Some four decades after Joseph Nye’s Foreign Affairs article on MNCs, “‘Multinationals: The Games and the Rules: Multinational Corporations in World Politics” his article finds continued relevance in our almost entirely globalized world. Early in the article, Nye frames how countries, in pursuit of economic growth and greater relevance, acquiesce to MNCs and celebrate their military-like occupation of sovereign states. On re-reading, Nye’s article first published in 1974 reads as prophetic for what lay ahead through the 80s, 90s, as it does for the present day. While his framing of this rise of super-MNCs and the “Coca-colonization” did not prove entirely right, the MNC and globalized business have found more covert means through which to influence nation states and IGOs alike.
In the 1970s American industry was dominated by the Automotive sector. In the midst of a significant financial slump the adage that “What is good for GM is good for America” proved true when the US government eventually interceded and rescued the car manufactures from bankruptcy. This event, which saw no major change to the tactics, techniques, and procedures for the automotive industrial bailout parallels with the similar events of 2008 in the automotive industry again which was followed by the-2009 recession. On this occasion, the adage was generalized that the organizations who were saved were simply “too big to fail.”
This speaks to the stark contrast between MNCs and nation states. While the economy of a nation state can collapse, can be vulnerable, even exploitable the economy will continue to stand. Look no further than the economies of Ireland and Greece who, despite suspicious financial behavior and numerous austerity measures continue to operate. MNCs on the other hand, as exemplified by GM in the past and JP Morgan more recently cannot survive in the economies they influence without some sort of state support. I would posit, and reserve elaboration for a later blog post, that this framing of government being a sort of static regulatory body stands in contrast to MNCs being portrayed as a dynamic, energetic benefactor. I would further hold that this framing is one informed entirely by the dominance of economic and business majors in the literature of MNCs. Time and again we’ve seen the public sector being the momentum that facilitates private innovation.
Whether or not this framing or my counter-framing are 100% accurate is moot. The dynamic, so employed because it is precisely that, is shifting and changing at a constant. No longer bound to a binary of high and low-state-ness, the MNC-State relationship is more faceted now than a simple jockeying for global influence. Whether regulating tax havens abroad and encouraging greater domestic production, where one facet of the relationship waxes the other wanes. Yet another further complication in a developing complicated and globalized world.