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Book Reviews

Against multinationals
Multinationals on Trial. 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,ING house HQ of ING 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

Selling Olga: Stories of HumanTrafficking and Resistance.Louisa Waugh. 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

Marx misunderstood
Economics Transformed. Robert Albritton. Pluto Press, 2007

Classical economics began with the publication of Adam Smith's Wealth of Nations in 1776. It continued with John Stuart Mill's Principles of Political Economy, first published in 1848, which was to remain a standard textbook on the subject for nearly a century. After the Second World War, neoclassical economics became the new orthodoxy in academia. The main difference with neoclassical economics is a much greater emphasis on mathematical formulas. However, what unites classical and neoclassical economics, together with all its various sub-divisions, is a theory of price with explicit or implicit policy recommendations for running the economy – unemployment levels, interest rates, cures for inflation, and so on. Where does Marxian economics fit into all this? The short answer is – it doesn't. Marxian economics provides a theory of profit and doesn't presume to tell the capitalists and their governments how they should run their system.

Profit-making is the life-blood of capitalism, though you wouldn't guess it from the news reports that economic well-being is threatened by a lack of “consumer confidence” – in other words, you're not buying enough stuff from the shops. Capitalist economics is there to explain that profit is untouchable as the reward for waiting for investments to pay off for the capitalists, and as a reward for risking their capital. But these are an attempt at justification of profit, not an explanation of the source of profit, which is what Marxian economics is concerned with. Waiting and risk in themselves do not create profit. There is only one way that vast personal fortunes and the social accumulation of capital can be satisfactorily explained: as the result of the unpaid labour of the working class being appropriated by the capitalist class in the form of profit.

And then there are the consequences of the profit motive: crises, recessions and mass unemployment; and all the other effects which create human and environmental degradation in its wake. Albritton doesn't deal adequately with any of this, which is unfortunate in a book which claims we can be “Discovering the Brilliance of Marx” in economics. Moreover, Albritton's understanding of Marx is undermined by his claim that we can “democratically manage markets so as to serve the needs of social justice.” Firstly, Marx never made that claim and in fact specifically argued against the use of markets of any sort. Secondly, markets presuppose private or class ownership of the means of production and distribution. Students of Marxian economics will need to look elsewhere.

LEW

Bronterre O’Brien

Bronterre O’Brien and the Chartist Uprisings of 1839. David Black.Radical History Network, 2007

James O'Brien contributed articles to the Poor Man's Guardian under the pseudonym “Bronterre” and eventually adopted it as his middle name.Chartists meeting Kennington Commons O'Brien soon became the Poor Man's Guardian editor as it campaigned for universal suffrage at the time of the 1832 Reform Act. This Act however merely redistributed the vote amongst the owning class, leading to the drawing-up of the People's Charter in response (“essentially a program for universal male suffrage,” according to Black) in 1838 by the London Working Men's Association and the Birmingham Political Union. In June 1839 a mass petition was presented to, and rejected by, Parliament. Violent uprisings then occurred around the country, including a fierce battle in Newport, South Wales, in which 24 died and 50 were wounded by gunfire. After the Newport uprising was suppressed its leader, John Frost, was sentenced to death (later commuted to transportation for life) and O'Brien was sentenced to eighteen months in prison for making seditious speeches.

Black's short tract on this particular episode reads like a Trotskyist analysis of the event as a failure of leadership (in Trotskyist literature working class setbacks are always the result of a betrayal of leadership). Thus Black argues: “if the Rising in Monmouth had not been led by John Frost it might well have succeeded.” Succeeded in doing what? Taking and holding Monmouth? Creating a revolutionary situation? Such fantasies were dismissed by O'Brien who had withdrawn from active involvement by this stage. According to Black:

“He explained later that he could not conscientiously take part in secret projects which could only at best produce partial outbreaks, which would easily be crushed and would lead to increased persecution of the Chartists.”

The Chartist campaign lasted another 10 years before collapsing in failure.

LEW