Corporations: Predatory or Beneficial?
In the movie Manhattan, Woody Allen's character talks about the hotel where the food was dreadful, and there was not enough of it, either! The critics of multinationals often make similar complaints. They argue that multinationals must be condemned because they bypass countries that need them, accentuating the divide between those who are fortunate and those who are not. Then they also complain that the multinationals cause harm where they go, exploiting the host countries and their workers.
The complaint about bypassing needy countries is misplaced. If multinationals avoid some poor countries, that is surely not surprising. They are businesses that must survive by making a profit. Indeed, no corporation ever managed to do sustained good by continually posting losses. If a country wants to attract investment, it has to provide an attractive environment. That generally implies having political stability and economic advantages such as cheap labor or exploitable natural resources. In the game of attracting investment, therefore, some countries are going to lose simply because they lack these attributes.
For these unfortunate countries, the harsh reality is that no matter how good their politics and policies are, they may not suffice to attract multinationals. I recall a Jamaican radio program where I was being quizzed by the widow of the charismatic prime minister Michael Manley, a socialist of great conviction and charm. She was complaining to me that Jamaica had done all the right things, in particular opening herself to freer trade, but it had not helped the country to attract investment. I reminded her that the proper question to ask was: would protection have led to better results? The answer was no, because it is improbable that Jamaica could have attracted investment if it had closed its small domestic market. I also