48 



Multinational Corporations 



In response to efforts by many foreign nations to protect their 

 own balances of international exchange by restricting the penetration 

 of foreign corporations, a form of international commercial institution 

 has rapidly proliferated. This form, the multinational corporation 

 or MNC, is designed to accomplish the age-old dream of the economist : 

 to minimize the economic significance of national boundaries. It 

 does help to alleviate once-potent economic causes of international 

 disputes, and it can be an effective agent of technology transfer, 

 but it also generates new causes of conflict and frustration. Charac- 

 teristically, the MNC moves capital, materials, credit, managerial 

 expertise, technological skills, intellectual property, and even trained 

 labor from country to country in order to maximize its total overall 

 and long-term profit. In the process it erodes the national sovereignty 

 of host countries, diverts capital and labor from nationally planned 

 economic allocations, and competes for economic and even political 

 power, while preserving its own economic and technological power 

 base remote from the countries it penetrates. At the same time, 

 because of the complex and farflung nature of its operations, it tends 

 to elude controls which the base country seeks to impose, or even at 

 times to outpace the base country's perception that certain controls 

 may be needed in its own national interest. In so doing it tends to 

 neglect political, social, and institutional costs of its operations. 



As an institution the MNC offers the capability of influencing con- 

 structively the evolution of a stable world economy and the develop- 

 ment of lagging economies. But as the MNC currently operate-, it 

 excites resentment among U.S. labor unions as an instrument to 

 cause unemployment at home; it excites resentment in developed 

 countries by superimposing foreign management over domestic 

 labor; and it excites resentment in developing countries by co-opting 

 labor and resources to feed into technologies which are often inap- 

 propriate to, and tend to distort, the development process in those 

 countries. 



Nationalism 



The disintegration of 10th century colonial empires has resulted in a 

 large increase (to L59 as of mid-1977) in the number of separate 

 sovereign slate-, each groping toward independence, governance, self- 

 determination of national policy, and coherence. Some of these states 

 have discovered the ancient formula whereby nationalism, in term- of a 

 contrived hostility toward their own neighbors, toward other groupings 

 of states, or toward one or another of the great powers, can serve to 

 unify and promote coherence of their own political structures. At the 

 same time, claims turn into "rights" and exchanges of values become 

 "exploitation," creating an attitude of manifesl destiny of the poor. 



I r nited Nations 



Bom in an epoch of hope for a cooperative world of peaceful tuitions, 

 the United Nations has degenerated into a cockpil of parochial squab- 

 bles. Since the penalty for intransigence in the United Nations is 

 inconsequential, the motive for compromise has disappeared and deci- 

 sions without practical effect are arrived at in the U.N. General 

 Assembly by counting the votes of the ministates. Effectiveness of the 

 U.N. Security Council is largely nullified by exercise of the veto power 

 by the leading permanent members. Constructive programs of the 



