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  1. Long reads
30 April 2001

Why consumer power is not enough

Election 2001 - Many feel that they have more clout as shoppers or shareholders than as vot

By Noreena Hertz

I grew up in a highly political home. My mother was the co-chair of the 300 Group, an organisation whose aim was to get more women MPs into parliament, and she herself stood in the 1987 election, the year before she died. I still remember that summer clearly: my home jam-packed with volunteers stuffing envelopes and providing back-up, endless car journeys up the M1, doorstep campaigning and letterbox leafleting, town-hall meetings and neighbourhood association get-togethers. And then, after my mum died, busloads of local activists journeying down to London from Walsall, where she had stood, to pay their respects at her memorial service.

In the 1980s, people still felt that politics mattered. They still had faith. Now, 14 years on, with a general election looming, even I, the daughter of a woman who devoted much of her life to politics, am finding it hard to garner much enthusiasm for the political process. Like many around me, I increasingly ask myself why I should vote. If you ask some of those who will turn out in June, they will probably say that they are doing so out of a sense of duty or past allegiance, not because they feel that politicians can actually deliver. The percentage of people in the UK who had “great confidence” or “quite a lot of confidence” in parliament dropped from 54 per cent in 1983 to only 10 per cent in 1996; and 71 per cent of British 16- to 21-year-olds surveyed in 1998 believed that the way they vote will make little or no difference to their lives. If the predictions are to be believed, almost a third of us here in the UK will not bother to cast a vote at the ballot box in June. This will be the lowest turnout since the Second World War.

Turning away from traditional politics is not just a UK phenomenon. In the US presidential elections last year, more than 90 million people, almost half the electorate, did not turn out to vote. During the European elections in Britain in 1999, fewer than half the electorate voted. Even in eastern European countries that be-came democracies as recently as 1989-91, turnout has been falling. In Poland, turnout was 64 per cent in 1989, but had fallen to 49 per cent by 1997. In Hungary, it fell from a high of 76 per cent in 1990 to 60 per cent in the 1998 election.

Membership of political parties almost anywhere in the developed world is also plummeting. In 1950s Britain, for example, the Labour Party claimed about a million members; today, membership is only 360,000. Conservative Party membership declined from around 2.8 million in the 1950s to fewer than half a million today. Compare this with the Royal Society for the Protection of Birds, which currently has more than one million members.

Why this crisis of confidence in politics? I believe that global capitalism is to blame. Or, more precisely, the brand of capitalism initiated by Margaret Thatcher and Ronald Reagan, now practised by parties of both left and right and proselytised all over the world: a brand that has resulted in a steady withdrawal of the state over the past 20 years, and a concomitant ceding of power by politicians to big corporations and the market. Today, corporations, not governments, increasingly define the public realm: 51 of the 100 biggest economies in the world are corporations. The combined revenues of General Motors and Ford exceed the combined GDP for all of sub-Saharan Africa. Governments are reduced to playing the role of servile lackey to big business, desperate to attract foreign capital to their shores.

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Faced with this silent takeover – with governments kowtowing to tycoons such as Rupert Murdoch, whose News Corporation paid no net British corporation tax at all up to the end of 1998, despite making £1.4bn profit in the UK since June 1987; with multinational corporations playing countries and politicians off against each other, exacting for themselves ever better and more lenient terms, lower regulatory standards and lower corporate taxes; with George W Bush’s shameful obsequiousness to big energy corporations; with our own government’s much trumpeted ethical foreign policy being quietly dropped once it was made clear how much the British arms industry stood to lose; with a world in which international politics is less and less about territorial gains and more and more about increasing market share – it is understandable that the electorate is increasingly unclear as to what and, more importantly, who governments are now for.

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And so voters are turning their backs on traditional forms of political expression. If power lies more and more in the hands of corporations rather than governments, the most effective way to be political is not to cast one’s vote at the ballot box, but to do so at the supermarket or at a shareholders’ meeting. When provoked, corporations respond. While governments dithered about the health value of GM foods, supermarkets faced with consumer unrest pulled the products off their shelves overnight. While nations spoke about ethical foreign policy, it was corporations that actually pulled out of Burma rather than risk censure by their customers.

