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But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. The Zurich team can. From Orbis , a database listing 37 million companies and investors worldwide, they pulled out all 43, TNCs and the share ownerships linking them.

The work, to be published in PLoS One, revealed a core of companies with interlocking ownerships see image. Each of the had ties to two or more other companies, and on average they were connected to Most were financial institutions. John Driffill of the University of London, a macroeconomics expert, says the value of the analysis is not just to see if a small number of people controls the global economy, but rather its insights into economic stability.

As the world learned in , such networks are unstable. Most company shares are held by fund managers who may or may not control what the companies they part-own actually do. Crucially, by identifying the architecture of global economic power, the analysis could help make it more stable. By finding the vulnerable aspects of the system, economists can suggest measures to prevent future collapses spreading through the entire economy.

Glattfelder says we may need global anti-trust rules, which now exist only at national level, to limit over-connection among TNCs. Sugihara says the analysis suggests one possible solution: firms should be taxed for excess interconnectivity to discourage this risk. Newcomers to any network connect preferentially to highly connected members.

TNCs buy shares in each other for business reasons, not for world domination. If connectedness clusters, so does wealth, says Dan Braha of NECSI: in similar models, money flows towards the most highly connected members. So, the super-entity may not result from conspiracy.

The real question, says the Zurich team, is whether it can exert concerted political power. Driffill feels is too many to sustain collusion. Braha suspects they will compete in the market but act together on common interests. Resisting changes to the network structure may be one such common interest. Barclays plc 2. Capital Group Companies Inc 3. FMR Corporation 4. AXA 5. State Street Corporation 6. Vanguard Group Inc 9. UBS AG Deutsche Bank AG Franklin Resources Inc Credit Suisse Group Walton Enterprises LLC Bank of New York Mellon Corp Natixis Goldman Sachs Group Inc T Rowe Price Group Inc The ownership of production facilities by such giants can certainly facilitate the achievement of this objective, and has certainly provided the initial platform for dominance, this ownership is neither necessary nor sufficient.

Such tendencies will be manifest within as well as between countries - between the 'Snowbelt' and the 'Sunbelt' within the United States, as well as between the United States and Mexico or Brazil; between older and newer industrial areas within the UK, as well as between the UK and Malaysia or Singapore. Globalisation of this kind can certainly work either way. If employment can be moved to the unorganised, low paid workers, then these unorganised, low paid workers can also be moved to the where the jobs are.

This was the dominant pattern in the post-war period. Whilst the old division of labour prevailed at the level of the nation state, the workforce, in the industrial countries, was internationalised. The potential impediment that relatively full employment in the advanced industrial countries posed to economic growth was checked by substantial migrations from the periphery. However, by the late s and early s, this process started to falter Adam Whilst this seems clear with respect to Britain Glyn and Sutcliffe , it also seems part of a general trend across the industrialised world.

For Adam, it is not sufficient to assert that the recession- induced unemployment of that period led to the cutback in foreign workers since it was the growth in external investment which led to the jobs cutback in West Germany. The reasoning here is that the growing resistance to immigration strengthened the position of labour in the industrialised economies and induced the switch from internal to external investment and employment.

This switch has been accompanied by the changed emphasis from managed migration to managed trade. Thus neo-classical economics describes capital as one of the factors of production, alongside land and labour management was added later. In such a view, capital refers to tangible assets such as plant and machinery, and intangible assets such as knowledge, trust and goodwill. Thus the price and value of shares equities on the stock market is considered to reflect the potential worth of its assets to firms, and their likely profitability.

In fine, neo-classical economics conceives capital as similar to land and labour in forming the three factors of production, as a productive input which is as necessary to production as land and labour. In this social relationship, capital exists through the exploitation of labour and the appropriation of surplus value. Capital and labour are therefore not merely technical, economic things but social and political concepts pertaining to human relationships and the organisation of social labour.

