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Романов Михаил Игоревич ТРАНСНАЦИОНАЛЬНЫЕ КОРПОРАЦИИ ...
УДК 339.92
ТРАНСНАЦИОНАЛЬНЫЕ КОРПОРАЦИИ В МИРОВОЙ ЭКОНОМИКЕ: СИСТЕМА НЕОКОЛОНИАЛИЗМА И ЭКОНОМИЧЕСКОГО ИМПЕРИАЛИЗМА
© 2016
Романов Михаил Игоревич, аспирант
Российский экономический университет имени Г.В. Плеханова (117997, Россия, Москва, Стремянный пер., 36 e-mail: mihaileromanov@gmail.com)
Аннотация. Данная статья посвящена феномену транснациональных корпораций и их крупномасштабной экспансии в экономическом, политическом, научно-технологическом и информационном направлениях. Был проведён анализ деятельности передовых транснациональных корпораций крупнейших промышленно развитых стран. В настоящий момент ведущие корпорации являются основными игроками современных международных экономических отношений наряду с независимыми государствами и представляются главной движущей силой мирового экономического развития. Рассмотрены методы лоббирования интересов финансовых корпоративных элит с целью установления экономического превосходства над конкурентами. Немаловажен вклад транснациональных корпораций в развитие инновационных технологий. Сегодня в лабораториях и научных центрах ТНК осуществляется основной объём научных исследований и разработок всего мира. Ведущие корпорации продолжают укреплять свои позиции и охватывать новые рынки сбыта продукции, иногда прибегая к самым грязным и аморальным приёмам. Как показывает история, мировая финансовая элита продолжает эксплуатировать периферию современного мира даже в тех случаях, когда периферийные страны имеют политическую независимость. Автор описывает эволюцию мировой экономической системы и обращает внимание на глобальное экономическое противостояние, переходящее в новую фазу своего развития.
Ключевые слова: транснациональные корпорации (ТНК), экономическая экспансия, рыночная капитализация, либерализация внешней торговли, инновационная экономика, научно-исследовательские и опытно-конструкторские разработки (НИОКР), избирательный процесс, международная конкуренция.
TRANSNATIONAL CORPORATIONS IN THE WORLD ECONOMY: THE SYSTEM OF NEOCOLONIALISM AND ECONOMIC IMPERIALISMS
© 2016
Romanov Mikhail Igorevich, PhD student
Plekhanov Russian University of Economics (117997, Russia, Moscow, Stremyanny lane, 36, e-mail: mihaileromanov@gmail.com)
Abstract. The following article deals with the phenomenon of transnational corporations and their large-scale expansion in the economic, political, scientific, technological and information fields. The leading transnational corporations of the major industrialised countries were analysed. Currently, these corporations are the key players in modern international economic relations along with the independent states and represent the main driving force of the world's economic development. It considers the methods of lobbying the interests of the financial corporate elite in order to establish economic superiority to the competitors. There is an important contribution of transnational corporations to the development of innovative technologies. Today, in laboratories and research centres TNCs carry out the bulk of research and development in the world. The principal corporations continue to strengthen their positions and embrace new markets, sometimes resorting to the dirtiest and most immoral tactics. As history shows, the world's financial elite continues to exploit the periphery of the modern world, even in those cases where these peripheral countries have political independence. The author describes the evolution of the global economic system and draws attention to the imminent economic confrontation between the forces described above, passing to a new phase of its development.
Keywords: transnational corporations (TNCs), economic expansion, market capitalisation, foreign trade liberalisation, innovative economy, research and development (R&D), electoral process, international competition.
Introduction
The 21st century is the era of large-scale confrontation between dominant civilisations. However, this clash of civilisations is neither political nor military, it is economic, with the leading transnational corporations (TNC) of the largest industrialised states as the key players instead of countries and power blocks. The acquisition of new trade areas and innovative technologies are their goals. Essentially, TNCs are the basic structural element of the economies in the majority of countries - they are the driving force for their development and improved efficiency. The global tendencies of production and capital internationalisation, privatisation, strategic alliances and foreign trade liberalisation have made TNCs the centre of world economic development. Considering the further redistribution of world markets and areas of influence it is possible to predict the appearance of international super-corporations by means of the merger and acquisition of the world's largest companies.
