10.THE EUROPEAN ROUND TABLE OF INDUSTRIALISTS "If we wait for our governments to do anything we will be waiting a long time," explained Wisse Dekker, the director of Philips, in the spring of 1983. “You can’t get all tied up with politics. Industry has to take the initiative. There is no other way."1 Together with 16 other powerful industrialists, he had just founded the European Round Table of Industrialists (ERT), an association that has silently and decisively influenced development in Western Europe, during the last decade. The idea of founding the ERT dates back to a speech by Pehr G. Gyllenhammar, then president of Volvo, to 1,200 leading US businessmen at a 1982 dinner at the Waldorf Astoria in New York. Since the early 1970s, Gyllenhammar had ties with the Rockefeller sphere of power. He was a member of the international advisory committee of the Chase Manhattan Bank, a member of the board of Henry Kissinger’s newly opened consultancy, and deputy chairman of the Aspen Institute. “There are more and more things that we need to get done in Europe that are already happening in the US and Japan," he said.2 A model for the new European club of businessmen was the Business Roundtable, which united 200 of the biggest companies in the US to combat the regulations and union influence that emerged from the popular movements of the 1960s and 1970s. The European Round Table of Industrialists was no ordinary lobby organisation, the Volvo president pointed out. “Our strategy is action oriented, not just another plea for help."3 The Round Table directors took it upon themselves to plan a new Europe. They made the strategic decisions, got support for them among government officials and politicians and, ideologically, prepared the public to accept them. The ERT works in symbiosis with the bureaucracy in Brussels. One of the most influential members of the European Commission, Etienne Davignon, now president of Belgium’s largest corporation, SGB, took part in the founding of the organisation. Today the Commission consults the ERT in all crucial matters. One example: the European Union (EU) has targeted telecommunications as a strategic sector in world market competition. The course taken in this area will set the terms for cultural life and public discourse well into the next century. In February 1994, the EU appointed a group headed by Commissioner Martin Bangemann to look into the sector. The group was completely dominated by leaders of large companies with interests in telecommunications. No elected politicians, no small businessmen, no union representatives, and no consumer representatives were allowed into this group. Six ERT members were invited, however, including: Carlo de Benedetti of Olivetti, Etienne Davignon of SGB, Jan Timmer of Philips, Candido Velazquez of Telefonica, Heinrich von Pierer of Siemens, and Pehr G. Gyllenhammar, then of Volvo. The Bangemann group recommended that the EU trust market mechanisms to shape the new information society and facilitate the development of all European companies with interests in TV, newspapers and other mass media. In the same way, the directors of the Round Table were instrumental in the decisions to establish the Internal Market in 1992, and to introduce a common currency for the EU countries, by no later than 1999. In December 1993, then-president of the EU Commission, Jacques Delors, presented a White Paper on employment and competitiveness. It claimed that unemployment now topped the EU agenda. The White Paper was for the most part a slightly revised copy of proposals the Roundtable directors had prepared ten years earlier. Delors had regularly met with the ERT, and in the press conference where the group presented its program, Beating the Crisis, he himself pointed out the similarities between his White Paper and the “wish lists" of large corporations. The key word in the ERT’s program for the labour market is “flexibility": flexible salaries, flexible working hours, and flexible terms of employment. In the EU declarations, the neo-liberal demands are transformed into a campaign against an alleged “two-third’s society". The idea is that the European economy is in the process of taking a giant leap forward in its development, in which a minority of citizens risk being left behind. One-third of the population is forced into unemployment and poverty since they cannot adjust to the new information society. Thus, those with jobs should show solidarity with those who have not. They should forgo increases in salaries, fixed working hours and job security. According to the White Paper, this is particularly important in the small and medium-sized companies, where the prospects for creating new jobs are the greatest. The cuts in social security programmes, prerequisites to the planned monetary union (EMU), are also in line with the demands from big business. ABB chairman Percy Barnevik is a member of a consulting group for competitiveness which the EU established, following a recommendation from the ERT. Writing in the Stockholm daily, Dagens Nyheter, 10 July 1995, he declared: “The greatest value of EMU for industry is perhaps the fact that external pressure is put on national governments to take necessary, though not always popular measures." In his White Paper Delors emphasises that the public sector has to be held in check. Resources from existing budgets need to be reallocated from operating expenses to measures which promote growth. Among these growth-stimulating measures he includes the multi-billion dollar program of investment in new motorways and other transport networks that the EU has designed, based on the ERT’s recommendations. The officially announced campaign against a “two-third’s society" obscures a program for what is more like a “one-third society". The public sector and the small and medium-sized companies, which today employ two-thirds of the workers in the EU, are