The growth of anti-capitalism in the world - Research Paper Example

? The growth of anti-capitalism in the world and its impact and significance for US multinational companies The growth of anti-capitalism in the world and its impact and significance for US multinational companies. 1. Introduction The development of social and economic inequalities in countries worldwide has been often initiated through practices the context of which has not been clear; in fact, the potential benefits of low social classes have been used as an excuse for supporting measures, which violate the rights of poor people. Capitalism has been a framework supporting the interests of the elite class without its mission to be clearly understood by the beginning. Indeed, the success of capitalism can be identified at the following point: people at low level of the social hierarchy are given certain benefits, which in fact are of non-value compared to the benefits resulted to the elite-class. In this way, laborers are given the impression that are key part of the political and economic system of their country; instead, they have become part of the production process under terms which are quite unfair, compared to the benefits resulted for the capitalists, the elite class which has the control of the production process and of the distribution of profits accumulated. Because of its unfairness and its opposition to the rights of laborers, capitalism has faced significant oppositions. Various theories have been developed for limiting the power of capitalism. These theories could be considered as incorporated in just one movement, the anti-capitalism movement supported by important theorists, like Marx. Current paper focuses on the examination of the growth of anti-capitalism worldwide and its impact on US multinational companies. The literature published in the particular field is reviewed and presented, aiming to show the key elements of anti-capitalism – as developed globally – but also to highlight the need for differentiation of anti-capitalism practices for best serving the needs of populations internationally. It is proved that anti-capitalism, in its current form, has many prospects to lead to a radical transformation of laborers’ position, supporting equality in the distribution of wealth. However, because the perceptions of anti-capitalism are differentiated in countries worldwide, as explained below, it is necessary for the relevant plans to be appropriately aligned with the local culture and rules. 2. Anti-capitalism in the international community 2.1 The context of anti-capitalism Anti-capitalism is a movement trying to confront the development of capitalism, as the specific concept was described by theorists and economists worldwide. In this way, in order to identify the elements of anti-capitalism, it would be necessary to understand the characteristics and the role of capitalism. In accordance with Fabra (1993) capitalism can be defined as ‘the system enabling man to regain the full value of the product of his labor’ (Fabra 1993, 139); the above explanation is based on the terms that capital is considered as ‘the accumulated product of labor’ (Fabra 1993, 140). As explained above, capitalism leads to a series of practices for accumulating the wealth – the one spent for acquiring the product. However, the practical implications of this process are many. For this reason, capitalism has been negatively criticized, as of its involvement in the development of social inequalities. This fact is made clear in the theory of Marx, who supported that as capitalism grows, the purchasing power of laborers is reduced (Fabra 1993, 23); the increase of unemployment is, in accordance with Marx, another implication of capitalism which, in any case, is considered as quite difficult to be controlled. Currently, it seems that the above efforts towards the limitation of capitalism have been fully justified. The high increase of the power of multinational corporations has led to their independency towards the governments; in this way, the rules of trade internationally have been negatively affected and competition, inevitably, has been harmed. The further expansion of anti-capitalism can be considered as necessary in order for these organizations to be controlled. However, in its current form, anti-capitalism cannot particularly help for the elimination of economic turbulences globally. It should be alternated, incorporating measures which can be applicable on markets of various sizes and characteristics; the simultaneous establishment of such measures in markets internationally could help to control capitalism more effectively – compared to the introduction of such measures in specific markets which would be considered as more vulnerable to economic turbulences. The role of anti-capitalism in modern societies has many dimensions; in the past, anti-capitalism movement had the form of oppositions against the expansion of measures that threaten the interests of lower social classes. Currently, anti-capitalism focuses on the alteration of methods used for the development of countries in the international community. This trend is made clear in the study of Kebede (1994). The specific study refers to the neo-Marxist theory, which is based on the view, that ‘underdevelopment cannot and will not be eliminated by still further capitalist development’ (Kebede 1994, 23). The actual context of the above view can be fully understood through the case of South Africa, as analyzed in next section. The promotion of capitalism, in the form of support for covering basic human needs, in the particular country serves only part of the problems of the local population; at the same time, capitalism in the specific region helps towards the increase of the power of the elite-classes. In this context, it is made clear that anti-capitalism in modern society needs to be differentiated compared to its past forms; the exact forms of this anti-capitalism movement – being close to the neo-Marxist theory on capitalism as presented above – have to respond equally to the interests of all social classes and not promote the social and economic inequality. 