When Corporations Rule the World.

• Author: Nelson, Toni

The specter of economic insecurity haunts a growing portion of the world's people. In industrialized countries, workers are seeing their job opportunities decline and their incomes erode. The median income in the United States has dropped by 4.6 percent since 1979, for example, and middle class families are spending an increasing share of their incomes on the basic necessities of housing, utilities, and healthcare. In developing countries, the situation is often far worse - from the heavily-polluting Maquiladora factories on the U.S.-Mexico border to the textile sweatshops of Southeast Asia, people struggle in toxic environments for wages that guarantee little more than their next meal.

David Korten argues that these conditions result from the expanding power of multinational corporations, the largest of which now have more economic clout than most nations - yet which are fundamentally authoritarian and antidemocratic, and therefore pose a growing threat to the ability of nations to protect their people and resources from uncontrolled exploitation. Noting that the 500 largest industrial corporations control 25 percent of the world's economic output but employ only one-twentieth of one percent of the world's population, Korten concludes that corporations benefit disproportionately from economic globalization, often at the expense of individuals and communities. What has happened in the United States is particularly telling; even though profits are at a 45-year high, between 1980 and 1993 the Fortune 500 companies cut their payrolls by more than 25 percent, eliminating nearly 4.4 million jobs and helping to drag down middle-class incomes.

Challenging the world's most powerful institutions on so fundamental a level might seem like tilting at windmills, were the challenger not an accomplished player in the very system he decries. Korten considers himself a conservative; after earning his Ph.D. in business from Stanford and teaching at Harvard Business School, he spent 30 years working on development projects throughout the Third World. Eventually, he founded his own non-governmental organization, the People-Centered Development Forum, after concluding that "the Western development enterprise has been about separating people from their traditional means of livelihood... to create dependence on the jobs and products that modern corporations produce."

Korten is meticulous in documenting the process by which corporations have become, in his view...