to be starved for the sake of the transnational giants. The rationale can be read between the lines in ERT documents. The list of demands for the EU Summit in November 1994 states: “Positive policies to improve the viability of small and medium sized businesses are supported by all large firms, which need to focus on their core business and to an ever increasing extent depend on a large number of subcontractors."4 The position of European transnational corporations is based upon research and development, marketing, financing and a few strategic points of production. The control over these fields allows them to control the whole production process. An ever increasing part of production is outsourced to subcontractors, who in layer upon layer serve the corporation at the top of the pyramid. In competition with other transnational giants, European concerns are dependent on extracting as much capital as possible from their subservient suppliers. They demand that their subcontractors deliver ever cheaper and better components “just-in-time", but this demand conflicts with government and trade union regulations. The small and medium-sized companies find it difficult to serve the large corporations, unless they are allowed to lower salaries, extend working hours and fire people as they wish. From another perspective, the more flexible the regulations regarding salaries, working hours and general conditions of employment, and the lower the taxes and social welfare contributions, the further the large corporations can push their demands. Thus, using their suppliers as “front men“, the giants demand “positive policies“ to their own advantage. The hype about the information society hides a type of production that depletes working people and the environment even more than before. Contrary to common belief, monotonous, production-line work in industry is on the increase. The conveyor belt is not on the way out. It is being introduced into stages of production where it has not been used before, and its principles are being extended to more and more areas of the economy. The stockpiles that were buffers during swings of supply and demand are being eliminated. With deliveries between companies being made “just-in-time“, the production process from subcontractors to assembling factories and market outlets functions like a huge conveyor belt. This model is Japanese and is called “lean production“ by business consultants. Trade unionists in the US have given it another name. They call it “management by stress“. In lean production, work is intensified while places of refuge are fewer since peripheral activities are transferred to other firms. Overtime and under-staffing are the rule. Thus, it is hard to find time for personnel enrichment. The ERT writes in a report about the growing conflict between the short-term demands of competition and the long-term needs of industry.5 The physical wear-and-tear of the labour force is greater than before and corporations find it more difficult to make use of and develop the knowledge of their staff. They soon find themselves in a situation where they have employees who both physically and intellectually are unfit for their needs. For these reasons, the Roundtable businessmen want to introduce the concept of “life-long learning“. This has nothing to do with a general increase in the knowledge requirements of working life. Of course, the large corporations need researchers, specialists and skilled workers, but the workers they are most interested in have other aptitudes. Schools should deliver “large numbers of very adaptable individuals able to tackle anything“, writes ERT. When these flexible, standard educated blue- and white-collar workers have been worn out, the corporations want to be able to exchange them for a fresh, updated batch. “The new ways of structuring and managing business to ride through times of economic recession have... rendered obsolete the concept of life-long employment in large companies“, states ERT. “Life-long learning, on the other hand, opens the door to allow people to move easily to another job...“6 Lifelong learning is not a life of all-round, creative work. It is a few decades of rushing between temporary employment and re-training, ending in unemployment and premature retirement from working life. Well concealed in the vision of the information society, with its ever-higher requirements of knowledge and skills, unemployment is redefined as a matter of personal shortcomings, the failure of a less able one-third of the labour force to make the transition into the future. Environmental destruction is treated in a similar way. Transnational corporations are now promoting themselves as environmentally conscious information enterprises. Their symbols are no longer smoking factory chimneys, but a female nuclear engineer sitting on a boulder in the forest, a handful of sea-lions who enthusiastically thank a chemical enterprise for its foresight, or a lorry of the latest energy-saving design in a natural setting. Environmental destruction is depicted as something old, a remnant of the past that leading western enterprises have left behind. New environmentally safe products and systems for emission control and recycling seem to confirm the picture. However, while the multi-billion dollar market for green goods develops in the rich countries, the transnational corporations continue their destructive activities on a global scale. European infrastructure is increasingly designed to meet the interests of the largest corporations. The members of the ERT are behind the bridge over Öresund (between Denmark and Sweden), as well as the Eurotunnel under the English Channel. These projects are part of a programme of so-called Trans-European networks (TEN), promoted by the association since the mid-1980s, and together with the Commission in Brussels, guided all the way to the decision-makers in