2.2. Effects of anti-capitalism on countries worldwide In order to understand the effects of anti-capitalism globally, it would be necessary to check primarily the ways in which globalization has affected politics, culture and business around the world. Then, the potential consequences of an opposite movement, i.e. of the anti-capitalism would be made clear. In accordance with Potter et al. (2008) globalization has caused severe economic turbulences in nations internationally. Multinational corporations have usually a key role in this problem. Because of the expansion of their activities, these organizations accumulate high amounts of money; in fact, ‘there are multinationals with higher turnover from the GDPs of small nations’ (Potter et al. 2008, p.166). Moreover, multinationals operating in many countries globally have the power to lower their prices making their products more attractive – compared to those of their competitors. These firms can develop such strategy since they have a high level of production and are able to achieve better agreements with their suppliers. However, in this way, the profits of local firms are likely to be reduced while monopolistic practices are likely to appear. From this point of view, the development of anti-capitalism could help national economies to strengthen, securing competition within their market and increasing their control on the business activities across their territory. Anti-capitalism, as a strong social movement, developed largely in 1990s (Gilbert 2008). It was in the above period that anti-capitalism activities were developed globally; the review of these activities can help to understand the current form of anti-capitalism concept, but also the way in its this concept could affect the operations of corporations which are expanded worldwide – being based on the rules of capitalism. Of course, anti-capitalism, as a concept, is almost as old as capitalism. In fact, the theory of Marx on capitalism, and his suggestions for the limitation of the specific economic trend have become the basis of the anti-capitalism movement. However, in 1990s the anti-capitalism movement become more strong, being influenced by the strong financial turbulences in the global markets. In Britain and in North America, anti-capitalism had a particular form: ‘groups of militant environmentalists joined organizations like Friends of the Earth and fought against the expansion of multinationals’ (Gilbert 2008, 82). The specific activities did not convince significant part of the population, mostly because their targets were not standardized; either of them focused on the improvement of existing governmental policies on the practices of large multinationals – referring especially to the terms set to these organizations regarding the protection of the environment from their operations; either of them, tried to promote the radical differentiation of the modern style of life suggesting the elimination of the consumption as a key element of daily life (Gilbert 2008). In this way, anti-capitalism become not just a social but also a political and economic movement, being opposed not just to the expansion of large operations but also to the further increase of the power of consumption as a factor influencing everyday life. At this point, the following issue should be mentioned: the fact that anti-capitalism movement is developed within a particular country cannot lead to the assumption that the local society and culture are opposed to capitalism. In other words, such activities, where developed, do not have many chances to succeed unless they are supported by a high percentage of the local population. For instance, in UK in order for the anti-capitalism movement to be successful it should be supported by the unions, which, traditionally, have an important role in the development of critical political decisions. Specifically for the UK it has been supported that the country’s past does not favor the development of anti-capitalism movement. This issue is highlighted in the study of Coates (2000) where reference is made to the high involvement of aristocracy in politics – a relationship that has been developed for more than a century, meaning the 18th century up to the beginning of the 19th century (Coates 2000, 138). With this past, Britain may not be considered as appropriate for the development of anti-capitalism movement, a view which could be opposed however by the fact that Britain is also known for the power of its unions – which can influence governmental decisions almost equally as aristocracy (Coates 2000). The research on the development of anti-capitalism movement globally has revealed an inconsistency in the efforts made for the confrontation of the expansion of capitalism. Indeed, while in Britain and North America a rise in the anti-capitalism movement has been identified in 1990s, in other countries worldwide the efforts