These constraints are real enough, but they are not natural but are the product of specific social relationships. Labour can autonomize itself from capital but capital can never autonomize itself from labour. Capital exists only through the extraction of surplus value from labour. That this exploitation is hidden, rarely appears controversial, and is never placed on the political agenda, indicates the extent to which the normative aspect of the power of capital builds on the structural power of capital, thus preserving it from challenge.

In the Marxist conception, capital assumes various forms in the process of exchange and capital accumulation, including fixed capital equipment, knowledge, raw materials, components, and money. But the defining characteristic of capital is the central dynamic of valorisation and accumulation, the systemic imperative to continuously extract surplus value and accumulate. State and Capital The state is an integral part of the capital economy, providing the legal conditions for the establishment and security of property rights, defined in private terms within capitalism.

The state also provides a range of public goods. The globalisation of economic relations is, however, creating substantial uncertainties and ambiguities. Systems of property rights defined in the context of legitimate national sovereignty and territorial jurisdiction imply that each state has the right to control economic activity within its borders, which suggest that states should have some ultimate final 'power over' capital, as power over the domestic economy which it purportedly governs.

Indeed, such a right seems central to notions of national sovereignty and parliamentary sovereignty. Further, whilst there may be one world economy emerging, there is not one world in a political sense.

The Evolution of Monopoly Capitalism

The division of the world into nation-states has made it possible for internationally mobile forms of capital to exploit their global power and reach in order to coerce nation states and shape their policy agenda. This is quite a substantial power, partly on account of the political goods and services which the state supplies, to the capitalist economic system as well as to its citizens, but also because people live in physical place rather than global economic space.

The debate concerning the relationship between the state and markets needs to be examined at the much deeper level of a national politics working within the structural constraints of a capital system that has now attained global significance. On the concept of structural power and its relation to the concept of action see Lukes ; Giddens ; Knights and Wilmott ; Belts On the concept of the structural power of capital, see Ward ; Kalecki in Hunt and Schwartz The structural dependence of the state upon the process of private accumulation translates easily into public power.

Individuals from the world of business and finance are accorded a quasi-public status when meeting with government.

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Given the dependence of the public realm upon the private economy, people from business are deemed to possess an expertise which is of general public value. Behind that expertise, however, are private power and resources. The general acceptance of this view means that politicians have to be concerned with the provision of conditions favourable to business, as a condition of investment and employment.

A democratically elected party possessing a radical or socialist agenda is constrained in its policy making by the nature of the dependence of the state upon the private economy. There is a marked disparity between the power of capital and of labour when it comes to shaping public policy within the context of capitalist relations. Whereas an 'investment strike' follows as a systemic response to a deterioration in the business climate, labour can only defend itself in these circumstances by organising a general withdrawal of labour.

Such a general strike or mobilisation of labour is difficult to achieve and is confronted by the full power of the state. Without a change in the political consciousness, such a general mobilisation of labour would be perceived as a dangerous threat to economic stability and the conditions of economic growth and therefore to the power and resources upon which the state and the general community depend. The structural power of capital is exercised primarily through the market mechanism.

Subjected to political challenge, the response affirms the right of individuals to dispose of their property as they see fit. Further, the supply of finance to governments through the purchase of government bonds and bills may also dry up, making it impossible for the state to finance its current activity. In fine, for indirect systemic reasons rather than direct personal influence, capital, and particularly finance capital, has the power to constrain the state.

This indirect power is supplemented by the direct lobbying of finance and business, but such personal persuasion is secondary to what is called the 'power of markets', but which is really the accumulative dynamic and logic of the capital system. This power systemically constrains economic actors, including the government and labour as well as business and finance. To this extent, within capitalist conditions and arrangements, markets have achieved a degree of abstraction from material realities and possess a certain autonomy of action.

