Magazine article Monthly Review

Multinational Corporations and the Globalization of Monopoly Capital: From the 1960s to the Present

Magazine article Monthly Review

Multinational Corporations and the Globalization of Monopoly Capital: From the 1960s to the Present

Article excerpt

In 1964, Paul Baran and Paul Sweezy wrote an essay entitled "Notes on the Theory of Imperialism" for a festschrift in honor of the sixty-fifth birthday of the great Polish Marxist economist Michal Kalecki. Later reprinted in Monthly Review in March 1966, the essay offered the first major analysis of multinational corporations within Marxian theory. Parts of it were incorporated into Baran and Sweezy's Monopoly Capital in 1966, two years after Baran's death. Yet for all that book's depth, "Notes on the Theory of Imperialism" provided a more complete view of their argument on the growth of multinationals. In October and November 1969, Harry Magdoff and Sweezy wrote their article "Notes on the Multinational Corporation," picking up where Baran and Sweezy had left off. That same year, Magdoff published his landmark The Age of Imperialism, which systematically extended the analysis of the U.S. economy into the international domain.1

In the analyses of Baran, Sweezy, and Magdoff, as distinct from the dominant liberal perspective, the multinational corporation was the product of the very same process of concentration and centralization of capital that had created monopoly capital itself. Likewise, it was to be understood in the context of the class-based society of capitalism and the capitalist state. As the main mechanism of monopoly capital abroad, multinational corporations were not to be analyzed merely in terms of the firm versus the state, but as components of an imperialist world system, in which firms were bound to state structures and class societies, and stood to gain from the hierarchy of nation-states within the world capitalist system and the division between center and periphery. Not only was such an analysis more complex, dynamic, and structurally rooted than mainstream studies; it better explained the long-term evolution of global corporations. Other radical thinkers, such as Stephen Hymer, Samir Amin, James O'Connor, Richard Barnet, and Ronald Müller, also contributed crucially to uncovering the role of multinational corporations in the 1960s and early '70s.

From the beginning, three interrelated issues dominated discussions of multinational corporations on both the left and right: (1) the reasons for their rise; (2) the distinction between multinational corporations and the mere international operations of firms, as well as the possibility that fully transnational firms might emerge: and (3) the degree to which such giant, globe-straddling corporations could supplant nation-states themselves. In addition, within Marxian theory, there was the question of how the rise of such firms, founded on foreign direct investment, might transform Lenin's theory of imperialism, which had focused on the export of capital, primarily in the form of portfolio investment. Today, the earlier analysis of the relation of the multinational corporation to imperialism, as developed by Marxian theorists in the 1960s and '70s, provides us with the critical tools to understand the new imperialism of global monopolyfinance capital, rooted in global labor arbitrage.

Three Big Questions on Multinational Corporations

1. The Origin of the Multinational Corporation

For neoclassical economics, the most difficult task was to account for the emergence of multinational corporations in the first place. Unlike Marxian economics, neoclassical analysis had no distinct theory of the concentration and centralization of capital connected to the accumulation process, and thus no theory of the tendency toward monopoly within the system. Although imperfect competition theory and industrial organization analysis took into account the growth in firm size, these forms of analysis were outside the central framework of bourgeois economics itself. In the 1960s, neoclassical economists sought desperately to account for the extraordinary rise of multinational corporations within the framework of a competitive model that largely excluded monopoly power. …

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