The combined revenues of the largest 10 corporations in the world, including Apple, Toyota, Walmart, Shell, BP, Exxon Mobil and Volkswagen, now exceed the combined income of 180 of the world’s 195 sovereign states. The top 10 corporations have combined annual incomes of more than US$2.8 trillion.
The figures were compiled by UK campaign group Global Justice Now, which also noted that, of the top 200 economic entities in the world, 153 are corporations.
Apple, the ninth largest company, last year recorded revenues of $233.7 billion, underpinning a record annual profit of $53.4 billion. Apple makes mega-profits not only by engaging in exploitative labour practices in China, but also by paying a paltry amount of tax. In Europe, due to a sweetheart deal in Ireland, Apple avoided any significant tax, paying just 0.005 percent in tax per year since 1991. In Australia last year, the company paid a meagre $85 million in income tax, despite generating $8 billion in local revenue.
According to Global Justice Now director Nick Dearden, “The vast wealth and power of corporations is at the heart of so many of the world’s problems – like inequality and climate change. The drive for short-term profits today seems to trump basic human rights for millions of people on the planet. These figures show the problem is getting worse”.
The rise of corporate wealth and power, however, is not simply a result of the greed of those who own and run these global behemoths. The capitalist system is built this way. There are more than enough resources worldwide to provide every person on the planet with adequate food, shelter, education and sanitation, but capitalism concentrates wealth into the hands of a small minority.
While the private ownership of the means of production, such as machinery and factories, is concentrated in the hands of a small number of capitalists, the vast majority of the planet’s population is forced to sell their labour power for a salary or a wage in order to survive.
Because capitalism is production for profit, it requires constantly expanding markets. In order to maintain and increase their profits, capitalists are forced to compete with each other. This results in the centralisation of the means of production in the hands of fewer and fewer capitalists as less successful capitalist ventures are eliminated or swallowed up by the successful ones, creating monopolies.
The US car industry illustrates this. In 1909, there were more than 270 companies producing automobiles in Detroit. Within 10 years, the number of firms fell drastically. In 1911, Ford and General Motors were responsible for 38 percent of industry output; by the 1920s they accounted for 60 percent. By the 1930s, the two companies, plus Chrysler, accounted for more than 80 percent of industry output.
Russian revolutionary Vladimir Lenin noted in 1916 that the enormous growth of industry and the rapid concentration of production in ever growing enterprises are a common characteristic of modern capitalism. According to Lenin, “This transformation of competition into monopoly is one of the most important – if not the most important – phenomena of modern capitalist economy”.
Since the end of the 19th century, major parts of the economies of the most advanced capitalist countries have come under the control of fewer and fewer corporations, which dominate the economy. These corporations are able to generate super-profits by monopolising production and by exploiting wage workers. This has resulted in the rise of global corporations, which control the vast majority of world trade. At the same time, there has also been a growth in global inequality.
So while it is right to demand that corporations pay more tax and that executive greed be curbed by regulation, the very structure and operation of the system work to produce inequality and monopoly. Capitalism is an exploitative dog-eat-dog system that can’t be permanently reformed. The mass of humanity can be freed of the inequality and exploitation it creates only by getting rid of the whole system and replacing it with a socialist system – one which places the needs of the vast majority of the population first, creating a society that puts people before profits.