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Monetary Conformation of Corporate Governmentality IV International Treaties

Eduardo Rivera Vicencio Facultat d’Economía i Empresa Universitat Autònoma de Barcelona - eduardo.rivera@uab.cat

Omar Chabán García Seville University - omachagar@gmail.com

José Luis Romero Bravo Granada University – romerobravojl86@gmail.com

Abstract: This paper describes the formation of international treaties as an integral part of the relationships that develop in the monetary system. In these relationships of the monetary system are the relationships between nations, which more than relationships between nations are relationships between large companies operating from certain countries with key global currencies and with other normally economically weaker countries and/or dependent on the strongest currencies in the monetary system. This conformation of the relationships of the monetary system is framed within the theory of corporate governmentality or the theory of government of large corporations, characterised by the concentration of wealth and ownership of income present and future, with backed debt-money generated by the financial system, which has supported this concentration of wealth. This is how international treaties are part of the elements of submission and domination by big companies to certain States or groups of States that end up imposing certain internal changes, with significant loss of sovereignty and with the complicity of economic powers and local politicians in these States, plus the complicity of international organisations, also subject to this corporate governmentality.

In particular, this document refers to treaties underway between the USA and Europe such as TTIP and TISA.

Key Words: European Union, monetary politics, monetary system, Governmentality, Theory of Corporate Governmentality, Foucault, privatisation, International Treaties, TTIP, TISA.

Reference to this paper should be made as follows: Rivera Vicencio, E., Chabán García, O. and Romero Bravo, J. L. (2016) ‘Monetary Conformation of Corporate Governmentality IV International Treaties’, Int. J. Critical Accounting, Vol. xx, No. xx, pp.xx-xx. Biographical Notes: Eduardo Rivera Vicencio is Researcher at the Autonomous University of Barcelona, Committee member of the ACCID Management Accounting Commission (Associació Catalana de Comptabilitat i Direcció ACCID/Catalan Accounting and Direction Association), Editorial board member of the International Journal of Critical Accounting (IJCA), Editorial board member of the African Journal of Accounting, Auditing and Finance (AJAAF), President South American Research Section of the Critical Accounting Society New York, U.S.A. and Business Consultant.

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Omar Chabán García is Editor of the “Social-Economic Review” associated with CECAR (Caribbean University Corporation), PhD student in the Department of Applied Economics III of the Seville University. José Luis Romero Bravo is Co-Editor of the “Social-Economic Review” associated with CECAR (Caribbean University Corporation), Master in Information Science for Granada University.

1 Introduction

After the elimination of the gold standard in 1971 during the Nixon administration,

the product of excess money supply crises began to become more frequent. The 1970s

were characterised as a period of adjustment to the imposition of the debt-money; but in

the late 1970s and the early 1980s, this money supply began to channel leveraged

buyouts of public companies in every corner of the world. The only ones that escaped

were those countries within the Soviet orbit and some other particular companies. After

the dissolution of the USSR, these countries also began the privatisation process and

leveraged buyouts caught them up.

In the late 1990s, this process slowed down because much of the best public

companies were already privatised and the few that remained had generated resistance

from workers or resistance from governments, especially in companies such as health

care, education, pensions and some flagship companies in each country.

This slowdown is was left the excess money supply without channelling new credits

and started a chain of crisis periods of excess money supply. In this period the policy

treaty of large companies became reactive in order to be able to channel all excessive

resources of the economy without any backing (money-debt), which caused the dot com

bubbles or the 2007 real estate bubble and which still remains in some areas of the

world today and which keep control over the interest rate - generating still even more

money-debt in the economy.

For this reason, treaties became an urgent matter for large companies before they

could exploit the next bubble of overvalued assets, of overvalued stocks and overvalued

derivatives. These treaties would allow open new markets where appropriate and where

they previously encountered greater resistance and so it was so important to keep the

crisis in time and not inject money into the real economy and so any measure or

agreement adopted to “solve the crisis” the citizenship would meet with less resistance,

however painful. From this, the need to minimise information about these treaties and

possibly get them to countersign the absolute secrecy and behind closed doors, with a

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captive political power of economic power, became a reality that was becoming more

urgent for these large companies.

The urgency of signing these treaties for large companies is the leak that these

needed to make a money-cost debt close to zero, which increasingly looked closer to its

fall due to it not finding where to inject. It was so much so, that a recent change made

by the IMF Board of Directors (8th December 2015) allowed countries with unpaid

sovereign debt to continue to borrow. This will allow countries indebted to those who

do not orbit the dollar to take credits and thus channel the excess money supply in the

market. In addition, this will also help slow the emergence of a parallel currency system

by the BRICS Group, which would accelerate the fall of debt-money.

This paper describes the formation of international treaties, particularly those

affecting Europe in the framework of the monetary system in which they are embedded.

