyone on the ground knew about it. So
it was an amazing experience to start with. We then went to South Africa for a
second case which was maybe the craziest case of all, which
was a case where Italian granite miners had taken the ANC government
and the South African state to ICSID because of Black empowerment
policies. These were policies which were enacted at the end of
apartheid to correct the historical injustice of apartheid and part
of it was to give 30% of every company to historically disadvantaged
people, so Black people. This Italian company said, this is
an attack on our investor rights. They took South Africa to court. And in
fact, that was settled out of court. And the South African government
said, you don't have to apply this policy to your company. So
they didn't have to apply. And the reason the South Africans did that --
We talked to ministers when we went to South Africa, or people
who had been ministers at the time -- And they said, we wanted to keep it
as quiet as possible because we didn't want to incentivize
other companies to do this because we knew that they could win or
they could at least take a lot of money from us. So actually, it
was the opposite in South Africa, we went to South Africa, no
one knew about this case, which was a fundamental attack on the
South African government and fundamental attack on post-apartheid policies. Anyway,
so the book developed out of that. The ISDS system is the emblematic
system in the book because it's impossible to justify. And as
you know, Chris, all these systems that enforce corporate
rule, that enforce investor rights, that enforce the rule of the
1%, they all have quite sophisticated ideology bolted on top
of them to justify them to the general population in as much
as they need to do, but also, to the people on the inside who don't
want to look in the mirror every day and think I'm a
monster. ISDS doesn't even have that, it's one of the few
systems I've ever come across where people find it very hard to even
justify it. Because the only justification, they say, is that it
increases the chance that a country will attract foreign
investment because companies won't be scared to go somewhere. They
know if something bad happens to them, they'll have recourse to a
supranational venue where they can get compensation. But of course,
that is completely opposite to what we're told how capitalism works.
If you go to the Congo and you open a mine, you might get huge
returns, but you might get expropriated or get your asset taken by a
paramilitary force, but that's part of the risk. This system
ensures you against that risk and de-risks capitalism for the global
corporate transnational class. So it's a huge attack on democracy. And
I'll just finish with this: It's not only the cases that reach
court, that the problem here... In fact, that's actually not even
the biggest problem. The problem is the policy chill effect this
has around the world because a lot of governments now, when
they're considering taking policies which might infringe on corporate
profits, that this is now getting hit with one of these cases
is now a big consideration. We got internal documents, for example,
from Guatemala through the Freedom of Information Act there about,
again, a mine that they were evaluating whether to grant an
environmental permit and the government were talking on the inside.
There were some discussions about the impact this mine would have on the
local
community, but in the
end, they were talking about what problems they'd have at ICSID
and whether they'd get sued by this company if they didn't
give the environmental permit. In the end, they gave the
environmental permit because it was too big a risk. And that happens
across the board, and it's a real attack on democracy, it's a
real attack on anything, any ability of a government to react
to its citizenry as it should do, ahead of corporate power. And it's not
just in the developing world now, it's coming home to roost.
We call it the boomerang effect. And in fact, a lot of these
systems which were set up to enforce corporate rule during the fall of formal
colonialism are now coming back to hit the states that they were created
in. Let's talk about how countries are pressured, you do in the
book, how they're pressured into accepting these agreements,
which are, of course, very disadvantageous. And then, let's go back
to El Salvador because that was one of the few examples where
they were successful in fighting back. Yeah. As an explanation, this
system is enshrined in free trade agreements, bilateral
investment treaties, which are called BITs, and other financial
agreements or trade agreements between countries. One of the
major revelations I had during the reporting of this book was
about free trade agreements or so-called free trade agreements. Free
trade agreements, when you hear that, you think that's about
the mutual lowering of tariffs, that's about increasing trade. In
fact, that's probably a page of a trade agreement; They're
hundreds of pages long. And it's about creating all these
different legal mechanisms for which corporations can operate in
that country unfettered. And the free trade agreements should be
called corporate rights agreements, really. And ISDS,
investor-state dispute settlement, this system where multinational
corporates can sue states is often enshrined in free trade
agreements. So it's in NAFTA, it's in CAFTA, it was going to
be in TTIP, which was touted as the biggest free trade agreement in
history between Europe and the US, which has been iced now. And then,
