Question: What should the role of the global corporation be?
Prestowitz: We tend to casually talk about American companies. We
think of GE as an American company, or Caterpillar as an American
company. Of course these companies are headquartered in America—they’re
chartered, their corporate charter is in America—but they’re really
global companies and the CEOs of those companies, often they’re getting
more than half of their sales outside the U.S., often more than half
their profits outside the U.S. They have subsidiary companies or branch
companies around the world. They have other constituencies. They have
workers in China, or in Brazil, or France, or wherever. They have to
treat those workers fairly, they have to deal with the Chinese
government and the... and Brussels and Tokyo. So in a way, they’re
almost quasi-sovereign entities; they're not countries exactly, but they
have resources that far exceed those of most countries. And so they’re
global players, and they’re allegiance is to their shareholders but not
necessarily to any particular country. And I’m not saying that it should
be because as I said, the CEOs do have responsibilities to a broad
constituency. But, we as American citizens—and particularly officials in
the U.S. government—tend to think of them as American companies in the
sense having some kind of special allegiance or special obligation to
the United States.
Now, in talking about globalization over the
last ten or 15 years we’ve had kind of a mantra—Bill Clinton actually
popularized it—that globalization will make everybody rich and being
rich they’ll become democratic, and being democratic they’ll be
peaceful. Well, it looks as if people can be rich without being
democratic, without having the rule of law. We thought that the global
corporation would be the transmission bill of democratic values into
authoritarian societies. But ironically and perversely, it seems that
the transmission could be the other way. The head of a global company in
Washington is a big political player, the CEO of a global company makes
big political donations. He or she has an legions of lawyers and
lobbyists. In the United States, with the rule of law, companies can
challenge the government in court and win. They can stop the U.S.
government. They can cause legislation to be written, they can cause
legislation to be blocked or to be passed. They’re big political
players. In Beijing, they’re not; in Riyadh, they’re not; in Singapore,
they’re not; they’re supplicants. They don’t deal with a rule of law in
Beijing, they’re careful about the relationships they have with
officials. They have to stay on the right side. They don’t make
political donations. They don’t have, they don’t challenge the
governments in court.
And so, in a funny way, the head of a
global company is more responsive to the wishes and the desires of the
authoritarian regime than of the democratic regime. And so, what’s
beginning to happen is the transmission of authoritarian values into the
U.S. regime. And those global corporations, who... frequently are on
government advisory committees. So you have this funny thing where the
government thinks they’re American companies and we have advisory
committees for the U.S. trade representative and other officials and the
heads of these global corporations come into advise the American
negotiators. But you wonder, are they thinking about the interests of
America or are they thinking about the interests of their corporations?
And in thinking about the interests of their corporations, to what
extent are they beholden to the desires of the authoritarian regimes?
Again, I’m not trying to be critical of the CEOs, I think they’re in a
very difficult position and I think many of them struggle. Jeffery
Immelt of GE has voiced this. He’s talked about GE being a global
corporation and yet, understanding that maybe shareholders are not the
only obligation, maybe it has other obligations. It’s a difficult
position for the CEO, but my main point is that in making policy for the
United States, we need to completely understand the role of the global
corporation and right now we don't.
there be a global entity in charge?
Clyde Prestowitz: Well,
in conjunction with other countries I’m not sure. That’s an interesting
question actually. Maybe there should be some kind of a global
chartering, corporate chartering mechanism. But for ourselves, I think
that I would like to have corporations chartered with a federal charter,
rather than a state charter and I would like to have a rule in the U.S.
like the Canadian rule. In Canada, only natural persons can make
political donations. I’d like to have only natural persons making
political donations in the U.S. And I would like to see a revamping of
the advisory committees in the U.S. government so that there’s a better
mechanism for defining and considering the American interest rather than
the corporate, global corporations interest.
on May 10, 2010
Interviewed by Jessica Liebman