As the world becomes more interconnected by transnational corporations and the internet territories and nations seem more and more like formalities than real players in the global community. Most people can travel practically anywhere, corporations manufacture products on one side of the planet and sell them on the other, and the internet allows people to do all that and more without dealing with customs and airport security. In addition many multi-national corporations are wealthier than a lot of small countries. Not to mention the advertising they do, which strongly influence how people think, and what’s worse is that many politician’s campaign ads are funded by corporate supporters. “Nations have lost most of the sovereignty they once had, and politicians have lost most of their capability to influence events.” (Giddens 236) True, nations can wage war against one another but the major war that is going on right now is not nation versus nation but an international coalition versus a non-governmental-organization. As shown by Gerald Epstein in “The Role and Control of Multinational Corporations”, Herman M. Schwartz with States versus Markets, Benjamin Barber in “The Educated Student”, and Anthony Giddens in “Globalisation”; the nation-state is becoming pointless. But that does not necessarily mean corporate takeover of the world as shown by Michael Hardt and Antonio Negri with Commonwealth, and Michael Weinberg in “It Will Be Awesome If They Don’t Screw It Up”.
One of the characteristics of globalization is the rise of multinational or transnational corporations, in particular their habit of manufacturing in countries where wages are lower or regulations are less tight and selling their products at several times what they spent on it in the wealthy countries that industrialized centuries ago. The result is that during the last twenty years the gross product of multinational’s foreign affiliates increased faster than the the Global GDP and many have greatly yearly profits than several countries. According to the charts on this site Wal-Mart makes more in one year than Austria. MNCs/TNCs have a variety of effects on their “host” countries that can be either positive or negative (depending on who you ask). On the one hand TNCs provide a stable source of income for the nations that host their factories, provide employment at wages that are often higher than normal for that country, and provide them with foreign investment that they wouldn’t otherwise get. On the other there are certain asymmetries in the economies of the host and home countries and third-world countries compete for multinational investment by lowering their taxes, and many people are blaming the current recession on all the manufacturing jobs in the U.S. being sent overseas.
To be honest, “Transnational firms have always existed, recall the Dutch East India Company.” (Schwartz 221) Though really the EIC and other colonial era TNCs were just extensions of the home country’s colonial empires, extracting raw materials for processing back home, unlike the current multinationals who do their processing in the former colonial nations. And the old transnationals were often able to wield their home nations’ military might in order to “persuade” native populations to work for them; the modern ones only have the carrot available to get new workers, no stick. Today’s TNCs might have a lot of influence over the governments of their host countries (and some would argue, home countries as well) but they’re not obvious puppets like it was before WWII, arguably the multinationals have just learned to be more subtle.
But now it is possible for local firms to emerge in independent undeveloped countries that do the same things as multinationals, why can’t they compete? One possibility is that MNCs have a massive technological advantage over smaller firms in undeveloped countries, after all, information such as blueprints and chemical formulas is very hard to sell since the customer can’t see it and therefore tell how good or bad a deal they’re getting until after they buy it. And of course the West has a massive head start technologically. Not to mention that “TNCs often occupied a strategic position in the local economy, because they produced goods that were related to the new leading sectors of the 1930s and 1960s clusters” (Schwartz 227) goods that were merely parts of a larger product to be assembled by one TNC that owned the many small firms which each made a specific part. Most likely it is a combination of both technology and monopolistic domination of the market.
Of course, it’s not just in host countries that transnationals exert a great deal of influence, they have control over their home countries as well. Through advertising they plant memetic viruses in our brains that affect how we think, they even fund campaign ads for politicians so we don’t have to think about who we vote for. Our founding fathers knew that an educated and informed populace was essential for a Republic to function, which is getting difficult. “In a way our first 200 years were a clear lesson in the relationship between democracy, citizenship, and education, the triangle on which the freedom of America depended.” (NWR 263) But after the Civil War and the rise of industry, capitalism, and a market society it became clear that young people were being increasingly exposed to the informal education of popular opinion and corporate advertising. Almost every channel has breaks in their programs every 8-10 minutes for advertising (the only exceptions I can think of being HBO and BBC), and many of the most commonly visited web sites are commercial. “Just fifteen years ago they were thought to be a potential new electronic frontier for democracy. But today very clearly they are one more mirror of a commercialized, privatized society where everything is for sale.” (NWR 265) In addition due to de-funding of public schools many have corporate sponsors, “is your college a Pepsi college or a Coke college?” And then there’s Channel One, the program where middle and high schools are leased televisions, modems, computers, maybe a satellite dish, in exchange for the students watching three minutes of advertising every day. Public opinion is essentially under the control of corporations who are interested in nothing but profit, and since the majority of nations today are more or less democracies where public opinion decides a lot that means they have control of government as well.