TNC expansion is one of the phenomena of the second part of the 20th century. This process reached its most significant scale in the last decades of the century. In fact, TNCs solve all the questions posed by new economic and political world repartition; they are on the verge of creating a world supranational government.
The birth of the United Nations Commission on Transnational Corporations in 1974 provided evidence of the role that was played by transnational corporations in world politics and economics. It deals with issues relating
to the operations of transnational corporations and directs the activities of the United Nations Information Center on TNCs. The interests of TNCs are behind wars and revolutions in countries located in Northern Africa and Latin America; they are behind government changes in Europe and Asia. But the financial benefits that transnational oligarchy received did not run into tens or even hundreds of millions of dollars - it ran into billions and trillions. Transnational corporations actively participate in all global processes and act as equals with industrialised countries in political, economic, financial and investment, informational, scientific and technical, military, technological, and ecological spheres. In foreign policy, TNCs put into practice a unique corporate diplomacy, and have created a corporate ideology to maintain a successful internal policy. They have numerous intelligence agencies to match those of the biggest states, and it is possible to equip an entire army with weapons produced, for example, by General Dynamics. The way in which TNCs' actions manifest themselves in world politics and economics coincide to a large extent with the actions of countries. This fact allows experts if not to identify them then, at least to draw parallels between these actions and manifestations in the spheres of international politics and economics. At the same time, a number of researchers think that transnational corporations will become the dominating force of the world economy in the near future and replace nation states as their main objective. Nowadays, the leading role in global processes is played by US transnational corporations, whose
Романов Михаил Игоревич экономические
ТРАНСНАЦИОНАЛЬНЫЕ КОРПОРАЦИИ ... науки
trade and investment expansion leaves behind the industrial and finance companies of other countries in both forms and extent. But this gap has been slowly decreasing due to improved performance of TNCs in Western Europe states and Japan, and the rise of transnational corporations in CEIT (countries with economies in transition).
Economic expansion
The spectacle of transnationalism is a feature of modern world economics with TNCs as its driving force, whereby the kernel of the world economic system includes five hundred transnational corporations that wield almost absolute economic power. The economic power of the largest TNCs can be compared with the GDP of an average state, and at the present time corporations impose their will on many countries. The market capitalisation of some transnational corporations exceeds $500 billion and annual sales volumes are in the region of $150 to $200 billion.
Each of the largest corporations yearly net profits is equal to the annual budget of Ukraine or Croatia. The number of countries where the leading TNCs' branches and subsidiary companies operate often exceeds the number of embassies that the states operate abroad. Moreover, the number of employees and members of their families (whose wellbeing, to some extent, depends on one large corporation only) is equal to the population of such countries as Slovakia or Hungary. The range of activity of TNCs in host states is evidenced by the fact that the sales volume of their foreign subsidiary companies and branches exceeds $19 trillion, that is twice than the amount of world exports. At the same time, over a half of all sales succumbed to the share of the 100 largest corporations, and each of the 1000 leading companies' sales volume exceeds $1 billion. Thus, American Wal-Mart's sales volume amounts to $408 billion, General Motors' $135 billion, ExxonMobil's $394 billion and Ford's $128 billion.
Today, TNCs control over 50% of world industrial production, 67% of international trade, more than 80% of patents and licenses for new equipment, technologies and know-how and nearly 90% of direct foreign investments. Almost all raw material trade in the world markets is controlled by TNCs, including 90% of world trade in wheat, coffee, corn, wood, tobacco and iron ore; 85% in copper and bauxites; 80% in tin, tea; 75% in rubber and crude oil. As a rule, TNCs are multi-industry companies, their activity is widely diversified, for example, each of the 500 largest US TNCs have subdivisions in eleven industries on average, and the most powerful of them cover 30 to 50 industries. Cumulative TNC currency holdings exceed all of the world central banks' cumulative holdings several times over. In this regard, cash movement of between just 1 to 2% of their total ownership is quite capable to change the parity of national currencies. Currently the total foreign investments of TNCs play more of an essential role than trade does. Direct and indirect investments, as well as loans and credits, are the forms of export capital. The reason for foreign investments is often an expression of interest in the natural resources of host countries aimed at guaranteeing the supply of their enterprises with raw materials. By means of foreign investments, the USA, for example, receives all imported phosphates, copper, tin, and 75% of its manganese and iron ore; likewise Japan obtains 40% of its bauxites, 50% of its nickel and 60% of its copper ore. Capital investments in foreign economies actively stimulate the demand for domestic production. Firstly, it is achieved due to the creation of new markets abroad; secondly, the export share of TNCs is constantly readdressed to their foreign branches; this guaranteed share is above 30% of Canada's, Germany's, France's, Sweden's exports and about 50% of the USA's exports. Thirdly, investments allow corporations to avoid hostile non-tariff barriers. About 30% of international trade consists of TNCs' intercompany flows. They have created a specific form of capital transfer within internal trade by means of transfer prices (artificially over- or underestimated), set by TNCs themselves during the delivery of 326
goods and service provision to the subsidiary companies and branches.
