HLTC05H3 Chapter Notes -International Financial Institutions, Movement For The Survival Of The Ogoni People, General Agreement On Tariffs And Trade

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9 Nov 2012
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Millen and Holtz
Transnational corporations (TNCs) most profoundly affect the lives of people
Direct impacts: affect wellbeing of workers in factories, fields and mines
Indirect impacts: affect quality of life for all of us through environmental practices,
promotional activity and political influence
Rise of the US TNCs
Early american business run by family farms, craftsmen shops,
businesses owned by cities and towns
After American Rev. --> Charters of incorporations issued to companies
legislators given authority
Early charters were cojntracts stating corporations rights and obligations,
when corporation violated, the state would revoke the charter and
dissolve the corporation
US civil war marked imp. shift in relationship b/w corporations and the
state
government helped to enrich corporations by buying mass quantities of
clothing, tents, weapons and food during war time
Corporations came to realize greater profits with their expanded
ventures, great depression
1886 - corporations protected under bill of rights, with this, US
corporations began to branch out to other countries
government protects US corps. against foreign business
Multinationals have become transnational corps. which source, produce,
and market their goods in many countries simultaneously, claiming
nationality in countries that offer most favorable tax structure or trade
policies
largests TNCs today - supranational corporations (larger than nation
state, no single jurisdiction, accountable to no governmental agency)
-- most dominant, operate any way they choose
TNCs hold a lot of political and economic power resulting in government
losing ability to protect citizens, which in turn leads to poorest
members of society suffering the most
Growth and expansion of TNCs
TNCs have grown enormously in size , wealth, number over last quarter
century
control over 70% of products of international trade, 80% of worlds land
cultivated for export crops, and majority of technological innovation
3/5 worlds TNCs officially based in US because of benefits govt offers to
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them (protection, priveledges)
owners of corporations benefit from power as well, able to redefine
system of international trade to suit own interests, have a lot of
influence over international trade and development organizations
(lobbying for privatization, liberalization, deregulation)
TNCs and trade in poor, indebted countries
IMF and world Bank imposed SAPS(structural adj. plans) on countries
who couldn't pay foreign debt back
main elements of SAPS: promotion of export oriented development
strategies, liberalization of trade, deregulation of market, and
privatization
International financial institutions (IFIs) pushed poor countries to invest in
foreign firms, new trade and investment measures
General Agreement on tariffs and trade (GATT) made it more difficult for
poor countries to control TNC activities or implement measures to
gain some benefit to local pop
some political elites actually had hope in the export-led development
strategy, others signed on for personal enrichment
for the strategy, states had to be less involved,regulations had to be
removed by govts, get rid of tariffs and quotas, lowered
environmental and labor standards
increase in competition for foreign investment led to poor becoming
subordinate to foreign companies
Poor african countries did not benefit the effects of strategy because
foreign investors were only attracted to countries experiencing
economic growth
Poorest nations further marginalized, reduced to role of suppliants for
foreign investment
TNCs dominating key sectors of economy critical for host countrys
economic development -- oligopoly of power --> control of supply
and price--> maximizing profits and detrimenting local industries and
pops
"enhancing global competitiveness" - excuse used by TNCs to take
advantages of inequalities among poor countires in need of foreign
capital
focus must be put on systemic political economic conditions that permit
worker abuse/labor violations in poor nations by TNCs rather than
focusing on specific cases and adopting a short term remedy for it
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Document Summary

Transnational corporations (tncs) most profoundly affect the lives of people. Direct impacts: affect wellbeing of workers in factories, fields and mines. Indirect impacts: affect quality of life for all of us through environmental practices, promotional activity and political influence. Rise of the us tncs: early american business run by family farms, craftsmen shops, businesses owned by cities and towns, after american rev. - most dominant, operate any way they choose: tncs hold a lot of political and economic power resulting in government losing ability to protect citizens, which in turn leads to poorest members of society suffering the most. Tnc labor practices: competition for adequate employment very high in latin america, africa and asiareal incomes on working people declining as well as laborers rights/protections, labor market flexibility: essential element of neoliberalism, and part of. African countries horrible work conditions, low wages, unemployment soaring,job loss, cuts in subsidies/social services, currency devaluation: tncs responsible for deterioration.

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