Multinationals and the Nation-State A. Game

Transcription

1 Multinationals and the Nation-State A. Game "NATIONAL INTERESTS OR CLASS INTERESTS? In the last few years a substantial num ber of m arxist analyses of post-w ar capitalism have lo c a te d th e d o m in a n t c o n tr a d ic tio n o f im perialism as one between m ultinational (or transnational) corporations and the nation state. W hile there are variations on the theme, the general conception is of a power struggle between m ultinational corporations and nation states. Thus in contem porary analyses of A ustralian capitalism we find statements such as: "T he p ro b le m of b u ild in g up the n a tio n state is that w ith m u ltin a tio n a ls such n a tio n states can exe rcise o n ly a lim ite d s o v e re ig n ty on local bra nch es of such c o m p a n ie s." (1) W h e e lw rig h t, w h o has m ade th e m ost exte nsive analyses o f in te rn a tio n a l ca p ita lis m Ann Game is a post-graduate research student in Adelaide. in Australia, claim s that w ith the rise of the (m ostly A m erican) m ultinational corporation w hich is responsible to no one, "w hat is in question is the survival of the nation s ta te... (2). As such analyses have been reflected in the strategies of w orking class and left political organisations it is im portant to dem onstrate that they are based on concepts derived from bourgeois liberal fram ew orks, and that c o n s e q u e n tly th e y lead to in a d e q u a te strategies fo r a revolutionary m ovem ent. To put it most bluntly, there is a sig n ifica n t trend tow ards various form s of nationalism w hich have the effect of concealing class c o n flic t and burying w orking class interests by proposing alliances w ith the national bourgeoisie, or defence of one s own state, against foreign or international capital. W heelw right's statem ent that "there are co n flicts between the interests o f international corporations and the national interest (op. cit. p. 60) is not uncom m on, and a frequent solution offered is that Australia should be put in the hands of Australian ow nership rather than being ow ned by Am erica or Japan. (3)

2 18 MULTINATIONALS AND THE NATIO N STATE One of these analyses of m ultinational corporations does actually adm it that an explanation o f the nature of national interests can be provided only after a discussion of the relationships between class and state and between class and im perialism ; butthen goes on to say that it is outside the scope of the paper; that national interests w ill be assumed, as in bourgeois ideology, w ith o u t analysing the real class dim ension. (4) It is to be a rg u e d h e re th a t th e n a tu r e o f inter-im perialist relations can only be grasped in the context of those questions neglected by M arinelli and Som aini. M isunderstandings of these relations have arisen as a result o f the m eaning given to such concepts as the m u ltin a tio n a l c o rp o r a tio n, n a tio n a l interests, and nation state in a num ber of recent analyses. It is necessary to break w ith ideological concepts and reform ulate the question in class terms. In these term s an analysis of inter-im perialist contradictions w ould notask the question w hat can or can t a state do in the face of large m ultinational corporations? Rather, the focus w ould be on the effect that the internationalisation of c a p ita l has on th e re la tio n s b e tw e e n im perialist bourgeoisies, and consequently on the ro le o f th e n a tio n and s ta te in inter-im perialist relations. MULTINATIONAL CORPORATIONS The key features of the post W orld W ar 2 phase of capitalism that are noted by most m a rx is t c o m m e n ta to rs, b u t v a rio u s ly interpreted are, firstly, the massive increase in direct foreign investm ent (thatis the setting up of m anufacturing plants in other countries, rather than the take-over o f shares in existing local enterprises) (5) and secondly, that this investm ent is taking place in other advanced c a p it a lis t c o u n tr ie s r a th e r th a n in underdeveloped countries. (6) T he s ig n ific a n c e o f d ire c t fo re ig n in v e s tm e n t in s id e o th e r m e tro p o lita n countries (that is, centres of im perialism ) is, however, often missed; particularly when it is expressed ih terms of the "rise of the m ultinational co rp o ra tion. The focus on transnational or m ultinational corporations as the characteristic feature of this phase of capitalism h s led neo-m arxists such as Barratt Browh to claim that there is a need to revise the traditional m arxist theories of im perialism (Lenin's Imperialism specifically). W hile adm itting that there is com petition b e tw een these firm s, th is is seen as qualitatively different to im perialist state rivalries at the end of the nineteenth century (my