2 Theoretical Framework, Methodology and Objectives

This paper is framed within the theory of corporate governability. This theory has

one of the mainstays in shaping the monetary system which is what historically has

been building the conditions for the concentration of wealth and appropriation of rents

and yields. [Rivera Vicencio, E. (2016a)] In turn, this same theory in the description of

the current monetary system, defines four major components such as: international

organisations, the States, the economy of big companies and the real economy

(households, small and medium sized companies). Within the existing relationships

between States are relationships that are established at bilateral or multilateral level

through international treaties. [Rivera Vicencio, E. (2016b) p.18-41]

These international treaties were established between dominant economies, between

dominant economies and dominated economies or between dominated economies where

the level and direction of domination are a function of the concentration of large

companies operating from an economy or a certain State and acceptance of the

international exchange currency of this State level1. In this way, they will establish

treaties between economies or the same or similar States, and treaties in an advantaged

1 Acceptance of the international exchange coins are found in the Special Drawing Rights (SDRs) such as the dollar, the pound, the yen and the euro. In the case of the latter currency (the euro), which operates in several countries, the historical and current dominant economies are in Germany and France; other countries have different relative weight within the euro zone.

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or disadvantaged position, depending on where you look, between dominant and

dominated economies.

On the other hand, within the theory of corporate governmentality, the role played

by international organisations on monetary and trade can be seen, whose activities,

propositions, address etc. are clearly linked and protect the objectives of the dominant

economies, either by their level of funding, participation, influence or veto rights in the

decision-making.

This theory of corporate governmentality, born from the Foucaultian approach,

forms an integral part of power relations and its various manifestations such as

discourse, discipline, ethics and governmentality. [Rivera Vicencio, E. (2014) p. 281-

305]

The descriptive methodology of this paper based on the work of Michel Foucault,

are the archaeological and genealogical methodology. The archaeological methodology

is registered in general history, it is occupied by the regularity of statements, which

gives rise to different discourses that refer to a particular time, resulting in the

knowledge that takes the role of science, or could also be expressed as the method of

analysis of local discourses. Together and intertwined with archaeological methodology,

it is the genealogical methodology follow in detail the relations of power and the tactic

that sets in motion the knowledge that emerge and freed from subjugation, from local

discourses. [Rivera Vicencio, E. (2012) p.741-742] You can also say that the

archaeological methodology represents the descriptive analysis of a given fact through a

historical moment through existing variables in this historical moment and the

genealogical methodology which corresponds to the description of the various

manifestations of power relationships around that historical fact.

Finally, the main objective of this methodology continues and, in turn, expands its

development to the theory of corporate governability, to deepen the description of the

state of the issue and facilitate the search for solutions to this economic system

established to enable more efficient and equitable distribution of wealth.

3 The Washington Consensus

From the 1980s, the huge privatisation, the concentration of wealth, appropriation of

rent and income was initiated based on the monetary system of debt-money. It also

established a list of economic areas to follow, through the Washington Consensus, in

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which it based on the devastating economic practices of Pinochet, Reagan and Thatcher

through a dogma that was applied in Latin America with catastrophic economic results

for most of the population. During these years, most Latin American countries had a

common feature - a suffocating foreign debt that prevented its development or means to

repay the debt due to industrialisation, which had been made thinking of the domestic

market and its debt, was in foreign currency, mainly in dollars, which resulted in the

perfect setting for the dominant mainstream expanding with the supposed end of Latin

American economic development and the repayment of its debt, all in a context of

expansion of the free market. In the absence of counterweights after the fall of the

Soviet bloc and with the active participation of the World Bank and the International

Monetary Fund, the prescription of the neoliberals went on to become a kind of unique

thought, an orthodoxy that seemed impossible to escape. The attitude of the Chilean

dictatorship was adopted by civil rulers, such as Carlos Salinas in Mexico and Carlos

Menem in Argentina, with disastrous consequences for the internal market, living

standards, national sovereignty and social pacts2.

The debt of Latin American countries appeared by the need for banks to place large

masses of capital from oil surplus and the issue of debt-money. Debt, which had

increased by rises in oil prices and loans from commercial banks, granted loans without

analysing the situation of its creditors.

Given the impossibility of repaying the debt in the late 1980s and early 1990s, the

Structural Adjustment Plans (SAPs) were developed. SAPs revolved around policies of

market liberalisation and state reduction. They sought to maximise the surplus

denominated in foreign currencies in order to go repaying creditors. The economic

ideology was recorded by the British economist John Williamson in 1989 under the title

“What Washington Means by Policy Reform”. This document introduced ten policies

designed for the development of Latin America and to solve debt problems, but this idea

spread further and became a general programme worldwide. The title reveals the parts

elaborated in the document, consisting of international organisations, the USA

Congress, the Federal Reserve, senior officials of the USA administration and research

institutes, also known as the “think tank”. The list of political consensus served

especially to guide governments of developing countries and international agencies

involved in funding when assessing the economic progress. These policies helped give a

2 La Jornada, 2013.

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neoliberal turn to Latin American economies, follow or not follow the guidelines

marked which had consequences on the possibility of funding because, by failing to

adopt the recommended policies, funding opportunities and the financial system were

nil.

