The Multinational Monitor

JUNE 1980 - VOLUME 1 - NUMBER 5


R E S O U R C E S

Apologia for Corporate Power

The Wealth Weapon: U.S. Foreign Policy
and Multinational Corporations

by Ben J. Wattenberg and Richard J. Whalen
Transaction Books, 122 pages
$12.95 cloth, $6.95 paperback
Reviewed by Vincent Wilber

During the years when the late Henry Luce personally ruled his publishing empire, certain correspondents were heard, when among friends, to disavow responsibility for the odd ideological twists massaged into their copy by the home office. Time-Life correspondents, they said, were required to file no more than straightforward, unembellished factual memoranda. The political slant, sly innuendo, and pejorative or admiring adjecture were strictly the province of the home office., reflecting Mr. Luce's conviction that too much objectivity and balance-particularly in reports dealing with political, economic or social issues-made for dull reading and were probably impossible for humans to achieve in any case.

This explanation provided a quite credible, Pontius Pilate-style ablution for the reporters concerned. It is no excuse, however, for Messrs. Wattenberg and Whalen, who in writing The Wealth Weapon are devoted to the Luce techniques while professing objectivity. Both authors, nonetheless, offer substantial credentials as journalists, editors and researchers. Whalen is a former contributing editor of Time and member of the editorial board of Fortune, where some of Mr. Luce's political philosophy and editorial techniques might have been handed down to him. Most recently, he has been offering his talents to presidential candidate Ronald Reagan as an issues advisor. Wattenberg is a senior fellow at the conservatively oriented American Enterprise Institute in Washington and co-editor of its magazine, Public Opinion.

What we have here are a pair of unabashed special pleaders-partisan essayists serving up a standard and trendy neo-conservative, elitist view of the way this country and the world in general should be managed and expected to behave. The device used is a make-believe debate devoted to praising (with faint damns perhaps to improve credibility) the institution of the multinational corporation, while urging the enhancement of its influence and, by extension, that of the nation through a revival of pre-Viet Nam imperial America. The "debate" is presented in successive chapters purporting to record the views of a "composite" businessman, labor leader, foreign policy activist, and representative of the Third World, winding up with a summation in which the authors decide "who's right and who's wrong." Since only one point of view is presented in any real depth or with much conviction, it is not hard to deduce who wins. Readers should nevertheless beware of thin intellectual ice. The format implies that except for the final chapter this book is no more than an exercise in conscientious reporting. In fact, the entire document is an editorial, although "hundreds of persons" are said to have been interviewed during its preparation.

All of the traditional "enemies" of big business are present on stage: "soft-headed" and "leftist" intellectuals, the "soft headed" government regulation, unfair taxation, and of course all centrally planned economics, particularly of the socialist variety. Two comparatively new villains have been added: U.S.-Soviet detente and "the new international economic order" (NIEO) urged in recent years by Third World leaders to correct what they see as inequitable treatment and exploitation by the industrial West.

The "positive" images are equally predictable: we must play "economic hard ball," protect free enterprise, defend "the western notion of freedom," "render unto Caesar," enforce "stability" through a judicious mix of "carrots and sticks." Last but not least comes that old business saw, "feed the horses to feed the sparrows."

All of this could be dismissed as good clean and quite readable fun, particularly satisfying to the ears of a modern day Babbitt, Teddy (big stick) Roosevelt, Charlie (what's good for GM . . . ) Wilson, or the purveyors of the doctrine of American manifest destiny. Unfortunately, however, the script becomes grim. It is made clear that the authors are peddling the multinational corporation as an economic weapon designed to support a new era of American activism and expansionism abroad, under terms of maximum freedom from recognition by home and host governments alike.

Nor is the multinational the only "wealth weapon" to be wielded. American trade and aid, monetary and fiscal policy are also to be used, both persuasively and punitively, to get our way in the world. The U.S., it is said, has "enormous flexibility in the use of our economic potency to achieve national political goals. We can fle-x our muscles without harming ourselves in any significant way." I n view of recent world events this argument comes as a pleasant surprise. The main engine behind these muscles and the results expected from their use is also clearly stated: "The freewheeling marketplace economics ofo the multinationals from America and other nations lead almost inevitably toward a more open society, the freeing up of social- arrangements, and ultimately a diffusion of power."

