The Efficiency (Contradictions) of Multinational Corporations

Multinational corporations are a substitute for the market as a method of organizing international exchange. They are " . . . islands of conscious power in an ocean of unconscious cooperation," to use D. H. Robertson's phrase.1 This essay examines some of the contradictions of this latest stage in the development of private business enterprise. At the outset, we should note that the multinational corporation raises more questions than economic theory can answer. Multinational corporations are typically large firms operating in imperfect markets and the question of their efficiency is a question of the efficiency of oligopolistic decision making, an area where much of welfare economics breaks down, especially the proposition that competition allocates resources efficiently and that there is a harmony between private profit maximization and the general interest. Moreover, multinational corporations bring into high definition such social and political problems as want creation, alienation, domination, and the relationship or interface between corporations and national states (including the question of imperialism), which cannot be analyzed in purely "economic" terms.