The content of the original working paper can be classified as terse, because the

level of detail is almost nonexistent, there is no mention of possible normal economic

facts as they are crises excess money supply, which the same John Williamson

acknowledged later, “And it is true that the Washington Consensus did not emphasise

crises avoidance”3 (Williamson, J. 2002), the problems of imperfect information given

by the free market or the socio-economic effects assumed the short-term measures

indicated. A goal was set that was none other than taking Latin America's

underdevelopment on the path of developed countries so that these countries could

repay the set debt to creditors. To achieve this, the political and economic agents, with

their headquarters based in Washington D.C, became involved in the process, in defence

of the interests of large global companies operating from their territory, under the

assumption that these large companies, financial and non-financial, generated economic

activity in the country where the dollar of the dominant economy, with standards

increasingly more liberalised, generated all the monetary offer and financing to large

companies to the process of concentration and appropriation of wealth.

TABLE 1: SUMMARY AND CHARACTERISTICS OF THE POLICY LIST

MADE IN THE WASHINGTON CONSENSUS

Fiscal Policy Budget discipline, deploring the deficit.

Public Spending Reorder and reduce public spending. Tax Reform Increase revenue without raising taxes.

Type of Interest Positive rate, giving no incentive to capital or a high increase in savings, determined by the market.

Exchange Rate Type should be set in the market and be competitive and competitive for export.

International Trade Import liberalisation, remove any element that distorts the market and replaces quotas with tariffs.

Foreign Investment Without being high priority, should be open to foreign investment.

3 “And it is true that the Washington Consensus did not emphasise crisis avoidance.” Williamson, J. (2002) in Peterson Institute for International Economics - Did the Washington Consensus Fail?

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Deregulation Promote an increase in competition.

Privatisation Promote to ease the state budget, “efficiently” increase and manage revenue.

Property Rights Guarantee the security of property rights.

Source: Chabán García, O. & Vallés Ferrer, J. 2015.

The economic impossibility of Latin Americans rejecting neoliberal ideas countries,

made the Washington Consensus make a mandatory list. The need for supranational

institutions to be financed forced them to take the path marked by economic

neoliberalism which brought corporate governmentality and, guided by the International

Monetary Fund, was extrapolated to the rest of the world. This is how the dominated

countries were born to mandatory recommendations which looked like an economic list

to bring underdevelopment Latin America reach Asia. According to The Economist,

“Your patients are spread throughout the world, from Venezuela to Vietnam. Doctors

find each other on 19th Street in Washington and, together, dispense the medicine. His

remedies, packaged in the Washington Consensus, include tough fiscal and monetary

policies, more freedom for trade and capital, and privatisation”4 (Observatory on Social

Debt Argentina: Barometer of Social Debt for Children, 2001). The reflection in Europe

we have in the Maastricht Treaty. Without forgetting, of course, that the European

Union is a political application of North America5.

4 The Maastricht Treaty

The ideological and political homogeneity spread throughout the world in a way

which had never been seen before, with the idea of an open global market, and

undermined the underdeveloped countries of quasi-liberal democracies, or reached the

point of the Middle East where absolutism was camouflaged by petro-dollars. Actions

which the key players and the developed countries involved brought more problems

than solutions. (Chabán Garcia, O. & Vallés Ferrer, J. 2015) What seemed like a pact

which aimed at improving the situation of the population led to a stage with winners and

losers with the dominant and the dominated. Among the countries that did not benefit

were the developing countries in Asia and Eastern Europe, which fell in growth and,

although Latin America remained, what is alarming is the evolution of the imbalance in

4 The Economist: “Sick patients, warring doctors” 18/09/1999. 5 The Telegraph: “The European Union always was a CIA project, as Brexiteers discover” 29.04.2016.

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income (redeployment and reduction poverty), this fact was reflected in the 2004

Human Development Report of the United Nations. This data corroborates what J.