the Council of Ministers. A total of 55,000 km of new roads are to be built, 12,000 km of which are to be motorways. The member companies of ERT have two immediate interests in this program. First, new transport links, particularly motorways, are a precondition for lean production. In a production model dominated by a few large concerns, division of labour is more accentuated than ever before. The relocation of peripheral parts of production to specialised subcontractors results in shipping increasing amounts of components ever longer distances. Just-in-time deliveries to shops and factories with minimal stockpiles multiplies the number of shipments. Rail transport uses only a quarter of the energy required to transport the same amount of goods as lorry transport, but it is not flexible enough to service the production system promoted by transnational corporations. In the early 1990s, the EU Commission predicted a doubling of freight within 20 years. The ERT maintained that additional space for lorry transport was of decisive importance, if European transnational concerns were to build the networks of subcontractors required to enable them to compete in the world market: “The growing reliance on just-in-time logistics in manufacturingreflects the dispersion of the traditional firm into networks, or ‘virtual corporations’ of continental and even global spread. Thus, rather than seeing congestion merely as a threat to the particularfine-tuning of costs (savings of warehousing and idled capital) called just-in-time, it must more importantly be seen as a threat to thesophisticated, specialised economy itself.“7 Another reason for the ERT’s demand for new motorways is the crisis in mass motorism. Traffic jams are commonplace in northern Germany, and in London and Paris, cars move no faster than horse-drawn carriages used to. The ERT is dominated by car companies and industries who, through their sale of metal, glass, electronics, concrete and fuel, are dependent on private car transport. Traffic congestion threatens their cash flow. Thus, they plan for continued adaptation of the human environment to the demands of private motoring. New motorways and ring roads in big cities reduce congestion only temporarily, but they allow for more cars in the road network. Thus, they are profitable for the automotive-industrial complex. The same thinking is behind the development of electronic control systems for traffic. The flow of cars should be optimised to make room for more. Several hundred researchers are working on this technology for industry and the EU Commission. The automobile industry’s Prometheus Project is sponsored by EU, and the EU’s Drive Project is supervised by a committee headed by Umberto Agnelli of Fiat, ERT and Prometheus. Instead of environment-friendly, mass transit by rail, the project leaders envisage convoys of private cars packed together with the help of satellites, computers and sensors. In a 1989 report, the Roundtable managers noted political resistance to their projects in many countries. Thus, it was important “to prevent a similar development from occurring at the European level“.8 Institutional inertia and opposition on the part of environmentalists and local, special interest groups could be overcome through the systematic massaging of public opinion and particular target groups. Leading politicians should be encouraged to use top-down initiatives to push the construction of infrastructure, and the private sector should be involved in the decision-making processes as early as possible. Representatives from the public sector, industry, banks, services and private institutions could develop new ideas in joint working groups and overcome “political, economic and technical obstacles“.9 In the EU, with its thousands of professional lobbyists, bureaucracy and systematic secrecy, this method of working can be practised without interference from any democratic influences. In Sweden, Gyllenhammar and his colleagues used this approach when they forced through a motorway along Sweden’s west coast and the bridge over Öresund. In Stockholm, it was used by the construction industry and real estate interests behind the Dennis Package, a multi-billion dollar plan to build motorways under and around the capital. The ERT tries to appease environmental opinion by proposing toll roads and fees. The plan has two thrusts: Firstly, access to the road network should be rationed in ways other than queues, since queues make auto use less attractive for everyone. The ERT notes that the price mechanism reduces demand, “favouring high value over trivial use“.10 In practice, this means that owners of more expensive and newer cars are left on the road. Car producers profit from that. Secondly, taxation is privatised. Either private interests acquire the right to put tolls on roads and bridges, like medieval barons, or road tolls are earmarked for new investments in roads. Both situations favour the automotive-industrial complex. The environment is used as a pretext for introducing a price mechanism which supports motoring. The programme of the Roundtable businessmen is a programme for growth, but growth in a special sense: the transnational corporations grow bigger and more powerful. Here lies a conflict. Lean production results in ever more goods being produced more quickly and more efficiently than ever before. However, at the same time, the public sector is being starved for the sake of the transnationals, salaries are slashed and the small and middle-sized companies impoverished. It is difficult, therefore, to find use for the new production capacity. There is not enough purchasing power in the market. A surplus of capital emerges that scours the planet looking for profitable outlets and causes swindles and crises. ERT foresees two solutions to this problem. The first is multi-billion dollar investments in new motorways and other