By Omar Javaid
The first ever MNC in subcontinent was the East India
Company, and those who have studied history of this region knows what happened
to the socioeconomic & political landscape after its arrival. There is
little doubt that due to their gradual decrease of political strength &
moral corruption, the Mughals lost their grounds against the foreign aggressor,
however, it wasn't just crumbling of Mughals monarchy, the foreigners saw that
weakness as an opportunity to grab the reign of power. For details watch "Bartanvi
Saamraaj Ne Hame Kaisay Loota?"
The benchmark set by East India Company is perhaps the same since then, the MNCs of today might have reviewed & altered their tactics & means of penetrations in local economies, however the overall goal of exploitation of natural resources of the world, more specifically the third world hasn't changed much since the times of East India company (even before then this was done not by corporations, but by empires). Previously it was colonization, today it’s called Globalization.
Noam Chomsky, Naomi Klein, John Gray, Mark Achbar, Michael Moore & John Perkiens*, are just a few names who have attempted to expose the modern face of MNCs & Neo-Liberal economic theories in which they find justification for some of their heinous acts. The criticism presented by these scholars, authors, intellectuals, journalists, documentary makers etc. is mostly on an economic plane however. This criticism is also contested by some authors as well, whose key arguments are like (a) MNC provide jobs to the unemployed, (b) MNCs stimulate the growth of vendor industry, (c) technology is brought in to increase or generate production of products which wasn't previously possible, like extraction of oil or coal etc. (d) bring in FDI for the local economy.
That's said, however exhaustive research of Naomi Klein discredits almost all of the above arguments in her book 'The Shock Doctrine'. She has given examples of more than a dozen countries where the above mentioned benefits were rather experienced in reverse as a whole by the economy.
The disadvantages are just more than this, the MNCs brings in a culture of consumerism with them, which just doesn't let the people ever feel well-off. Whatever a person owns or consumes isn't just enough, there is always something more to consume... for which he has to earn more, her wife has to get out in the market as well, to raise their standard of living of the whole family... all the traditional things in life are no more precious, like the time spent with your children, with parents, with relatives... what is more important now is to become a better consumer, to purchase the new stuff introduced in the market, and till the time you begin to enjoy this new stuff, its obsolete, its newer version has been launched, you are now old fashioned if you are carrying an old cell phone, driving an old car, wearing an old fashioned clothing... now you need to buy new things, and for that you need to work even harder, forget about your kids, family, neighbors or your relationship with God... it is you and the desires satisfaction of which is the utmost importance which is only possible through consumption of various brands of product, without which you just don't mean anything, or can live a happy & satisfying life... This is the consumerist culture, which MNCs must introduce, reinforce, maintain and extend in any local economy where they operate; the traditional cultural landscape must be changed through their marketing efforts, etc. This is imperative for their bottom-line, profitability and shareholder’s value. This transition doesn't happen in a go, often it takes decades of 'below & above the line' interaction with the public. It is interesting to note that the most educated class (educated with so called modern education, see John Taylor Gatto’s ‘Weapons of Mass Instructions’ to know why) in the society is the first one to embraces the stated consumerist values...
Broadly speaking this consumerist culture splits the society among two classes, one is of those who can afford the products & services available in the market and the rest are those who cannot. The ‘Haves’ and ‘Have not’s’. This second class is also important for MNCs, as it is hired as labors by them. Thanks to justification provided by Neo-Liberal economic theory, they have struggled across many different places in the world to keep this class to the same economic level, perhaps often reduced it, by lobbying for abolishment of labor rights or minimum wage limits set by government. This class difference never let the lower one to feel happy about their lives, as they are treated as underprivileged, deprived, etc., and not respected as the upper class. The resulting frustration among them isn't a surprise, which is released in various ways, like increased street crimes, increased violent incidents and disturbance in law & order situation, making the entire society less stable and secure for everyone.
Often it is blamed that corruption in the government rows is responsible for this... looking from the other side reveals that MNCs prefer such government setups. The presence of corrupts government official, who prefer their own self-interest over public interest, is appreciated by the MNCs (see Naomi Klein’s Shock Doctrine), so that they are easily bribed for their own benefit. MNCs help reinforce corruption, whether legal or illegal, among the state authorities of a particular country particularly third world. This is necessary to keep the wages low...
