Power to the People (In Suits)
How a whole new kind of business
lobby is a threat to democracy
by Paul Bigioni
www.zmag.org, November 7, 2006
In June of this year, " the three
amigos" - the name the press gave the leaders of Canada,
Mexico and the U.S. because they were meeting in Mexico at the
time - launched the North American Competitiveness Council (the
NACC). The NACC, described in government press releases as a partnership
between government and business executives, consists of 10 business
leaders from each NAFTA nation. Its stated purpose is to advise
government on how to improve the competitiveness of North American
business in global markets; NACC members meet with government
ministers from all three nations on a regular basis to provide
While I suspect that, to the average reader,
none of this sounds terribly momentous, I am of a different view.
Examining the NACC in its historical context discloses that it
is, in its very structure and composition, an anti-democratic
On the surface, the NACC appears to be
an initiative of government. It is not. It was entirely conceived
by the private sector. In 2003, the Canadian Council of Chief
Executives launched its "North American Security and Prosperity
Initiative," a sales pitch designed to convince government
to pursue such business-friendly initiatives as "re-inventing"
borders, regulatory convergence and energy integration. It is
no coincidence that the NACC currently pursues these same objectives.
The NACC's members are drawn almost exclusively
from the Canadian Council of Chief Executives, the Business Roundtable
in the U.S. and the Consejo Mexicano de Hombres de Negocios, a
Mexican business association. These organizations represent some
of the largest corporations in their respective nations; the NACC
is a means for them to influence government policy in the interests
of the companies they work for. No other group in society - labour,
consumers, small business - has been invited to join.
The Canadian Council of Chief Executives
and the Business Roundtable are already extremely influential
lobby groups. They have existed for decades and have had a profound
impact on public policy. The Canadian Council of Chief Executives
was instrumental in selling the original Canada-U.S. Free Trade
Agreement to business and government leaders in Canada. It helped
water down Canada's anti-trust laws by successfully promoting
the enactment of the Competition Act, a law that has done little
to stop the deepening concentration of ownership of Canadian business.
The Canadian Council of Chief Executives' repeated calls for cuts
to taxes and social spending were made law when Paul Martin was
Canada's finance minister.
The Business Roundtable is similarly influential.
During the 1970s, it coordinated a series of approximately 200
lawsuits that compelled the U.S. Federal Trade Commission to cease
its program of monitoring the concentration of ownership of American
businesses. This paved the way for the merger and acquisition
booms of the 1980s and 1990s. The Roundtable also played a central
role in convincing the U.S. to adopt the NAFTA.
Given the tremendous influence of these
business associations, it is obvious that they already have the
ear of government. What, then, will the NACC add to their influence?
In short, the NACC formalizes and deepens
the existing patterns of influence these business associations
already have. The U.S., Canada and Mexico have each assigned three
high-level government ministers to meet with the NACC three times
per year. Canada's ministers of Public Safety (Stockwell Day),
Industry (Maxime Bernier) and Foreign Affairs (Peter MacKay) have
been appointed to this task. In the U.S., the Secretaries of Homeland
Security, Commerce and State have been chosen. The appointment
of the highest government figures short of president and prime
Minister shows that governments take the NACC seriously.
In August, the NACC met to establish its
procedures and to reach a consensus among its members on its policy
objectives. Members had apparently already come up with about
300 objectives, a list of which was not available to the public.
At its August meeting, the NACC reduced the number of its objectives
to three - border facilitation, regulatory convergence, and energy
integration- in the short term in order to proceed with policies
members felt were "actionable and easy to achieve."
Remember that these three are the same objectives pushed by the
Canadian Council of Chief Executives in 2003.
Also at its August meeting, the NACC resolved
that "a template be developed to bring initiatives to the
table, to prioritize them, assign responsibility, a time frame
and schedule for completion, and where possible, develop an economic
assessment." The NACC further resolved to discuss "the
possibility of developing an electronic interface for future exchanges
of documents, views and developments."