There is more than a whiff of disingenuous simplicity and Madison Avenue hype in this. Far from "freeing up social arrangements," there is ample evidence that the multinational corporation is exacerbating social tensions within the two-thirds of the world that is poor, and among the up to 800 million people (nearly a fourth of the world's population) who are either starving, malnourished or hungry. The Wall Street Journals Barry Newman has reported that "in many nations beset by widespread poverty, investment and trade by multinationals has done little to create jobs. [-here is even evidence that foreign investment, along with unenlightened government policies, has done just the opposite: make jobs disappear." Writing in Multinational Monitor in February, Richard Barnet, co-author of the thoroughly documented and widely respected work on the multinationals, Global Reach, noted that "the corporations have no interest in producing goods suitable for the consumption or use of the poorest 60 percent of the (world) population. They are not in the business of producing low-Cost housing, cheap and nutritious food, or village medical care ... The export-led model of development of which the multinational corporation has been the principal engine has meant crippling debt and increasing dependence upon the rich countries, their private bank,, and the international lending agencies that they control."

Such considerations are apparently of secondary interest to Wattenbergand Whalen. who devote much more space and accolades to the multinational's "repatriated profits" potential (assuming cooperative host country governments). Conveniently ignored are the public costs of such earnings, including the share bestowed on suitably acquiescent and helpful elites of host countries. These costs, direct and indirect, have been high for American taxpayers. Iran under the Shah was a great playground for American multinationals and so (notably for the arms industry) was Viet Nam; so was Cuba, Chile. and to a lesser extent Nicaragua under Somoza. Around the world, ordinary U.S. citizens have been called on regularly to put their money or their lives on the line in the interest of the United States overseas corporate presence.

But of more urgent concern is the closer linkage advocated between the multinational and the foreign policy apparatus of the U.S. government. These two establishments already live together out of wedlock, and advocacy of a genuine marriage smacks uncomfortably of the concept of the corporate state.

True, the "labor leader" wants to curtail the export of American-based jobs to low-wage nations, and the "foreign policy activist" would like to have these useful monsters accept some "guidance" (he avoids the term "regulation") by the government while in pursuit of their all-important profits. The consensus, however, is reasonably clear: The U.S. must shrug off its post-Viet Nam "guilt" (blamed on the machinations of left-wing intellectuals) and flex its economic muscles before the rest of the world; it must use both carrots and sticks to manage recalcitrant or demanding European allies and less developed nations alike; and it must get tougher with the Soviet Union or other totalitarian socialist countries by tightening the "linkage" between how they behave and how we treat them.

However, even the correction of such assumed past and current national policy errors is found to be inadequate unless the corporate genii is made truly free of interference, and given the public backing it is said to need to work its invigorating magic. It is suggested that this assistance may include the need to demonstrate "order-keeping credibility by using limited military force," and to avoid further "gutting" ' of the CIA. Finally, the cruelest stupidity of all, "we are and should be somewhat more tolerant of repression on the right than on the left," in dealing with world-wide violations of human rights. The reasoning behind this remarkable suggestion (by the fictional foreign policy activist) is that rightists seem to lack the "statist bureaucracy and police apparatus of the left." One can only wonder how many non-fictional foreign policy operators are now employed by the government who share these views. Perhaps some who have served rather too many tours in Pinochet's Chile or Somoza's Nicaragua?

The authors invoke the "spirit" of both Thomas Jefferson and Henry Kissinger in the final paragraph of their book. We would settle for Jefferson alone, who said on one occasion, "Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they drew their gain."

- Vincent Wilber is a retired Washington-based U.S. Foreign Service officer. While a member of the Foreign Service, he served extensively in Western Europe and Latin America.


Reports

Antarctica and Its Resources

The last continent on earth still Untouched by man, for years peacefully administered by multilateral treaties in the interest of scientific exploration--Antarctica---has today become the focus of an emerging international controversy. The discovery of valuable natural resources in Antarctica, including biologically-rich fishing grounds, and vast mineral deposits, has given new urgency to the debate over who should benefit, Antarctica and Its Resources, published by the British group Earthscan, examines the issues involved, providing a well-balanced and thorough analysis of the legal, environmental and distributional implications of Antarctic exploitation and development.