Delivering a quality product at a reasonable cost is not all that is now demanded of corporations. The key to consumer satisfaction is not only how well a company treats its customers, but increasingly whether it is perceived as taking its responsibilities to society seriously.

It is not just the brown-rice-eating, sandal-wearing brigade who are making demands: 60 per cent of UK consumers are prepared to boycott stores or products because they are concerned about their ethical standards. Three-quarters of British consumers would choose a product on green or ethical grounds. More than 75 per cent of Americans would boycott stores selling goods produced in sweatshops. Monsanto was brought to its knees by a coalition of eco-warriors and Britain’s Women’s Institute members – hardly extremists by any reckoning. A coalition of churches and synagogues, the Interfaith Centre on Corporate Responsibility, with $110bn at its disposal, is among the ethical investors now using their power as shareholders not only to “regulate” corporate manoeuvres, but also to persuade corporations to do good.

But can we entrust the public interest to be safeguarded by consumer and shareholder activists? Can shopping really adequately replace voting?

No, it cannot. The world cannot be simplified to the extent that consumer politics tends to demand. Is GM food necessarily always bad for consumers or the environment, or could this technology be harnessed for good? Child labour may be distasteful to westerners, but does boycotting goods made with child labour improve or exacerbate the lot of third world children? Trusting the market to regulate may not ultimately be in our interest.

Moreover, such de facto populist politics can easily result in tyranny, not necessarily of the majority, but of those who can for whatever reason protest more effectively. Rather than empowering all, consumer and shareholder activism gives greatest voice to those with the most money in their pockets, those who can switch from seller to seller with relative ease.

Consumer and shareholder activism is a form of protest that favours the middle classes, an outpouring of the dissatisfaction of the bourgeoisie. For the poor and socially excluded, this kind of protest is simply not an option.

But supermarket and shareholder activism is only an element of a more broadly configured protest movement gaining in stature and participation by the day, a movement buoyed by the internet and mobile communications, by a globalisation of concern that seeks to counter the globalisation of greed. Whether it is Sister Patricia Marshall lobbying Pepsico to pull out of Burma, Britain’s Women’s Institute members protesting against GM foods, or the Seattle, Prague and May Day riots that we have seen on our television screens over the past 19 months – all over the world, people are lashing out against corporations, governments and international organisations. When even James Wolfensohn, the president of the World Bank, concedes that “globalisation is not working at the level of the people”, people who want to challenge the status quo must go outside traditional political channels to do so.

As with consumer and shareholder activism, the limitations of other forms of protest are clear. The commonality of interests often centres on a shared general disillusionment, rather than specific concerns or proffered solutions. In some cases, protesters are motivated by a sense of common good, but in others they are concerned only with safeguarding their own interests, or those of a limited group, as in the fuel protests in Britain last autumn. Pressure groups need to play to the media, which encourages a polarised posturing, the demonisation of “enemies”, and oversimplification of issues. And the need to get the front-page story often inspires violence – as one of London’s May Day protesters told me: “There has to be trouble, otherwise the papers won’t report it, we won’t get our concerns on the front page.”

Yet despite the limitations of protest, the crucial question is whether, as its power increases, it will be able to act as a catalyst for reform. Can protest change politics in the same way as it is beginning to change the corporate agenda?

Looking at today’s mainstream politicians in the UK, the omens are not good. The costs of our elections can no longer be met by the state or party membership revenues, so politicians have to look for alternative backers in the private sector. Governments rely on business to address the problems that they do not want to or cannot take on, and thus become ever more dependent. It seems almost impossible that any of our parties will alter the balance of power in a way that disadvantages business.

This is the short-term perspective on change. But if our politicians are not farsighted enough to confront the silent takeover, if they are not prepared to search for solutions, to stand up against big business when the market mechanism does not work or when the pursuit of profit is against the public interest, and use their coercive powers to demand compliance from corporations, if they forget that people will no longer support a world run for the sake of growth rates and private capital flows, then they will sign their own death warrant, and the world we live in will be one where corporations rule, markets are above the law, voting was something we did once or twice long ago, and protest is the norm. The final stage of the takeover is the end of politics itself.

Noreena Hertz’s The Silent Takeover is published by Heinemann (£12.99). Her film, The End of Politics, will be broadcast on Channel 4 in May as part of its election coverage