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Silent Coup

Silent Coup

How Corporations Overthrew Democracy
by Claire Provost 2023 296 pages
4.36
188 ratings
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Key Takeaways

1. Corporate justice systems threaten democracy globally

Will the rights of private investors be enforced, he asked, 'against the wishes' of these people?

Investor-state dispute settlements. This system allows corporations to sue governments in private tribunals for policies that impact their profits. It effectively gives companies power over democratic decision-making on issues like environmental protection and public health. The system originated in the 1950s, championed by German banker Hermann Abs, and has since expanded globally through thousands of trade agreements.

Cases against governments. Examples include:

  • Pacific Rim mining company suing El Salvador for $250 million after being denied a permit due to environmental concerns
  • Vattenfall suing Germany for billions over nuclear power plant closures
  • Philip Morris suing Australia and Uruguay over cigarette packaging laws

Chilling effect on policy. The mere threat of expensive lawsuits can deter governments from enacting public interest regulations. This "regulatory chill" undermines democracy by prioritizing corporate interests over the will of citizens.

2. International aid often benefits corporations more than the poor

'We are the world's biggest NGO ... The only difference is, we're making money so we are sustainable.'

Aid-funded business. Much foreign aid never reaches poor countries directly. Instead, it flows through a network of contractors and subcontractors, often benefiting companies from donor countries. In the UK, over 90% of aid contracts went to British companies in 2014.

Corporate welfare. Development finance institutions like the World Bank's International Finance Corporation (IFC) provide loans and investments to private companies, ostensibly to spur development. However, many investments support projects with questionable development impacts:

  • Luxury hotels and shopping malls
  • Private hospitals catering to elites
  • Expanding operations of multinational corporations

Aid tied to corporate interests. Historical examples like the Pergau Dam scandal in Malaysia show how aid has been used to advance business interests rather than poverty reduction. Though policies have changed, corporations still heavily influence aid spending priorities.

3. Special Economic Zones carve out corporate-controlled territories

'We are living the conflict,' she told us, 'and the threats we receive from paramilitaries are always for this, that they're going to kill us because we're working with campesinos, because we're training them to defend their land, for these kinds of things'.

Proliferation of zones. Over half the world's countries have established Special Economic Zones (SEZs) - areas where normal business and trade laws don't apply. These zones offer tax breaks, lax regulations, and cheap labor to attract foreign investment. An estimated 66 million people work in over 3,500 zones globally.

Corporate governance. Many SEZs are privately owned and operated, effectively ceding government authority to corporations. Some even have their own security forces and legal systems. Examples include:

  • Shenzhen SEZ in China
  • Aqaba Special Economic Zone in Jordan
  • Honduran ZEDEs ("model cities")

Social and environmental costs. While touted as drivers of development, SEZs often displace local communities, exploit workers, and circumvent environmental protections. They represent a alarming trend of corporations carving out territories beyond democratic control.

4. Private security forces expand corporate power and influence

'It is extremely difficult', wrote other academics from the University of Leicester in the UK, 'to grasp either the activities or the true scale' of this industry due to a 'veil of secrecy around its activities that is only occasionally lifted'.

Booming industry. The global private security market was worth an estimated $180 billion in 2015, projected to reach $240 billion by 2020. In many countries, private security personnel outnumber police officers.

Privatization of force. Corporations increasingly rely on private military and security companies (PMSCs) to protect their interests, especially in unstable regions. This blurs the line between corporate and state power. Notable examples:

  • G4S, world's largest security company, employs over 500,000 people
  • Blackwater (now Academi) infamous for role in Iraq War
  • DynCorp contracted to train Liberia's entire army

Lack of accountability. PMSCs operate with limited oversight and regulation. Their activities are often shrouded in secrecy, making it difficult to hold them accountable for human rights abuses or other misconduct.

5. Nuclear weapons programs perpetuate corporate control

These privatisations reflected broader trends as states outsourced a widening variety of activities and responsibilities.

Privatized nuclear complex. Much of the US nuclear weapons infrastructure is now run by private contractors under a "GOCO" (Government Owned, Contractor Operated) model. Key facilities include:

  • Los Alamos National Laboratory (managed by Bechtel-led consortium)
  • Lawrence Livermore National Laboratory
  • Y-12 National Security Complex

Profit-driven management. Critics argue that private management prioritizes profit over safety and science. Issues include:

  • Cost overruns and mismanagement
  • Safety violations and accidents
  • Retaliation against whistleblowers

Perpetuating nuclear threats. Private contractors have a vested interest in maintaining and expanding nuclear weapons programs, regardless of public opinion or strategic necessity. This corporate influence shapes nuclear policy and undermines democratic control over these existential threats.

