MNCs, Environment & Culture: Extractive industries, agribusiness, & water

As noted at the start of the course, extractive industries are among the most visibly destructive and obviously exploitative areas of MNC activity. Forestry MNCs in Irian Jaya, the Philippines, and throughout Southeast Asia have contributed to a staggeringly rapid and widespread depletion of rain forests. And mining activities are intrinsically dangerous and destructive, bringing numerous MNCs into confrontations with host societies, their citizens, and advocates. These are obvious examples of the environmental/cultural impact of MNCs. These impacts, however, are often more subtle.

The increasingly concentrated nature of MNC dominated business is a familiar theme is this course. Nowhere is this more controversial than in the recent concentration and global vertical integration of agriculture. The rising prominence of agri-business (MNCs that specialize in various aspects of food production and distribution) has come to entail increasing corporate control of the food production cycle, extending from the proprietary creation and sale of seeds/crops, fertilizers, pesticides, to the distribution and retail sales of vast quantities of foodstuffs—often in MNC run supermarkets. Potable water too is well on the way to becoming an oligopolistic, MNC dominated industry. The rapid privatization of foodstuffs and water, along with deepening vertical control, means that MNCs are increasingly coming to control access to some of the basic necessities of life.


Export Processing Zones

EPZS are especially common in the following industries: garments/textiles, electronics, footwear/sporting apparel, toys, and pharmaceuticals.  Critics of these enclaves claim that the “trickle down” benefits touted by liberals are arrested or irrelevant in zones of exploitation. This is alleged because of a state-to-state competition for MNC investment that can drive wages, benefits, and worker conditions down—a socalled “race to the bottom.” Needless to say liberals dispute this is many cases, evidence for which is Raymond Vernon’s “obsolescing bargain theory” (discussed in course readings). On balance, however, EPZs among the poorest nations tend to be related to policies of last resort—the notion that “the only thing worse than being exploited is not being exploited” (Susan Strange). This leaves critics (e.g. NGO human rights groups, non-liberal economists, economic nationalists, citizen coalitions…) to wonder whether the social costs of EPZs can outweigh the promised benefits. Just what those benefits are (or whether they exist) is a question best evaluated on a case-by-case basis. What works for China, Indonesia, or Singapore, for example, is not necessarily the same for the Philippines, Guatemala, or Honduras.


Cox, workers and MNCs: some thoughts

As discussed in class, the Cox article (Labour and Multinationals) is a complicated read but can be reduced to an ultimately simple claim: the marginal and oppressed of the world aint who they used to be. In keeping with his Marxist leanings Cox wants to advocate on behalf of workers, but also realizes that Marxism is outdated and/or too narrow in a couple of key ways. First, the rise of MNCs in the 20th Century has trans-nationalized what were once essentially national confrontations between workers and owners of the means of production. While Marx uses a global rhetoric (“workers of the world unite”) he is well aware that such unity is more potential then real, and unaware that MNCS will soon arise and dramatically alter the nature of production and class relations. The shop-floor of Marx’s day has increasingly become the Export Processing Zones (EPZs) of today, a development particularly important to the most marginalized “members” of society. Second, this development reveals the outmoded vocabulary of classical Marxism. The “bourgeoisie” and “proletariat” give way to the “trans-national managerial class” and “the primary & secondary labour class.” More importantly, Cox identifies a new and especially vulnerable group, the “social marginal class,” whose ranks are increasing everywhere but especially in the developing world.

Cox avoids using the term “Labour” (capital L) because it has become a synonym for trade unionism, workers who have done reasonably well via a process he calls the “institutionalization of class struggle.” Cox’s concern is for non-unionized employees (secondary labourers) and social marginals (workers who have either dropped out of the market altogether or who are in grave danger of doing so). This group would comprise socalled “sweatshop” labourers, child workers, and so on. In a sense, Marx’s vision is partially achieved: some of the workers of the world have united, but primarily in the advanced industrial states, selling out their brothers and sisters in the process, both at home and (mostly) in the EPZs of the developing world.

This trans-nationalization of class struggle has made worker exploitation more extreme, more global, but also more invisible. The struggle for workers rights, where it can happen, is increasingly in the “sweatshops” that populate the periphery of global production. Where workers fight back, they face obstacles (from lack of governmental protection to paramilitary death squads) and/or MNCs simply move on, or “down,” to host states where workers are more compliant.


Cox article in Summary Overview

Synopsis: Transnationalization of class struggle

• an adaptation of classical Marxism

• goes beyond simple 2 class model (exploiting & exploiting class)

• inspired by Gramsci and Habermas (Critical Theory)


• the new “ruling class”

• composed of CEOs, upper management, economic diplomats, IGO officials, high ranking government officials, and just about anyone whose direct interests are consciously served by the globalization of finance, labour, and production (this class thinks globally)

• dominant but small class relative to others


• created in advanced industrial states by creation of trade unions

• Cox calls this the “institutionalization of the class struggle”

• this class protects its new-found powers and privileges at the expense of less fortunate workers (secondary labour class)

• secondary labour class comprises “McJobs” (low pay, low skill workers in danger of falling out of this class (though a lucky few may also move up into the ranks of the TMC (both primary and secondary labour class class thinks locally)


• most impoverished and insecure of all classes

• a new class (both to the world and to Marxist theory)

• barely a class at all (e.g. too marginal to have a “class consciousness”)

• an emerging and growing class in LDCs