Since the massive protests that disrupted the World Trade
Organization's meeting in Seattle in 1999, not a single international
gathering on trade issues has convened without being dogged by
protesters condemning globalization. Everyday newspapers report how
globalization is changing people's lives. But what is this all-powerful
globalization? The dictionary defines it as 'an act of making things
global in scope and action'. But who are the actors? Who exactly is
'making things global in scope'? Scholars have debated endlessly about
the phenomenon that has emerged as one of the most contested in our
epoch. Finally there is a book - Global Inc - that takes us under the
skin of the global economy, offering an X-Ray-like image of the sinews
and arteries of multinational corporations. This is not to say
multinational corporations are the principal force behind globalization,
but the extent of their reach and power certainly makes them one of the
most important actors.
The inspiration behind this examination of the global economy, the MIT
historian Bruce Mazlish, came up with the idea of the book one day in
2000 when he read a UN report on the power of the modern day Leviathan -
the multinationals. It said that of the 100 largest economic entities in
the world, 53 were multinational corporations (MNCs). Astoundingly,
these private companies were wealthier than over 120 nation-states.
Given their tremendous influence on economies, politics, and culture
worldwide, he concluded, getting a true grasp on globalization would
depend on understanding the nature, historical roots, and functioning of
MNCs. Mazlish, who has been leading the New Global History initiative,
set about to organize a conference resulting in, among other things, the
book under review - a marvelously produced atlas with short explanatory
articles put together by business executive Medard Gabel and economic
geographer Henry Bruner.
The phenomenon of globalization has shrunk the world and made it
increasingly interconnected and interdependent over the millennia.
Driven by technological and economic forces, globalization gathered
momentum in the fifteenth century with Columbus' discovery of the New
World. But it was the emergence of the world's first multinationals -
the British East India Company (in 1600) and the Dutch East India
Company (in 1602) that truly launched the process that has matured into
the current economic integration of the world. With the rapid evolution
of transportation technology from horse-drawn carriages to sailboats to
container ships, the speed and volume of exchange grew dramatically,
linking the world ever-closer together. As the authors put it,
"globalization and global corporation are as interrelated as the chicken
and the egg." Without technological advances, corporations would not
have been able to spread as far and as wide as they have. And without
the resources and the drive to use these technologies, the pace of
globalization might have been much slower.
From a mere three thousand in 1990 the number of multinationals has
grown to over 63,000 today. Along with their 821,000 subsidiaries spread
all over the world, these multinational corporations directly employ 90
million people (of whom some 20 million in the developing countries) and
produce 25 per cent of the world's gross product. The top 1,000 of
these multinationals account for 80 percent of the world's industrial
output. With its $210 billion in revenues, ExxonMobil is ranked number
21 among the world's 100 largest economies, just behind Sweden and above
Turkey.
Along with some amazing numbers - portrayed in beautiful maps and charts
- about the nature, reach, and power of the multinationals, this book
helps to demolish many misperceptions. Would you guess which country in
the world is the home to the largest number of multinational
corporations? It is not the US, Britain or Japan. Some 9,356
multinationals have chosen Denmark as their home, followed closely by
Germany Sure, the wealthiest ones (93 out of the top 100) are still
located in the US, Japan, and Europe, but the automatic assumption that
big multinationals are American is simply no longer true. In 1962
almost 60 per cent of the world's top 500 multinationals were American
but by 1999 American corporations accounted for only 36 percent of the
total.
Given the power and reach of such corporations, one would imagine them
to be large entities. However, the authors say that most of the 63,000
firms that operate internationally employ less than 250 people, and some
service companies have even fewer workers. After the collapse of the
Soviet Union and expansion of the European Community, there has been a
phenomenal growth in small companies doing business across national
borders. Many of the newly emerging economies have surpassed the US in
the number of multinationals that call them home. Compared to 3,387
corporations in the US, some 7,460 MCCs are headquartered in South
Korea, and 4,334 in Japan. With its $485 billion in assets, the largest
multinational of the developing world is Hong Kong-based Hutchison
Whampoa.
The authors note that the multinationals have had some beneficial
effects, even if they are "the unintentional by-products of
multinational corporations' profit-maximizing activities." They have
paid increasing tax revenues to the government of countries they operate
in, provided employment opportunities, offered goods and services that
were previously unavailable, and, above all, brought in capital,
technology and management techniques. But the list of the negative
impacts of their operations is also long. One of the areas where the
power of the multinationals is felt most is in the realm of culture.
Since MNCs dominate media production and distribution - just six
corporations sell 80 percent of all the recorded music worldwide - they
introduce ideas and images that some governments and religious groups
fear may destabilize their societies. McDonald's - which boasts 29,000
restaurants in 120 countries - has been accused of promoting an
unhealthy diet, although the authors point out that the company has
varied its offerings according to local tastes, serving all-kosher meals
in Israel and lamb-based Maharaja burgers in India.
The impact of the multinationals, however, goes much further than
fashion and food. Because of their clout in generating jobs and
revenues, governments in the developing world compete to win their
investment. In the process, tax rates, social policies, labor relations,
accounting practices, and a whole lot of other things get determined by
the concerns of multinationals. "Given the enormous influence that
large multinational corporations wield in today's society through
contributions to political campaigns , 'influence peddling', and
outright bribery in many parts of the world," the authors say, "it would
not be far-fetched to say that the power of the large corporation could
also be a threat to the democratic process." One can only hope that the
globalization of telecommunications and the media that multinationals
have helped to bring about will also provide the means for critics
worldwide to bring attention to the problems created by the
multinationals' drive for profit.
© 2003 Yale Center for the Study of Globalization
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