On 4 July 2017 Dr John Mikler, associate professor in the Department of Government and International Relations at the University of Sydney, addressed AIIA NSW on “The Influence of Global Corporations”. He sketched the dramatic rise in their number since 1970 – by 2012 there were some 100,000 businesses which could be described as international, multinational, trans-national or global.

But calling them “global” obscured the fact that these businesses remained embedded in the nation state. The United States, Britain, some European countries and, increasingly, China were the base of operations for most of them. Some 85 per cent were based in the top ten economies. Half of existing market leaders were American, while half of the newer players were Chinese. Between 50 and 60 per cent of their sales, assets and employment were in their home countries. Staff remained predominantly national at all levels, including the most senior.

Behind the scenes, the “global” corporations worked closely with their home governments. These governments exercised considerable efforts to secure the interests of their companies, for example in trade access negotiations. The lobbying powers of the dark lords of international business were prodigious. There was significant intermeshing between the corporations and their governments; former MPs were typically among their board members.

They also achieved an ideological dominance in discussion of the international economy. Their discursive power – through the media, academic discourse and political debate – meant that people perceived no alternative to their growth and dominance. They promoted the imagery of free markets and global access when in reality their dominance depended on crushing real market forces and excluding smaller competitors. An example was there being essentially only two kinds of mobile phone system, Android and Apple.

Their focus was largely regional rather than truly global – China dominated in the Asian region, Britain and the US in Europe. Mergers and acquisitions reflected this focus. Five major corporations dominated most markets. Their economic power was greater than that of at least 150 individual countries. The largest of these firms became “too big to fail”: governments came to their rescue, as occurred in the global economic crisis of 2008.

International free markets were therefore something of a chimera. Global corporations largely tended to reinforce the power of their respective nation states. They relied not on competition but on control. Better international regulation was needed in order to balance their power with wider considerations of equity, economic progress and international cooperation.

Report by Ian Lincoln