Williamson wrote in the year 2000 in an article entitled “What should the World Bank

think about the Washington Consensus?” In the article he said that there are real effects

of poverty reduction required that the world had such a purpose, “I share the view that

embodied in my version of the Washington Consensus policy is pro-poor, but must be

complemented in a world that seriously marks the objective of poverty reduction.”6

(Williamson, 2000)

The position of many economists in favour of neoliberal policies cannot be forgotten

because they mostly belong to countries of dominant economies and, therefore, respond

to the interests of these economies; furthermore, they have been trained in institutions

with dominant neoliberal discourse. These same higher educational institutions, which

were financed by large companies (in many cases) built a dominant economic discourse

supported by these “institutions of global prestige”, which institutionalised economic

discipline and normalised their policies and submitted to the formation of corporate or

the governing of large companies.

Moreover, the international treaties became a tool of large companies to impose

their policies and discipline its signatories, which facilitated the concentration of wealth

in the hands of these very large companies. This was possible because of the captivity

of the State by economic power, either by financing needs that these same large

companies gave them or the link between economic power and political power.

The Treaty on European Union (TEU), or The Maastricht Treaty, is a cornerstone

for achieving a unified Europe. It modified the Treaty of Paris, the Treaties of Rome

and the Single European Act, and officially established the name European Union in

substitution of the European Community. The Treaty was signed on 7th February 1992

in the Dutch city of Maastricht and entered into force on the 1st November 1993 and

gave a new dimension to the European integration process.

The Treaty, with all its a priori positive effects for the area, ended by establishing a

single currency - with all the problems that this mechanism represents. This single

6“We know that poverty reduction demands efforts to build the human capital of the poor, but the populist interpretation fails to address that issue [...] In broad terms, with the qualifications that have been noted above, I would subscribe to the view that the policies embodied in my version of the Washington Consensus are pro-poor but need to be supplemented in a world that takes the objective of poverty reduction seriously.” Williamson J. (2000)

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currency for national circulation, but also international exchange, always ended by

causing internal imbalances in countries or external imbalances in exchange rates. This

situation was very similar to the dollar, which should have prioritised the correction of

internal imbalances, with effects on the international economy situation; that is to say, a

repetition of the Triffin Dilemma. This mechanism of monetary unification applied in a

number of countries with different levels of development, growth and domestic

economic configuration, and ended up being dominated by the dominant economies in

the area, such as Germany and France in the case of Europe, and a decline for the rest of

weaker countries in the area.

Europe changed an international exchange currency IEC, which kept the national

currency - which allowed certain adjustments in each of the countries – for a euro

currency, international exchange and national circulation, which caused, and will

continue to cause, huge imbalances between countries of the area as appropriate

national restatements opposed to international monetary policies, prioritised by an

internationally strong currency, always affecting the weakest in the group of countries

and increasing differences in a Europe of different speeds.

The Maastricht Treaty specified that the members of the European Union should

meet various macroeconomic convergence criteria before being admitted to the

European Monetary Union (EMU). These criteria include: (Krugman, P. & Obstfeld, M.

2001, p. 605) the country's inflation rate should not exceed by more than 1.5 percentage

points to the average of the three EU member states with the lowest inflation. The

country must have maintained a stable exchange rate within the European Exchange

Rate Mechanism without having devalued on its own initiative. The country must have

a deficit not exceeding 3% of GDP (except in exceptional and temporary

circumstances). The country must be less than or close to a reference level of 60% of

GDP public debt and the reasons for this treaty can be seen in Table 2, but the goal was

more ambitious than achieving a single currency.

TABLE 2: MOTIVES FOR THE CREATION OF THE EUROPEAN MONETARY SYSTEM

A single currency (Euro) that supposes further integration of the European market by eliminating threats and costs of exchange rates was sought. Some countries of the European Union saw the Bundesbank as that which ruled the monetary policy and which looked for German interest. The European Central Bank would have more consideration to the problems of other countries in taking positions. The single currency was the way to full freedom of movement of capital, since the

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other option was to have fixed parities with national currencies, which could easily cause speculative attacks. It sought to ensure political stability; the single currency would align the economic interests of the individual countries of Europe to create a political union in favour of peace on the continent.

Source: Made by Krugman, P. & Obstfeld, M. 2001, p. 604.

Analysing what happened in the European Union, it is easy to internalise the

Maastricht Treaty as an adaptation of the Washington Consensus. The Treaty set the

economic regulations which should govern the European Union; in its third chapter, the

neoliberal foundation in the economic sphere can be appreciated: market liberalisation,

privatisation, deregulation, flexibility templates or fixing as a monetary target price

stability, among others. (García Camarero, J. 2009 p. 108) For authors like Josep María

Serrano (2000), the neoliberal ideology is more marked in Maastricht than proposed by

the Washington Consensus. One example is that the main role of the European Central

Bank is to ensure price stability, unlike the USA Federal Reserve, which sometimes

includes the promotion of employment. In short, monetary policy exercised by the

European Central Bank came to favour that the euro was stronger than the dollar at the

expense of activating stronger than USA neoliberal policies.