This, of course, what Marx described as a condition of alienation, the products of human action achieving an existential significance independently of human creators. Whereas government and politics, locked into the electoral cycle, tend to focus primarily on an appropriate short-term business climate, capital is concerned most of all with the creation and maintenance of the long-term conditions for private accumulation.

This involves reproducing the subordination of labour to capital through a disciplinary economic environment. Whereas government is focused upon popularity and legitimacy in short-term electoral cycles, and hence the immediate business climate, capital is concerned also with the wider macroeconomic environment within which it operates. Marx MCP Rev What this means is that the state acts as a collective capitalist, transcending internal competition between capitals to serve the general interest of capital as a whole.

The more far-sighted, large-scale sectors of capital are prepared to sacrifice immediate interests in the short run so as to accumulate capital in appropriate conditions in the long run. In the contemporary context, the bigger, more powerful sections of capital can withstand recession and take over weaker or bankrupt competitors. Michal Kalecki noted this phenomenon back in , going on to argue that whilst governments are able to use macroeconomic policy to obtain full employment, they would not necessarily do so.

But 'discipline in the factories' and 'political stability' are more appreciated by the business leaders than profits. Their class instinct tells them that lasting full employment is unsound from their point of view and that unemployment is an integral part of the 'normal' capitalist system. Michal Kalecki in Hunt and Schwartz rentier interests refers to those who are on fixed, or investment incomes, who may be vulnerable to inflation.

Whereas for Marx the economic cycle expressed the inherent contradictory dynamics of the capital system, for Kalecki the cycle is ultimately a political phenomenon, with the state consciously choosing deflationary policies over full employment strategies. A closer examination, however, indicates that Kalecki's argument affirms a basic Marxist proposition concerning the capital system: that periodic crises are endemic to capitalism, with periods of slump eliminating inefficient capitals and generating unemployment.

True, with full employment the 'power of the market' shifts the balance towards labour. But if labour asserts this power to such an extent as to threaten to subvert the mechanisms of valorisation and accumulation, the conditions favourable to business are destroyed and investment strikes follow. At this point, labour must proceed further to constitute a new social order or retreat back to a subservient relation to capital.

This is not a matter of technical economics but ideas, ethics and politics. Many damaging criticisms were made of monetarist economics from a technical point of view. Yet the monetarist emphasis upon controlling inflation through deflationary policies gained general acceptance, even in the context of mass unemployment. Monetarist economics made economic growth conditional upon the conquest of inflation. Monetary targets mandating 'discipline' in goods and labour markets became commonplace.

Either workers would exercise wage restraint or they would 'price themselves out of jobs'. A core monetarist belief is that economic conditions could not be properly controlled by governments, that economic outcomes were the spontaneous product of 'natural' market forces. At most, government action facilitates the operation of the market, working to promote efficiency in the private economy. To the extent that this mode of thought became hegemonic, promoted by influential figures in business and politics and accepted by sufficient numbers of people in the wider society, it involved a redefinition of the possibilities and limits of politics, shifting the terrain of political controversy, intervention and alteration to capital and away from labour.

In other words, the economics is only part of the story, a rationalisation of deeper political divisions and motivations. Freeing the markets from political and institutional regulation is a political decision which unleashes private power against government and labour. With that redefinition of the political comes the end of demand management, government regulation of the economy, industrial strategy and policy. The Power of Capital: International Applications Given the globalisation of economic relations, involving the growing dominance of the transnational corporations and the increasing impact of international capital mobility, public policy, government intervention and action and the power of capital need to be analysed at the international level.

This means addressing economic interdependence, the bargaining power of transnational corporations, the structural power of financial capital and the determinants of short-term capital flows. It also involves an examination of the political, institutional and ideological aspects of power. The growing power and influence of transnational corporations has long been noted Radice Forms of Direct Power: transnational corporations, the inter- nationalisation of authority, and international networks From the perspective of critical pluralism, Charles Lindblom distinguishes between authority associated with governments and markets associated with private enterprise.