against capitalism were led to severe delays. Reference is made specifically to South Africa; the country has suffered for many years because of Apartheid and the increase of the power of the elite social class – meaning the rich farmers and entrepreneurs who were actively involved in the development of the country’s politics (Padayachee 2006, 416). The win of the African National Congress in the elections of 1994 gave the impression that the country would be revealed from the severe social and economic problems of the past – meaning especially the race discrimination which was followed by a discrimination in wages and in civil rights (Padayachee 2006). However, soon it was made clear that ANC was not going to fight the expansion of capitalism across the country; indeed,’ the neo-liberalism and elite-dealing, as parts of a bourgeois democracy’ (Papayachee 2006, 416) have become indispensable elements of the government’s practices across the country. The case of South Africa, as described above, proves that the fight against the capitalism, or else, the movement of anti-capitalism cannot be considered as limited within a particular period of time or within specific borders. It can appear in countries with different political and social background and it is likely to face strong oppositions, under the terms that the power of elite class, the most keen supporter of capitalism, is high in all countries worldwide. The different trends regarding the development of anti-capitalism movement worldwide can be explained by the following fact: not all countries worldwide are equally affected by globalization and capitalism. Thus, the level and the forms of anti-capitalism efforts worldwide are likely to be differentiated; also these efforts are likely to have different chances to succeed. The specific problem is analyzed in the study of Sklair (1994); in the above study, reference is made to the following phenomenon: in the developed countries – or else, the First World – capitalism cause different distortions compared to the countries of the Third World – most of the African countries (Sklair 1994). It is further explained that countries of the Third World do not face the same social, political and economic problems with the developed countries. Thus, capitalism, as promoted through globalization, in the countries of the Third World is mainly used in order to resolve basic human needs (in food, water and medicines). Then, after resolving these problems, other problems appear (diseases and environmental issues) which are common with the countries of the First World; in the last case, globalization is not of any value for the countries of Third World (Sklair 1994). For this reason, the argument that globalization can be used for the development of the countries of the Third World should be rejected as non-valid (Sklair 1994). The development of these countries could be achieved by carefully designed plans, which would refer to all aspects of life of locals, and they would not focus on specific daily needs. The expansion of capitalism, as attempted, in the countries of the Third World should be prevented, as not serving the needs of the local population and not promoting the actual development of the region, as the initiators of these efforts claim (Sklair 1994). Under these terms, it is assumed that in South Africa the anti-capitalism movement focuses on the transformation of the plans that are currently used for the country’s development. Instead of focusing on practices that serve only basic human needs – but which also serve the capitalism – those supporting anti-capitalism in South-Africa try to highlight the need for measures which will improve the life of the locals on a long term basis, for instance the improvement of existing infrastructure (local water system, transport, industries and so on) across the country. A different approach would be used for evaluating the development of anti-capitalism in well-developed countries, like Japan. In the above country, the rules of the market have been developed in such way that competition is under the close monitoring of the state. Moreover, the terms set for the entrance of foreign enterprises are quite strict. Also, the management practices of Japanese enterprises are quite different from their Western counterparts, which are likely to prefer ‘downsizing’, a practice avoided by Japanese organizations. Instead, efforts are made so that organizational profits are used for the development of the organization rather than being distributed to the shareholders (Burkett & Hart-Landsberg 2000, 69). Because of the above anti-capitalism practices, Japanese enterprises have become extremely competitive in the global market; in fact, the profits of Japanese multinationals have helped towards the stabilization of the Japanese economy. Even in periods of strong crises, these enterprises, supporting the anti-capitalism movement, have managed to keep their performance at a significant level, a fact that has also benefited the Japanese economy (Burkett & Hart-Landsberg 2000). The case of Japan and its support towards anti-capitalism proves that the above movement can significantly help the improvement of business activities worldwide; in this way, national economies could be also benefited – either in the short or the long term. In any case, the development of anti-capitalism worldwide seems to be closely related to the cultural characteristics of each country. This fact is made clear in the case of Germany, especially as the country’s social