In practice, the Maastricht Treaty has been the tool used to establish an appropriate

monetary system for the concentration of wealth and rent appropriations of States and

therefore of its citizens. If we analyse Article 104 of the Treaty7 it prohibits central

banks financing governments, which from the economic point of view means favouring

only private banks. Since the introduction of Maastricht to about 2012, it is estimated

that European banks have received about seven billion euro, and part of this sum has

fuelled financial speculation through the formation of bubbles in different markets that

have subsequently had catastrophic consequences for the people in much of Europe,

while in the European Union it is not against existing tax havens (Torres Lopez, J.

2012). This independence makes the States forming the European Monetary System

makes it impossible to alter the monetary policy, and as the former French Prime

Minister Michel Rocard wrote, “Why do States have to pay 600 times more than

banks?” (Rocard, M. 2012) 7 Overdraft facilities or granting any other type of credit facility with the European Central Bank and the central banks of the Member States was prohibited, hereinafter referred to as the “national central banks” in favour of Community institutions or bodies, central governments, regional or local authorities, or other public authorities, bodies governed by public law, or public undertakings of Member States as well as the purchase directly from them of debt by the ECB or national central banks.

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Another measure within the monetary favoured private banking policy was the

independence of central banks allowing, according to Juan Torres (2012), and acting in

the service of private banking, producing two significant events such as currency

instability and greater distribution of income in favour of the most powerful. In

addition, other rules such as budgetary stability, unfulfilled in more than 140 occasions,

far away from economic logic.

Theoretically, after The Maastricht Treaty, technocratic threshold requirements were

imposed in the interest rate, deficit, debt, inflation and exchange rate ( in the transition

period) and marked a deepening groove in which sank, unevenly, the 27 countries that

made up the European Union and especially the 17 Euro-zone countries. But the truth

was that the real role that European citizenship should have played (despite recognition

to vote in municipal elections) was absent. The Maastricht Treaty is only justified by its

key contribution to the economic and monetary union, setting upwards and under the

German and French requirements for European construction control through a single

currency.

If we look at the three phases agreed on at Maastricht we find the root of the great

evils plaguing a European Union in deep crisis. Firstly, from 1990 to 1993, the full

liberalisation of capital; secondly, the preparation and submission of programmes that

responded to the economic convergence criteria by each of the States (for reducing

inflation and controlling the deficit and public debt); and thirdly, and in short, from

January 1999, the creation of the single currency under a governing institution of

monetary policy, outside any democratic control. The European Central Bank was

designed to have no political responsibility and with the sole purpose of controlling

inflation. This policy of controlling inflation, only applied to the real economy, was

what maintained low production costs but, in turn, reduced the income level of the real

economy, due to time lags between settings wage and price increases, where wages

were corrected after price increases or not corrected and, in recent times, even reduced.

Instead, the economy of large companies, with the absence of control, excess money

supply, product of debt-money, generated the repeated crises which were increasingly

constant and prolonged, did not correct these imbalances.

From the consecration of the Maastricht criteria and to this day only unemployment

as a result of excessive rigidities in the labour market is addressed. The neoliberal idea

becomes real when considering that unemployment is the responsibility of the workers

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themselves who do not accept the necessary adjustments and unions that defend

incompatible rigidities with confidence and security that companies need for creating

jobs. (Martinez Castells, A. 2012; Navarro, 2014) “The homo economicus who tries to

rebuild is not the man of exchange, it is not the consumer man, it is the company and

production.” (Foucault 2007, p.182-187)

This “open bar” situation for capital is clearly reflected in the evolution of roots in

Ireland called the Irish Miracle or Celtic Miracle, consisting mainly in the rapid

implementation of the provisions of the Maastricht Treaty through the development of

deepening the Lisbon Treaty of 1999, which, in the year 2000, resulted in corporate

taxes being reduced to large companies by 40% to a maximum of 12.5% and which led,

in turn, that wages would switch to represent 70% of GDP to 40%. In addition, until

2007 in Ireland - except in 2002 by tenths - there was always government surplus even

despite its lack of infrastructure and services, but in 2010, due to the evolution of the

measures of the “miracle”, its public deficit was 32% of GDP, leaving the progressive

filtration to the economy of this transfer of exactly one third to banks that, like in the

case of Spain, had inflated a huge housing bubble.

This line of internal depreciation thinking is also reflected in influential voices like

Hans-Werner Sinn, President of the IFO Institute for Economic Research think tank, a

reference centre for Germany and the European Central Bank which, in an interview in

2013 argued that “Rajoy must approve another labour reform with lower flexible wages,

as Schroeder did in 2003. He eliminated the minimum wage and rolled the welfare state

depriving millions of people of their social benefits. It caused riots and protests. It lost

him his job but it was the right policy. Perhaps Rajoy will not govern for long but it is

what Spain needs.”8 This logic inevitably led to ask the compatibility between the

survival of the euro in today's terms - the direct and indirect presence of the IMF in the

Ministries of Economy fledging economic policy in European capitals - with the

development, wages, employment, public health and quality education, social protection

... in short, with an advanced democracy.