Originally published as a briefing document for journalists, Antarctica now covers a broad range of problems in up-to-date fashion, documenting the various treaty provisions forwarded by First and Third World countries, as well as the various development strategies proposed over the past ten years. In addition, the report provides a concise history of the Antarctic region, with an explanation of its geological and climactic characteristics its wildlife and its resources. Well-researched and organized, Antarctica and Its Resources is a valuable guide to understanding what promises to be a prolonged struggle to place the Antarctic under wider international control.

For a copy, send U.S. $5.50 to:

Earthscan
10 Percy St.
London WIP ODR
England


Periodicals

Current TNC Bibliography

This new service covering over 1400 journals, books, and monographs represents one of the first attempts to provide a systematic index to current periodical literature dealing with the activities of multinational corporations. A massive undertaking, the first issue covers primarily business periodicals published in English, with future issues expected to cover a wide range of newspapers and foreign publications.

References in the bibliography are divided according to headings ranging from specific products and marketing regulations to corporate activity in specific countries. A more general section provides a critical overview of particular industry sectors, including banking, agriculture and pharmaceuticals.

Still in an experimental stage, Current TNC Bibliography promises to be a well-organized and much-needed alternative to traditional reference sources, providing careful and detailed indexing of the growing amount of literature on multinational activities.

TNC is published 3-4 times per year, with subscription rates at 23 for Britain and 28 for overseas. Reduced rates are available for individuals and groups campaigning against transnational corporations.

Inquiries should be sent to:

John-L. Noyce, Publisher
P.O. Box 450, Brighton
E. Sussex, BNI 8GR
England
Amerique Latine

Published in French by the Paris-based Center for Research on Latin America and the Third World, (CETRAL), Amerique Latine is a new journal focusing on recent political and cultural developments in Central and South America. Editors of the journal point to the overriding emphasis on Asian and Middle Eastern affairs in the Third World coverage of the mainstream European press, and to a lack of contact between various research groups involved in Latin American studies. Amerique Latine is thus a "call to action" for journalists, academics and economists to provide the reading public with detailed and accessible reports on Latin American affairs, and to establish a clearinghouse for information and research from around the world.

The journal, to be issued three times a year, includes contributions from leading economists and sociologists in Western Europe and South America, and lists the support of numerous international organizations concerned with Third World development. Historical and theoretical pieces are balanced by more general reports on the long-term impact of corporate investment on Latin American economies. Finally, Amerique Latine provides the reader with an often-lacking cultural perspective on Latin American affairs, with articles reviewing the literary works of modern Latin American writers. An extensive book review section in addition covers a critical range of recent political and economic analyses of the situation in Mexico, Haiti and Cuba.

Editors of Amerique Latine invite suggestions and contributions. For information and subscriptions, write:

CETRAL
35, rue des Jeuners
75002 Paris, France


Work in Progress

German Pharmaceuticals Project

The German National Coalition of Development Action Groups, a network of organizations dealing with Third World issues, is currently planning a campaign to investigate the activities of the pharmaceutical industry, with emphasis on the role played by the major multinational pharmaceutical corporations in developing countries.

Anyone interested in working on the project is encouraged to contact the coalition at their base in Hamburg. In addition, the group is requesting any information or reports on the pharmaceutical industry, particularly with regard to the major German companies operating overseas.

The address of the group is:

Bundeskongress Entwick
Lungspolitischer Aktionsgruppen
Nernstweg 32-34
2000 Hamburg 50
West Germany


Organizations

The Data Center

Founded three years, ago, this organization has amassed a vast collection of information, covering corporate activities in the United States and abroad, international labor movements, and Third World social and political developments. Its goal is to provide researchers and activists with an alternative to the business press.

The Center monitors domestic and international newspapers, magazines and journals, and maintains a comprehensive collection of reference books. It compiles information on specific industries, such as energy, agribusiness and mining, and boasts detailed files on more than 5000 corporations, both U.S. and foreign-based.

The Data Center's wealth of material is available by personal visit, telephone call, or written request. The library is open to the public. The Center's "search service," at an hourly charge of $10, will deliver information relating to a specific issue or event which interests the caller. Its "corporate profile" offers for $100 an in-depth study of any corporation.

Low income individuals and nonprofit organizations can inquire about special reduced rates for the center's services.

For more information, telephone (415) 835-4692, or write:

The Data Center
464 19th Street
Oakland, California 94612


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