6. Historical roots of corporate empires trace back to colonialism

'Because we were born here and grew up here, we're used to having guns around', one young woman who we met in town told us. 'You realise that it is a strange place to live only when you leave … in many cases these weapons kill people.'

Colonial legacy. Many modern multinational corporations have direct links to colonial-era enterprises:

  • Unilever traces back to palm oil plantations in Belgian Congo
  • De Beers diamond company founded during British colonization of South Africa
  • United Fruit Company (now Chiquita) notorious for exploiting Central America

Transition strategies. As formal empires crumbled, corporations and allied government officials developed new strategies to maintain economic control:

  • International legal systems to protect foreign investors
  • Aid and development programs tied to corporate interests
  • Special economic zones to preserve business-friendly enclaves

Ongoing exploitation. Though methods have changed, many argue that the fundamental dynamic of extracting wealth from poorer countries continues through these corporate empires.

7. Resistance movements challenge expanding corporate power

'This is a struggle not only in Bolivia, or Latin America, but throughout the world,' he argued. 'Who do natural resources belong to? The people under the control of their state? Or are they privatised under the control of transnationals so they can plunder our natural resources?'

Grassroots opposition. Communities around the world are organizing to resist corporate encroachment on their land, resources, and democratic rights. Examples include:

  • Protests against mining projects in El Salvador
  • Indigenous movements opposing oil pipelines in North America
  • Campaigns for water rights in Bolivia

Policy changes. Some governments are pushing back against corporate power:

  • Ecuador and Bolivia enshrining rights of nature in constitutions
  • South Africa reviewing and cancelling investor protection treaties
  • El Salvador banning metal mining nationwide

Alternative models. Social movements are also developing alternative economic models that prioritize community control and environmental sustainability:

  • Worker-recuperated factories in Argentina
  • Community-owned renewable energy projects
  • Food sovereignty movements promoting local, sustainable agriculture

8. Media fails to adequately expose corporate takeover of democracy

Many newspapers have correspondents focused on national supreme courts but there are few journalists that so closely cover the international investor-state tribunals that function as a global supreme court.

Limited coverage. Mainstream media often fails to report on the systems and strategies expanding corporate power globally. Key issues receive little attention:

  • Details of investor-state dispute cases
  • Aid money flowing to corporations
  • Privatization of security and military functions

Financial barriers. Much reporting on these topics is confined to specialty publications behind paywalls, inaccessible to the general public.

PR and lobbying influence. Corporate interests actively shape media narratives through:

  • Advertising spending
  • Sponsorship of "native content"
  • Think tanks and lobbying groups providing "expert" commentary

Need for investigative journalism. The authors argue for more robust, independent reporting to expose how corporations are undermining democracy and shaping global governance.

9. Long-term corporate planning outpaces democratic processes

'The main guidelines, the amount of conservation, how wide the buffers have to be, all of that is already approved and set … as I understand it, the damage is done.'

Multi-decade strategies. Corporations and allied think tanks develop long-range plans spanning decades, far beyond typical election cycles:

  • 1950s San Francisco conference planning global corporate expansion
  • Mont Pelerin Society's long-term promotion of neoliberal ideology
  • Corporate scenario planning for climate change impacts

Policy lock-in. Trade agreements and investor protections can bind future governments to corporate-friendly policies for decades:

  • NAFTA's 20-year phase-out period
  • 50-year land leases in Special Economic Zones
  • Energy Charter Treaty's 20-year survival clause

Democratic deficit. Citizens and even elected officials often have limited ability to influence these long-term corporate strategies once set in motion.

10. Corporate welfare systems protect profits at public expense

Crises of faith or lacking trust in democratic institutions from parliaments to the media make sense. Democracy and independence are largely buzzwords that feel hollow – because they were made hollow, over generations with strategic planning, lobbying campaigns and new infrastructure.