This obsession for a concept of competitiveness based on the precarious

consumption capacity and living conditions of labour is also evident in the current

conditions imposed on Greece after the signing of the Memorandum of Understanding,

through which the country became more hit by the crisis, in an exercise of collective 8 http://economia.elpais.com/economia/2013/03/02/actualidad/1362257899_219022.html

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economic amnesia. The Euro group led by Germany, demanded Greece to pay its debt

above its own growth capacity. It led the country to economic disaster and from which

it has not been able to recover from, even today. Furthermore, the figures arising from

policies under the baton of the same people who criticised its consequences, were

applied to Greece, forgetting the situation of a post-war Germany where half their debt

was written off and help given to repay the remaining half, which allowed for the rapid

reconstruction of the country, its industry and growth and which has led it to be,

currently, the strongest country in Europe.

This stance of civil responsibility by the creditor nations was absolutely banished

from the logic of individuals who currently controlled the speech and macroeconomic

guidelines of European countries. For example, it accused Greece of having excessive

social protection, as in the case of pensions, which required that the retirement age was

delayed by five years and reduce their level (having already fallen by 48% since 2010)

while the Financial Times reports that 45% of these were below the poverty line.9

Likewise, it also required the development of a new labour market reform in which

weak, and in many cases, collective agreements were eliminated with the explicit

intention of lowering wages to increase exports but without considering the negative

impact it would have on the purchasing power of the population and, therefore,

domestic demand and the consequent economic stimulus. It also happened in other

aspects of the Greek situation. (Weisbrot, 2015)

The reality, in short, is that all the factors that caused the debt of Greece and other

Euro-zone countries are directly linked to the policies of the euro and its own inherent

crisis from rebates and tax exemptions capital or revenue fall by the interruption of the

accumulation to the huge bill for bank bailouts and by passing the ECB status itself,

specifically focused on controlling inflation and unable, therefore, a real capacity

currency issue and direct State loans. Among the convergence criteria for entry into the

Euro-zone, the loss of ability of central banks of various countries were no longer

subject to democratic controls, which is the reason why Sweden is not in the euro, for in

its Constitution that loss is prevented. This loss of economic sovereignty of countries

had their penultimate twist in the Pact for the Euro Plus10 in March 2011, through which

9 See “Q&A: Greek Pensions – Deal or No Deal” Financial Times.http://www.ft.com/cms/s/2/2ea2eb52-0ac3-11e5-a8e8-00144feabdc0.html#axzz3dSIJA8yy 10 https://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/es/ec/120310.pdf , pp. 14-20

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the signatories undertook to restore the health of the banking sector under the

parameters of the European Banking Authority.

5 TTIP (Transatlantic Trade and Investment Partnership)11 and TISA (Trade in

Services Agreement)

When we previously referred to a penultimate twist we did so because the last of

these to close the circle of corporate governmentality is brewing in the form of new

various free trade treaties, more or less secret, inspired by NAFTA (North American

Free Trade Agreement) between the United States, Canada and Mexico, and whose

consequences it is interesting to highlight as indicated in a recent article by Dr. Vicente

Navarro12. The first of these, and the only one to be discussed to illustrate the

motivations and implications of these types of treaties, known as TTIP, to regulate

transactions and investments between the USA and the European Union, began to take

shape in November 2012 after 325 meetings behind closed doors of which 92% were

made with corporations and only 8% with public interest groups. In the pressure ranking

of negotiations, we have in first place the agribusiness lobby (with members like

Cargill, American Soybean Association). In second place, the Federation of European

Employers and the European Industrialists' Round Table, with companies such as

Telefonica or Iberdrola. In third place, automotive industry (BMW, Ford, Renault,

Volkswagen and others) and, ultimately, a conglomerate of pharmaceuticals, such as

Lilly, Sanofi-Aventis and Bayer. In these negotiations the following strong power

groups also participated, such as Digital Europe (Apple, Blackberry, Microsoft, IBM

etc.) or the American Chamber of Commerce, with companies such as Monsanto or

McDonald’s.

These negotiations have been characterised by their total opacity, which has led to a

complaint from the European Ombudsman and which has been totally ignored by the

European Commission invoking the interests of the European Union towards

transparency in the European Union, and it only has been allowed access to MEP’s

documents with condition that they cannot be copied or notes taken of what is contained

in the documents. In fact, the chief negotiator of the United States stated that these

documents will be secret for the next thirty years.

