CHAPTER XXIII.
THE TRANSNATIONAL CORPORATIONS
AND THEIR INFLUENCE ON THE WORLD ECONOMY.
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Another new aspect in the present stage of evolution of the capitalist system is the supra nationalisation of the world economy, brought about by the development of the transnational corporations.
During Capitalism's early stages, capitalist businessmen were competing against one another mainly in their own national local markets.
As Capitalism expanded, in the rush for foreign markets and raw materials, they found themselves competing against the capitalists of other industrial countries, often under the political and military protection of their respective governments. A race began to develop amongst Industrial Nations for the control of those parts of the world that were still undeveloped or weak.
This nationalistic competition for markets and resources was one of the main causes of friction and jealousy between Nations. It was also the cause for many wars during the last two centuries.
The gradual development of monopolies, cartels, and now the transnational corporations has to a great extent eliminated the nationalistic features from capitalist economy. Therefore, the probability of all out warfare between capitalist Nations has been gratly diminished. The inextricable links of the corporations and world finance transcend all national boundaries. Capital has no nationality.
As we have seen earlier, the development of monopolies, cartels and corporations was inevitable. The nature of capitalist production and competition promotes the accumulation of capital in ever fewer hands as Marx had stated over a century ago: ".....That the small industrialist cannot survive in a contest one of the first conditions of which is to produce on an ever greater scale, that is, precisely to be a large and not a small industrialist, is self evident".
The next logical consequence of the accumulation of finance and technology in the hands of few corporations is their diversification in different fields of activity, and their expansion throughout the world. Their political power grows in direct proportion to their economic power.
There is a deep analysis of the present development of the corporations in a work entitled "Global Reach" by Richard J. Barnet and Ronald E. Muller. The authors explain many important aspects of the corporations, their influence in world affairs and on the lives of individual persons. What the transnationals are promoting today is a trend towards the integration of capitalist economy under their effective control, and mainly for their own maximum profit.
They have lost almost completely their original national identities and loyalties. They have become international in their organizations; they are conglomerates that unite capital and technological knowhow from all the industrial countries of the world. They view the world as one entity as a global field for their activities.
One of the main effects of the transnational corporations on the world economy is the transfer of entire industries and production from countries with relatively high wages and standard of living to countries with abundant cheap labour still unspoiled by long union traditions.
This transfer of production to depressed areas of the world has been a feature of capitalist economy for a long time. It is part of the general drive to increase the productivity of capital and labour. But in the early stages, for many different reasons, this mobility was not always easy or possible.
This movement of productive forces became more accentuated after the Second World War, mainly from the United States to Europe and Japan, then from these countries to all parts of the world. This was not by any means a one sided push by the international bankers and corporations, it was also the desire of the developing Nations to be developed, even by the corporations.
This great exodus of industry is having a worldwide leveling effect: it tends to produce unemployment and to reduce the wages and standard of living in the developed countries, and, at the same time, it increases the level of employment and, if the corporations are not too greedy, also the standard of living of the underdeveloped countries.
There is possibly one exception to this exodus of industries from the developed countries. For reasons of national security, the armament industry is kept at home while some others are exported. The arms industry, therefore, may tend to assume a great proportion of the internal economy of such countries.
The world wide equalising effect of the transnational corporations could be considered beneficial towards uniting the Nations of the world, if it was planned and intended for the benefit of the whole of society, but it is because of the corporations'capitalist nature and the saturated market situation, which they are themselves aggravating, that instead of Human progress, often they bring more hardship to the populations of the industrial countries, and even more hardship to the Nations which are trying to become industrialised. Instead of uniting the world, they are frightening most countries into the economic, social and racial antagonism of the trade war.
What has happened in the world since the World War II is partly the result of capital losing its nationalistic identity. No matter how much patriotic business leaders and investors profess to be they have become international players, they do not care where in the World they invest their money and build their factories, capital and profits have no nationality. It is the working peoples of each country that are forced to compete to throw each other out of work; they become frightened, unsecure and therefore become also xenophobic and racists seeing their jobs and livelihood diminish or disappear.
At present there is the project of globalisation going on: creating a global market for business with international rules defining a business biased constitution under the leadership and protection of the United States, NATO and other capitalist governments. The problem is that some nations like capitalist China, capitalist India and capitalist Russia may not like the policing interference of the U.S.
Globalization under capitalist rule and competition can only be a disaster; only an international, humanistic, ecologically sound scientifically planned economy should be desiderable and would be possible.