7 Following is an abridgement of a pa- per on multinational corporations present- ed to the Committee on Development and National Independence of the World Con- gress of Peace Forces, in Moscow in October. The author is Associate Professor of History, Simmons College, and Research Fellow in Ethnic Studies, Harvard. By Dr. Mark Solomon a the end of World War II. there has been a rapid expansion of . “multinational” corporate operations. MNs first appeared in the early twentieth century as both a feature and outgrowth of the monopolization of enterprises in the industrialized capitalist countries, and of imperialism. Their major interest is not in trade as such, but in profits. They do not simply ‘“‘buy from and sell to"’ other. nations. The editor of the Harvard Busi- ness Review ~defines the multinational “as having production and marketing facilities in many countries, enjoying worldwide access to capital, depending on foreign income, and being managed with a worldwide point of view.” MNs engage in direct investment in foreign nations. moving through success- ively complex stages from the simple export of products to foreign ‘countries, to the establishment of sales organiza- tions abroad, to efforts to control and/or purchase foreign firms, to the establish- ment of foreign manufacturing facilities and finally, to the multinationalization of management and ownership of overseas enterprises — from top to bottom. The term *‘multinational”’ corporation is to- day generally applied to businesses oper- ating in at least six countries, whose overseas subsidiaries account for at least one-fifth of the parent’ company’s assets and sales, and which report $100 million or more in annual sales. This criteria is piddling for the 200 American industrial firms estimated by the U.S. Department of Commerce to the ‘‘multinational" in scope. General Motors alone registers an- nual sales approaching $30 billion. more than the Gross National Product (GNP) of all but 15 countries. In addition, Ford Motor Company, with an annual income greater than Austria’s GNP, General Electric, IBM, Chrysler, Mobil, ITT, Gulf, RCA, General Telephone, etc., are among the U.S. multinationals (two- thirds of the multinationals in existence are U.S.-owned) which account for 80% of all direct U.S. foreign investments, with annual sales of nearly $200 billion. It is understandable that they have been called ‘‘invisible empires.”’ Following the lead of the first multi- nationals which concentrated in the early days upon extractive mining and petro- leum industries, a diverse group of power- ful corporations has accelerated over- seas investments. From 1950 to 1971 di- rect overseas investments by United States MNs increased sevenfold from $11.8 billion to over $78 billion. In addi- tion, banking interests have added a dra- matic element to expanding U.S. foreign investments. U.S. banks are ac- quiring assets overseas at an even faster rate than most multinational corpora- tions. A recent report noted that foreign branches of U.S. banks have some $70 billion in assets abroad, nearly ten times the $7.5 billion of mid-1965. 2 The oppressive effects of MNs are by no means confined to the underdeveloped -areas. Seventy percent of the foreign operations and transactions of U.S.-based multinationals are with other industrial- ized nations. United States interests own 45% of Canada’s manufacturing facilities alone. The search for cheap labor is ex- tended to both industrialized and under- industrialized countries. Not only are workers in developed sections pitted against labor in neo-colonial areas, but workers in various industrialized nations are forced to compete against each other. General Electric moved its clock and tini- er works from Ashland, Massachusetts (throwing 1,100 workers out of jobs). to the depressed wage area of Taiwan. But Litton Industries bought the Royal Type- writer Company of Hartford, Connecficut, where hourly wages were $3.60 and moved that operation to Hull, England, where the hourly rate was $1.20. Seventeen hun- dred Hartford workers were thrown out of work. When a U.S.-owned glass manu- facturing subsidiary in France was faced with strike action, production was shifted _ to countries which were Common Market members and the products were shipped back to France. The French strike was broken. The flight of thousands of, jobs from the United States to depressed wage areas has led the chief economist of the AFL- CIO to declare that in ‘‘the international economic arena... capital is mobile, labor is not.” The United States now has one of the PACIFIC TRIBUNE. FRIDAY, JANUARY 25, 1974— PAGE 6 highest unemployment rates of any indus- trialized nation, but it has gone from a trade surplus of $7 billion in 1964 to a trade deficit of $7 billion in 1972. The beneficiary is the multinational which relentlessly seeks dominance over foreign labor and locks that labor into depressed wages — to the detriment of labor every- where. : The negative impact of multinational activity is felt on many levels of econom- ic life within industrialized nations. An- drew Brimmer, a governor of the Federal Reserve Board of the United States re- cently warned that multinational bank- ing activity was having a detrimental effect upon the availability of credit in. the U.S. in such vital areas as housing, consumer loans, and municipal financing. Twenty huge multinational banks, accord- ing to Brimmer. were holding vast sums in foreign offices for speculation in over- seas investment. MNs have also*been re- sponsible for collossal increases in *‘mo- bile money” (currency that-floats inter- nationally). At the end of 1971 multina- tionals controlled a staggering $268 billion in short-term liquid assets. This is far greater than the assets held in national banks. In the recent dollar crisis, half the currency dumped on the market for a_ quick killing (mainly at the expense of the U.S. dollar) was known to be from predominantly U.S.-based multinationals. MNs profited enormously from interna- tional currency fluctuations while labor in the United States and elsewhere bore the burdens of currency inflation. While victimization by the policies of the giant MNs is a fate shared by all wo ing people, it is in the relations betwé multinationals and “less industrial nations’”’ that the exploitative policies these corporations are most clearly vealed — and where monopoly, neo-col ialism, and racism merge into a SI pattern of oppression. The average raté return on U.S. investments in unde veloped countries is considerably hig than multinational investments in | veloped countries and nearly twice rate of domestic investments. U.S. Department of Commerce gures. show that for corporations inv@) ing in the less industrialized nations © tween 1950 and 1965 the amount of P leaving those countries was 264% of | capital inflow. This is in contrast to rope and other developed areas, W the profit outflow was 74% of capital flow. Salvadore Allende explained t0 United Nations why his country had tionalized U.S. properties: ‘‘Uncontr@ economic power... is the force Wl threatens us with stagnation, with wo! ing our dependency, and therefore imP ing our development.”’ Throughout Chile’s history, Ame!” copper companies derived substal profits from the copper mines, while tributing little to the nation’s eam) and growth. Between 1955 and 1970 # conda Copper averaged 21.5% in chill profits, while averaging only 3.6% in 9 countries. Recent statistics for the * ippines show that returns from S¥ holders’ equity in the timber indus was 15.8% (in 1971). but 6.8 in the in mining it was 53.9% compared 13.8°c: and in rubber 36.4% compat* WORLD MAGA