11 The birth of this project goes back to December 1995 with the adoption of the “new transatlantic agenda” during the Transatlantic Summit in Madrid and which was reactivated in June 2005. 12 The negative consequences of the previous free trade agreements http://www.vnavarro.org/?p=12260

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The main objective of this treaty (as well as that of others) is not to stimulate trade

by eliminating tariffs but to eliminate regulatory barriers that limit the potential benefits

of companies; that is to say, ignoring social and environmental rights, working rights,

food safety standards and regulations on the use of toxic chemicals, laws protecting

Internet privacy and even the new guarantees in the banking field that had been

developed from the 2008 financial crisis. Another objective of these treaties is, in line

with the Consensus and Maastricht, the privatisation of public sectors as a way to

contain public spending, affecting key sectors such as health, education and the pension

system. Furthermore, the TTIP in particular has two very dangerous mechanisms that

directly affects freedom and democracy: the mechanism for resolving disputes between

investors and States placing them at the same level as independent private courts when

settling complaints of investors, known as ISDS (Investor-State Dispute Settlement) and

the creation of the Council for Regulatory Cooperation, a new transnational institution

that has no historical precedent and which would be responsible for weakening the

legislative proposals of States and promote proposals that would weaken the

requirements that companies must meet. In short, the shaping of corporate

governmentality institutionally materialised at a world level.

The TTIP not only incorporates aspects of agreements made in the past, but also

aggravates them. With this TTIP, large companies may impose their conditions beyond

its borders in matters of food safety, toxicity regulations, health insurance, drug pricing,

freedom on the Internet, protection of private life, energy, culture, copyright rights,

natural resources, vocational training, public works, immigration, etc., where no field of

interest will remain outside the government of large corporations; political action and

limited sovereignty being made to political leaders negotiating with large companies

and their managers. The signatory countries of the treaty undertaken ensured the

harmonisation of laws, regulations and procedures with the provisions of this treaty,

therefore, the aim is not to protect investors but to increase the power of multinationals,

reducing to a minimum margins of manoeuvre, which cannot even be changed even if

there are changes of regime in the States except with the unanimous consent of all

signatories. (Punto de Vista No. 8, 2015 p.6-13)

On the financial side, it represented a lifting of all restrictions on investment risk, to

prevent States control their volume, nature or origin of financial products.

16

However, what lies at the bottom of this and similar treaties such as the TTP (Trans-

Pacific Partnership) or the TISA (Trade in Services Agreement), is preventing the future

reversal of fraudulent process appropriation of income and wealth and increase the

consolidation of global governance of large companies in the future, e.g. corporate

governmentality. To this end and with military support (NATO), it will be the large

companies that impose their legislative criteria within each State and any possibility of

reversion or resistance, it will be counteracted by its own large corporations courts,

through financial asphyxiation, - as has been common in countries that have tried to

stop being dominated and not become subject - and with military pressure they can

exert large companies through NATO, which is nothing more than the armed wing of

the great financial and non-financial companies. All this is possible with the complicity

of a captive political power linked to economic powers who act like executives of large

companies, rather than defending the rights of the citizens who elected them, deceived

by a confused speech and through ignorance and the misinformation to which they are

subjected.

Anticipating the permanent crisis that would occur due to excess money supply and,

therefore, the falling dollar, together with the stagnation of the economies of the north,

which seems to have peaked and, what is more, the significant growth of the Eurasian

area still has room to grow, further to the creation of a monetary system parallel to the

west by the group of countries in BRICS, make great financial and non-financial

companies want to settle their markets and current privileges through treaties that make

any reversal fraudulent privatisation processes impossible and generate their own courts

to resolve possible conflicts favourably with the States.

The aspirations of large companies is not a new topic; since 1995, the year the

World Trade Organisation (WTO) began, their objective was none other than to revive

the General Agreement on Trade in Services (GATS) which aimed to bring about the

progressive liberalisation of all service activities. Furthermore, the WTO included

twelve sectors - business suppliers, communication including postal services and the

audiovisual sector, construction and engineering, distribution, education, environment,

financial services and insurance, health and social services, tourism, recreational,

cultural and sport, transport and other services not included, plus a subdivision of 160

subsectors, so that nothing escaped. But negotiations failed. The big freeze in 2005

brought about the frustration of the business community, which founded the Global

17

Services Coalition (GSC), which joined forces with the Coalition of Services Industries

(CSI) and American and European Services Forum (ESF) to exert pressure on

governments and the European Commission. These employers from various countries

including at least 6 tax havens, together with the association of London financial

services. The GSC convinced the 50 governments to support a draft agreement on the

TISA outside the WTO. This agreement incorporated the objectives and method of

GATS, “... to accelerate privatisation in all fields and prevent any form of public re-

appropriation of a trading or privatised activity.” The TISA re-imposed the principle of

“national treatment” where “Each Member shall accord to the services and service

suppliers of any other member, with respect to all measures affecting the supply of

services, treatment no less favourable that it accords to its own like services and their

own providers of similar services.” Under the same article TISA prohibits, “public

monopolies” as national education, exclusive service providers and national, regional or

local public water companies. Another clause copied by TISA of the GATS was “the

ratchet effect” which prohibited the return of privatised services to the public sphere.