Such analysis is increasingly outmoded in being focused upon the nation state. The transnational corporations exert authority beyond national governments, exploiting their global reach across national boundaries in the way that they allocate resources. Decisions are taken on a global scale, with funds shifted from one nation to another, affecting the jobs and income of millions of workers, and the levels of economic activity in a range of nations. The most obvious example here is that of the 'Seven Sisters' in the international oil industry Sampson, These companies colluded over the setting of prices and in the bargains they struck with governments.

Oil is also a good example of the interrelationship of economic, political and military power. The inroads that Western, particularly British, oil firms made in the Middle East in the first half of the twentieth century were dependent upon British military power in that part of the world. The profit-making interests of British Petroleum and Shell and the security interests of the British state were in symbiotic relation. BP lobbied the British government for military action when its Iranian assets were nationalised in The British government in turn asked for US help to restore the Shah, the price of which was a large stake for the American 'majors', the large US oil companies operating in the region.

The lobbying of both parent and host governments by transnational corporations also takes place with regard to international organisations, such as the IMF and the World Bank. The links between private business and international agencies and institutions are further strengthened by transnational financial networks, as well as organisations such as the International Finance Corporation, a branch of the World Bank.

There are a number of international forums which sustain the links between commercial banks, central banks, the IMF and World Banks, the 'Paris Club' and the Bank for International Settlements for two. There is, therefore, an organised pattern of international elite interaction between business, state officials, bureaucrats and members of international organisations.

These international networks are abstract and remote compared to the domestic networks which are the traditional, visible targets of political organisation and action. Organisations such as the Trilateral Commission formed in are explicitly concerned to foster international interaction and networks and develop a shared vision across the governments and societies of the principal capitalist economies. The important point to note is the promotion of a shared outlook concerning the role of private business and enterprise in the international economy, an overarching ideology which encompasses all of these institutional forums.

This common ideology is propagated by a range of international journals and periodicals, such as the Financial Times, the Economist and the Wall Street Journal, alongside more specialised publications. The progression of elite interaction and network-building on a global scale sets the parameters of the political agenda when it comes to the formulation of policies which affect the business climate. International organisations are likely to exert influence and bring pressure to bear upon national governments to the extent that they express a mode of thought that facilitates the interests of capital.

Adding this influence and pressure to the structural power of capital, and one sees the emergence of a transnational capitalist class, with its own particular form of class consciousness Cox ; van der Fin ; Gill This transnational class consciousness is a 'strategic' awareness of the long-term understanding of the general conditions which facilitate the interests of transnational capital, in addition to more immediate and 'crisis-management' issues.

But there are fractures in this strategic consciousness of global capital. Financial and industrial capital operate according to different time- horizons, with finance exhibiting a much more short-term outlook, a horizon which is likely to shorten all the more as a result of the digital revolution.

Again, the commercial banks were slow to appreciate the scale of the mounting 'debt crisis' of the s, underestimating the extent to which the 'sovereign' debt of the developing nations posed special risks to the banks. The problems of short- termism, narrowed horizons, risky ventures and lack of foresight are likely to be exacerbated with the application of information and communication technology to economic processes in the coming decade. Large scale transnational capital has benefited greatly from the impact of increased capital mobility, boosting its power in relation to national capital.

Transnational capital is not dependent on the conditions of the national economy the way that a purely national company clearly is. This needs to be remembered when it comes to assessing the prospects for industrial strategy and policy, either at national or European level. Further, the bankruptcy of small or weak forms, or their taking over by stronger competitors, works to the advantage of transnational capital, particularly in the manufacturing sector.

The case for an industrial strategy and policy is more cogent from the perspective of the national economy than it is from the perspectives of transnational capital operating in a global market. The structural power of transnational capital has grown markedly in relation to national capital, national governments and labour. In this hierarchy of power and influence, transnational capital stands thrives on the highest rung whilst labour flounders on the lowest rung.

