Multinationals on Trial by James Petras and Henry Veltmeyer. (Ashgate, 2007.)
The basic thesis of this book is that multinational corporations (MNCs) are not simply capitalist corporations which have investments throughout the world in search of the highest rate of profit, but that they are also agents of the states in which they have their home base, helping them to build up and consolidate an “empire”.
Their argument is that MNCs investing in Third World countries do not benefit them or help them to develop; on the contrary, through various financial devices and unequal contracts, they are vehicles for extracting and transferring wealth from these countries back to the home country. Further, once established in a Third World country, they outcompete or takeover local businesses and corrupt and co-opt local politicians and officials. The local politicians then come to adopt a foreign policy favourable to the home state and the process of the incorporation of their country into that state’s empire is achieved. The “imperial” state in turn helps their MNCs by using institutions such as the IMF and WTO to facilitate MNC entry into other countries through the imposition or negotiation of measures to encourage foreign investment, tariff-free trade, repatriation of profits, denationalisations and the protection of MNC property rights.
There is a certain amount of truth in this. States do support MNCs in this way, but it is not so obvious that MNCs are conscious agents of a state’s “imperialist” ambitions, especially as Petras and Veltmeyer are not always clear which states are “imperial”: The US (of course) but sometimes they speak of “the Euro-American Empire” or the West generally, so avoiding the problem of deciding whose empire a euro-american MNC would be helping to build.
“Imperialism” is a slippery word as all states seek to channel as much of world profits their way as they can. It is just that some states are stronger – some, much, much stronger – than others and so are better at doing this. In which case “imperialist” would just be another way of describing the successful states. But this does not mean that currently weaker states are not striving to do the same.
Petras and Veltmeyer take the side of the weaker states in this world-wide struggle between all states to grab a share of world profits and offer advice to developing countries on how to combat the policies of the stronger, more successful states. The authors tell them not to rely on foreign investment to develop, but to adopt measures such as nationalisation, state monopoly of foreign trade, protectionism and ex- change controls instead. In short, a policy of national state capitalism, although they themselves don’t use this term. They see themselves as “anti-imperialist” and even pro-working class and socialist. Anti-imperialist maybe, but not socialist.
At the end of the first chapter, they grossly distort Marx’s materialist conception of history when they write of “the class and national struggle, which as Marx once pointed out is the ‘motor force of his- tory’” (our emphasis). Marx did indeed see class struggles as the motor force of history, but not national struggles as such. National(ist) struggles are class struggles under an ideological smokescreen, but not of the working class. They are either struggles by an aspiring capitalist class to establish themselves as a new national ruling class or struggles by an established but weak national owning class to gather a bigger share of world profits for themselves. There is no reason why socialists should support them.
Adam Buick
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