Coming back to economics, another less frequently experienced problem faced by third world countries (particularly) dependent on MNCs for jobs etc., are shaken badly by global financial crisis. Countries with less penetration is effected less because of obvious reasons. Furthermore too much involvement of MNCs minimizes the ability of the governments to control the movement of foreign exchange in and out of the country, leaving the entire nation at the mercy of global investors. During bad times, these MNCs can take out their investments with just a click of button, thanks to electronic money which is sucked out of an economy without state’s permission. There are lots of examples, a famous one is the crisis faced by Asian Tigers decade ago, the consequence of which has been explained by Naomi Klein in vivid details; she writes:
Self-sufficiency at local level, driven by traditional values, is imperative to maintain and nourish a stable society. This is a sweeping statement, making a detailed response obligatory on the author’s part, which will be covered in a later post. For now let’s keep our focus on the new form of imperialism known as globalization, and let us be aware of its potential pitfalls so that we remain our expectations realistic, so as to minimize the chance of any unpleasant surprise which isn’t quite unlikely keeping in view the experience of many countries in the past. Let us also remember that to understand the present and foresee the future, it is imperative that we be aware of the past, as otherwise comprehension of the present reality and planning for the coming future might become impossible for us.
An ammature documentary was made my some students on this article, have a look:
_______________
The first ever MNC in subcontinent was the East India
Company, and those who have studied history of this region knows what happened
to the socioeconomic & political landscape after its arrival. There is
little doubt that due to their gradual decrease of political strength &
moral corruption, the Mughals lost their grounds against the foreign aggressor,
however, it wasn't just crumbling of Mughals monarchy, the foreigners saw that
weakness as an opportunity to grab the reign of power. For details watch "Bartanvi
Saamraaj Ne Hame Kaisay Loota?"
When seen in retrospective, the agenda of East India Company
wasn't too difficult to comprehend. The idea was to simply grab the natural
resources of the subcontinent and other colonized places around the globe. This was arrogantly assumed by the colonizers as their natural
right; see Edward Said’s 'Culture & Imperialism' for exhaustive details.
Exploitation of natural resources was only a part of the agenda; the colonizer
even attempted, somewhat successfully, to colonize even the minds of the
locals. ‘Minutes of Education’ of Lord Macaulay and its practical execution
across the subcontinent, is a clear proof. This was done simply because the
locals were perceived as uncivilized, and the colonizers assumed it as their
duty to civilize them through imported education and the institutional
frameworks.
The benchmark set by East India Company is perhaps the same since then, the MNCs of today might have reviewed & altered their tactics & means of penetrations in local economies, however the overall goal of exploitation of natural resources of the world, more specifically the third world hasn't changed much since the times of East India company (even before then this was done not by corporations, but by empires). Previously it was colonization, today it’s called Globalization.
Noam Chomsky, Naomi Klein, John Gray, Mark Achbar, Michael Moore & John Perkiens*, are just a few names who have attempted to expose the modern face of MNCs & Neo-Liberal economic theories in which they find justification for some of their heinous acts. The criticism presented by these scholars, authors, intellectuals, journalists, documentary makers etc. is mostly on an economic plane however. This criticism is also contested by some authors as well, whose key arguments are like (a) MNC provide jobs to the unemployed, (b) MNCs stimulate the growth of vendor industry, (c) technology is brought in to increase or generate production of products which wasn't previously possible, like extraction of oil or coal etc. (d) bring in FDI for the local economy.
That's said, however exhaustive research of Naomi Klein discredits almost all of the above arguments in her book 'The Shock Doctrine'. She has given examples of more than a dozen countries where the above mentioned benefits were rather experienced in reverse as a whole by the economy.
The disadvantages are just more than this, the MNCs brings in a culture of consumerism with them, which just doesn't let the people ever feel well-off. Whatever a person owns or consumes isn't just enough, there is always something more to consume... for which he has to earn more, her wife has to get out in the market as well, to raise their standard of living of the whole family... all the traditional things in life are no more precious, like the time spent with your children, with parents, with relatives... what is more important now is to become a better consumer, to purchase the new stuff introduced in the market, and till the time you begin to enjoy this new stuff, its obsolete, its newer version has been launched, you are now old fashioned if you are carrying an old cell phone, driving an old car, wearing an old fashioned clothing... now you need to buy new things, and for that you need to work even harder, forget about your kids, family, neighbors or your relationship with God... it is you and the desires satisfaction of which is the utmost importance which is only possible through consumption of various brands of product, without which you just don't mean anything, or can live a happy & satisfying life... This is the consumerist culture, which MNCs must introduce, reinforce, maintain and extend in any local economy where they operate; the traditional cultural landscape must be changed through their marketing efforts, etc. This is imperative for their bottom-line, profitability and shareholder’s value. This transition doesn't happen in a go, often it takes decades of 'below & above the line' interaction with the public. It is interesting to note that the most educated class (educated with so called modern education, see John Taylor Gatto’s ‘Weapons of Mass Instructions’ to know why) in the society is the first one to embraces the stated consumerist values...
