The Internationalization of Monopoly Capital
by John Bellamy Foster, Robert W. McChesney, and R. Jamil Jonna
Monthly Review
In a 1997 article entitled “More (or Less) on Globalization,” Paul Sweezy referred to “the three most important underlying trends in the recent history of capitalism, the period beginning with the recession of 1974-75: (1) the slowing down of the overall rate of growth; (2) the worldwide proliferation of monopolistic (or oligopolistic) multinational corporations; and (3) what may be called the financialization of the capital accumulation process.” (Globalization, he argued was not a recent trend but a process that characterized the entire history of capitalism.)1 The first and third of these three trends—economic stagnation in the rich economies and the financialization of accumulation—have been the subjects of widespread discussion since the onset of severe financial crisis in 2007-09. Yet the second underlying trend, which might be called the “internationalization of monopoly capital,” has received much less attention. Indeed, the dominant, neoliberal discourse—one that has also penetrated the left—assumes that the tendency toward monopoly has been vanquished. In this narrative, the oligopolistic structure of early post-Second World War capitalism in the United States and elsewhere was broken down and replaced by a new era of intense global competition.
We do not intend to argue, in what follows, that those perceptions of growing global competition were all wrong. Rather, we suggest that renewed international competition evident since the 1970s was much more limited in range than often supposed. It has since given way to a new phase of global monopoly-finance capital in which world production is increasingly dominated by a relatively few multinational corporations able to exercise considerable monopoly power. In short, we are confronted by a system of international oligopoly. We present the broad contours of our argument with empirical evidence and explanation. Our treatment of these issues will no doubt raise as many questions as it will answer. Nevertheless, our objective is to demonstrate that addressing the internationalization of monopoly capital is a necessary prerequisite to understanding present global economic trends, including the period of slow growth and financialization in the mature economies.
The general outlines of what we have to say will not, of course, be a revelation to all of our readers. Evidence of the internationalization of monopoly capital has been mounting for decades. As Richard Barnet and Ronald Müller wrote in 1974 in their book, Global Reach: The Power of the Multinational Corporations: “The rise of the global corporation represents the globalization of oligopoly capitalism….The new corporate structure is the culmination of a process of concentration and internationalization that has put the economy under the substantial control of a few hundred business enterprises which do not compete with one another according to the traditional rules of the classic market.”2
As in all cases of oligopoly, where a few firms dominate particular industries or spheres of production, what is evident is not competition in the classic sense. Rather we are confronted with a dialectic of rivalry and collusion.3 In particular, “price competition”—or “price warfare,” as it is often called in business—is viewed as too dangerous, and generally avoided by the giant corporations. Instead, competition between firms largely takes other forms: the search for low-cost position, which remains the bottom line for business; competition for resources and markets; and product differentiation.
The typical or representative firm today is a monopolistic multinational corporation—a firm that operates in numerous countries, but is headquartered in one. In recent years, there has been a growth of multinational corporations in the periphery of the capitalist economy, but in the main such global firms are predominantly headquartered in the rich nations of the center (the more so the larger the firm). As the United Nations Conference on Trade and Development (UNCTAD) stated in its 2010 World Investment Report, “The composition of the world’s top 100 TNCs [transnational corporations] confirms that the triad countries [the United States, the European Union, and Japan] remain dominant,” although “their share has been slowly decreasing.”4
Mark Casson, a leading mainstream analyst of the global corporation, observed in 1985: “From a broad long-run perspective, the postwar MNE [multinational enterprise] may be regarded simply as the latest and most sophisticated manifestation of a tendency towards the international concentration of capital. This view emerges most clearly from the work of Lenin [in Imperialism, the Highest Stage of Capitalism].”5
Today this tendency is manifested most concretely in the growth of international oligopolies. For Louis Galambos, a business historian at Johns Hopkins University, “global oligopolies are as inevitable as the sunrise.”6 Indeed, as the Wall Street Journal put it in 1999:
In industry after industry the march toward consolidation has seemed inexorable….The world automobile industry is coalescing into six or eight companies. Two U.S. car makers, two Japanese and a few European firms are among the likely survivors.
The world’s top semiconductor makers number barely a dozen. Four companies essentially supply all of the worlds recorded music. Ten companies dominate the world’s pharmaceutical industry, and that number is expected to decline through mergers as even these giants fear they are too small to compete across the globe.
In the global soft drink business, just three companies matter, and the smallest, Cadbury Schweppes PLC, in January sold part of its international business to Coca-Cola Co., the leader. Just two names run the world market for commercial aviation: Boeing Co. and Airbus Industrie.7
The same tendency is evident across the board: in areas such as telecommunications, software, tires, etc. This is reflected in record annual levels of global mergers and acquisitions up through 2007 (reaching an all-time high of $4.38 trillion), and in vast increases in foreign direct investment (FDI), which is rising much faster than world income. Thus FDI inward stock grew from 7 percent of world GDP in 1980 to around 30 percent in 2009, with the pace accelerating in the late 1990s. (See Chart 1, below.) Even these figures are conservative in demonstrating the growing power of multinationals since they do not capture the various forms of collusion, such as strategic alliances and technological agreements that extend the global reach of such firms. Nor is there any accounting of the massive subcontracting done by multinational corporations, extending their tentacles into all areas of the global economy. In these and other ways, the rapid expansion of multinationals is creating a more concentrated world economic system, with the revenue of the top five hundred global corporations now in the range of 35-40 percent of world income.