there's bilateral investment treaties. Often, countries don't
even know what they're getting into. In the South Africa case, it was
quite interesting; They were talking about the bilateral
investment treaties which were used by this Italian mining company, and
they said, these were agreements signed by Mandela after the
fall of apartheid. And he'd go to, say, Belgium, and they'd say, oh,
welcome. You're coming back into the fold now. They'd have a nice dinner
and then say, let's sign this nice, little bilateral
investment treaty. The imputation being that this meant nothing; it
was a bit of diplomatic goodwill. That was the term that was
used by people who we talked to who formally served in the
ANC government. And then, 20 years later, they're getting hit with
these suits that they didn't even know could be activated
through these agreements. And that's often what you see: The whole system
is done very secretly. In fact, when we went to the World Bank, as I
said, we went to the archives but we also were inside the World
Bank and we were talking to people at the different branches, the
IFC, which we can also talk about, which is a majorly
important institution. And within the World Bank building, we were
saying, do you know where ICSID is? And people even who worked in the
World Bank didn't know where ICSID was. So it's this bastard
child that no one wants to talk about. No one knew about it which
was a revelation, and even less people know about it on the outside, as I
say, mainly because it's completely indefensible. But yeah, it's
the whole system is done... That's why I call it a shadow legal
system because it's all very, very secretive; Even the cases
themselves, they're not open court. It's very, very hard to get
documentation. The system by which arbitrators have chosen is
opaque, the compensation they get, the whole system is massively
secretive. And the problem is it's often in the interests of
the corporation and the state to keep it that way, that's the
problem. As I mentioned, the South African government wanted to keep
the case really quiet because they don't want to
incentivize other companies to do it because this system
effectively allows any company in the world to do another thing
called jurisdiction shopping. So even if you were based in a
country that doesn't have a bilateral investment treaty with
the country you want to sue, you open a shell company in a country
that does and then activate it through that. So you can
effectively do it. You can find a way if you need to. Maybe the most
corrupting part of the whole system is what's called third party
financing which is that there's boutique financial firms
which invest solely in claims against governments. They loan to
companies, not only to pay for the expenses of the case, but also to
expand. But they say, we'll loan you this money. You don't
have to pay us back if you lose, but if you win, you give us
a cut of the award. Now, we're talking, sometimes, about billions of
dollars. In the case of Occidental Petroleum, they won billions
from Ecuador. There's a case now against Honduras which is getting some
attention in the media where an American company is taking
Honduras to ICSID for $11 billion. A third of their GDP for the
current government of Honduras is trying to shut down an SCZ, which was
opened by the previous US-backed neoliberal regime. They're
trying to reverse that and they're getting hit with this suit. And
the Honduran government doesn't know what to do because this is
such a huge sum of money that it could have a huge impact on
their whole program and the ability for them to survive. They can't
pay it, so it's going to be interesting what happens to that. It's a
massive attack on democracy. The left, which was exercised by what was
called the anti-globalization movement in the '90s, it got
derailed a bit by 9/11 from the War on Terror, but these systems
have only grown in strength. The left needs to reengage with these
issues and this system needs to be publicized as well as the
other systems we talk about in the book. Let's talk about the case of El
Salvador because it's an exceptional case and mention the fate
of this activist, Marcelo Rivera.Yeah. The other point was, as you know,
around the world -- And this is another thing that's been
hushed up by the corporate media -- There are inspiring activists all
over the world fighting back against corporate rule. In the
case of El Salvador, there were activists, there was Marcelo Rivera
who was killed, but there were many others who were killed who were
fighting mining projects and it's always the same. It was
always the same when we'd come across it. We''d talk to people and
say, yeah, well, we can't prove that it was the mining company
because this was someone who goes past on a motorbike, lets
out a flurry of bullets, kills this person, and the legal system
doesn't really work, the police, the detective system doesn't
work, so they don't find who kills him. Everyone assumes it
was associated with his activism against the mining company but it's
never proven. I went to Columbia as well which is a very interesting
case because Chiquita, the banana company formerly known as United
Fruit, changed their name because they have a fear of few too
many governments and it was bad press. But Chiquita was taken to
court in the US under the Alien Tort statute over their
behavior in Columbia because they had hired paramilitaries and
paid paramilitaries to kill activists and trade unionists who were
fighting Chiquita in Columbia. That case is still going, or
I'm not a hundred percent sure, but it was going when I went there in
