In
our previous article, we identified some of the principal players. To help us better understand the issues, we
now need to understand the game; the game of world trade. World trade, that is trade between nations
is not a new: The Phoenicians and later
the Greeks and Romans plied the Mediterranean waters to trade with other early cultures. During the 17th century, prior to
paper money, European powers, to build up their bullion reserves, strived to
achieve favorable trade balances.
England
and other European powers discovered the value (i.e. profit) of
“mercantilism.” That is, they bought
the cheap raw materials from the less developed countries and manufactured and
sold the more costly goods; and to ensure their advantage, they colonized a
good part of the globe. We, the U.S.,
rebelled against England and, that brings us up to the current rebellion
against the modern practice of world trade.
So,
if world trade isn’t new, what is new and contentious about today’s world
trade?
What
is new and in contention is the scale and scope of the economic reach and
impact on every corner and individual on this planet by “Transnational
Corporations” (TNCs). Now, that in
itself shouldn’t, necessarily, be a bad thing.
And, you’ll find many corporate CEO’s and their entourage of economists
and investors who contend that on a “macro-scale” they do more good than
harm. That is, they create more jobs
and produce more of the world’s necessities, wealth and amenities than would
otherwise be the case.
The
problem, contend the “Non Governmental Organizations”(NGOs), is that most
people don’t live in macro-world of statistics, they live very much in the
“micro-scale” world as individuals who feel pain and suffer from loss of jobs,
income and poor , hazardous living and working conditions.
Before
we cite some of the specific objections to the negative aspects of TNCs
economics and practices, let us cite some statistics that will illuminate the
source of their clout.
The 1995 World Investment Report estimated there were 40,000 TNCs with 250,000 affiliates. With the ensuing 5 years of economic expansion, we can be fairly certain, that there are many more today. They control better than 2/3 of the world’s trade and services; much of it subject to monopoly pricing and practices, with 30% constituting intra-firm transactions; they call it free trade. Close to 4.8 billion of the world’s 5.6 billion people live in countries where the average per capita gross national product (GNP) is less than $1000 per year. With rising inequalities, a few benefit but, most are left behind; the result is surplus people and global apartheid.
TNCs
hold 90% of the world’s technology and product patents. Thus, they account for most of the world’s
industrial capacity, technological knowledge and international financing. They mine, refine and distribute most of the
world’s oil, gasoline, diesel and jet fuel.
They build most of the world’s power plants, satellites, computers,
electronics, chemicals, medicines and biotechnology and paper products. They grow,
harvest, and process most of the
world’s crops.
All
but 10% of the TNCs are based in northern industrialized countries, with 50% in
the U.S, France, Germany, The Netherlands and Japan. The top 200 TNCs corporate sales exceed the combined economies of
the 182 countries; that is all countries except the top nine. The richest 5th of humanity
controls 85% of the world’s gross domestic product. However, rather than credited as job creators, they have been
accused by the NGOs of having been job
destroyers.
They
pack a lot of economic and political clout.
So, we should not be surprised that they exert significant influence
over domestic and foreign policies of the industrial and emerging nations. They have been accused of being accountable
to no one but themselves, and that they either control or circumvent national
governments.
Is
the harsh criticism justified? Or are
TNCs just a natural progression of the free enterprise system?
Can
all this power and control be made more responsible and subject to democratic
oversight?
Do
the apposing players (NGOs vs. TNCs) want to play the game with the same set of
rules? Is that the issue?
Is
there any connection between ECONOMIC GLOBALIZATION and current terrorism?
I
will attempt to answer the above questions in subsequent articles. However, I would very much like to hear your
comments and questions. Although I will
make every attempt to be objective, the very process of selecting the items
inevitably reflects my bias. Therefore, as we research and discuss the issue, your
input is crucial to the success of the project; success being defined as
consensus and agreement on possible course of action.
STAY TUNED.
Art
Peracchio