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34
say, computers, that nobody would buy
them if they
u·ere
made in Amcrica. So
foreign offices are opened. And the
laborees abroad are paid up to double
the salary of their count rymen due to
the afnuence of the American multina–
tional. Only eight percent of the
production of all U. S. multinationals
is sent back to thc U. S. to compete
domestically.
Multinational corporations actually
crea/e
more U. S. jobs by bringing about
$8
billion in corporate profits back to
the U. S. (this is the greatest single
"plus" on the Balance of Payments led–
ger) to reim'est in U. S. companies.
This means thousands more
U.
S. -based
jobs. Many foreign subsidiaries only
serve as assembly points for production
lines based in America.
Truc, there are valid criticisms of
sorne multinational corporations. Many
contributc to a "brain drain" or technol–
ogy lag. German and Japancse busi–
ness cartels actually cont ributed to
World War
Il.
But the overall effect
- barring
politiral
interference with
business - is toward
peace.
The "American Challenge"
Increasingly the voice of the critics is
being heard abroad.
In 1968, aspiring
f
rench politician
Jean-Jacques Servan-Schreiber wrote a
European best-sellcr entitled,
The
American Challenge.
In bis book, the
United States was portrayed as the eco–
nomic invader of Europe, robbing the
Continent of its best minds, markets,
and methods, to fecd the economic
colossus across the Atlantic.
" In 15 years,'' he charged, "the third
industrial power, after the United States
and the Soviet Union, could not be Eu–
rope but American industry in Europe."
He cited impressive statistics to support
his case. U. S. multinational corpora·
tions in Europe produced 80% of the
Continent's computers, 95% of the
integrated circuits, 50% of the semi–
conductors, and similar majorities of
many other strategic industries.
In his own France, Servan-Schreiber
noted that between two thirds and three
fourths of the telecommunications, farm
machinery, photographic Jilm, paper
industries, and prepared foods were
American based, despite the stiff condi-
Tbe
PLAIN TRUTH
tions rrance then held over the Ameri–
can multinationals.
And the U. S. economic invasion
showed no sign of leveling off. Between
1960 and 1965, American investment in
Europe doublecl from
$6
to
$12
billion,
then doublecl again from
$12
to
$24
billion between 1965 and 1970. The
figure is expected to reach
$30
billion in
1972!
But on closer examination of "the
American Challenge" in Europe, one is
tempted to ask, "Who's challenging
whom?"
The European Challenge
An author in the Unitecl States could
well document a book similar to Mon–
sieur Servan-Schreiber's, entitled
The
E11ropean Cha//enge.
In such a hypo–
thetical book, an American could state
the names of the products listed in
the first paragraph of this article and
claim, "Before
x
number of years, we
will not be able to 'Buy American' any
longer, since foreign 'slave labor' has
undersold us in every market. It is time
to act !"
Hopefully, such a book will never be
written, or, at least, wi ll not be
bo11ght
by a gullible public if written. But the
"evidence" is there. A recent tabulation
counted 766 manufacturing enterprises
in the United States owned in whole or
part by 491 foreign corporations. Also,
European investment in the U. S. stock
market far surpasses U. S. investment in
foreign stocks. Sioce 1967, the fastest
growing multinational nations have
been - not the U. S. - but Germany,
Sweden, and Japan.
European investment in the U. S. is
even
larger
now than the U. S. invest–
ment in Europe, according to a
Forl!me
survey. Grcat Britain, owner of 29% of
these foreign assets in the U. S., owes
6% of its domestic jobs, 10% of its
production, and 20% of its exports to
multinational business.
But such arguments and endless sta–
tistics tend to cloud the fundamental
issue: Are such multinational businesses
good
or
bad?
If
they are good, as most
economists claim - if they are the
greatest force for peace on earth today
- then the volume of sales or assets in
one country or another would not be
March-April 1972
inflammatory pol•tical rhetori c. It would
be proudly coveted.
Whicb Voice Will Prevail?
The nation-statcs of the world still
have the power to strangle world busi–
ness if they so choose.
"We may bring clown on our heads
the worst economic crisis the world has
ever seen - and largely for lack of
política! courage, for vanity and pride,''
wrote Peter Drucker. We need, he said,
"an institution that has a genuine
u/f–
intcrest in the welfare of the world
economy. Because the world is strictly
an economic community, the institution
that represents it will have to be an
eco-
1tomic
rather than a political institu–
tion" (Drucker,
The Age of Discon–
linllily.
p.
91).
Yet it is the economic diplomat -
the foreign businessman - who has
always been a convenient whipping boy.
In the Twentieth Ceotury about
$2.5
billion in assets of
U.
S. businesses have
been expropriated by poor Latin Ameri–
can and Third World revolutionaries.
But
110
nation with major companies in
the
U. S.
has expropriated an American
business. The "co-hostage system" seems
to help, although it doesn't necessarily
solve the
caflse
of war. A nation moti–
vated by purely selfish interests could
still commit a major act of war in the
age of multinational business.
Nationalism sometimes
defies
reason!
Multinational business is, in this
Twcntieth Century, a powerful restrain–
ing force for peace. It has been
forced to combat those elements of
human nature that cause strife and
division. Its motive, of course, is mutual
profit making; but almost as a by–
product, world business has produced
a community of men who have a
new allegiance that
tramcends
national
boundaries.
Can we apply this principie in the
sphere of international politics? Can
al! nations .risc above the selfish national
desires and really work collectively for
world peace - for the combined good
of all mankind?
History indicates that national in–
terests have always prevailed. Without a
fundamental change in national behav–
ior, then, "world peace through world
business" is not a realistic hope.
O