emphasis). This view rests on the a s s u m p tio n th a t " th e m u lt in a t io n a l corporation has emerged as a more pow erful entity than the nation state. The new empires are the giant corporations... (8) The political conclusions of such a view are the same as those of the ultra-im perialist position - that is, one that claim s there are no contradictions between capitalist states, the only significant contradiction being that between im perialism and the third w o rld. A particular variation of this is super-im perialism. The argum ent in this case is that as a result of the dom inance of US capital, all capitalist states are united under the leadership and dom ination of the US super-state. (9) Barratt Brown claim s that in the light of the fact that rivalry between capitalist nation states has been contained in the face of com petition from the com m unist w orld and national liberation m ovem ents (1)) and that firm s are now transnational, Sweezy is correct in seeing the only possible revolutionary initiative com ing from the im poverished masses in underdeveloped countries (See Baran and Sweezy Monopoly C a p ita l). S uch p o s itio n s ig n o re the contradictions w ithin and between im perialist bourgeoisies and the im portance of class struggle in m etropolitan countries. The view t h a t th e L e n i n i s t c o n c e p t i o n o f inter-im perialist rivalry (rivalry between states in defence of certain fractions of capital) has been superseded w ith the em ergence of transnational corporations is based on a m isunderstanding of the relation between capital and the state, and leads to reform ism in practice. (11) That is, if the rise of the m ultinational corporation has in some sense meant the demise of national states, the q u e s tio n o f sta te p o w e r, c e n tra l to revolutionary strategy, becomes obscured. (This is to be taken up again later). The question of the displacem ent of direct foreign investm ent tow ards m etropolitan centres has sim ilarly been m isinterpreted by those who hold an u ltra-im p erialist position. (12) Those advanced capitalist countries where US capital holds dom inant position become, in th e ir schema, quasi-colonies, analgous to peripheral countries: a line of continuity is thus drawn between the states of the Third W orld and the sm aller industrial nations e.g. B ritain. (13) That is, the pow er

3 AUSTRALIAN LEFT REVIEW SEPTEMBER, of m etropolitan states is being destroyed either under the dom ination of large US capital, or the US superstate, or intern a tio n al capital above states. (14) The strategy that suggests itself in the light of this view is an alliance w ith the national bourgeoisie against US im perialism. Such strategies are based on m isunderstandings of the relation between US capital and the bourgeoisies w ithin these form ations. As Mandel has pointed out, the p e rc e n ta g e in c re a s e in d ir e c t. fo re ig n investment inside other m etropoles,c ontrary to this view, signifies intensification of inter-im perialist com petition. (15) It is interesting to com pare strategies for national independence of, fo r example, Australia, put forw ard by some m aoist groups, w ith Mao s view on the same question in the case of sem i-colonial countries: "When im perialism launches a w ar of aggression against such a country, all its various classes can te m pora rily unite in a national war against im perialism... W hen im p e ria lis m c a rrie s on its oppression not by war, but by m ilder means - political, econom ic and cultural - the ruling classes in semi colonial countries capitulate to im perialism, and the two form an alliance fo r the jo in t oppression of the masses of the people Mao Tse-tung On Contradiction (F.L.P. Peking 1967, p. 30) Mao s w arning against collaboration with sections of a ruling class in sem i-colonial countries is even more vital in the case of im perialist countries. T h e c r u c ia l p o in t w ith re g a rd to multmattottatgorporatlons is~fo understand that they are effects of the concentration and centralisation processes of capital. 3 h a wortijwicfe scale. T hat is. they are sim ply the ihsffiufionattorm of this stage of m onopoly capitalism TThey don t signify thatcapitalism hastjuajjtatively changed, buttat her, are^the necessary result of the basic dynam ics f capitalist developm ent (16) w hich exist independent' o f m ultinational corporations. M artinelli and Somaini, fo r example, assume that because the m ultinational corporation embodies the processes of concentration and centralisation... (op. cit. p. 69), it issu fficie n t to focus attention on firm s. On the contrary, it is precisely because they are the institutional effects of a process that the changing structure of global production and form of the accum ulation of capital, and consequent class relations can only partially be understood by looking at the m ultinational corporations and their activities. THE MULTINATIONAL CORPORATION AND THE NATION STATE In order to grasp the nature of interim perialist contradictions, it is not only necessary to sh ift focus from the institutions of m ultinational corporations to m odifications in class relations, but also to understand the role

