Noreena Hertz was born in England, received her MBA from the Wharton School of Business and her Ph.D in economics from the University of Cambridge, where she is Associate Director of the Centre for International Business.
Ten years ago she helped Russia organize its first stock market. She has written a book on why people have taken to the streets. It’s called, THE SILENT TAKEOVER, and it’s a best seller in England where the Sunday TIMES OF LONDON named it one of the year’s best.
HERTZ: Governments have been ceding power to big multinational corporations in the market. We see the manifest in a variety of ways. Where governments are giving up power to big international institutions like the World Trade Organization or NAFTA, which are disabling governments’ ability to protect the rights of their own people. Now, the World Trade Organization is an organization that defends trade interests. I think the problem is less that they exist. The problem is that internationally we’ve only got an organization that protects trade interests. Surely we need some kind of counterweight to protect human rights and the environment too. So, public goods being increasingly handed over to private enterprises to run. Now there’s nothing wrong per se with things being handed over to the private sector to run, if you have, for example a really strong regulator in place.
There’s nothing wrong with what a company is doing. Companies have to realize profit to their shareholder. They have a legal responsibility to do so, their fiduciary duty. It’s the responsibility of states to ensure that in that in that process the poor are still being served and looked after. In Bolivia, the price of water doubled almost overnight. A quarter of an average Bolivian’s salary was now to be spent on accessing water. So it’s not that there’s anything necessarily wrong with private companies providing these functions. It’s just that when we have a weak state, no regulator, no competition and you leave it to companies. The poor, the marginalized will often be the losers. This completely destroys the social contract, this idea that government and citizens together have a relationship to provide public goods, a sense of community, a better world. The social contract has been privatized, has been handed over to the private sector to safeguard with incredible conflicts of interest. Scientific research. Scientific research, something that, you know, we want to be able to trust, to believe in, increasingly being funded by private corporations. When the FDA tried to remove saccharine off the list, or decided to remove saccharine off the list of cancer inducing chemicals, its work was based on the findings of the University of Nebraska researcher who was funded by Sweet and Low. And therefore the conflict is we can’t even trust the information we now receive. We need to have much clearer regulations on things like corporate funding of scientific research. Things need to be made explicit which are implicit. We don’t want the takeover. We shouldn’t allow the takeover to be kept silent any longer.
Noreena Hertz has been dubbed ‘the British Naomi Klein’ by sections of the media, a comparison which is misleading. Klein’s bestseller, No Logo, reflects a certain socialist influence, a recognition of the role of the working-class movement (there is a reference to Leon Trotsky on the first page), which is missing from The Silent Takeover. Working-class protest, even the word ‘class’, barely get a mention. Some globalisation theorists argue, mistakenly, that the position of the working class has been irreversibly undermined by, for example, the capitalists’ ability to shift production and investment around the globe. The Silent Takeover doesn’t venture into this territory but, nevertheless, makes the sweeping statement that “union power has been smashed”. Clearly Hertz has missed the role trade unions played in the protests against the WTO, IMF and George Bush’s Free Trade Area of the Americas. Real problems like the closer integration of union tops into the corporate structure – the process of bourgeoisification – are not addressed in the book.
Hertz readily admits that she is no anti-capitalist, nor even anti-business. “Capitalism”, she argues, “is clearly the best system for generating wealth, and free trade and open capital markets have brought unprecedented economic growth to most if not all of the world”. It would have been better to print this statement on the front cover as a ‘health warning’. Yet despite its shortcomings, The Silent Takeover contains a lot which should interest anti-capitalist activists. Because it raises issues which invariably surface in discussions on globalisation, socialists need to familiarise themselves with the main ideas in the book.
The central idea is that there has been a “power shift” during the last 20 years, away from politicians and the states they govern, towards big global corporations. This contributes among other things to a “race to the bottom” as governments try to undercut one another, with tax breaks and other incentives, to attract multinationals or stop them from leaving. One statistic used by Hertz has been quoted extensively: that of the world’s 100 largest economic entities, 51 are companies and only 49 are nation states.
Publication: The Silent Takeover : Global Capitalism and the Death of Democracy (Hardcover), Amazon;
And here an excerpt – p14: … Over the last two decades the balance of power between politics and commerce has shifted radically, leaving politicians increasingly subordinate to the colossal economic power of big business. Unleashed by the Thatcher-Reagan axis, and accelerated by the end of the Cold War, this process has grown Hydra-like over the last two decades and now manifests itself in what are diverse positive and negative forms. Whichever way we look at it, corporations are taking on the responsibilities of government.
And as business has extended its role, it has … actually come to define the public realm. The political state has become the corporate state. Governments, (by not even acknowledging the takeover) risk shattering the implicit contract between state and citizen that lies at the heart of a democratic society, making the rejection of the ballot box and the embracing of non-traditional forms of political expression increasingly attractive alternatives …
Third World Traveler, publishing large excerpts of her book;
Noreena Hertz in Wikipedia;