The important factor of further increase in TNC economic power is numerous merges and absorptions, whose level has risen in the last few decades. There was a merger of Boeing and McDonnell Douglas in 1997 (that was worth $15 billion to Boeing) which strengthened American equity presence in the market. Nowadays, the Boeing Company is the largest world aerospace corporation. Two leading American oil corporations Exxon and Mobil merged in 1999 while Chevron and Texaco merged in 2001. The pharmaceutical giant Sanofi-Aventis has appeared as a result of a merger in 2004. Russian Norilsk Nickel took over Canadian LionOre Mining in 2007, a company with a unique resource base (namely nickel and gold mines in Africa and Australia). Google seized Motorola Mobility in 2011, taking possession of over twenty thousand patents for various mobile developments together with a prestigious research laboratory. In the same year, Microsoft took over Skype, leaving Google, Facebook and Cisco behind in its wake. On 12 October 2015, the American corporation Dell signed an agreement on obtaining the EMC Company, subsequently became an all-powerful business megastructure. Such mergers testify to the global centralisation and concentration of capital on a global basis for future domination of TNCs in the world. The absorption of leading companies has reached the level where many corporations are forced to buy-back their own shares from other holders, avoiding possible absorption by competitors. General Motors was forced to buy-back its own shares for over $2 billion before acquisition of new companies to ensure its own security.
International politics
The most important TNC activities in the political sphere of the home country are interaction and maintenance of contacts with the executive, legislative and judicial systems, central and regional country authorities, leading political parties, public organisations, and mass media. It is achieved by staff rotation between TNCs and the most important government agencies of the home country, active participation of corporations in the electoral process and lobbying company interests. The international activity of TNCs forces them constantly to face foreign policy agenda. At the same time, the management of TNCs prefers to resolve major issues on the activities of their companies in host states by holding their own meetings and negotiations with the heads of these countries, without the support of foreign policy bodies. TNCs actively join the local political process in the host states they operate in. Their representatives enter national associations of manufacturers where they have an opportunity to contact heads of regional authorities. Corporations usually finance certain local political parties that also influence host state policy. In a number of instances, as a consequence of revealing illegal activities of TNC in host countries, the political leaders, leaders of political parties and public organisations connected with illegal actions of corporations were removed or bunkered. One of the most striking examples is the Lockheed bribery scandals in the Federal Republic of Germany, Italy, the Netherlands, Japan and other countries. The American aircraft manufacturing company Lockheed Corporation gave big bribes to officials of the mentioned countries for the sale of military and passenger planes. In 1976, the evidence of the bribe was discovered and made public by the Committee of Foreign Affairs of the US Senate. As a consequence of the international scandal, fifteen high-level government officials including the Prime Minister Kakuei Tanaka, who received a $2 million bribe, were prosecuted by the Japanese high court. A number of ministers were brought to justice in Italy, and the President of the country, Giovanni Leone, was forced to resign. The husband of the Queen of the Netherlands, Prince Bernard was accused of taking a bribe of $1.1 million and resigned his positions on various corporate boards. According to the Lockheed manager Ernest Hauser, the corporation bribed Franz Josef Strauss, Minister of АНИ: экономика и управление. 2016. Т. 5. № 4(17)
Романов Михаил Игоревич ТРАНСНАЦИОНАЛЬНЫЕ КОРПОРАЦИИ ...
