In today’s modern democracies, corporations wield significant influence over our lives, as well as over our governments. In the wake of the global financial crisis, it is evident that corporate interests are not always aligned with the public interest. Furthermore, there are few incentives for companies to adhere to this objective. This issue was raised last November in Melbourne at the Democratising Governance symposium organised by the Centre for Citizenship and Globalisation housed by Deakin University. In his presentation, Dr Hans Lofgren brought up the issue of democratising transnational pharmaceutical corporations. That of course relates strongly to the arguments made by Robert Dahl for example over fifty years ago: controlling corporations and ‘giant’ companies (in the words of Hans Blokland) was a striking feature of the USA’s New Deal and lead the political landscape as a top issue before and well into the 2nd European War (circa 1930s to 40s). This led me to ask about not only the feasibility of such an endeavour, but also about democratising other corporations, such as banks.
To offer one striking example, the Reserve Bank of Australia recently defied market expectations by keeping interest rates on hold, leaving the cash rate unchanged at 4.25%. But there are concerns that the ‘Big Four’ banks will announce an interest rate move independent of the RBA’s decision – which most have done. ANZ announced its interest rate decision, and banking analyst Brett Le Mesurier even noted that a rate increase would be a possibility. While banks would justify lifting rates in order to prop up profits amid a slump in loan growth, a rate rise would undoubtedly hit mortgage holders the hardest. The only way for consumers to voice their disapproval is to switch lenders or tell their governments that the citizens will control corporations.
Published in Political Reflection Magazine Vol. 3 No. 2