Do Multinational Corporations Exploit the Developing World - Term Paper Example

Do multinational corporations exploit the developing world Introduction: When there is a clamouring for the optimisation of resources in every imaginable field it is certainly quite difficult to imagine a scenario wherein the prosperity of one section does not jeopardize the existence or the health of another. To assume that there can be progress without giving up something is being quite nave, to say the least. Over the last decade or so, there is this outcry against anything that falls within the category of 'multinational'. The very term denotes a firm that has a presence globally or rather one that would like to be known in more parts of the world than it is at the present point in time. However, to most people in the developing world there is this grudging acceptance (often tinged with a strong dose of denial) of the benefits of allowing a multinational firm to function on their soil. The capitalist perspective: To most parts of the developing world, 'Capitalism' is a mantra that is probably one of the surest ways of achieving economic stability not just for the individual, but also for the country as a whole. "The essence of capitalist exchange is to proceed from money to money by way of commodity and end up with more money than one had at the outset." (Raymond Aron 1967). Does this sound quite lop-sided Well, to a person or a firm who has decided to bet his last dollar on making it big in a country that is not his own, there is every cause to make the most of what can be got. Over a period of time, one will be able to assess and evaluate the quantity and quality of the resources that are available in this new country. However one-sided the argument of a capitalist may seem to be, there is no doubt that expansion of any firm involves certain losses, the pinch of which is usually felt by the developing world. There is this constant rat-race for economic prosperity, marked by large-scale trade-offs that are more often than not, worth the reward, over a period of time. To the capitalist, this is the essence of success, a tangible measure of progress. The socialist perspective: There is no doubt that Communism as an ism has all but disappeared from the present day world. In spite of this, there are remnants of this ideology which are very powerful in many parts of the world even today. When one talks about the rights of the worker or the son of the soil for that matter, there is this overriding imperative to take care of his needs before all developmental issues are even thought of. There is always the fear that the advent of multinational corporations would first exploit workers and then alienate them in their own homelands. A fear that has taken root in many parts of the world today, sparking off protests against the entry of multinational firms into a country. As opposed to indigeneous firms that are aimed at taking care of the land and labour without exploiting any resource, socialists believe that the entry of multinationals will spell the beginning of the end as far as economic independence is concerned. "The social relations within which individuals produce the social relations of production, are altered, transformed, with the change and development of the material means of production, of the forces of production." (Karl Marx, 1963 ). To be a stranger in your own homeland is probably the worst nightmare of any individual. The exploitation that can become a reality with the advent of capitalistic advancements in economic development could certainly contribute to a certain level of alienation among the working class. This would in turn lead to a lack of confidence in the entire system of economic and industrial development. "The worker is related to the product of his labour as an alien object." (Karl Marx, 1977). It is this kind of alienation that forms the indestructible root of protests and disillusionment in the system. Over the years there have been sociologists like Emile Durkheim whose functionalist views formed the bedrock of economic development and sociological thought in the latter part of the nineteenth century. Though Durkheim was very much in favor of division of labour and a certain level of specialisation, there is no doubt that he was also concerned about the loss of identity of the individual. He opined that the individual became 'no longer anything but an inert piece of machinery, only an external force set going which always moves in the same direction and in the same way' (Emile Durkheim, 1893). This is certainly a frightening prospect for not just a sociologist but for any individual who has the foresight to think about what his status might be in a land governed by the expansion plans of multinational corporations. Corporate will vs. social responsibility: Since no true progress can be achieved with a polarisation of thought or ideology, one needs to find the right balance in any situation. Neither pure capitalism nor absolute Marxism will achieve the results that can augur well for any kind of society, developing or otherwise. What is needed in every developing part of the world today is an effort that takes into the account the health of both the nation and its resources, both natural as well as man-made. For instance, if there is a multinational giant that is trying to set up its operations in a part of the world that is not very economically developed, it would be a very attractive proposition for the latter. However, the picture might not be as rosy as it seems when an EIA (Environmental Impact Assessment) is done. Today, one keeps reading about how and why corporations want to go global; but, if a step in this direction is going to undermine the health of a nation and its resources, there needs to be a complete rethink on the strategy that is to be adopted for so called development. Conclusion: In order to achieve a viable balance, an all-inclusive participatory management of all stakeholders is necessary. There are instances where members of the working class are included in the decision-making body of an organisation, in order to ensure that participatory management is made a reality. However, there are quite a few in the corporate sector who are quite sceptical about this move. Is this a cleverly orchestrated move on the part of the multinational to gain a footing in a strange land, or is it a genuine move that internalises worker power It is in this complex scenario that the pluralist thoughts of sociologists gain ground. Pluralism 'provides an opportunity for success for every interest that is voiced.'(Ralf Dahrendorf, 1959). Whether or not this participation is a reality, there is no doubt that there is a collective yearning on the part of the developing country to have a say in its developmental programmes. One keeps hearing all the time of global giants, as they are sometimes referred to, taking over a whole state or country in the name of development. Natural resources are tapped and recompense for the same is far from adequate. Government acquiescence further fuels the ire of those who feel that their country has been sold for a pittance to a multinational firm, for whom profit is the sole objective. To answer the question: do multinational corporations exploit the developing world; it would certainly be a difficult proposition to offer a firm yes or no. Though there are quite a few instances of multinational corporations moving into the developing world, in order to expand their base, there are reasons to believe that these very corporations have a human face as well. There is an acceptable level of social responsibility that they exhibit, in order to convince members of the working class and other socialist groups that though profit might be high on their priority list, it is not to be achieved at the cost of national resources. To a very large extent, this is the face of corporate expansion today. Though the word 'global' is one of the best loved today, it is also becoming increasingly clichd. In fact, there is reason to believe that 'going local' would be better in the long run than 'going global'. In other words, a careful estimation of the resources at hand and an assessment of the impacts of expansion could pave the way for balanced, responsible growth of multinationals. The bottom line in this whole discussion is the wielding of power. The sharing of power has to be not only just but also timely since, 'power is visible only through its consequences' (Westergaard & Resler, 1976). The various stakeholders cannot afford to lose sight of the fact that with power comes responsibility. If there is an equitable sharing of all resources and profits, there can be no apparent exploitation of any sector of society. Though this is might sound like a fairly utopian model, it is no doubt an achievable goal for modern society today. References: Aron, Raymond. 1967. Social Class, Political Class, Ruling Class in Bendix and Lipset. Main Currents in Sociological Thought. Vols. I & II. Harmondsworth. Penguin Books. Dahrendorf, Ralf. 1959. Class and Class Conflict in an Industrial Society. London. Routledge & Kegan Paul. Durkheim, Emile. 1893. The Division of Labour in Society. Trans. George Simpson. Macmillan. Marx, Karl. 1963. Karl Marx: Selected writings in Sociology and Social Philosophy. Eds. Bottomore T.B. & M. Rubel. Harmondsworth. Penguin Books. Marx. Karl. 1977. Karl Marx: Selected writings. Ed. D. McLellan. Oxford. Oxford University Press. Westergaard, J. & Resler, H. 1976. Class in a capitalist society. Harmondsworth. Penguin Books. Read More