The Multinational Corporation

In its century or so of self-conscious existence the international economy has shrunk its distances, speeded its communications, widened the scope of its goods and money markets and made the first halting steps towards international decision-making. In the public sector international action has appeared in government-negotiated financial and commercial arrangements and in the activities of international functional agencies. In the private sector national business has spawned international business through the operations of multinational enterprises — large corporations with headquarters in one country and pursuing their activities, in the manufacturing, extractive, or service fields, in several others. Such enterprises are a result of the drive of corporations to extend their international transactions within their own networks of control and influence distinct from the operations of governments in their operational areas. By nature they are large and powerful and they touch the interests of governments and international agencies at many points. Although large firms with diverse foreign interests are by no means new, the postwar period, from the fifties, has seen such growth in their numbers and influence, and they are so changing the nature of the international economy that the multinational corporation must be regarded as the most striking feature of institutional change in the world economy since the war. It is our purpose in this chapter to examine the economics and some of the political implications of this development.