Is America Necessary? Conservative, Liberal, & Socialist Perspectives of United States Political Institutions

By Henry Etzkowitz; Peter Schwab | Go to book overview
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6 Multinational corporations
The basic questions this chapter will address are:
1. Are multinational corporations solely economic institutions? Or are they essentially political institutions that also conduct business?
2. What are the effects of multinational corporations on the United States?
3. What effects do multinational corporations have on countries other than the United States?
4. Can multinational corporations be controlled by any other political institution?

Multinational corporations operate in a number of countries and have the ability to shift personnel and resources from one country to another, effectively removing themselves from domination by any national government.

Conservatives believe that multinational corporations are economic organizations that play a positive role in the development of poor countries and in the economic expansion of rich countries. Because multinationals are effectively organized, well-financed, and well-run, they are eminently suited to coordinate world economic development. Conservatives hold that multinational corporations are, at present, the only organizations that have a world perspective and the capacity to engage in effective economic development. Such corporations must be left alone to conduct their own business. National governments should not be permitted to hamper their activities. Both developed and developing countries should recognize and support the role that multinational corporations play in agrarian, industrial, and technological development.

Liberals maintain that multinational corporations, left to their own devices, will abuse the power their financial and economic resources give them. They believe that the economies of poor countries are stunted by the monopolization of economic enterprise by multinationals. The economies of the Western world can also be hurt if there is no control over them. An example of this type of activity is the arrangement that international oil companies made with producing nations, in 1973-74, to increase sharply the price of oil.1

Multinationals are accepted by liberals as an economic fixture in the world. They hold that if permitted, multinational corporations will exert political power over national governments. For liberals, government legislation is the answer to the abuses of power that multinationals engage in it given the chance. Countervailing forces exist which can limit the undue influence exerted by multinational corporations. These are labor unions, small business, and government. The first two are discounted as viable forces because they have little means of exerting authority across national boundaries. The ability to transcend national boundaries is the

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