Multinational Corporations

Multinational corporations are succeeding in unifying the world economy, but they are having little impact on achieving social and political progress. The economic benefits of multinationals in their host countries is often limited to a select few. The chief goal of these corporations is the maximization of profits, a goal which often conflicts with fundamental human needs and national interests. Although the world managers of multinationals consider themselves forces for peace, stability, and development, the corporations that they head only serve to aggravate social inequities in developing countries.

The world managers of multinational corporations speak in glowing terms of a new world order in which national boundaries will become obsolete. As one IBM executive states, "For business purposes the boundaries that separate one nation from another are no more real than the equator." The global corporation has emerged as a planetary enterprise in which distinctions between home country and host country markets are obliterated. The single market concept prevails because, for most multinationals, profits from host countries now exceed those generated by home countries, particularly for U.S.-based firms. American-based corporations are investing an increasingly substantial proportion of their assets abroad. As a result, world managers contend that the true multinational corporation has become, in essence, a company without a country.

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nvincing many politicians of the need to erect barriers to free trade. The politicians themselves have much to fear from encroaching globalism, and are reluctant to share power with world managers of multinational corporations: " . . . in a world without borders dominated by global corporations [politicians] may lose the capacity to govern." A significant number of Americans believe that big business already controls government, which contributes to the mistrust of multinationals by the general public. Young people around the world exhibit a decidedly anti-business sentiment. In their view, large corporations are faceless entities committed to the voracious pursuit of profits and unbridled consumerism. Multinationals contend that their presence in a host country generate benefits for all concerned. One area of benefit is purportedly the democratic ideal: "Globalism is an appealing ideology in a world torn apart by fratricidal wars." An example is International Telephone and Telegraph (ITT) and its crusade to topple the Allende government in Chile during the early 1970s. In 1970, ITT offered the CIA $1 million to aid the U.S. government's efforts to prevent a Marxist victory in Chile's political elections. Undaunted b

Category: Economics - M