Bailouts and subsidies. Governments routinely provide financial support to corporations, particularly during economic crises:

  • 2008 bank bailouts
  • Ongoing fossil fuel subsidies
  • Tax breaks for corporate relocations

Socialized risks, privatized profits. Public money often underwrites corporate risk-taking while profits remain private:

  • Nuclear power plant liability limits
  • Export credit guarantees for risky overseas investments
  • Pandemic vaccine development funded by taxpayers

International institutions. Bodies like the World Bank and IMF promote policies favoring corporate interests:

  • Structural adjustment programs pushing privatization
  • Loans contingent on investor-friendly reforms
  • Technical assistance promoting corporate-led development models

Last updated:

FAQ

What’s Silent Coup: How Corporations Overthrew Democracy by Claire Provost and Matt Kennard about?

  • Exposes hidden corporate power: The book investigates how transnational corporations have systematically expanded their influence, often undermining democratic governance and public interest.
  • Global investigative journalism: Drawing on years of reporting and travel to 25 countries, the authors reveal the mechanisms corporations use to insulate themselves from democratic control.
  • Four-part structure: It covers corporate justice, welfare, utopias, and armies, illustrating the global systems corporations have built to protect their interests.
  • Critical perspective on democracy: The authors argue that these corporate expansions amount to a “silent coup” against democracy, challenging readers to reconsider where real power lies in society.

Why should I read Silent Coup: How Corporations Overthrew Democracy by Claire Provost and Matt Kennard?

  • Reveals hidden power structures: The book uncovers how corporations quietly control key aspects of governance, law, and security, often out of public view.
  • In-depth, credible reporting: Based on extensive global investigations, interviews, and archival research, it provides detailed evidence rather than abstract theory.
  • Empowers informed citizenship: Understanding these dynamics is crucial for anyone interested in democracy, justice, and the future of public accountability.
  • Call to action: The book encourages readers to engage critically with political processes and advocate for more transparent, equitable systems.

What are the key takeaways from Silent Coup: How Corporations Overthrew Democracy?

  • Global corporate legal systems: Corporations use international treaties, tax havens, and special economic zones to protect profits and override national laws.
  • Privatization of security and force: Private security companies and military contractors have eroded the state’s monopoly on legitimate force, increasing inequality and impunity.
  • Aid and development co-opted: International aid often funds private companies and corporate interests, rather than directly helping the poor.
  • Resistance and hope: Despite pervasive corporate influence, grassroots and political movements worldwide offer models for reclaiming democracy and justice.

How do Claire Provost and Matt Kennard investigate corporate power in Silent Coup?

  • On-the-ground reporting: The authors traveled to 25 countries, interviewing activists, lawyers, officials, and workers for firsthand accounts.
  • Archival and data research: They accessed historical documents, legal cases, and investment data to trace the origins and evolution of corporate legal and financial systems.
  • Following the money: The investigation analyzes how public funds and legal frameworks support corporate power globally.
  • Personal encounters: The book includes stories from activists and insiders, making complex systems accessible and engaging.

What is the international investor-state dispute settlement (ISDS) system as explained in Silent Coup?

  • Definition and function: ISDS allows corporations to sue governments in international tribunals if policies threaten their profits, often bypassing national courts.
  • Threat to sovereignty: The system can impose large financial penalties on states, discouraging governments from enacting progressive laws.
  • Secrecy and industry: ISDS has become a lucrative, secretive industry involving elite lawyers and third-party funders, with little transparency or accountability.
  • Real-world examples: Cases like Pacific Rim vs. El Salvador and Vattenfall vs. Germany show how ISDS is used to challenge environmental and public health regulations.

How does Silent Coup by Claire Provost and Matt Kennard describe Special Economic Zones (SEZs) and private cities?

  • Corporate-controlled enclaves: SEZs and private cities are areas where corporations have significant control over land, labor, and governance, often with reduced regulations and tax incentives.
  • Global spread and impact: The book traces SEZs from Ireland to China, India, Vietnam, and beyond, showing their role in creating “islands” outside democratic oversight.
  • Social and environmental costs: These zones often displace communities, suppress workers’ rights, and exacerbate inequality, benefiting mainly multinational corporations.
  • Worker exploitation: SEZs frequently restrict union activity and labor protections, leading to poor working conditions and social unrest.

What role does Mauritius play as a “fiscal paradise” in Silent Coup?

  • Tax haven for corporations: Mauritius is depicted as a key node in the global network of tax havens, offering low taxes and financial secrecy to multinationals and the wealthy.
  • Facilitates tax avoidance: The island enables practices like treaty-shopping and transfer pricing, draining public resources from poorer countries, especially in Africa and India.
  • Development paradox: While Mauritius boasts strong economic indicators, the book highlights growing inequality and questions the sustainability of its offshore finance-driven model.
  • Impact on global South: Mauritius serves as a gateway for investments that often bypass local economies, undermining development and public welfare.