4 20 M ULTINATIONALS AND THE NATIO N STATE o f the state. Firstly, it is im p ortant to dem onstrate the conception of the state im plied in the form ulation of a p o w e rstru ggle between m ultinational corporations and nation states. (17) The tra d itio n a l liberal view of international relations has been one of free, separate nation s ta te s e m b o d y in g n a tio n a l in te re s ts, com peting w ith each other fo r pow er. Bourgeois p o litica l scientists and econom ists have found it necessary to m odify som e of th e ir assum ptions w ith the em ergence of m ultinational corporations. In general they have added the international corporation as another individual actor on the international arena com peting fo r pow er. In this new model the international corporation has an hom ogeneity and equivalence w ith nation states. It is precisely this fram ew ork that some m arxists have em ployed recently. Robin M urray fo r example, claim s that tw o traditional assum ptions have to be replaced; firstly, that there is an identity o f interests between a firm and its state, and secondly, that the state has pow er to control the activities of its firm s, W hat is needed instead is a model w hich contains international firm s, nation states, and international institutio ns as prim ary u n its (as opposed to a model that has either only nation states, or international firm s as prim ary international actors). (18) Thus we find various m arxists speaking in te rm ssim ila r to those of the liberal international relations fram ew orks: fo r exam ple, pow er is the driving force o f m ultinational corporations and their success lies in th e ir bargaining pow er w ith host nation states. (19) G oldstein speaks of p ublic pow er versus private pow er, the m a n a g e r s o f th e f o r m e r b e in g accountable, the latter, not. (20) S im ilar assum ptions are involved when W heelw right, follow ed by Catley and McFarlane, speak of m ultinational corporations being responsible to no one but th e ir own headquarters. (21) The other side of this coin is o f course the suggestion that m ultinationals can be put u n d e r c o n t r o l o f th e p e o p le v ia nationalisation A lthough it is not the main p o in t to be taken up here, the notion of a cco u n ta b ility to the people falls entirely w ith in th e lib e ra l b o u rg e o is n o tio n o f dem ocracy. G oldstein also refers to a zerosum struggle fo r power of managers of m ultinational corporations w ith managers of state pow er. (22) The concept of zero-sum power, or countervailing pow er, rests on the pluralist assum ption that pow er is a given quantity in a society fo r w hich a num ber of autonom ous groups or individuals compete. The gaining o f some of his pow er by one group means its subtraction from an o th e r._ A c o m m o n th e m e in a n a ly s e s o f international firm s is the fle x ib ility of these firm s, their ability to shift pro d u ctio n units w herever it suits them, the consequence of w hich, it is argued, is an abdication of absolute state pow er. (23) This particular article goes on to claim that totfi'e extent that foreign capital has penetrated the national econom ic space the state loses pow er to defend its own capital. (24) W hile it is certainly true that states no longer necessarily cfefend their own ca p ita l, to speak o f the state losing power v,-a-vis som e section of capital is m isleading. S im ilarly M artinelli and Som aini argue that because m ultinationals control financial flows, te chnology etc. and can make arbitrary choices th e ir activity generates national interest c o n flic ts. (25) That fs, nation states, supposedly being powerless to control fo re ig n firm s, are less capable of acting in the national interest" (w hether it be the interest of national capital, or the people at large). Thus, the general picture that emerges from these accounts is that these firm s in some sense by-pass, or are above nation states and weaken them, suggesting (although never e xplicitly) that the national state has in some w ay to be defended against international or foreign capital. In order to dem onstrate that the main contradictions on an international level today cannot be understood as one between m ultinationals and nation states it is necessary to outline briefly the m arxist conception of pow er and theory of the ca p italist state. MARXIST THEORY OF THE STATE M a rx is t e x p la n a tio n s o f in te rn a tio n a l c o n flic ts are lo c a te d in th e fie ld of contradictions between classes, rather than conflicts of interest between nation states. It is not, however, sufficient to leave the matter here, fo r the question m ust be asked: w hat role does the state play in international relations or more precisely, in te r-im p e ria list conflicts? In o-der to establish this it is necessary to look at the fu nction of the state in capitalist societies. It is im portant to note that we are now looking at the national state apparatus