These guys are not fooling around. Recent
Freedom of Information Act disclosures in the U.S. reveal detailed
organizational charts and telephone lists that enable NACC members
to directly contact government staff at all levels and in departments
as diverse as manufactured goods, movement of goods, energy, environment,
e-commerce, financial services, business facilitation, food and
agriculture, transportation and health.
All this demonstrates how clearly different
the NACC is from a mere lobby group or business association. If,
for example, an advocacy group like the World Wildlife Fund wants
to talk to a government minister, it typically writes up a report
on a topic of interest, sends it to a minister and then calls
to seek a meeting. The minister might agree to meet with WWF representatives,
or might assign a deputy minister or lesser bureaucrat to meet
But the World Wildlife Fund is not invited
by the government to formulate government policy. Neither are
cabinet ministers assigned to meet with the World Wildlife Fund
on a regular basis. This is the difference between the NACC and
a mere lobby group. Through the NACC, our government has chosen
to give precedence to the voice of the business elite. The NACC
does not wait in line with lobbyists for a fleeting opportunity
to meet a cabinet minister.
In the words of one government press release,
the NACC has been "institutionalized." Government is
not merely tolerating the NACC - it is changing to incorporate
NACC policy input into its ongoing operation. At the same time,
the NACC remains an entirely private body, advocating policies
that financially benefit the corporations it represents. Bereft
of its own ideas, Ottawa has apparently privatized the very function
of policy making.
There is a troubling precedent for this.
In 1934, the government of Nazi Germany created an advisory body
called the National Economic Chamber (the NEC). Though it seemed
to be an innovation, the NEC was merely a rehash of the pre-Nazi
Central Committee of German Employers' Associations. It was a
private association, incorporated by the Nazis into their system
The purpose of the NEC was to formulate
economic and social policy for the Reich. Membership in the NEC
was confined strictly to the leaders of Germany's largest businesses,
trusts and cartels. Representatives of labour and consumers were
excluded from participation.
It is typically assumed that the Nazi
dictatorship controlled all elements of society, including business.
To the contrary, Nazi business philosophy was not markedly different
from that which prevails in North America today. The Nazis advocated
self-regulation in business, and their laws encouraged further
and deeper consolidation of ownership in the already monopolistic
In the late 1930s, Professor Robert Brady
of the University of California studied the Nazi economy and concluded
that "the totalitarian powers of the new [Nazi] state can
and will be used to see that no one escapes whatever the majority
of the most powerful German business men decide to do." One
must remember that, by 1934, Hitler had already violently purged
his party of its radical socialist elements. Before that, he had
curried the favour of big business and secured the financing and
political support necessary to improve the fortunes of the Nazi
Party in the 1932 elections. Nazi economic policy was revised
The German experience points up a long-forgotten
truth most eloquently stated by U.S. President Franklin Delano
Roosevelt: "The liberty of a democracy is not safe if the
people tolerate the growth of private power to a point where it
becomes stronger than the democratic state itself. That, in its
essence, is fascism - ownership of a government by an individual,
by a group, or by any other controlling private power."
Germany, like other fascist nations, had
seen its economy fall under the control of a very small number
of monopolistic businessmen. Over time, networks of private business
associations had given German big business a cohesive and powerful
influence over political affairs. That influence was used to Hitler's
advantage. He became Chancellor by constitutional means in January
of 1933. Inside of a month, he met privately with Germany's leading
industrialists and bankers. Captured German documents reveal that,
at that meeting, he promised to eliminate the Marxists and restore
the military. He told his invited guests that "private enterprise
cannot be maintained in the age of democracy; it is only conceivable
if the people have a sound idea of authority." Goering chimed
in to the effect that the pending election would be "the
last one for the next 10 years, probably even for the next 100
On that occasion alone, Hitler collected
contributions of three million marks. The trend was thus from
economic monopoly to political dictatorship. The business associations,
cartels and industrial trusts wholeheartedly supported Hitler.
Having purchased their own freedom from the Nazis, they were content
with the loss of everyone else's.
