Socialist Worker

What are the multinationals?

Issue No. 1701

What do socialists say?

What are the multinationals?

By Hazel Croft

GIANT global corporations have quite rightly become the targets of anti-capitalist protesters. The biggest ten multinationals have a total income greater than the combined income of the world's poorest 100 countries. The Ford motor company has sales that are bigger than the total economic production of South Africa. General Motors' is bigger than Denmark and Turkey.

These huge firms screw workers in the West and devastate the lives of those in the Third World. This has led some people to talk of "globalisation" as a totally new phenomenon, something distinct from how capitalism operated in the past. But domination by a few giant firms and institutions across national boundaries was a trend identified by Karl Marx in the middle of the 19th century-way before anyone had dreamt up the term "globalisation".

Marx saw how, because capitalism was a ruthlessly competitive system, firms would break through state boundaries in the search for new markets in the quest to outdo their rivals. In the Communist Manifesto, published over 150 years ago in 1848, Marx wrote: "The need for a constantly expanding market chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere. All old established national industries have been destroyed or daily are being destroyed. They are dislodged by new industries that work up raw materials drawn from the remotest zones, industries whose products are consumed not at home, but in every quarter of the globe. In place of the old local and national seclusion we have universal interdependence of nations."

When Marx wrote this industrial capitalism was only fully established in Britain and Belgium. But the tendency he identified has been confirmed by the subsequent development of capitalism. Today every nation has been brought into the world market. There is no corner of the globe that can escape from the giant corporations.

But although production has become increasingly international that does not mean multinationals are independent of nation-states. Multinationals are all close to one parent country which they use as a base from which to spread their operations.

So General Motors and General Electric are based in the US. Nippon and Toyota are based in Japan. These multinationals will try and squeeze their workers as hard as possible in order to increase profits.

So Ford bosses have pulled the plug on car production at their Dagenham plant in east London, throwing the livelihoods of thousands of workers to the wall. But that does not mean multinationals can simply roam the world at will, switching production from one country to the next in search of the cheapest cost.

In fact most multinationals concentrate their investments in advanced industrial countries, with a few in the recently industrialising countries. Some 90 percent of multinationals are based in industrialised countries. This is because they need easy access to markets where they can sell their goods, and for their workforce to have a certain level of skill-even if this means the company has to pay them higher wages.

In the advanced industrialised countries there is also ready access to transport systems, schools and health services. Multinationals also look to the governments of their national states to protect their interests at home and abroad. The 20th century was not only the era of the rise of giant corporations, but also the bloodiest ever in world history.

So the First World War was fought between the Great Powers for control of colonies and markets. The US and Britain fought the 1991 Gulf War to ensure oil supplies and lucrative profits to the giant oil companies. But although they wield tremendous power, the big corporations can be beaten. The anti-capitalist protests in Seattle and Washington showed how vulnerable the multinationals are. Think how hard they could be hit if the workers who make their profits were to take collective action.

The global operations of capitalism have not made workers powerless. Microsoft's Bill Gates would not be the richest man in the world unless there were workers producing his software. Two years ago 9,000 workers at the Flint plant of General Motors in the US went on strike. The lack of parts caused by their action meant that production at 13 other GM plants had to be halted.

Similarly a strike at Ford in Britain could bring the whole of Ford Europe to a halt within a matter of days. Moreover, if workers in different countries take solidarity action, together they can beat the multinationals back.

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Sat 17 Jun 2000, 00:00 BST
Issue No. 1701
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