Wednesday, July 7, 2010

All Hail BP!

It occurs to me that mega-corpoations such as BP act like arrogant, bullying, empire-building nation states of yore because, well, they have grown so large—in terms of wealth and assets—that they are now analogues of nation states. One example of their wealth: Exxon's annual profit in 2006 was $39.5 billion, the equivalent of Ghana's GDP. It's "much reduced" $19.3 billion profit in 2009 is at the level Macedonia's GDP.

I'd go further to say we may be entering a phase in which certain corporations—most obviously banks and oil companies—will dominate even supposedly powerful real nations, dictating domestic and foreign policy beyond the specific areas of finances and energy.

There's nothing new in the corporate control of nations: Britain (arrogantly, bullishly) outsourced its empire building to the British East India Company. In modern times, oil companies have become quite used to the de facto control of territory, as the inhabitants of the Niger Delta have discovered. What's new in the case of BP is that the arrogance and bullying has clearly infiltrated the so-called First World: America, in other words, is experiencing what the Niger Delta, the Persian Gulf, and countless so-called Developing Nations have experienced: oil spills, environmental degradation, human displacement, compliant (or just plain scared) governments. The acceptable risks of the oil business.

Where will this end? A dystopian outcome might be war—the point when oil resources become so low and sought-after that real nations and oil companies begin to fight each other for them‚the oil companies employing mercenary armies they have gotten to know in recent wars, I imagine. The commerce-driven Opium Wars between Britain (dba the British East India Company) and China might be a template for this sort of conflict.

Too fanciful, I think. More likely is what already seems to be happening to BP. Older nation states often pulled themselves apart and went bankrupt when their arrogance and bullying—and empire building—created unsustainable financial situations—taxes that led to riots, ill-conceived alliances that led to more conflict (World War I), and so on.

BP may already be at this stage. One shocking part of the whole Gulf of Mexico oil spill for me is not just that BP had a poorly conceived clean-up and containment plan for the spill, it's that by not having one, they put the company at risk. In other words, BP is on the verge of bankruptcy. These mega-corporations--like Britain's King John—might just stupid themselves into irrelevance!

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