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Millen and Holtz.docx

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University of Toronto Scarborough
Health Studies
R Song

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 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 TNC labor practices • competition for adequate employment very high in latin america, africa and asia...real incomes on working people
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