transportation networks, organised through EU. Even at the founding of the business club, Pehr G. Gyllenhammar was already talking about a new Marshall Plan for Europe. He explained that investment in infrastructure was a way of securing a market for the enormous liquidity accumulated by the large corporations.11 In the past, the State financed bridges and roads from taxes, but now, according to the ERT proposal, private enterprise would take over this function. With State guarantees against losses and the right to charge tolls and fees, the corporations would be ensured profitability on investments whose return would otherwise be too long-term and risky.12 European corporations see the construction of motorways, bridges, fast trains and electronic traffic control systems as having the same potential for large profits as US industry has traditionally had in military orders and the space programme. The car industry is mimicking the military sector. The second solution to the problem of a surplus of capital and insufficient domestic demand, is expansion outside Europe. The struggle for new markets in the South and East is a key element in the strategy for economic growth in the EU, formulated in Delors’ 1993 White Paper. This is completely in line with the vision of the Roundtable businessmen. In 1990, the ERT formed a Working Group for North-South issues, managed by Nestlé president, Helmut Maucher. Stephan Schmidheiny, who founded the Business Council for Sustainable Development that same year, was also involved. The ERT has concluded that the total market in the developing countries is two-thirds the size of the EU one, and that it will grow much faster. In the next few years, it is estimated that two-thirds of the demand for all new cars will come from Asia.13 To ensure access to this market for capital and goods, the ERT worked energetically to push through the new GATT trade agreement. The European-based transnational corporations demand that Southern countries give them the same rights as they give their own domestic corporations. They also demand respect for their technical monopolies. In one report, the ERT points out the importance of patents and trademarks. In India, Hindustan Lever, a subsidiary of Unilever, has been able to do business with “over 70,000 tonnes of unconventional and previously neglected indigenous oils“.14 One of the oils mentioned in the report comes from the neem tree, which is now commercialised and protected with international patents. For generations, Indian farmers have made use of the seeds of the neem tree. Now, the market price for the seeds is 20 to 30 times what it was.15 The ERT is worried that European businesses are lagging behind in their search for new markets. Over the past century, business has operated in protected niches, as it was put in one of the reports, but in the coming century US, Japanese and European capital will be standing eye to eye. The struggle for the growing markets in the South will be decisive.16 According to the ERT, an important instrument of competition will be for every industrial region to adapt the economies of developing countries to its own capitalist model. The US has an edge on the EU, with its bilateral arrangements, the NAFTA trade agreement and its control over institutions like the World Bank and the International Monetary Fund. Japan is working hard to promote its model, particularly in Asia, and is demanding more influence in international aid agencies. However, the Roundtable businessmen complain that little is heard from the EU. The EU’s sphere of influence does not extend beyond its immediate surroundings.17 The weakness is not economic but political. The global economic interests of the EU-based transnational corporations will be vulnerable to the manoeuvres of competitors and hostile local forces, unless they are accompanied by a comparable political influence. For these reasons, the ERT calls for the EU to develop a capability to defend its interests globally: “Industry and the people working in industry ... expect their [political] leaders to exercise a proper influence on the world and cannot accept that their Community should be relegated to the margins of international politics...“18 In the Middle East crisis of 1990, the economic giant behaved like a political dwarf. “Europe had interests at stake in the Gulf, and views on what should be done.... But when the question of using force was raised, Europe had neither the decision-making processes nor the instruments to allow it to act“.19 European-based transnational corporations see military rearmament and a common European military force as a means to secure their global interests. Their aspirations are hidden in the talk about the EU being a “great peace project“. 1 Newsweek, 28 March 1983. 2 The Times, 13 September 1983. 3 Newsweek, 18 April 1983. 4 ERT, European Competitiveness (15 November 1995), p. 6. 5 ERT, Lifelong Learning (June 1992), p. 6. 6 ERT, Education for Europeans (November 1994), p. 9 and 13; and Lifelong Learning, p. 6. 7 ERT, Growing together one infrastructure for Europe (May 1992), p.11. 8 ERT, Need for Renewing Transport Infrastructure in Europe (March 1989), p. 12, 18, 35, 41. 9 Ibid., p. 12, 18, 35, 41. 10 ERT, Growing together one infrastructure for Europe, p.11. 11 Financial Times, 19 January 1983; and Times, 13 September 1983. 12 ERT, Growing together one infrastructure for Europe, p.31. 13 ERT, European Industry a Partner for the Developing World (August 1993), p. 3 and 7. 14 Ibid., p. 15. 15 Vandana Shiva, Radha Holla-Bhar, The Ecologist 6/93. 16 ERT, European Industry a Partner for the Developing World, p. 3 and 7. 17 ERT, Survey on improvements of conditions of investment in the developing world (May 1993), p. 10. 18 ERT, Reshaping Europe (September 1991), p. 58. 19 Ibid., p 58. 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		© Mikael Nyberg 2001-03-29