None of Your Business

Global Reach: The Power of the Multinational Corporations

by Richard J. Barnet, by Ronald E. Müller
Simon and Schuster, 508 pp., $11.95

America After Nixon: The Age of the Multinationals

by Robert Scheer
McGraw-Hill, 326 pp., $3.95 (paper)

Capital, Inflation, and the Multinationals

by Charles Levinson
Macmillan, 306 pp., $7.95

The term “multinational corporation” has become familiar only recently. Writing in these pages just five years ago, I felt obliged to explain that the multinationals were not merely giant corporations that did a world-wide export business, but giants whose manufacturing or servicing facilities were located around the globe, so that Pepsi-Cola, to take an example, could be bought in Mexico or the Philippines (or another 100-odd countries) not because the drink was turned out in America and then shipped abroad, but because it was produced and bottled in the country where it was consumed.

In recent years, largely as a consequence of the oil crisis, the word “multinational” has become standard newspaper usage, so that we now understand that Exxon or ITT are not just “American” companies, but maintain a network of refineries, factories, warehouses, service establishments, laboratories, training centers, and retail establishments spread across the continents. What we do not perhaps yet understand sufficiently is that the multinationalization of business is not just an American but an international phenomenon, so that when we fill up the tank at a Shell station or buy Valium at a pharmacy we are purchasing commodities produced in the United States by companies of non-American nationality.

Nevertheless, it is one thing to talk knowingly about the multinationals, and another to grasp the significance of their operations. Are they, as Richard Barnet and Ronald Müller write in Global Reach, “the most powerful human organization[s] yet devised for colonizing the future”? Do they challenge the nation-state as a main force for shaping the destinies of billions of men and women? Will their penetration into the underdeveloped world condemn these areas to perpetual backwardness—or can they serve as the conduits of technology and capital without which the underdeveloped nations will be condemned to eternal poverty?

It is not easy to answer these questions, for the impact of the multinationals remains in many ways obscure and perplexing. Or perhaps I should say that I find their impact difficult to appraise. Many other observers do not. Someone who wants a “clearer” picture of the multinationals would do well to consult the Guide for the Perplexed, appended to this essay, where I have briefly summarized a few recent books on the question. There the reader is sure to find at least one book that will tell him what he wishes to know.

Why are the multinationals so difficult to discuss? The first reason is that we know so appallingly little about them. How large are they? How big are their sales? How vast their profits? We really do not know.

Take, for example, the basic question of the value of the direct foreign investment—the plant and equipment, not the portfolios—owned by American enterprises. Our knowledge of the extent of this direct investment largely rests on a Commerce Department survey conducted in 1966. This survey collected data on 3,400 parent companies and 23,000 foreign affiliates. But efforts to enlarge and update that survey, now sadly …

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