The New Shape of Business in the Emerging Markets
Prof Edwin Locke, writing in Capitalism Magazine, notes that the three most oft-repeated claims made by anti-capitalists and anti-globalists are that multi-national corporations:
1) are becoming too powerful and threaten the sovereignty of smaller, developing, and emerging-market nations
2) exploit workers in said nations by paying lower wages than they would pay in their home countries; and
3) destroy the environments of the same
Via the Social Science Research Network comes a new paper by professor Paul Bracken of the Yale School of Management that addresses the first of these three claims head on. The paper is entitled "Big Business and the Golden Straightjacket . In it, Bracken argues that the days where Western multinationals were "unchallenged suppliers of technology and know how to launch the emerging market economies on their path to capitalism" are nearing and end. But it is not anti-capitalist policies that are bringing about this state of affairs. Rather, its competitive and nationalistic forces. Bracken continues:
The rise of domestic Chinese, Indian, and Russian corporations will give the Western multinationals more competition in the future because most mega countries will not permanently cede their home markets to foreign multinationals. But the implications go well beyond those of business competition.
The large corporation is a regulator of globalization. It determines the degree of globalization, whether it is shallow or deep. Foreign multinationals will increasingly have to work through these domestic companies to get access to their giant home markets. Western companies will find it much easier to go with an established domestic company than either going it alone, dealing directly with the government, or stitching together a network of hundreds of small businesses.
Thus, in Bracken's view the world's developing and emerging market economies, particularly the big ones, have at their disposal the means to not only prevent themselves from becoming mere vassal states of Western multinationals, they have the means to ensure that technology transfer and capablilities development are part of the deal. In other words, rather than defying the demands of globalization- demands which if met, are the quickest route to wealth and national development- emerging market economies are making economic development a high national priority.
Achieving that goal requires first engaging in sober, economically-rational assessments of the nation's resources and capabilites and then engaging a wide-range of institutions, particularly Western multi-nationals, about how to best develop those resources and capabilites. And that's quite a different kind of work than organizing marches where shirtless hooligans and other self-proclaimed defenders of the oppressed crash police barricades, toss dust bins through the plate glass window of local McDonald's, and engage in the kind of uncivil disobedience that shuts down large swathes of large cities. As Bracken so succinctly puts it:
The large corporation embodies the liberal, free-market rules that advanced Western countries value. It may not embody all of the values of liberal democracy, but it comes much closer to them than authoritarian and big government nations usually do.
To the degree we accept this premise, one conclusion in particular becomes inescapable: the anti-globalists and anti-capitalists aren't crashing the barricades on the road to prosperity, they are the barricades.
UPDATE: HK Dave of SimonWorld has a new post detailing the arrest of "professional protesters" entering Hong Kong prior to upcoming WTO meetings. The title is "Ravings of a Trade Xenophobe". I should have thought of that one.
globalization, anti globalization