2016. Often, it is complete impunity really because there's enough
layers of degree of separation. Like in the case of Rivera, it was
complete impunity. In Honduras, which I mentioned, which we
also went to, there were lots of activists against an oligarch called
Facusse who's now died, but he was in Aguan Valley and there were
lots of activists getting killed who were fighting against
his companies and their actions. And though, a lot of people were getting
killed, nothing ever happened, and actually, they got investment
from the World Bank. But this is what you see. No one's fighting
back against this on the inside because the whole system's set
up to promote corporate power. The only people fighting it,
and the only people really who understand it and have to understand it is
the people on the ground because they have no choice to imbibe
all these false ideologies which justify it to the people on the
inside. They understand what the corporations are doing
when their friends are getting killed for raising a hand of
dissent against what they're doing. It's really depressing in that
sense but it's also really optimistic in a sense that there is
real activism against a corporate rule, and it does win
sometimes. There's the case of Bolivia, which is talked about a lot,
but in 2000, the water system in Cochabamba -- The
third-largest city in Bolivia -- Was privatized and handed over to
the American corporation, Bechtel, who jacked up prices massively and
made it impossible for most people to afford water. They even
made collecting rainwater illegal. Then, huge amounts of people came
out in the streets and two weeks later the government had to reverse
it. Five years later, they had their first Indigenous
president who was a liberation leader who nationalized countless
industries when he got into power and was later praised by the World
Bank, IMF for the economic success under his government. And
his government did the opposite of everything you're told to do by
the IMF and World Bank which is interesting in its own right. So
yes, people are working at high, high risk. But it's inspiring to see
their bravery but also the successes that can be brought about.
Because the reason, as I mentioned, that a lot of this is
kept undercover is because it's unjustifiable and it's clearly
impossible to justify if you know the facts. And the other problem
we have and what we should focus on in the West, because we
have a responsibility in that we have a freedom that these other people
don't, we can say stuff and do activism and raise the alarm
with a degree of freedom they don't have. But the media we have, the
corporate media; is infested with corporations. They're
owned by corporations, but also, they do all these
advertorials now. Every part of the media is infested with corporate
power and so is the NGOs. And we came across this in El Salvador which is a good
example. Now, this wasn't to do with the ISDS case but when we went
there, we went to a town on the outskirts of San Salvador, the
capital called Nejapa. And Nejapa is a really poor town but
they live on top of an aquifer. And no one there could afford
water from the aquifer. But yet, down the road, all these
multinational companies were bottling the water to make Coke and other
things, one of them being SABMiller, which is one of the
biggest companies in the world, it bottles Coke. We did a story for The
Guardian. So naturally, in The Guardian, its whole development
website is sponsored by the Gates Foundation so the article
went under the Gates Foundation logo. The Gates Foundation is not a
benign player in the system; It's one of the major forces
for pushing a neoliberal idea of development. I went to
SABMiller for comment, as you do, and they sent me a report. They
said look, you've got it all wrong. We've done nothing wrong. Look at
this report we co-authored with Oxfam. I couldn't really
believe that because Oxfam -- I'm a bit less naive now -- I thought
back then, I was like, well, Oxfam, they're doing some good in the
world. But this report basically exculpated SABMiller of any
wrongdoing in the Nejapa and had the Oxfam America logo and I thought,
that is incredible. And then, obviously, it goes onto The
Guardian website under the Gates Foundation. Two days later --
This was amazing -- An interview appears on The Guardian: Not an
advertorial, not flagged as anything, an interview with the Latin
American division head of SABMiller. He doesn't mention our
article but it's basically him talking about why there are problems
with water in Latin America and it's all about the political
corruption. Of course, that's the term du jour of the multinational
corporations: They blame the victim. Why are those politicians
corrupt? I wonder. Is it anything to do with the corporations
themselves? Then, I thought that is incredible that it wasn't a
letter, it was an interview. I looked into it and I saw that
SABMiller funded a whole section of The Guardian's website as well. So
you see, and I publicized that, and then soon after, I was
banned from ever writing for The Guardian again. The problem is that
I had a predilection to go against this stuff but your average
reporter who's getting bombarded with all with these Oxfam
reports, with these officials from SABMiller, they don't know that
The Guardian's funded by SABMiller. It's very hard to push back
against that, and often, nearly no one does. It's a panorama of control and
it's very, very hard to get the truth out about this corporate
system in the corporate media. It's not a coincidence is it? You