Transnational companies can threaten unions with plant closures and relocation of investment to other countries in a way that national companies cannot. The legality or otherwise of secondary picketing is of little relevance in these globalised conditions. Nations with relatively weak and pliant labour forces will attract investment at the expense of those nations with strong and well-organised labour movements. This has happened within nations. But this process is now happening across nations.

Thus parts of the American electronics industry moved to Asian countries such as Singapore and Taiwan in the s. In fine, the 'new international division of labour' expresses the rising power of transnational capital, relative to national capital, government and labour, and is characterised by the relocation of manufacturing to the newly-industrialising countries NICs. In terms of the structural concept of power, the fundamental contrast is the relative mobility of capital on a global scale and the relative immobility of labour, largely confined within national parameters.

Whereas it once seemed as though the strength of organised labour in core economies gave it a certain countervailing power within the emerging international division of labour, particularly given the apparent potential to organise internationally, such power has been significantly eroded, not only be recession but by globalisation.

Labour finds itself in the same position as governments, organised within the constrains of the national state and economy but having to attract foreign investment. The existence of an enormous 'reserve army' of cheap labour in the developing countries has served to 'discipline' labour in the developed countries. The transfer of production from the core economies was accompanied by high levels of unemployment in the developed countries Froebel Governments competing to attract foreign investment offer various concessions which are devised to reduce the cost of capital, relative to that of labour tax breaks, subsidies, etc.

The result is less demand for labour and a rise in unemployment, if the surplus workers are not absorbed into the lower-paid, labour-intensive employment, such as services. One of the most important tendencies generating economic uncertainty and instability with respect to the global mobility of capital concerns the nature of financial markets. Borrowing countries used these funds to bolster state capitalist enterprises over against transnational capital, attempting to play sections of international capital off against one another Frieden The point is that a glut of international finance creates a contradiction by strengthening the power of state capital in relation to transnational capital.

A much greater instability inherent in the nature of international markets concerns the threat of a deep and prolonged recession as a result of a major banking collapse or even the loss of financial confidence through fears of a banking collapse. Market logic holds that investment is undertaken through expectation of profit yields, allowing for risk. This suggests that there has been insufficient investment in less-developed countries, something which will prevent them from becoming more 'credit worthy' in the estimation of the international banks.

As a result, one can envisage a shortfall in global economic growth in the long term. In fine, whilst a global hegemony based upon the concept of monetary discipline and 'sound finance' is emerging alongside a globalisation of economic relations and a transnationalisation of authority, the whole process is beset by inherent contradictory tendencies.

Most obviously, the generalisation of deflationary policies as all countries compete to prove their 'monetary soundness' will generate negative multiplier effects which will tip the global economy into recession. The key point is that the 'rational' policy for each nation to follow may well issue in a 'collective irrationality' when followed by all nations. In economics this is known as the 'fallacy of composition'. This action brought about a reduction in the level of world trade, exchange rate instability, and growing international uncertainty which harmed business confidence and deterred investment.

This implies that a supra-national organisation is the ideal type of political authority in the context of transnational capital. The question is whether, in the s, the architects of European unity are sufficiently aware of the implications of this fallacy and, more importantly, are capable of devising an institutional infrastructure strong enough to enable the international coordination of macroeconomic policies in the face of hypermobile global capital and finance. The increasing globalisation of economic relations should not be taken as supposing symmetries in development.

On the contrary, concentration has proceeded apace with globalisation. Interdependence does not imply equality in global economic power relations. D The Economist 24 January And they are the principal generators and recipients of FDI Dicken Such structural power can be translated directly and systematically into political and social power. Governments must facilitate the process of private accumulation, now proceeding on a global scale, as a condition of their own power, survival and, indeed, electoral popularity.

It is private business, not public authority, which has effective control over the processes of production, investment and employment in the national economy. This structural fact necessarily constrains government to serve capitalist interests Lindblom ; Dahl ; Miliband ; Offe ; Poulantzas ; Czinkola, Rivoli and Ronkainen This implies the internationalisation of power and authority, with international linkages being used to shape public policy.