Defence of the Federal Republic of Germany and his party the Christian Social Union (CSU), for $10 million in order to purchase the Lockheed F-104 Starfighter interceptor for the Bundeswehr in 1961. The heads of the military and air forces of Sweden, Spain, Turkey and Colombia were removed as well. The investigation of the Lockheed Corporation's illegal activities led to further revelations and scandals in Greece, France, Saudi Arabia, Egypt, Mexico and the Philippines.
The range of TNC intervention methods in the internal affairs of host states and their influence on political and social situations in these countries is far-reaching. For example, the American United Fruit and several other US TNCs that were dissatisfied with policy in Panama, Honduras and Costa Rica created a special fund to undermine the stability in these countries in 1975. Armed conflicts, sabotage and even an assassination attempt against the President of Panama, Omar Torrijos, were planned with this purpose in mind. Earlier, the United Fruit Company participated in the landing of Cuban counter-revolutionary units at the Bay of Pigs, and, as the American press reported, the Hughes Aircraft Company took part in preparation of assassination plots against Fidel Castro. Fight between corporations for market channels and sources of raw materials even caused wars between states. The bloodiest Latin American war in the history of the 20th century, the Chaco War between Bolivia and Paraguay (19321935), ruined both countries especially Bolivia, leading to the loss of 60 thousand of its population. In fact, it was a struggle between the American corporation Standard Oil of New Jersey (now ExxonMobil) and the UK-Netherlands Royal Dutch Shell for oil reserves found in the Gran Chaco region. In short, the American corporation needed access to the sea for its planned construction of an oil pipeline. By that time, Royal Dutch Shell had already received oil concessions for a part of the Gran Chaco's oil-bearing fields and fought to preserve and expand its holdings.
Science and innovative technologies
A particular feature of modern TNCs is their huge expenditure on research and development (R&D). For example, annual spending of General Motors, Ford and IBM on these purposes is $2 to 3 billion which exceeds the research budgets of many countries. Indeed, almost all expenses on R&D for the private sector in the USA are divided between 700 of the largest companies, however, about 40% of these means fall to the share of 15 of the largest corporations. Today, the laboratories and scientific centres of TNCs carry out the main amount of scientific research and development. At the same time, host countries are playing an increasing role in the scientific and technological strategy of TNCs. For example, in the early nineties, IBM had over 25 thousand scientists outside the USA; about 30 laboratories carried out R&D programmes within the corporation's general plan. Nevertheless, nowadays taking into account all the features of the markets, specialisations of branches and IBM subsidiary companies, the number of employees and laboratories abroad has been doubled. TNCs implement various approaches and methods for research work organisation.
The significant contribution into advanced technology development of TNCs is made due to cooperation with scientific centres. Such centres are often created by universities, and leading industrial corporations are eager to finance them. Small- and medium-sized companies make a certain contribution the creation of advanced technologies for TNCs, because only brand-new R&D discoveries and their implementation in specialised production will help them to survive. Although the total spending of small- and medium-sized companies for R&D do not exceed 5%, but they carry out a significant amount of prominent innovations. Due to this expenditure, the majority of such companies are often go bankrupt and only the most successful ones continue to cooperate with TNCs which finance them through venture funds.
Many modern large TNCs make civil products alongside military ones. The American aerospace corporation United
Technologies makes the lift equipment (Otis Elevator Company), aviation engines (Pratt & Whitney), aerospace systems for commercial, regional, corporate and military aircraft (UTC Aerospace Systems), etc. At the same time, there is a number of the TNCs specialising only in weapon production. These include Lockheed Martin, General Electric, Northrop Grumman, Raytheon and Leidos. One of the distinctive features of military production is the performance and high profit level of order. That is why TNCs (that earlier produced civil goods) have been investing in the military production during the past two decades, instead of civil production as was the case before. For example, in 1985 General Motors took over the Hughes Aircraft Company, which specialised in military aircraft production. Thereafter GM sold its shares to the Raethon Company in 1997. In its turn, in 1999 General Dynamics absorbed the Gulfstream Aerospace Company, which was also making military planes. The Ford Corporation intruded into military aerospace production and founded the subsidiary company Ford Aerospace & Communications. Annually military-industrial corporations manufacture military equipment and weaponry for tens of billions of dollars. The nomenclature of their products includes military equipment of nearly all types - from caponiers and radars to intercontinental rockets and aircraft-carriers. TNCs sell military and technical products in more than 100 countries of the world. As a result, military-industrial corporations are often the focus of world community in connection with weapon supplies in conflict zones, the igniting of civil wars and military coups.