framework was developed at the end of the 19th century. Despite the fact that the elite-class in Germany of 1900s had many common characteristics with that of Britain, many differences could be also identified. More specifically, as noted above, in Britain of the 19th century, emphasis has been given to the promotion of neo-liberalism and capitalism while industrialism had to face significant barriers (Rubinstein 1994, 57). On the contrary, in Germany of the late 19th century, the elite class emphasized on the country’s economic growth, which was considered as depended on the country’s industrialization; as a result, in Germany of that period, industrialization was promoted more than capitalism, aiming to strengthen the economy. In modern Germany, similar trends have been identified; the specific practice of German governments seems to have led to the desired benefits: the country’s industries have become extremely strong supporting the national economy; capitalism may not be quite developed in Germany, as in Britain where the power of the elite class to intervene in the country’s politics is extremely strong; the anti-capitalist policies that Germany applied through the decades – even if these policies cannot be characterized as purely anti-capitalist – they have led to the stabilization and the growth of the national economy, a target which is not fully achieved by Japan which has launched similar anti-capitalism strategies for protecting its economy. 3. Anti-capitalism and multinational corporations 3.1. How anti-capitalism can affect the operations of multi-nationals As noted above, capitalism can affect all aspects of social and economic life. Moreover, since capitalism is based on the accumulation of profits – aiming to cover the amount spent for acquiring the product – it is closely related to business activities. The promotion of capitalism through the business operations can have many forms (Callinicos 2001). Most commonly, capitalism, as part of the business plans, is reflected in the employment practices and rules of companies (Callinicos 2001). Of course, it could be argued that because of capitalism, the labor market globally is benefited – through the expansion of business activities (White 2010). However, such view would not be valid; the Marxist theory that capitalism leads gradually to unemployment can used as a first argument against the above view (White 2010). At the next level, the current increase of unemployment in developed countries, where capitalism flourishes, can be considered as strong evidence that the promotion of capitalism, as promoted through the employment practices of businesses of various sizes, can significantly harm the economies of all countries. Multinationals are key tools for the promotion of capitalism; having to operate globally, these firms tend to transfer the culture/ rules of their home country to the foreign markets (meaning the markets of the host countries) (Parrett 2007). In this way, multinationals, even if there is no such priority in their plans, they tend to promote capitalism – as the specific trend is enforced by the promotion of common operational rules and employment ethics in all units of multinationals worldwide – as this activity meets the terms of globalization (White 2010). The involvement of capitalism in the development of multinationals worldwide cannot be denied. In fact, in accordance with Jones (2005) in the context of capitalism, governments worldwide tend to support the interests of their multinationals worldwide. It is explained that if the units of a multinational corporations in a foreign country are under threat – because of local political or social turbulences – the government of the country where the multinational is based may decide to intervene – even using military corps – for protecting the interests of its multinational. For example, when the Suez Canal was nationalized in 1956, France and Britain decided to send military forces in the area in order to protect the units of their firms in the particular country (Jones 2005, 220). In the same context, in 1954 US corps invaded in Guatemala for preventing the local government from taking unused lands of the United Fruit Company for redistribution to peasants’ (Jones 2005, 220). The above examples prove that capitalism is not just a theoretical framework offering guidelines for particular political or business decisions; it also incorporates a series of practices which are considered as justified for protecting the interests of the capitalists, or else, of those who have direct or indirect benefits from specific business activities. In the above context, it is made clear that the anti-capitalism movement can affect the activities of multinationals; these firms are particularly related to capitalism since their profitability is high and the interests related to their operations are many (Ison, Peake & Wall 2002). Therefore, these corporations can be considered as potential tools for the promotion of capitalism. Of course, the above fact cannot lead to the assumption that the control of the practices of these corporations cannot be changed, becoming less hostile to the laborers (Griffiths & Wall 2007). Such perspective exists, but this target can be achieved only through a strong anti-capitalism movement, as indicatively described below. 