This involves a transnational capitalist class committed to accumulation as a global process, creating transnational agencies and institutions to regulate the whole process. To refer to the globalisation of economic relations and a global market economy, therefore, fails to grasp the way that social relationships are structured around private property in the means of production.

Liberal economists refer to immutable or natural economic laws as though productive activity is something independent of human beings. And such a view is made comprehensible by practical experience at work and through the media and other social and cultural agencies, as well as through institutions like the Adam Smith Institute and the Institute of Economic Affairs.

As a result, the capitalist worldview comes to be hegemonic. A global social structure is in the process of emerging, and it is a class structure organised around production relations and economic ownership. The practical implications of this are clear when one considers the distinction that may be drawn between the national capital and the national economy.

David Coates draws this distinction in relation to Britain, where the international orientation of the capitalist class is directly connected with the deindustrialisation of the national economy Coates ; Pollard , causing balance of payments constraints and inflicting a vicious circle of decline Smith The emergence of a transnational capitalist class possesses similar implications in that it threatens to concentrate production, investment and employment in areas which facilitate its own interests, destroying the economic basis of those areas which possess militant labour movements, recalcitrant governments or an unsuitable economic infrastructure.

The networks of economic ownership, and hence of the activities of the capitalist class, transcend national borders. And this is the very process which has played a significant role in British industrial decline Coates in Bottomore and Brym ed ch 2. It is therefore important to examine globalisation and monopolisation in their relation to deindustrialisation in advanced economies, to stagnation in the world economy, and to the capitalist class in general.

It is also important to establish that these relations are not simply economic but are power infused and involve class struggle. The transnational materialism of Steven Hymer and Robert Cox is valuable here in stressing the role of class relations in production in the emergence of a global economy. Transnational institutional networks and linkages form to regulate the whole system. No national government can, in this context, determine its own economic policy on the basis of national interests and the democratic will of the people.

Power is private and economic rather than public and political. International economic integration has subverted these controls, with each national economy so shot through with international economic flows as to render independence in policy making an impossibility. The transition of capitalism from its liberal to its monopoly stage is associated with the increasing organisation and power of labour, involving higher wages and the provision of a greater number of social services.

This positive development induces capital to move to locations more favourable to the process of accumulation, favourable, that is, in the sense of having lower labour costs and lower social and environmental costs. One may question whether efficiency, in the sense of capital accumulation, is the real reason for capital flight. Of course, given capitalist relations, there will come a point where the power of organised labour can obstruct the mechanisms of accumulation and investment.

Capital flight is thus as political an act as economic. It is a flight from the power of labour and of democratically elected governments which may come to contest with the capitalist class the right to control production and investment. Thus Cowling and Sugden expect production and investment to be relocated away from advanced industrial economies to the unindustrialised and industrialising countries Cowling and Sugden And there has indeed been a substantial number of manufacturing jobs transported from the First to the Third World in recent times Harris f.

The revolution in communications and information technology has enabled the corporation to retain central control from metropolitan headquarters whilst decentralising the responsibility for operational decision making. This gives the corporation the flexibility to adapt to an increasing number of production units around the world Cowling and Sugden The class aspect to this process is revealed in the concern to relocate from those areas where powerful labour movements and democratic governments have been able to contest control with the corporations and impose a social and democratic dimension upon capitalism.

Such corporations are private governments, possessing the power of decision and allocation over the resources upon which national governments and labour movements depend. Thus, if real wages rise and the power of labour to contest control with the power of the capitalist class increases, as happened in the advanced industrial economies, there is a political as well as an economic incentive for corporations to relocate production to countries where labour is cheaper and unorganised.

