The Evolution of Multinational Capital: Shifting Dynamics and Global Impacts
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Multinationals have brought two changes to the overall internationalization of capital. First, they have changed its geographic flows. In the days of classic imperialism, as we have seen, the objective of capitalist expansion was focused mainly on gaining access to raw materials or to markets for basic commodities, like textiles. The multinationals have turned away from these basic commodities toward the sorts of high-technology goods in which they are world leaders, such as computers and pharmaceuticals. The result has been a striking shift in the overseas allocation of capital. In 1897 almost half of American overseas capital was invested in plantations, railways, or mining properties. Today only a small fraction of our foreign investment is in those fields. Instead, the bulk of our overseas capital has moved into manufacturing, and three-quarters of the flow of international investment goes to Europe and Canada and other developed capitalist lands. So, too, the great preponderance of French or Japanese or German international investment seeks out locations in the developed world, rather than in the old colonial parts of the globe.
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A second economic consequence of the rise of the multinationals has been their remarkable ability to combine high technology with cheap and untrained labor. The incredibly complicated mechanisms that underlie modern economic life, such as computer parts or television subassemblies, can be produced in the Hong Kongs and South Koreas and Thailands of the world, using scientific machines operated by men and women just off the paddy fields. From the point of view of imperialism, the upshot of this is a perplexing one. The ability to transplant whole production processes into areas of the world that only yesterday were peasant economies has succeeded to an unprecedented degree in exporting the social institutions of capitalism. Just as the factors of production themselves emerged from a precapitalist social setting during the great economic revolution, so in our times a new economic revolution is bringing the market economy into regions that were formerly only passive, not active forces in the world economy. To that extent, modern imperialism has been a great force for the vitalization of capitalism abroad.
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At the same time, the new imperialism has greatly intensified the competitiveness of the system in its developed homelands. This is not only the result of the interpenetration of each other’s markets that we discussed above, but because the manufacturing outposts of the multinationals in the underdeveloped regions can fire artillery barrages of low-cost commodities back into their motherlands. As no nation knows better than the United States, TV sets made in Hong Kong or Taiwan, or automobiles made in South Korea or assembled in Mexico, can easily undersell the same products manufactured in California or the Midwest. It is too soon to foretell the consequences of this internationalization and intensification of competition or what may be the outcome of the financial and political crises that have appeared—not surprisingly—in nearly all the Asian “tigers.” What seems beyond doubt is that we have moved in the direction of a global economy in which new world-straddling enterprises coexist uneasily with older national boundaries and prerogatives. It is an ironic ending to our consideration of the problem of imperialism that the movement whose origins were connected with alleviating the pressures on capital has ended up by making them worse. “It is an ironic ending to our consideration of the problem of imperialism that the movement whose origins were connected with alleviating the pressures on capital has ended up by making them worse.”