How does Silent Coup explain the privatization of security and the use of force by corporations?

  • Rise of private security: The book documents the growth of private security companies and military contractors protecting corporate interests, often beyond state control.
  • Historical continuity: Modern private military companies are linked to colonial-era mercenaries and chartered companies with their own armed forces.
  • Case studies of violence: Examples include Chiquita’s payments to paramilitaries in Colombia and private militias in Honduras, illustrating the human cost and impunity of corporate violence.
  • Erosion of state authority: Privatization of force undermines the state’s monopoly on legitimate violence, increasing inequality and reducing accountability.

What insights does Silent Coup offer about the privatization of nuclear weapons labs in the US?

  • GOCO model explained: The Government Owned, Contractor Operated (GOCO) model has shifted management of nuclear labs to private consortia, aiming for efficiency but raising concerns.
  • Safety and secrecy issues: The book reveals increased secrecy, safety lapses, and cost overruns under private management, including radioactive leaks and fires.
  • Economic and social impact: While labs bring wealth to some communities, surrounding areas often remain impoverished, highlighting stark inequalities.
  • Transparency concerns: Privatization has led to diminished transparency and worker protections in critical national security facilities.

How does Silent Coup describe the impact of corporate legal and financial systems on democracy?

  • Erosion of democratic control: Corporations use international treaties and tribunals to challenge and overturn government policies, limiting elected officials’ ability to regulate in the public interest.
  • Regulatory chill: Governments may avoid or dilute progressive laws, such as environmental protections or labor rights, out of fear of costly investor lawsuits.
  • Parallel power structures: Supranational corporate empires operate outside of public scrutiny, effectively displacing sovereign communities and countries.
  • Undermining public accountability: These systems constrain governments’ ability to enact policies reflecting the public will, undermining democracy.

What are some examples of grassroots resistance and activism highlighted in Silent Coup?

  • Global grassroots movements: The book shares stories from local communities fighting mining companies in El Salvador, workers organizing in SEZs, and activists opposing corporate influence worldwide.
  • Risks faced by activists: It documents threats, violence, and repression against those challenging corporate power, including murders of anti-mining activists and suppression of labor organizers.
  • Hope and resilience: Despite obstacles, these struggles represent “an act of precious resistance,” showing that people are fighting back to reclaim democracy and justice.
  • Models for change: The authors highlight successful campaigns and ongoing efforts that inspire hope for more democratic and just futures.

What are the best quotes from Silent Coup: How Corporations Overthrew Democracy and what do they mean?

  • Benjamin Zephaniah: “Silent Coup reveals the truth about how little our votes mean when corporations and dirty dealers are pulling their corrupt strings in the background.” This underscores the book’s central theme of hidden corporate control undermining democracy.
  • Noam Chomsky: “An ugly world, out of control, unaccountable, but with overwhelming power.” This highlights the secretive and unaccountable nature of corporate legal and financial systems.
  • Vandana Shiva: “Sovereign communities and countries are being displaced by sovereign companies and the supranational systems they have built to establish their control, creating in the process our age of corporate colonialism.” This quote captures the book’s argument that corporate power is a new form of colonialism.
  • Call to action: The quotes collectively emphasize the urgency of understanding and resisting corporate power to reclaim democracy and justice.

Review Summary

4.36 out of 5
Average of 188 ratings from Goodreads and Amazon.

Silent Coup receives mostly positive reviews, with readers praising its in-depth investigation of corporate influence on global democracy. Many find the book eye-opening and informative, highlighting how corporations manipulate international systems for profit. Some criticize the writing style as uneven or lacking cohesion. Reviewers appreciate the book's global perspective and historical context but note it offers few solutions. Overall, readers consider it an important work that exposes the extent of corporate power in undermining democratic processes worldwide, though some find it overwhelming or depressing.

Your rating:
4.63
39 ratings

About the Author

Claire Provost is an investigative journalist and author known for her work exposing corporate influence on global politics and economics. She is affiliated with The Centre for Investigative Journalism, a respected organization dedicated to uncovering hidden truths about power structures. Provost collaborates with Matt Kennard on investigative projects, including their book "Silent Coup." Her writing focuses on revealing the complex relationships between corporations, governments, and international institutions. Provost's work is characterized by thorough research and a commitment to shedding light on often-overlooked aspects of global power dynamics. She is recognized for her contributions to understanding how corporate interests shape international politics and economics.

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