Special services
Tough competitive struggle and striving for maximum profit force the management of TNC to keep an eye on the activities of their competitors and monitor all of the world's processes. For this purpose, the majority of the leading TNCs have founded special reconnaissance and counterintelligence units for this purpose with the same forms and methods of public intelligence agencies. Former employees of intelligence and counterintelligence agencies, special armed forces and police are usually hired to work in these units. And the former high-rank employees of the state intelligence and counterintelligence bodies are often chosen to act as the head of the special services in corporations: John McCone, who served as Director of Central Intelligence from 1961 to 1965, headed ITT Corporation intelligence service for a long period, another American political leader, William Colby, the head of the US Central Intelligence Agency from 1973 to 1976, was a political consultant of the largest US corporations and the member of their boards. The leading US TNCs had been spending annually over $2.5 billion (almost as much as the CIA) for the secret services in the early eighties last century. The cost of security facilities was estimated at $800 million, which altogether shows the extent of activity of the special services in TNCs. The number of people at General Motors' security services (22 thousand staff) could be compared with the FBI.
The special services of TNCs obtain various political and economic information, which is not available to foreign services or reconnaissance of the leading states. These special services use all types of espionage: from scientific and technical to political. Intelligence services in corporations are engaged not only in data collection, but also in forecasting the development of politics in those regions and countries, being the main concern of TNCs. American Gulf Oil analysts could predict the overthrow of Mohammad Reza Shah Pahlavi in Iran four months before the Islamic revolution in 1979 demonstrating the high accuracy of such forecasts. As a result of this prediction, the company transferred their activities from Iran to other countries in time and bared no losses during the anti-American uprising. Later, Gulf Oil was absorbed by corporation Standard Oil of California, and renamed Chevron.
In reality, the secret services of corporations and home countries have a strong symbiosis. For example, some of the interrelations between American TNCs and the CIA
Романов Михаил Игоревич ТРАНСНАЦИОНАЛЬНЫЕ КОРПОРАЦИИ .
are fixed and regulated by legal norms. The CIA even had a special department on communications with TNCs to maintain fixed contacts with the American corporations. The cooperation between corporations and the special services of home countries was revealed by Edward Snowden who disclosed details on the state programme PRISM, passed by the US National Security Agency in 2013 that included mass phone and Internet spying following communications between American and foreign citizens and the leaders of many countries. According to Edward Snowden such American corporations as Microsoft, Google, Yahoo!, Facebook, YouTube, Skype, AOL and Apple participate in the PRISM programme.
Final remarks and conclusion
There is no doubt TNCs have become a driving force of the world economy. Today, TNCs are equal participants in international economic relations, as well as home and host countries. The well-being of a country, its participation in the division of international labour, the degree of integration into the world economy and finally its international competitiveness depends on the success of the corporations rooted in its economy.
In general, the TNC is a complex phenomenon that is constantly developing in the system of intereconomic relations. It requires constant attention, studying and international control. Large Russian corporations such as financial and industrial groups have been starting their own parallel development because they realise that their active expansion prospects in the foreign markets will improve exponentially. If Russia does not want to become a victim of the neocolonialism and economic imperialism of TNCs, it should be ready to make a global economic stand, which is sure to become a basis of the future confrontation between civilisations in the 21st century.
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1. Huntington, Samuel P. The Clash of Civilizations and the Remaking of World Order // Simon & Schuster, 2011. 368 pages
2. Perkins, John The New Confessions of an Economic Hit Man // Berrett-Koehler Publishers; 2nd edition, 2016. 384 pages
3. UNCTAD Transnational Corporations (Journal) (Volume 23, Number 1); United Nations, New York and Geneva, 2015. 99 pages
4. UNCTAD World Investment Report 2015 -Reforming International Investment Governance; United Nations, New York and Geneva, 2015. 252 pages
5. UNCTAD World Investment Report 2016 - Investor Nationality: Policy Challenges; United Nations, New York and Geneva, 2016. 232 pages