5 AUSTRALIAN LEFT REVIEW SEPTEMBER, rather than the nation state. The use of the concept "nation state" frequently im plies that the nation and the state are one and the same, the consequence o f this being the suggestion that there is a national interest transcending class interests. The m arxist conception o f the state is that it has a function of "holdin g to g e th e r societies, su ch as c a p ita lis t s o c ie tie s, th a t are fragm ented by class contra dictions. (26) When understood in the co n te xt of a society divided into classes, the state s role as a factor of order and regulation, necessarily means the reproduction of the particular social relations on w hich capitalism is based. In the w ords of Engels: The m odern state is only the organisation w hich bourgeois society creates in order to m a in ta in th e g e n e ra l e x te rn a l conditions of the ca pitalist mode of production against attacks by w orkers as w ell as individual ca pitalists. (Anti Duhring) Not only is the state essential to capitalist s o c ie tie s b e cause th e y are based on contradictions and irreconcilable class antagonisms, but these also make inte llig ib le the appearance of the state as standing above society. In order that these antagonism s and cla sse s w ith c o n flic tin g E co n o m ic interests m ight not consum e themselves and society in a fruitless struggle it became necessary to have a power seem ingly standing above society that w ould alleviate c o n flic t... (Engels, Origin of the Family, Private Property and the State, M.E.S.W. (International 1969) p. 586) The apparent separateness of the state is not to be understood in the sense of either it being a neutral umpire between contending class interests or having some interests of its own. This appearance is made necessary in order that a class society be reproduced; that is, the economic and political dominance of the capitalist class be maintained. Without the state apparatus the antagonistic nature of the relations of production w ould be laid bare, and hence society" threatened by sharper class struggle. Now we can return to the question of state power, particularly the notion that the power o f the s ta te is b e in g th re a te n e d by m ultinational corporations. This assumes that power is actually located in the institu tions of the state. This strictly speaking is notthecase ; pow er in capita list societies means class power, and state power is a particular aspect of_ the power of the ruling class. The state itself has no pow er - rather it is where ruling class pow er is exercised. The political dom ination and power of the capitalist class is realised through the relatively autonom ous state apparatus. It is because of the relative autonom y o f this apparatus that the state appears to have power itself over society. D ifficulties w ith state pow er in the analyses discussed above, have partially arisen out of a c o n fu s io n o f sta te p o w e r w ith sta te intervention, particula rly state intervention on behalf of n atio nal fractions of capital. That is, when the state is seen to act on behalf of "fo re ig n capital as opposed to national fractions it is frequently expressed in term s of loss of power of the state to act in the national interest. B ill W a rre n, in a rg u in g a g a in s t th e a s s u m p tio n th a t m u lt in a t io n a ls a re th r e a te n in g th e p o w e r o f th e s ta te dem onstrates precisely the same confusion. (27) He argues that the pow er of nation states vis-a-vis large firm s is in fact greater now, and increasing, on the grounds that the processes of concentration and centralisation of capital have frequently been consequences of deliberate state policies. What he quite co rrectly appears to be em phasising is the increasing need fo r state intervention w ith the increasing internationalisation of capital. (28) This, however, is n o ta q u e stio n of the increase or decrease of state pow er but rather a question of identifying the sections of the capitalist class in w hose interests the state is intervening. It is now clear that it makes little sense to speak of m ultinationals (in other w ords, fractions of capital) threatening the pow er of nation states, or possibly elim inating them when state pow er is the expression of class power, and the reproduction of capital is dependent on the state. Such an approach evades the task of class analysis, particula rly an analysis o f the different fractions of capital of w hich the bourgeoisie is com prised. C onfusion has arisen at this point because with the internationalisation of capital it is not necessarily national fractions w hich w ill be