(Punto de Vista No. 8, 2015 p.27-29)

Moreover, the European Commission considered that the WTO should provide the

institutional framework of an international body that endorses and supports these

treaties, where this organisation states that: multilateral trade agreements are part of

their own agreements for members who sign them and are mandatory. (p. 29)

“On behalf of the protection of investments, governments are ordered to ensure

three main principles: equal treatment to foreign and national companies (which makes

it impossible, for example, to give preference to local companies that defend

employment); security investment (public authorities cannot change the operating

conditions, expropriate without compensation, or proceed to an “indirect

expropriation”); freedom of the company to transfer its capital (a company can go

across borders with everything, but a State cannot ask it to go).” (Punto de Vista No. 8,

2015 p.19)

In the case of signing these treaties, the signatory countries were subject to private

companies to litigate against the State, through special courts such as the International

Centre for Settlement of Investment Disputes (ICSID), a World Bank office which, in

turn, arbitrated most cases of the United Nations Commission on International Trade

law (UNCITRAL), the Hague Tribunal, some Chambers of Commerce etc. Although it

18

had existed for more than fifty years, the possibility that a company could litigate

against a State, this mechanism is used very little although it suffered a sharp increase in

this century. Between 2003 and 2011, 80% of all dispute cases, the majority being

Northern companies and 75% of these companies coming from the United States and

the European Union. Such disputes turned 57% against countries in the south, above all

countries that want to free themselves from the yoke of domination and break with

economic orthodoxy. (p. 19-20)

6 Conclusions

International treaties, rather than agreements between States, is the imposition of

criteria for large companies to certain States with dominated economies, as a way to

ensure these markets, as a tool of taxation of certain legislative changes that favour their

interests, as a way to force privatisation processes for the appropriation of new

economic sectors and consolidate sectors now privatised, and as a way to make the

process of privatisation or appropriation of rents and yields irreversible.

This conformation of corporate governmentality has been made possible with the

support of a monetary system capable of generating a money supply in the economy of

large companies and makes them have a very significant level of credit to go

appropriating all types of businesses in all sectors of the economy. This huge money

supply and access to credit for large companies, previously limited by the gold standard,

is today, with the issuance of debt-money or money back printed paper, makes LBOs

that can make these companies almost unlimited, even with an interest rate tending to be

at zero, maintained since 2009.

For this reason, this excess money supply in the economy of large companies

requires them to look for new sectors to invest this monetary excess, especially in

sectors where they can increase profitability, as are those sectors that are protected by

the States, such as education, health systems, pension systems etc. To this end, and due

to stopping this privatisation process, due to resistance of power from some countries or

due to changes in political orientation or reducing potential public companies to

privatise as many of these as possible, have already been privatised or reversals of

privatisation processes in some countries, makes these treaties facilitate the way to these

large companies in the process of appropriation of income, wealth concentration and

consolidation of corporate governability.

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The immersed treaties in the process of historical formation of corporate

governmentality has its origins in the structure of capitalism and are structured to the

extent that they are generated to the conditions of subjugation and simultaneously

created international organisations or changing its objectives to support the imposition

of a particular discipline to States. Discipline which, in turn, is supported by a speech

and a neoliberal ethic of equality, security and freedom for the private company and

capital movements, but not for the public company nor for the people; for the latter two,

it is a relationship of submission to large private companies. This is made possible by

social demobilisation that the political system has gradually reduced under the same

premises security and freedom by imposing restrictive rules and social movements that

have helped increase the motivation of the people and its controls on them. This same

background is the one that allows these types of treaties to be discussed behind the

backs of people, without any information and in absolute darkness, where the members

of the Chamber of the European Union cannot remove copies of these treaty proposals

affecting all Europeans, decreasing the chances of resistance and struggle, about

something that their existence is unknown. For Foucault if there is no resistance there is

no power. It is the power of misinformation; it is the power of those who have the

information; it is the knowledge-power. Knowledge-power which the people have been

subjected to and with the complicity of their own political representatives.

So far, this paper is part of a set of descriptive papers which interprets the prevailing

corporate governmentality and opens the door to future research to validate this

theoretical proposal as new theoretical approaches designed to reverse based on the

concentration of wealth, appropriation of rents and yields, and which does not consider

all the side effects of environmental destruction, inequality and imbalances in the

distribution of wealth.

20

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