While countries become increasingly open to trade there are still skeptics who claim that most nations only gain a small amount of their income from external trade, and that most trading is done within regional blocs such as the European Union or the North American Free Trade Agreement. But the World Trade Organization has been encouraging minimal tariffs almost since it was created in 1995, meaning that even with free trade within NAFTA it can be extremely profitable to import from the other side of the planet. Still the skeptics (who are usually on the political “left”) maintain that globalization is nothing but an ideology by free-marketers who wish to dismantle welfare systems and reduce or outright eliminate government spending. But really when else have trillions of dollars that exist only electronically been exchanged on a daily basis? The amount of world trade today is higher than it ever was in previous decades, any previous decade. And it’s all thanks to the instantaneous global communication afforded by the satellites and transoceanic fiber optic cables that were first set up in the late 1960s and now act as pathways for the Internet. It’s impossible to escape globalization, protectionist tariffs can temporarily help an economy “but more permanent forms of protectionism will not help the development of the poor countries, and among the rich would lead to warring trade blocs.” (Giddens 241)
Of course there is a possible alternative to the unchecked capitalism that is sweeping the country, the common suggested by Hardt and Negri. Though “it is difficult to see the common, even when it is all around us” (Hardt and Negri viii) what with the prevailing ideologies of capitalism and socialism blinding the majority of people, there are some things that are neither “public” (defined as belonging to the state) or “private”. For example, languages are owned by no one, not by any person, not by a corporation, not even by the country where it originated from (assuming it still exists). Now Internet and computer related technologies are proving extremely difficult to privatize, considering the fidelity with which software can be copied and how easily bypassed the safeguards to prevent that are proving. Plus the means of production themselves involve information, codes, knowledge, images, and affects that increasingly require high degrees of freedom and open access to the commons, the Internet in particular.
An emergent technology that might extend the domain of the common would be 3D printing, a process that uses a fairly cheap machine ($300-1000 currently) to make a physical object from raw materials (usually plastic) and a digital CAD design, essentially it’s a factory that fits on your desk. For now the 3D printing community is small, kind of like the personal computing community of the early 1990s, “a relatively small, technically proficient group, all intrigued by the potential of a great new technology.” (Weinberg 1) This could potentially render all industries other than those involved in extraction and refining of raw material and energy obsolete, though it was believed that home taping would destroy the music and movie industries. But of course digital piracy is one of the fastest rising forms of crime, especially since the internet allows data to go anywhere. Now I doubt that printed objects will reach the same quality as goods from companies for at least a couple decades (especially considering that current printers only work with one type of material, so no electronics yet), and there’s copyright law to consider. Copyright protects writings, drawings, or designs, but not the idea behind it, nothing is stopping someone from designing something that does the same thing as an existing product but is discernably different, so even if copyrights somehow become enforceable there are ways around it. This could make not only nations, but also corporations obsolete.
So in conclusion the nation-state is quickly becoming a thing of the past, a mere formality with declining power. Multinational corporations transcend borders and territories while simultaneously influencing the countries they operate in. But it’s not just corporations that are rising, thanks to the same Internet that brought up the corporations the individual can wield a considerable degree of influence and within the century I would expect someone to have the manufacturing ability of a small company in their own home. Countries will continue to exist for quite some time of course but will be powerless puppets of the TNCs, we might as well live under a single world government that is indifferent to culture.
Epstein, Gerald. “The role and control of multinational corporations in the world economy.” The Handbook of Globalisation. Ed. Jonathan Michie. Northhampton MA. USA. Edward Elgar Publishing inc. 2003.
Schwartz, Herman M. States versus Markets: The emergence of a global economy. New York, NY. St. Martin’s Press, Scholarly and Reference Division, 2000.
Barber, Benjamin. “The Educated Student: Global Citizen or Global Consumer?” Gilbert H. Muller. Boston MA. USA. Houghton Mifflin. 2008.
Hardt, Michael and Antonio Negri. Commonwealth. The Belknap Press of University Harvard Press. Cambridge, MA. 2009.
http://www.publicknowledge.org/it-will-be-awesome-if-they-dont-screw-it-up Weinberg, Michael. “It Will Be Awesome If They Don’t Screw It Up: 3D Printing, Intellectual Property, and the Fight Over the Next Disruptive Technology” Public Knowledge. Washington D.C. 2010