Reader Supported News
Little did Willie Nelson know when he recorded "Crazy" years ago just how crazy it would become for our cherished family farmers in America. Nelson, President of Farm Aid, has recently called for the national Occupy movement to declare an "Occupy the Food System" action.
Nelson states, "Corporate control of our food system has led to the loss of millions of family farmers, destruction of our soil…"
Hundreds of citizens, (even including NYC chefs in their white chef hats) joined Occupy the Food System groups, ie Food Democracy Now, gathered outside the Federal Courts in Manhattan on January 31st, to support organic family farmers in their landmark lawsuit against Big Agribusiness giant Monsanto. (Organic Seed Growers & Trade Association v. Monsanto) Oral arguments were heard that day concerning the lawsuit by 83 plaintiffs representing over 300,000 organic farmers, organic seed growers, and organic seed businesses.
The lawsuit addresses the bizarre and shocking issue of Monsanto harassing and threatening organic farmers with lawsuits of "patent infringement" if any organic farmer ends up with any trace amount of GM seeds on their organic farmland.
Judge Naomi Buckwald heard the oral arguments on Monsanto’s Motion to Dismiss, and the legal team from Public Patent Foundation represented the rights of American organic farmers against Monsanto, maker of GM seeds, [and additionally, Agent Orange, dioxin, etc.]
After hearing the arguments, Judge Buckwald stated that on March 31st she will hand down her decision on whether the lawsuit will move forward to trial.
Not only does this lawsuit debate the issue of Monsanto potentially ruining the organic farmers’ pure seeds and crops with the introduction of Monsanto’s genetically modified (GM) seeds anywhere near the organic farms, but additionally any nearby GM fields can withstand Monsanto’s Roundup herbicides, thus possibly further contaminating the organic farms nearby if Roundup is used.
Of course, the organic farmers don’t want anything to do with that ole contaminated GM seed in the first place. In fact, that is why they are certified organic farmers. Hello? But now they have to worry about getting sued by the very monster they abhor, and even have to spend extra money and land (for buffers which only sometimes deter the contaminated seed from being swept by the wind into their crop land). At this point, they are even having to resort to not growing at all the following organic plants: soybeans, corn, cotton, sugar beets, and canola, …just to protect themselves from having any (unwanted) plant that Monsanto could possibly sue them over.
"Crazy, crazy for feeling so….."
The farmers are suffering the threat of possible loss of Right Livelihood. They are creating good jobs for Americans, and supplying our purest foods. These organic farmers are bringing Americans healthy food so we can be a healthy Nation, instead of the undernourished and obese kids and adults that President Obama worries so much about us becoming.
So what was President Obama doing when he appointed Michael Taylor, a former VP of Monsanto, as Sr. Advisor to the Commissioner at the FDA? The FDA is responsible for "label requirements" and recently ruled under Michael Taylor’s time as FDA Food Czar that GMO products did not need to be labeled as such, even though national consumer groups loudly professed the public’s right to know what is genetically modified in the food system. Sadly to remember: President Obama promised in campaign speeches that he would "let folks know what foods are genetically modified." These are the conflict of interests that lead to the 99% movement standing up for the family farmers.
Just look at the confusing headlines lately that revealed that mid-western farms of GM corn will be sprayed with 2,4-D toxins found in the deadly Agent Orange. Just refer to the previous lawsuits taken all the way to the U.S. Supreme Court by U.S. Veterans who tried to argue the dangers of Monsanto’s Agent Orange, and high rates of cancers in our soldiers who had to suffer the side effects from their wartime exposures in Vietnam.
In 1980 alone, when all this mess started with corporations wiping out the livelihoods of family farmers, the National Farm Medicine Center reported that 900 male farmers in the Upper Midwest committed suicide. That was nearly double the national average for white men. Even sadder is the fact that some of the farmers’ children also committed suicide. Studies show that when one generation of family farmers lose their farms, then the next generation usually can’t revive the family business and traditions later.
Jim Gerritsen, President of the Organic Seed Growers and Trade Association, has pointed out that there are 5th and 6th generation family farmers being pushed off their farms today, and because of a "climate of fear" (from possible lawsuits from Monsanto), they can’t grow some of the food they want to grow.
These farmers are the ones who have been able to survive the changes over the past twenty years by choosing to go into the budding niche of organic farming. Now look at what they have to deal with while trying to grow successful businesses: Monsanto’s threats.
To Read the Rest