wouldn't go to Pravda to understand the reality of what the Soviet
Union was doing and you don't go to the corporate media to get
the reality of what corporations are up to. So to conclude, from this
book, the responsibility we have is to not play that game because we
have power. We have power in the West because this is where
all these systems are operated from. We have power and we need to
use that power to tell the truth, even if it means we
get marginalized from the mainstream media, which is an
inevitable consequence of doing it.They were successful in El Salvador in
blocking the mining agreement, the activists, one of the very few
successes you write about in the book. I want to talk about,
we have a couple of minutes left, the boomerang effect, because it comes
back to haunt us. And you use Germany as an example. Explain
in the last two minutes what took place.In Germany, Hermann Abs, as I
mentioned, was the German banker that was the godfather
of this system. And then, we went to Hamburg in Germany to
look at a case, well, there was two cases actually. Germany had
decommissioned their nuclear power after the Fukushima disaster
in Japan because they said it was too dangerous. And this
Swedish company, Vattenfall, who run nuclear power plants in
Germany, took them to these courts for billions. And then, there was
another case where Vattenfall had a coal-powered power plant
in Hamburg as well, which we went to. The waste from the plant
was raising the water temperature in the river that ran aside it, but
also, way far into Hamburg. And they challenged the environmental
permit where they said, you've got to keep the river below a certain
level. They challenged it, and then the local government basically
said, okay, you can go back to how you wanted it before. It's a way
to strong arm people. And it was amazing talking to people in
Hamburg because actually one of them said to us, I knew about
the system before. I was shocked when I realized that we could get hit
with this stuff. And that's something we saw all across the
world. And we reported a lot in Europe. And I'll finish with a case
in Britain, recently. A major part of the book is about how
corporations have chiseled off physical space from states. That's a whole
nother topic. But the main one is SEZ, special economic zones,
which are like corporate utopias. You don't have to pay a
normal tax, you don't have to pay customs duties, you don't have to apply
the minimum wage: all these things that corporations, if they
designed the world, this is how it would look. Britain now, a couple of
years ago, announced that we're going to open 13 free ports.
Free port sounds like a nice thing but a free port is
effectively a SEZ, and that's Britain now. So the developed world
has joined the race to the bottom and is basically finding any way to sell
off the few remaining things that it has to corporations. And it's
basically in Britain... NHS, for many decades, was a beacon in
the world, people looked up -- It's the National Health Service.-- National
Health Service, yes. It was created by the labor government after World
War II, free at the point of use; Anyone could use it. Growing
up, I'd go to... You never ever were asked about money when
you went into a hospital to see the GP, it was amazing. But we are now
privatizing the whole of the NHS and making it more and more like
the American system which is the worst in the world in terms
of how much it costs to health outcomes. So why are we doing that? We're
not doing that because the government's thinking, okay, this is
a good idea. We're doing that because the government isn't
making policies, the corporations are making policies and enforcing them
on the government. And there's very, very little pushback
against it in Britain, because again, it's all been done by
stealth. I went for an X-ray the other day and it was out in a
trailer outside the hospital that was run by G4S and
Serco; two companies. The whole of the NHS, our ambulances,
have G4S logos on them now. Stuff you wouldn't have thought would
be possible is happening and they're eating every part of the
state and they've erected the mechanisms to do that
internationally, but also, as you know, domestically. We
haven't touched on that and the book doesn't really touch on
that. But domestically, in terms of the US particularly, the corporations
have colonized the political system and it's impossible for
most politicians now to get elected without heavy backing from the
corporate sector. So that's why we call it silent coup because
in 2023... This is a war which has been waged for 500 years by
the corporation against the state. But effectively, in 2023, they've
won. And there's very, very few spaces left that they haven't
colonized. And the cultural outgrowth of that as well is that the
prevalence of conspiracy theories, like Bill Gates is installing
chips in people's brains, there's a lot of it around. I don't
know. There is in the United States as well but a lot of it is that
people understand that the politicians they're seeing on TV aren't
making the decisions. And in the corporate media, there's no
analytical framework for them to understand why that is, so you reach
for, I don't know, an individual or a cabal, when in fact the
answer for me is corporate power; That is where those politicians
aren't making decisions. They're right in that. But the
people who are are corporations, the big ones, and in the work
I do on a day-to-day level with Declassified, I look at a lot of
declassified files, British government, and they talk about it so openly.
