Opposition to globalization, however, does not end with concern for the fate of impoverished workers and poor countries. It also focuses on the political consequences of globalization. International corporations driven by profits, it is argued, have combined with the mega-institutions of the international market to undermine the authority of sovereign governments, and with them the old political order. Where there were once autonomous nations, the claim goes, there is now only a world regime controlled by business interests.

Of course, predictions of the imminent demise of sovereign states—for better or worse—are not new. Marx and Engels offered a similar prediction in their 1848 Communist Manifesto. The founders of modern communism claimed that history was moving towards the disappearance of the state and its replacement by an international regime of the proletariat, in which there would no longer be room for nationalist prejudices:

A century and a half later, eulogies for the sovereign state have become commonplace. Their tone has changed, however, from optimism to a fatalistic pessimism. Now that the hopes of many intellectuals for a Socialist International have been dashed, the state—in its social-democratic form, of course—has suddenly become a bulwark against the predatory power of global capitalism. Yet this bulwark, it is argued, has seemingly begun to erode: Under pressure from multi-nationals and global financial institutions, it is argued, the welfare role of the state is rapidly giving way to a minimalist approach to government, to the benefit of the wealthy alone.³³

To globalization’s detractors, then, the weakening of the state means the beginning of a new, more threatening age in which the jungle conditions of the free market prevail. “The deepest meaning conveyed by the idea of globalization,” writes sociologist Zygmunt Bauman, “is that of the indeterminate, unruly, and self-propelled character of world affairs; the absence of a center, of a controlling desk, of a board of directors, of a managerial office.”³⁴ In this way, the sworn enemies of national sovereignty have suddenly become its most ardent defenders. The ideological about-face of radical activists on this issue is a result of their dread of the corrupt and corrupting power of capitalism. As Naomi Klein writes:

A similar protest in the name of national autonomy can be heard from politicians identified with the nationalist Right. Patrick Buchanan, for example, has in recent years launched a vehement attack on the World Trade Organization, which he insists is a threat to the founders’ vision of an autonomous America.³⁶ He has also lambasted international corporations, whose detachment from their national roots has turned them into “the natural antagonist of tradition.”³⁷ Buchanan did not hesitate to express support for the violent demonstrations in Seattle, declaring that “the great threat that we have inherited comes not from the evil empire, the Soviet Union, but from an emergent, global government, and an international political class that seeks to control the destiny of the world in furtherance of its own ideology. I think this is the great battle of the future.”³⁸

The fear described by Buchanan is, apparently, contagious. Today, even the political center is haunted by similar anxieties. A survey conducted by USA Today in July 2002 revealed that 38 percent of Americans believe that the world’s largest companies can be considered “an actual threat to the nation’s future.”³⁹ While this crisis of confidence was no doubt exacerbated by the corruption scandals at Enron and WorldCom, its main cause is a more general concern that large corporations have simply become too powerful.

Nor is this sentiment entirely without base. Indeed, multi-nationals have grown more powerful. There are also more of them than ever before—and their numbers are steadily growing. In 1900, for example, there were 2,500 companies in the world with operations in more than one country. In 1970, the number had risen to 7,000, and by 1990 it had climbed to 30,000.⁴⁰ According to a recent report by the UN, there are today no fewer than 65,000 multi-national companies operating worldwide. In 2001, the volume of sales generated by overseas branches of multi-national companies was in the vicinity of 19 trillion dollars, and their investment in foreign markets—6.6 trillion dollars. Finally, as of 2001, the multi-national companies are responsible for one-tenth of the global GDP, and account for one-third of all export activity in the world.⁴¹

Should we conclude from these numbers, however, that large corporations pose a threat to national autonomy? The experience of the recent past shows that, at least in the West, such a conclusion is far-fetched. Neither individual states nor supra-national political bodies have refrained from curbing the power of giant corporations. In 2001, for example, the European Union prevented the world’s largest corporation, General Electric, from buying Honeywell, arguing that the takeover was likely to pose a threat to free competition in the aircraft industry.⁴² A few months earlier, the EU prevented a merger between the communications titan Time Warner and the British music giant EMI.⁴³ On the other side of the Atlantic, as well, the U.S. government conducted a major investigation of Microsoft, resulting in the latter’s conviction in 2001 on charges that it illegitimately thwarted competition in the operating-system market. The U.S. government also prosecuted giant corporations such as Mitsubishi and BASF over their involvement in price-fixing cartels.⁴⁴

Obviously we cannot deduce from these examples that corporations have little or no influence on national politics. After all, companies do everything in their power to have an impact on elections, legislation, and regulatory decisions that affect them, and also to outmaneuver political and juridical bodies whenever they feel the need; and their efforts sometimes bear fruit. We can deduce, however, that a commitment on the part of government officials to free-market principles does not necessarily make them the handmaidens of big business. Indeed, the opposite is frequently the case. After all, privatizing public companies and opening local markets to international competition has made corporations more vulnerable to competitors, and therefore less arrogant. Whatever coercive power international corporations have against consumers and workers tends to be the result not of freer global trade but of monopolistic practices, which free-trade policies are aimed at preventing. While monopolies are in fact inclined to trample on the interests of the consumer, in competitive conditions companies have no choice but to be efficient and to persuade their customers that they provide the best value. “If you are worried about corporate power, you should support globalization,” writes Philippe Legrain, a former adviser to the director-general of the World Trade Organization. “Even though many global companies are bigger than before, they are not necessarily more powerful. It is the absence of competition, not size, that gives companies clout.”⁴⁵

One must therefore be skeptical of the claim that “corporations rule the world.”⁴⁶ Even major corporations can offer little effective resistance to the power of sovereign states, and it is doubtful that this will change in the foreseeable future. Moreover, while it is nations’ sovereign authority that makes it possible for them to enforce their rule, companies must rely largely on persuasion to sell their products. Nations have at their disposal the right to impose taxes or to confiscate property, which they regularly exercise against even the largest companies; corporations must satisfy the consumer in order to gain favor. An unpopular, inefficient regime can last a long time before failing, but an unprofitable company rapidly ends up in liquidation. Nations can even last for many years without any private corporations at all, if they choose to centralize all of their economic power—with disastrous consequences, to which the communist experiment bears witness—but corporations usually need the patronage of a well-ordered country if they are to function at any reasonable level.⁴⁷