6 22 M ULTINA TIO N A LS AND THE NATION STATE defended by the state. That is, the general interest of capital may not correspond to the particular interests of national fra ctions of the bourgeoisie. (29) C om peting fractions of capital are possibly interested in elim inating each other, but not the state apparatus. For all capitals operating w ithin a particular society require the state to play a dom inant part in reproducing the social c o n d it io n s n e c e s s a ry fo r c a p it a lis t production. And, it m ust be noted, th a t despite com petition between sections of capital, all sections have interests in com m on such as containing w orking class struggle, raising the rate of profit, etc. National state intervention is a pre-requisite fo r the necessary international expansion of capital. And here indeed there is a contradiction: the increasing im portance of intervention of the national state as a condition of capital expanding internationally. This is an expression of the general contradiction of capitalism, between the tendency tow ards socialisation of the productive process and the private nature of appropriation, w hich is dependent upon the intervention of the national state. Expressing the co n tra dictio n in this way is not at all the same as saying that there is a struggle between tw o entities, m ultinational corporations and nation states. The political consequences are quite different. CONCLUSION The main point of the foregoing has been to argue against various form s of nationalism, such as that prom oted by maoists", that com e from seeing the foreign o rin te rn atio n a l nature of capital as the characteristic that makes it the enem y. The basic antagonistic relations of exploitation on w hich capitalism is based have not changed: it is the form that changes in d iffe re n t p n ases o f im p e ria lis m. T h u s, the role of the state in capitalist society has not changed either. The basic tenets of m arxism - leninism are also still valid. W hether the argum ent be that the state is the to o l of foreign or international capital, or that its power is being threatened, the theoretical mistakes and political consequences are the same. S trategically these new theories lead to reform ism. The national state in these schemas is either to be defended against foreign capital, or taken over intact by the people (the w orking class in alliance w ith fractions of national capital) out of the hands of the foreign m onopolies. (30) Such notions ignore the role of the state in m aintaining the political dom ination of the capitalist class. This dom ination cannot be overcom e unless the state apparatus itselt is smashed, or as Marx and Engels put it: The w orking class cannot sim ply lay hold of the ready made state m achinery and w ield it fo r its own purposes. (31) There are tw o main political conclusions to be drawn from the above. Firstly, there is a need for proletarian internationalism as against so cia l-p atriotism. S econdly, the enemy of the people is still the bourgeoisie and its state; and the struggle against them can only be led by a class conscious labor movement. FOOTNOTES 1. B. McFarlane & R. Catley, From Tweedledum to Tweedledee, A & NZ Book Company, Sydney, 1974, p E.L. Wheelwright. Radical Political Economy, - ANZ, Sydney, 1974, pp McFarlane and Catley speak of the Labor government s inability to respond adequately to the contradiction between the growing nationalism of the Australian people... and the de facto economic and political power of transnational corporations." (op. cit. p. 5). There is no attempt here to identify what "the Australian people" consists of, or whose interests their" nationalism serves. 4. Alberto Martinelli, Eugenio Somaini, "Nation States and M u ltin a tio n a l C o rp o ra tio n s, Kapitalistate I, 1973, p See e.g. J. Dunning, Studies in International Investment, Allen & Unwin, 1970, for figures on proportionate increase in US investment abroad since the war. 6. US investments in Europe quadrupled , whereas they not quite doubled in Canada, and hardly increased in Latin America. J. Dunning (ed ), The Multinational Enterprise, Allen & U nw in, 1971, poin ts out d ire c t fo re ig n investment constitutes 75 per cent of capital exported now, as against 10 per cent before M. Barratt Brown, Essays on Imperialism, Spokesman, 1972, p Loc. cit. 9 See e.g. P. Sweezy, P. Baran, M onopoly Captial, Penguin, 1968; H. Magdoff, The Age of Imperialism, Monthly Review, 1969; Sweezy and Magdoff in Monthly Review; M. Nicolaus, "USA: The Universal Contradiction". NLR, No