When the Prime Minister, Tony Blair or whoever it is, is
talking to other presidents, he's talking about big British
businesses and how he can help them. I did a story recently about BP in Russia
under
Putin and how Blair had
sucked up to Putin solely because he wanted to help BP get
into Russia in the early 2000s. And this is a story that is a
whole nother story, but Putin, in 2003, was given a state visit to
the UK, the first time since the late-19th century, over a hundred years of
a Russian head. He came and went round in a horse-drawn carriage with the
queen around London.
A couple of days later,
BP got the contract to become the biggest foreign investor in
Russia's history. And that's how the world works. And you can't
talk about it but we need to talk about it because otherwise,
people are going to be reaching for these conspiracy theories. And
it's quite scary because -- You've done a lot of work on this
but -- If you look at fascism, especially about the Nazi regime,
before the Nazis came into power, conspiracy theories were prevalent. And
all it took was a demagogue to come along and say, it's all
the fault of the Jews. It might be some different group next time
but the point is the level of discourse now is waiting for
someone. You've got Trump in the US. He's a good example. He uses
the confusion and he uses
the inability of people
to locate power to enforce a corporate fascistic agenda. We
haven't quite had it in the UK because we haven't had anyone who's as
charismatic as Trump. We've got Boris Johnson, who was a bit of
a [inaudible 00:35:27]. But I do worry. That's why, to
conclude, that the left needs to reengage on this issue. I know you
have, and you've been one of the most important journalists
really pushing this idea, but it's not something that is widely
enough covered by the left media or the left intellectuals. For me,
you cannot understand the world today unless you're looking at
it through the lens of corporate power; That is the integral issue.
And the fact that the state is not operating in the interests of
people anymore, and there's no form of democracy, because it's
being completely destroyed by corporations. I want to ask, you have a section
in the book called Corporate Welfare. You did mention Oxfam,
but you detail these partnerships between NGOs like CARE USA, Save
the Children, and these large corporations,
Coca-Cola, pharmaceutical giant, and GSK. Talk about how it
works, how these NGOs have been corrupted. Well, a lot of it is to do with the
fact that there's cuts to... A lot of it picked up after the
financial crisis because governments were cutting back on aid programs
and funding places like Oxfam, and Save the Children does get
some state funding, and people were donating less. So in that
context, they had to survive, they had to look around for other funding
models. And corporations are always there because they've got
all the money. So corporations got in. We talked to countless NGOs
about it. And often, people on a lower level who weren't making decisions
were upset about it. You don't go into Oxfam, you don't leave
university and go into the humanitarian sector or the aid sector to
partner with SABMiller, to exculpate them a blame over
taking the resources of one of the poorest communities in the
world. You don't do that. So they were upset. The higher-ups said, we
sign these contracts where they have no say over our programs, they have
no say over our editorial position in the case of The Guardian
and the media. But it doesn't work like that. I'm not saying those
contracts don't include that but The Guardian's a good
example. The Guardian said to us, we make sure that when we
partner with a corporation and start publishing corporate propaganda
for it, producing and publishing it, we have strict parameters
where we say it won't bleed into editorial policy, they have
no right to recompense. But 10, 20 years down the line, you've got
dozens of corporations all over the website and it has an implicit
and subconscious effect on the reporters because your whole
institution is infested with this corporate power and it operates in
a very insidious way. I mentioned the SABMiller one, that's one of
the few cases where it was, in my opinion, a very literal relationship
between the funding and the ability to barge in on the editorial
side of things. But it often operates in a much more insidious
role. And it's the same with NGOs. And NGOs are, in my opinion, a major
thread in this corporate imperial tapestry; They are vital to
it. Because they give the patina of altruism, they give the patina
of humanitarianism to this whole system, and that justifies it to the
world, effectively. And often, they're partnering with corporations
and enforcing policies, or at least, supporting governments which
are enforcing policies which promote corporate rule. And the same
thing goes for aid because a lot of these organizations are
allied to aid institutions like that. The World Bank is an aid
institution. We spent a long time investigating the
International Finance Corporation which was created in 1956,
again, in the heat of the decolonization movement. And the idea of that
was let's invest. Let's not just transfer capital to governments,
let's now invest in private corporations to help them go to
new markets. The IFC, effectively, now is an investment bank. I went to a
diamond mine in Tanzania that had been funded by the IFC.
