Multinationals on Trial. By James Petras and Henry Veltmeyer. Ashgate. 2007.

  The basic thesis of this book is that multinational corporations (MNCs) are not simply capitalist corporations which have investments throughout the world in search of the highest rate of profit, but that they are also agents of the states in which they have their home base, helping them to build up and consolidate an “empire”.

The authors’ argument is that MNCs investing in Third World countries do not benefit them or help them to develop; on the contrary, through various financial devices and unequal contracts, they are vehicles for extracting and transferring wealth from these countries back to the home country. Further, once established in a Third World country, they outcompete or takeover local businesses and corrupt and co-opt local politicians and officials. The local politicians then come to adopt a foreign policy favourable to the home state and the process of the incorporation of their country into that state’s empire is achieved. The “imperial” state in turn helps their MNCs by using institutions such as the IMF and WTO to facilitate MNC entry into other countries through the imposition or negotiation of measures to encourage foreign investment, tariff-free trade, repatriation of profits, denationalisations and the protection of MNC property rights.

There is a certain amount of truth in this. States do support MNCs in this way, but it is not so obvious that MNCs are conscious agents of a state’s “imperialist” ambitions, especially as Petras and Veltmeyer are not always clear which states are “imperial”: The US (of course) but sometimes they speak of “the Euro-American Empire” or the West generally, so avoiding the problem of deciding whose empire a euro-american MNC would be helping to build.

“Imperialism” is a slippery word as all states seek to channel as much of world profits their way as they can. It is just that some states are stronger – some, much, much stronger – than others and so are better at doing this. In which case “imperialist” would just be another way of describing the successful states. But this does not mean that currently weaker states are not striving to do the same.

Petras and Veltmeyer take the side of the weaker states in this world-wide struggle between all states to grab a share of world profits and offer advice to developing countries on how to combat the policies of the stronger, more successful states. They tell them not to rely on foreign investment to develop, but to adopt measures such as nationalisation, state monopoly of foreign trade, protectionism and exchange controls instead. In short, a policy of national state capitalism, although they themselves don’t use this term. They see themselves as “anti-imperialist” and even pro-working class and socialist. Anti-imperialist maybe, but not socialist.

At the end of the first chapter, they grossly distort Marx’s materialist conception of history when they write of “the class and national struggle, which as Marx once pointed out is the ‘motor force of history’” (our emphasis). Marx did indeed see class struggles as the motor force of history, but not national struggles as such. National(ist) struggles are class struggles under an ideological smokescreen, but not of the working class. They are either struggles by an aspiring capitalist class to establish themselves as a new national ruling class or struggles by an established but weak national ruling class to gather a bigger share of world profits for themselves. There is no reason why socialists should support them.

ALB

Buying People

Louisa Waugh: Selling Olga: Stories of Human Trafficking and Resistance. Phoenix £8.99.

The Olga of the title is a Moldovan woman who was earning 35p a day working in an outdoor market. In desperation she and a friend replied to a newspaper ad promising well-paid jobs abroad, and were told they would be caring for elderly people in Italy. They ended up being sold to a bar-owner in Kosovo, where they were forced to work as prostitutes. After two years Olga managed to escape and returned to her home town, where she was housed and supported by the International Organisation for Migration. During her time in Kosovo she was beaten so badly that she lost almost 70 per cent of her sight.

Louisa Waugh’s book is full of appalling stories such as this, of women trafficked into the sex industry and forced to ‘repay’ those who arranged their journey and employment. Not all trafficking involves sex slaves, however, and many of those smuggled to other countries work in construction and agriculture, among other industries. The International Labour Office estimates that two and a half million people are caught up in trafficking, though others give far higher figures. In Moldova it has become one of the largest national industries, while Albania is another big source of trafficked women.

And what are the causes of this shocking ‘industry’? One is the fact that many men are willing to pay for sex, so pimps can make a profit from it. But on the supply side the answer is one simple word: poverty. Waugh quotes the director of an organisation called the Useful Women of Albania: “Women are trafficked from Albania because they are desperate to leave in the first place . . .if women are living here in poverty and they have nothing, then they will sell the only thing they can make money from: their own bodies.” The line between those who are trafficked and those who migrate ‘freely’ is a thin one. A report for Save the Children referred to “a steady rise in emigration for voluntary prostitution abroad in order to escape poverty and bleak futures in Albania.” But prostitution can rarely be voluntary in any real sense, and few of the women who migrate in order to earn money from selling sex are prepared for precisely what awaits them.

Many governments in Western Europe, including the UK, have addressed the problem of trafficking by cracking down on illegal immigration. But this has only led to the creation of an underclass of undocumented migrants, a group which includes those who died in Morecambe Bay in 2004. Forced labour — not confined to sex work — is an important part of the British economy, for capitalism wants cheap and pliant labour power. The extremes to which it will sometimes go to obtain it, graphically depicted in Waugh’s pages, show why it’s necessary to get rid of this diabolical system.

PB