The capitalist class holds power by virtue of its control of the means of production. Capital mobility enables the capitalist class to wage class struggle on a global scale. Cowling and Sugden are clear that the process of global industrialisation and deindustrialisation is both undemocratic and inefficient Cowling and Sugden The relocation of production and investment according to labour cost differentials and the relative power of labour allied to improved communications and transformation, the information revolution and more flexible production technology has created a powerful mechanism for deindustrialisation in the industrialised world.

The more successful the economy, the greater the wages and the power of labour, the more likely that employment will be lost to the unindustrialised or industrialising parts of the world where labour is cheaper and more quiescent. This whole process is driven by the class struggle which is now proceeding on a global scale between capital and labour Cowling and Sugden This process is inefficient in that it is driven not by social and economic considerations but by issues of class control and wealth distribution. This power is not, then, exercised according to notions of efficiency — increasing output from existing resources - but according to class interests in extracting the maximum surplus value from labour, being concerned to lower labour costs and undermine the class power of labour Cowling and Sugden Moreover, this global power of allocation comes to compel national governments and labour movements to restrain their social and political power, to keep labour costs down and avoid militancy.

Thus governments learn to facilitate the process of private accumulation as opposed to translating the democratic will, as expressed in periodic elections, into public policy Offe Monopoly capitalism and structuralism The state is subject to the structural constraint of the environing capital system and its accumulative imperatives. The great danger of such structural analysis is that it risks theorising the economic determinism of the capital system as a general determinism.

As a result, human beings cease to be creative actors or agents, shaping and constituting the reality around them, but become mere passive 'bearers' of systemic laws and regularities. There is a danger that instead of criticising the autonomy-denying structures of an existing system of economic determinism, a structural marxism comes to theorise a pervasive, or overdetermined, structure denying creative human agency. With this comes the danger that global systemic forces and features come to be theorised as a given object of analysis, outside of the scope of human political controversy, intervention and alteration.

In the structural marxist analysis, the symbiotic relation between the state and capital means that such systemic forces and features are indirectly embodied in the public policy of nation-states. The approach of this thesis is to criticise forms of structural determinism as pertaining to an alienative and exploitative system of production rather than as expressions of a general condition, thus presenting a form of structural analysis which allows a creative role for human agency, action, consciousness and choice.

Human actors are constrained within certain structural locations, but they still act in certain ways, exercise some choices rather than others, make decisions, from within a range of alternatives that are not simply given by structures. And in the final analysis, creative human agency is the origin of the self- made social world, with all of its structures, institutions and imperatives. It follows that human beings are epistemologically and structurally capable actors able to see through and break through the prevailing social institutions and relations.

Transnational Historical Materialism In contrast to the structural determinism that characterises some influential Marxist approaches, this thesis pays more attention to the work of the Hegelian Marxist Antonio Gramsci Gramsci In his emphasis on ideas, culture and hegemony, Gramsci opened up substantial scope for creative human agency Keohane Gramsci was himself a marxist but he took Marx to be criticising capitalist determinism as a dehumanisation that needs to be overthrown by creative conscious human agency.

Although the Hegelianism of the early Marx became less pronounced, something of the ethical commitment remained.

Transnational Monopoly Capitalism, the J-mode Firm and Industrial ‘Hollowing Out’ in Japan

Gramsci likewise affirmed the concept of the 'ethical state'. The concept of the ethical state is related to the notion of a 'disinterested culture' and a personal development which are independent of political doctrine or expediency. As against Lenin's instrumentalist concern to capture state power in order to refashion society from above, Gramsci's ethical concept of politics entailed the building of socialism from below through the extensive development of a collective potential.

In fine, in addition to economics and its structures and imperatives, Gramsci affirmed the creative potential of politics, ethics and education, emphasising that possibilities for fundamental social transformation are shaped in ways which are not reducible to economics. The conditions of social transformation include the material circumstances of society, but also modes of thought, values and political goals. Any perspective concerned with social transformation needs to take acknowledge the power of politics and ideas and channel their development progressively in relation to structural economic problems.