To my dismay, I see in North America a
repetition of the German trend. Ownership and control of business
in North America has been acutely monopolistic throughout the
entire post-war period. Concentration of ownership has only deepened
over time. Since the Reagan era, the philosophy of "self-regulation
in business" has held sway and, in the U.S in particular,
laws originally passed to ensure free competition have been weakened
As in pre-war Germany, North American
business has organized itself into powerful associations that
preach the public good while attending to the private demands
of their members. Since the early 1980s, governments in Canada
and the U.S. have adjusted their policies to satisfy the desires
of these business associations. As in Germany decades ago, the
monopolistic businessmen of North America have found their political
Quite obviously, North America has not
followed Germany into dictatorship. Unfortunately, however, the
North American Competitiveness Council represents a small but
significant step in that direction. It is small because, alone,
the NACC cannot destroy our democracy. It is significant because
it is an institutional change - a subtle restructuring of our
government that gives our business leaders disproportionate power.
As with pre-war Germany's National Economic Chamber, the NACC
is in essence a private business association reborn as a formal
part of government. If this intrusion of business into government
is permitted to expand, then the North American business elite
could in time become that "controlling private power"
that President Roosevelt warned of.
It must be noted that the men and women
who attend NACC meetings do not call for an end to democracy,
and they are not Nazis. Neither, however, were many of the businessmen
of Weimar Germany. In the years before Hitler's rule, the German
business elite was simply given the freedom to combine into ever
larger trusts and cartels, often justified as necessary for competing
in global markets. By the end of World War II, control of the
German economy was in the hands of about 100 men, according to
the estimate of U.S. Department of Justice employees tasked with
"decartelizing" postwar Germany. We have forgotten what
President Roosevelt and his Justice Department knew back then:
market power is political power. For this reason, decartelization
was considered an essential part of de-nazification.
I therefore find it depressing when I
hear the Canadian Council of Chief Executives call for changes
to our Competition Act to facilitate "the kind of strategic
alliances and new business arrangements that companies need to
operate effectively in the global marketplace." The Council
also claims that "a fair degree of concentration in some
sectors is not only inevitable but desirable."
Given these statements, and given the
"anti-anti-trust" views of the Business Roundtable in
the U.S., can it not be expected that the NACC will advise government
to permit more mergers and alliances between companies? This will
deepen the monopolization of the North American economy. The result
will be the concentration of even more political power in the
hands of even fewer, bigger businesses.
Thus, the NACC does not have to call for
any constitutional change to damage democracy. And thus, we should
not sit back and wait to see how business intends to exercise
its growing political power before we concern ourselves with the
fact of that power's existence. We can assume, in any event, that
the NACC will push many of the same policies that its private
members already call for.
At the same time as the NACC is institutionalizing
big business's influence in government, Stephen Harper's Conservatives
are cutting millions of dollars of funding to other groups and
programs that provide policy input. Notwithstanding its budget
surplus, Canada has now cut or reduced funding for Health Canada's
policy research, the Centre for Research and Information on Canada,
Canadian Policy Research Networks and the Human Resources Policy
Research Initiative. "Administrative" funding cuts to
Status of Women Canada mean in reality that women's lobby groups
will be starved. The Law Commission of Canada, a group that considered,
among other things, how to promote economic security for vulnerable
workers, has been entirely eliminated in the name of efficiency.
Canada's Government is giving priority to the demands of the business
elite even as it shuts out other groups who might have opposing
The NACC exists because of a growing anti-democratic
sentiment in North American society. It has been created and populated
by people who seem to believe that only the elite few with market
power should be trusted to wield political power. The majority
of citizens, their opinions and experiences are to be disregarded.
The German example shows that this mistake
has been made before. What is entirely new, however, is the global
ambition of our business leaders. Today's business elite have
at their disposal the NAFTA and the WTO-administered trade agreements
with which to limit the ability of government to interfere with
their profits. NACC members already recommend the creation of
more supranational governmental bodies to administer different
aspects of the North American economy. By this means, national
sovereignty will be further displaced, and the voice of the citizen
will matter even less.
Paul Bigioni is a lawyer practising in
Toronto, Canada. He is writing a book about the persistence of
fascism and the economic conditions which give rise to it. His
research is focused on the political impact of competition policy.