Remember, this is public money, it's our money, the World Bank is
publicly funded. They funded a diamond mine in Tanzania which hadn't made
a profit for 10 years which is a very nice thing for them to
say because if you don't make a profit, you don't pay tax. And
they've got corporate accountants that can do that. And
Tanzania's tax ministry is probably like five or six guys in
a room. And then, we went to a five star hotel in Myanmar Burma
which had got funding from the IFC. So it's about enforcing corporate rule
under the guise of development, under the guise of
humanitarianism, and under the guise of aid. And it's all the
opposite of what they say because the World Bank's stated aim
is the alleviation of global poverty. And they're enforcing policies
which ensure the majority of humanity continue to live in
poverty. And it's not a coincidence we live in the world we live
in. That's what they try and tell us is, oh, we can't quite
work out why it ended up like this but it's not a coincidence;
It's because they've reinforced these policies. And if a government
goes against them, then they get taken out by the hidden
hand, which is the US military, effectively, or at least the
NATO intelligence, military infrastructure.You talk about how the role
of traditional militaries have been privatized, border control
has been privatized, prisons privatized, and I wondered if you could
touch on the consequences of that. And then also, you use the
term "informal imperialism." If you could address those two
issues. Yeah. We end the book with the privatization of the military and
security forces around world. And in fact, we mentioned the concept
of democracy in a subtitle. And in terms of the democracy,
maybe this has the biggest ramifications. Because for
centuries, philosophers and sociologists have said that the power of
the state rests on the fact that it has the resort to the legitimate use
of force, and only the state does. So a police officer can
kill someone if they're under threat but an average Joe can't. We
did an analysis of the numbers and in many countries private
security, mainly security at this point but private
security, outnumbers police now. So what does that mean? And
then, obviously, there's the privatization of the military as well.
And my first book that I wrote was about the US
military. And Donald
Rumsfeld made this famous speech at the Pentagon on September 10,
2001, where he basically said we need to privatize the DoD's
services. It got forgotten after the atrocities of the next day, but
the plan was enforced. And in '07 or '08 there were
more private contractors working for the Pentagon than there
were DoD personnel. And you've got the Wagner Group in Ukraine. This
is a major, major trend and we're at the start of it as well. This
sounds like some crazy dystopian idea but there's no reason you couldn't
see two corporations going to war themselves over resources
soon. Because the other thing about this whole system is there's no
regulation. There is a informal regulatory framework which a
lot of corporations sign up to private security companies but there's no
way to enforce it and it's like a gentleman's agreement. And
that's something that the Western countries and Russia have colluded
on because they don't want to regulate it. It gives them one of the
major facets of this system for states and one of the major
benefits for them is the lack of accountability. It's the plausible
deniability: If you get a private company to do it, all
the mechanisms can be enforced, in the UK, the Ministry of
Defense, or in the US, the Department of Defense, they disappear. We
can't send Freedom of Information Act request to private
contractors, it's much, much easier to hush up atrocities, so
it's in the interest of states to subcontract this out in
terms of accountability. It's really worrying. And that goes on to
what you were asking about Rivera in El Salvador. It's much,
much easier to cover up atrocities if corporations are doing them and if
it's outside of the state framework. So yeah. It's going to be
a major, major issue going forward. Everywhere we went... The book
we wrote in chronological order in that we started with ISDS, we went
on to aid, and then we went on to SEZs. When we were looking
at SEZs and the chiseling off of physical space, we started
understanding that the world that was being created by this corporate
system, by this rule of the 1%, was a world of a small elite
which was becoming richer and richer and then a society on the
outside that was becoming more and more desperate and
destitute. And in that scenario, that 1%, or even less than 1% has to
wall itself off from the rest of that society that it's
destroying, and it has to guard that with these private security
forces. It's a symptom of the disease and the disease is corporate power.
Great. That was Matt Kennard, a former staff reporter for Financial Times
and co-founder and chief investigator at Declassified UK. I
want to thank The Real News Network and its production team:
Cameron Granadino, Adam Coley, David Hebden, and Kayla Rivara. You
can find me at chrishedges.substack.com. English
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