The Multinational Corporation as “the Good Despot”: The Democratic Costs of Privatization in Global Settings

Abstract

In 1861 John Stuart Mill published Considerations on Representative Government to discuss the justifications for democracy. In the third chapter of this book he explores why a government run by a Good Despot is unacceptable. In this Article we revisit Mill’s critique of the Good Despot to problematize the contemporary exercise of authority and influence by multinational companies, especially in foreign countries. Inspired by Mill, we redefine the problem of privatization. The challenges of privatization are mostly defined by essentialist concerns (whether certain governmental functions must remain the province of public authorities) or a consequentialist critique of the problematic outcomes of privatization (how it influences human rights or causes environmental damage). In this Article we shift the attention to the democracy losses associated with the privatized decision-making process. We identify the growing influence of private, particularly foreign, actors as a democratic problem of exclusion of persons from decision-making processes on issues with constitutive influence on their lives, and explore the different aspects of what we regard as an acute problem of democratic deficit. The redefining of the problem as one of process and democratic deficit allows us toconclude with a critical assessment of the potentials and limitations of contemporary attempts to solve it.