FDI what is it good for? Absolutely nothing? FDI is a confusing thing because it carries with its assumptions and structures which some perceive as equalizing and liberating, whereas others perceive it as destructive and exploitative. As someone who is typically critical of MNCs it is hard for me to imagine FDI as an inherently positive force. Examples of FDI and austerity as pursued by the IMF and world bank hurting third world countries are visible many places. In Jamaica and India, the destruction of the ISI programs, and state protectionist programs and being replaced by FDI, while increasing GDP, has been increasing exploitation of the land and the population. Yet this cannot be said to be FDI’s fault, but rather the fault of the broader liberal and neo-liberal regime which uses FDI as a tool to seemingly undermine state sovereignty. But if this structure and regime is already pre-established, is FDI the actual issue, or is FDI and MNC involvement in the third world a necessary evil as Susan Strange might put it. Susan Strange, a Marxist IR theorist, argues that while FDI and MNC exploitation of the global south is deeply destructive and harmful, yet she pessimistically believes it is currently a necessary evil within the overall immobile capitalist structure. For Susan Strange and Marxist like her, FDI and MNCs provide the base capital and investment to kick start development in the developing world, and therefore through FDI countries and people become less exploited—after they are initially greatly exploited. This argument actually sounds less Marxist than liberal, because rather than attempting to change the world—which is Marx’s main goal—Susan Strange admits defeat in the face capitalism and decides the only way to improve the conditions of the poorest, is for them to be exploited even more. Yet does FDI actually improve the conditions of the global south or decrease them? These questions can’t actually be answered by me, but again I feel that when FDI is used as a way in which to remove more state-centered policies, one allows the global capitalist regime to implement austerity and market-centered policies. This removal of the state power, through state power such as trade treaties and global IO’s, the implementation of FDI—while perhaps not directly negatively affecting the material conditions of the working power—erodes the states capacity to regulate MNCs and capital. As such while FDI may not have a directly negative impact, it may in fact indirectly hurt workers by disempowering the governments which may have protected the workers.

Tzur Shupack

MNCs are complex. Do they cause exploitation, do they manipulate or control the government? I think that capitalism, and mercantilism before it, set up MNCs to exploit the third world and influence government policy. The history of modern MNCs start in the US with the Santa Clara vs. Southern Pacific Railroad and in England with the companies act of 1862. While Crawford argues that MNCs originate here, and I mostly agree with this, it’s important to see how MNCs had their networks of power and control prior to the 20^th century. MNCs built off the production and distribution networks of the state associated companies, the United Fruit Company was originally a state associated company, and then it was fully privatized by the late 19^th century. The United Fruit Company used their historical connections with Latin America, and the power of the American state to assume control over monopolies in natural resources in Guatemala. In the early 20^th century United Fruit Company had control over the rail, mail, and electricity. The United Fruit Company had access to gain these monopolies due to the fact that dictators controlling Guatemala gave the united fruit company cheap contracts over these resources for bribes. The United Fruit Company essentially used the influence and power of the American empire to maintain market control over much of Latin America. This is important to see because even before the Guatemalan coup the United Fruit Company had political and economic leverage over the US and Guatemala, due to historical factors such as imperialism and colonization. Yet the reaction that MNCs don’t really influence governments because sometimes governments hurt MNCs profits is looking at too narrow of a scope. An example of Governments not doing foreign policy action at the behest of MNCs is the oil interests in the first gulf war. A study showed that the oil interests influence as a reason for the gulf war was the 4^th most relevant factor. However, this scope is looking at violent foreign policy, not general foreign policy which includes trade treaties. Additionally, this example doesn’t even suggest that the government didn’t have the oil interests in mind, but that these oil interests weren’t the most critical factors influencing the war. I would respond to these criticisms by focusing on US trade policy, which resoundingly supports MNCs profits and control, especially as indicated by the TPP under the Obama administration.