Maybe It’s Anarchy After All

We need to transform the relationship between state and citizen

Last week I interviewed journalist Matt Kennard about how corporations overthrew democracies by way of a shadow legal system created in the sixties by the World Bank, ensuring corporations can sue governments for policies which impact their bottom line. The investor-state dispute settlement (ISDS) system enables multinational corporations and foreign investors to challenge entire countries which threaten their corporate “rights” under international investment and trade treaties.

As Matt explains in the episode, these major tribunals are held in back rooms around the world, where three arbitrators—who are not obliged to have any legal qualifications—hear cases brought to them by corporations who are often financed by third parties to challenge national interests. The numbers are staggering. Honduras is currently being taken to court by American company Prospera for $11 billion—one third of the nation’s GDP. Why? The country enacted its sovereign right to repeal a 2013 law that allowed Prospera to establish a charter city in a special economic zone (SEZ) in 2021. Losing could bankrupt the developing nation.

But it’s just one of many cases over the past five decades that have seen national interests be captured by the corporate sector. Created in the sixties, the ISDS enabled imperial powers to maintain control over foreign resources by handing the reins over to the private sector to whip the majority world into submission under a global, capitalist world order. As Matt points out, the most insidious effect of the ISDS is not the cases that make it to court, but the “policy-chilling” within governments themselves who, afraid of attracting the wrath of powerful multinationals, draft policies which benefit their corporate overlords above their citizenry. 

This secretive legal system neuters national politics, twisting the arms of those who would dream to enact their sovereign right to nationalise industry, for example, and burying those who do under mountains of legal fees, forcing them to a court created to help corporations win their cases. And it’s a lucrative side hustle for the financial sector, with boutique financial firms financing corporations to take states to court in exchange for future profits from ventures. It is an unjustifiable, corrupt racket—so unjustifiable, that many working for the World Bank are unaware of its powerful fifth arm. 

Matt points out that the existence of such a shadowy legal system only proves what we know, intuitively, to be true: powerful states exist to protect corporate interests, highlighting the revolving door between intelligence agencies in the West and fossil fuel companies as another example. 

The media’s capture by corporate interests explains why people are oblivious to the mechanisms which shifted power from governments to corporations, but keeping it in the same hands (the irony of the free-market-loving American far-right panicking about a “deep state” when they should be panicking about a “deep boardroom”.) Power exchanged crowns for wigs and wigs for suits, but no matter how you dress up violence the results are always the same: more for the few and less for the many. The myth of freedom, “debate” of culture wars and illusion of choice in two-party systems combine to create a society in which the citizenry point fingers at each other whilst the corporate arm gets its fingers in every pie. Truth may seem like a long-lost concept in an age of hysterical subjectivity but the evidence is clear: The system was built to protect interests, not people. 

In 1921, Walter Benjamin wrote of the difference between the “political general strike” and the “proletarian general strike”. The political general strike “demonstrates how the state will lose none of its force, how power is transferred from the privileged to the privileged, how the mass of producers will change their masters”, whereas the proletarian general strike “sets itself the sole task of annihilating state power”.

““This general strike clearly announces its indifference toward material gain through conquest by declaring its intention to abolish the state; the state was really . . . the basis of the existence of the ruling groups, who profit from all enterprises whose burdens are borne by the public.” Whereas the first form of work stoppage is a form of violence, since it only occasions an external modification of working conditions, the second, as a pure means, is nonviolent. For it takes place not in the readiness to resume work after external concessions and some modification of certain working conditions, but in the resolve to resume only an entirely transformed work that is not compelled by the state, an upheaval that this kind of strike does not so much occasion as consummate. The first of these undertakings is therefore law-positing, whereas the second is anarchistic.”

This was a clear warning over 100 years ago to not trust the transfer of power to the political realm, to not trust that our representatives represent the citizenry and our best interests. This was a warning that power needs to be held in check by a people. That power was eroded by unleashing the private sector, setting citizen against citizen. A general strike today is almost unthinkable because we would not be striking against the state, but against each other. The very precarity of dissolving the other into the sea of citizenship paved the way for the rapid erosion of trade unions in the 80s. 

As Benjamin suggests, the only form of considered action is that which refuses the conditions of the current system, to transform the relationship between citizen, labour, state and, now, corporation. Action which tinkers in the margin and is granted such experimentation by the system should be revealed for its ineffectiveness by that very right. The radical violence of the world we live in can only be challenged with radical response. The truth is a torch. Let it shine the way. 

© Rachel Donald