7 MULTINATIONALS AND THE NATIO N STATE This is Sweezy's most recent position. See Imperialism in the Seventies, Monthly Review, Vol. 23. No. 10, 1972, pp Also June and Oct Previously he took the more commonly held ultra-im perialist view that imperialism is united under US hegemony. While it is axiomatic that revolutionary movements are the threat to capitalism (the victories in Indo-China being the most recent testimony to this) neither this nor the fact that one capitalist country may have hegemony at a particular time can lead to a peaceful unity of international capitalist interests. The very dynamic of the capitalist production process makes this an impossibility. 11. The obvious comparison here is with the reformism of the German SPD and K. Kautsky, the initial proponent of a theory of peaceful ultra-imperialism. 12. This fact has also been widely used by neomarxists in attempts to refute Lenin, e.g. M. Kidron, Imperialism: highest stage but one, in Capitalism and Theory, Pluto Press, 1974, London (first appeared in 1962 in International Socialism), pp On an empirical level these arguments overlook the fact that Lenin referred to capitalist investments in other advanced capitalist countries. More importantly th o u g h, they are based on a lack of understanding of Marx s tendential law of falling rate of profit. 13. M. Nicolaus, op. cit., p This latter notion comes out, e.g. in R. Murray, The internationalisation of capital and the Nation State. NLR, No. 67, and Pici^otto and Radice, Kapitalistate, No. 1, 1973, p E. Mandel, Laws of Uneven Development, NLR, No. 59, pp It should be pointed out that in his argument for a United Europe" Mandel himself neglects inter-im perialist competition on a European level. Europe vs. America?, NLB, 1970, pp This is not to be understood in the terms put forward by Barratt Brown, that modern technology pushes firms beyond frontiers of nations" (p. 56, op. cit.). Technology is not the dete rm in a n t fa c to r. C o n c e n tra tio n and centralisation (and hence improvements in technology) occur as a result of the imperatives of competition between capitals. 17. Sweezy and Magdoff go one step further when they refer to the nation", multinational corporations and nations are fundamentally and irrevocably opposed to each other,, Monthly Review, Nov In this article, the nation, defined as a collectivity with pretensions to sovereignty, the nation state, and the national in te re s t are used interchangeably. 18. In Dunning (ed.) The Multinational Enterprise, p Previous reference has been made to Barratt Brown s suggestion that in fact multinational corporations have become the dominant factors in international relations, whereas nation states were previously. The issue here is not which of these entities has won the struggle, but rather, the framework that sees them as equivalent (but not necessarily equal) entities in a struggle. Barratt Brown is by no means alone in his opinion - cf. Kindleberger, Hymer, Sampson, Vernon. 19. A.G. Papandreou, Multinational Corporations and Empire, Social Praxis, Vol. 1, No. 2, W. Goldstein, The Multinational Corporation, Socialist Register, 1974, Merlin, p Wheelwright, op. cit. p. 37. McFarlane & Catley, op. cit., p Goldstein, op. cit., p Picciotto and Radice, op. cit. p. 57. Murray, NLR, No. 67, pp Ibid. p. 62. These authors do in fact give a more accurate account of the function of the state regulation of the national market economy on behalf of the capital operating within it. 25. Op. cit., pp For the most comprehensive contemporary work on the marxist theory of the state see N. Poulantzas, Political Power and Social Classes, NLB, and Sheed & Ward, B. Warren, How International is Capital?", NLR, No. 68, 1971, pp Writers such as Mandel have argued that the internationalisation process could provoke some form of supranational state. Not only is this mechanistic, but it falls into the ultraimperialist mistake of thinking that it is possible to eliminate the contradictions from capitalism, and ignores the fact of uneven development of social formations on which inter-im perialist contradictions are based. 29. It has frequently been noted that, contrary to the initial purpose of the EEC, it has been more advantageous to US capital than European. See Mandel, Europe vs. America, p. 60; Turgendhat, The Multinationals, Penguin, 1973, pp cf. Lenin's castigation of the "Leaders of Socialism (German SPD) for their adaption to the interests not only of their national bourgeoisie', but of their s ta te... State and Revolution in Selected Works, Vol. 2, Moscow, 1970, p Marx & Engels, Introduction to German edition of Communist Manifesto, MESW, op. cit., p. 31.