Broadly speaking this consumerist culture splits the society among two classes, one is of those who can afford the products & services available in the market and the rest are those who cannot. The ‘Haves’ and ‘Have not’s’. This second class is also important for MNCs, as it is hired as labors by them. Thanks to justification provided by Neo-Liberal economic theory, they have struggled across many different places in the world to keep this class to the same economic level, perhaps often reduced it, by lobbying for abolishment of labor rights or minimum wage limits set by government. This class difference never let the lower one to feel happy about their lives, as they are treated as underprivileged, deprived, etc., and not respected as the upper class. The resulting frustration among them isn't a surprise, which is released in various ways, like increased street crimes, increased violent incidents and disturbance in law & order situation, making the entire society less stable and secure for everyone.
Often it is blamed that corruption in the government rows is responsible for this... looking from the other side reveals that MNCs prefer such government setups. The presence of corrupts government official, who prefer their own self-interest over public interest, is appreciated by the MNCs (see Naomi Klein’s Shock Doctrine), so that they are easily bribed for their own benefit. MNCs help reinforce corruption, whether legal or illegal, among the state authorities of a particular country particularly third world. This is necessary to keep the wages low...
Coming back to economics, another less frequently experienced problem faced by third world countries (particularly) dependent on MNCs for jobs etc., are shaken badly by global financial crisis. Countries with less penetration is effected less because of obvious reasons. Furthermore too much involvement of MNCs minimizes the ability of the governments to control the movement of foreign exchange in and out of the country, leaving the entire nation at the mercy of global investors. During bad times, these MNCs can take out their investments with just a click of button, thanks to electronic money which is sucked out of an economy without state’s permission. There are lots of examples, a famous one is the crisis faced by Asian Tigers decade ago, the consequence of which has been explained by Naomi Klein in vivid details; she writes:
“...24 million people lose their jobs in a span of two years ... It expresses itself in different forms across the region, from a significant rise in religious extremism in Indonesia and Thailand to the explosive growth in the child sex trade. Employment rates have still not reached pre-1997 levels in Indonesia, Malaysia and South Korea. And it's not just that workers who lost their jobs during the crisis never got them back. The layoffs have continued, with new foreign owners demanding ever-higher profits for their investments. The suicides have also continued: in South Korea, suicide is now the fourth most common cause of death, more than double the pre-crisis rate, with thirty eight people taking their own lives every day. That is the untold story of the policies that the IMF calls ‘stabilization programs’, as if countries were ships being tossed around on the market's high seas. They do, eventually, stabilize, but that new equilibrium is achieved by throwing millions of people overboard: public sector workers, small-business owners, subsistence farmers, trade unionists. The ugly secret of "stabilization" is that the vast majority never climb back aboard [the ship]. They end up in slums, now home to 1 billion people; they end up in brothels or in cargo ship containers. They are the disinherited, those described by the German poet Rainer Maria Rilke as ‘ones to whom neither the past nor the future belongs.’” (see page 277 Shock Doctrine)
Now what to do? MNCs depend upon local employees who work
for them. Forget the labor desperate to find a job; rather the educated classes
which aspire for lucrative positions in these organizations are the ones who
can make a difference, just by realizing the extent to which their contribution
in an MNC can be damaging for the society. These organizations hire smart
people, preferably MBAs to work in their marketing, sales, HR, operations,
finance departments etc. However thanks to their education, these smart people
aren’t anymore smart enough to care about their own society particularly in the
long run. This needs to change, as once the business graduates would begin to
choose other options like entrepreneurship; MNCs wouldn’t increasingly be able
to find people to work for them. Of course it would be ridiculous to expect an
overnight change, in fact the transition would perhaps last an entire
generation.
Self-sufficiency at local level, driven by traditional values, is imperative to maintain and nourish a stable society. This is a sweeping statement, making a detailed response obligatory on the author’s part, which will be covered in a later post. For now let’s keep our focus on the new form of imperialism known as globalization, and let us be aware of its potential pitfalls so that we remain our expectations realistic, so as to minimize the chance of any unpleasant surprise which isn’t quite unlikely keeping in view the experience of many countries in the past. Let us also remember that to understand the present and foresee the future, it is imperative that we be aware of the past, as otherwise comprehension of the present reality and planning for the coming future might become impossible for us.
An ammature documentary was made my some students on this article, have a look:
Author is a philinthropist, researcher, author, social entrepreneur, trainer, mentor, holds voluntary positions of Sr. Editor Critic Magazine, Vice President GEAR (www.gear.org.pk) and tweets @javaidomar
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