3.2 Effects of anti-capitalism on US multinationals The anti-capitalism movement has strongly affected US multinationals. The effects of this movement on the practices of these corporations are differentiated. A first sign of the influence of anti-capitalism on the strategy of US multinationals is the alteration of these firms’ Corporate Social Responsibility (CSR) plans as a result of the strong anti-globalization movement started in Seattle in 1999 (Segal-Horn & Faulkner 2010). The above movement aims to set limits in the expansion of globalization across USA, since this trend has led to the increase of unemployment, the decrease of wages and the deterioration of conditions in the workplace (Segal-Horn & Faulkner 2010, 53). Even if the above movement has not achieved these targets, taking into consideration the current level of unemployment in USA, still it has helped to improve the conditions in the workplace and lead firms to support equality and fairness in the workplace (Segal-Horn & Faulkner 2010). From this point of view, the anti-capitalist efforts developed by protesters in Seattle has led to the decrease of the power of capitalism in US, even if the achieved benefits are limited compared to the targets set. The above case proves that the anti-capitalism movement can lead to the differentiation of the employment practices of multinationals – as in US multinationals – and the control of inequalities and discrimination in the workplace. The influence of capitalism in the practices of US multinationals is reflected in another fact: the World Trade Organization is responsible for setting the rules of trade in markets internationally. Multinationals, which operate in a series of markets, have to take these rules into consideration when developing their plans (Ison, Peake & Wall 2002). The above practice is made clearer in the case of the environmental standards set for firms operating globally; each multinational, including US multinationals, need to align their operations with these standards, otherwise they are likely to face severe consequences (Ison, Peake & Wall 2002). In the context of anti-capitalism movement, the environmental practices of each multinational should be decided in accordance with the needs and the characteristics of each region where the organization’s units are cited. Often, US multinationals have been accused for not fighting capitalism enough; however, in many cases, these allegations are not valid since the increase of efforts towards this direction is not feasible or it would not produce any additional benefits, at least if initiated only by a sole multinational – i.e. without the relevant effort to be supported by other multinational; this is the case of Nike, which has been often accused of promoting socialism while in fact it just follows the business practices which are commonly developed by other US multinationals (Jackson 2003). Towards the same direction, residents in Lakeview have confronted the accusations against Walmart supporting that it is not the organization’s fault but the market structure and rules that have led to the development of the firm’s current strategies (Lane 2011). In the case of McDonald’s also, it is considered that the oppositions against the firm’s practices are not justified, taking into consideration the current market ethics which have led to the establishment of particular strategies for firms which are interested in activating globally (BBC 2001, Maitland 2002). 4. Conclusion The increase of the power of the anti-capitalism movement globally has affected the operations of multinationals in all countries. In US the influence of the above movement in the strategies of multinationals can be identified mostly in the rules of these firms’ Corporate Social Responsibility framework. Moreover, the alterations of the above firms’ employment rules – in favor of employees – denote that the anti-capitalism movement in USA has managed to confront the expansion of globalization across the country. The current increase of unemployment and the decrease of wages (as a consequence of the increase of immigration but also of a series of wrong political decisions) across the specific country are likely to lead to the further enhancement of the anti-capitalism movement (Alazraki 2009). However, in any case, the elimination of capitalism would be difficult to be achieved – not just in US but also in other countries internationally, less depended on capitalism, such as Japan and Germany, as explained above. The key reason is that capitalism, because of its continuous development for many decades, has become a factor on which key decisions of governments are based – as revealed through the examples – presented above – of military interventions developed for protecting the interests of multinationals. In accordance with the above, the anti-capitalism movement is likely to affect the strategies of multinationals worldwide; in the case of US multinationals the above movement has been taken into consideration when developing the organization’s key strategic framework, as this trend is revealed mostly commonly in the CSR strategy. However, it is clear that more initiatives would be developed for the further enhancement of anti-capitalism through the US multinationals under the terms that these initiatives would be actively supported by the country’s government. References Alazraki, M. (2009) “Will capitalism fall like communism? Another Dr. Doom says yes” Daily Finance. June 23, 2011. http://www.dailyfinance.com/2009/05/15/will-capitalism-collapse-like-communism-another-dr-doom-says-y/ Anderson, W. (2004). “Does Wal-Mart Destroy Communities?” Ludwig von Mises Institute. 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