The argument is not won at the level of theory but practice. In other words, it is not enough to argue that the alternative conception is feasible; it needs to be shown to work. For Gramsci, this defines revolution as a process which involves the building of a counter-hegemony, one which is capable of challenging and eventually subverting and supplanting the dominant hegemony. Given the entrenched nature of dominant ideas and institutions in any given society, a successful counter-hegemonic strategy involves a change in the way in which the limits of the possible are perceived, highlighting the potential for a new type of society.

It is for this reason that Gramsci identified ideas, ethics and education as crucial. For Gramsci, counter-hegemony implied the alliance of all potentially progressive forces in an 'historical bloc'. The notion implies the unity of objective and subjective forces so that the prevailing ideas and conceptions of society correspond to the productive forces, embodied in political parties, trade unions and civic associations. Such an historic bloc is not the passive result of economic evolution but is the product of conscious political activity, given that it involves the resolution of crises with transformative potential conflicts between the forces of production and the relations of production.

The scope for the formation of such an historic bloc is delimited by specific economic conditions and relations and the particular ideas and institutions which prevail in a particular time and place. Gramsci's ideas about counter-hegemony and social transformation were focused primarily on the nation state. Capitalism was still viewed primarily in terms of the national economy.

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Marx himself had theorised capitalism as the universal mode of production, hence his call for the workers of all lands to unite. Marx GI This makes it possible to conceive the formation of historical blocs and of counter-hegemony on a world historical scale. Some such possibility has been suggested by Robert Cox, for whom the growing internationalisation of production and exchange contains the potential for an emergent transnational historic bloc.

In the first instance, this bloc betrays its origins in the capital system, with its central institutions and agencies being the transnational corporations, the banks, international organisations such as the IMF as well as internationalist elements of the biggest nation states. These institutions are united by shared goals, objectives and ideologies, a shared commitment to a particular type of world order, and the fact that they are interlinked by a range of transnational forces.

Marx may well have urged workers of all lands to unite, but it is the capitalists who are demonstrating internationalism and forging supra-national links and connections.

Revealed – the capitalist network that runs the world

Robert Cox argues that the growing interpenetration of the various national economies means that cooperation between capitalist states is likely to become significantly greater than in the past. This would involve the development of an internationalised policy process which makes it possible for the various national interests to be accommodated in a collective framework. Cox thus emphasises the rise of institutional linkages possessing a transnational character, in the form of 'policy networks' Cox For Stephen Hymer, such developments suggest the emergence of a world economy, organised hierarchically, and centring on the headquarters of the biggest transnational corporations the Fortune The emergence of this transnational capitalist hegemony also implies that the question of a counter-hegemonic strategy must now be international in scale and focused upon the global environment Hymer in Frieden and Lake Whilst Cox and Hymer build their analysis on class relations in production, they do not view these relations primarily in terms of national capital and national labour but instead focus upon transnational capital in relation to national capital.

This implies that a transnational capitalist class is in the process of formation, a possibility which Lenin denied. Lenin, following Marx, thought that the workers of the world could and would unite against a capitalism divided between nation states and competing capitalists. In contrast to this, the implication of the transnational materialism of Cox and Hymer is that the global power and mobility of transnational corporations, able to shift the geographical location of their production from one nation to another, puts labour movements, still organised on the basis of the nation state and the domestic economy, on the defensive.

Transnational capital exploits its global power and reach to play these national labour movements — and national governments — off against each other in a classic strategy of divide and rule. The result is that the process of transnationalisation gives certain sections or fractions of capital a structural advantage that is far greater than had been the case under a system of relatively separate, 'national' capitals.

There is a need to emphasise here that 'national' capital is also placed at a disadvantage vis competition with transnational capital. The point is important to bear in mind when discussing possibilities for an industrial strategy and policy focused on the domestic economy. In relation to transnational capital, national capital focused on the domestic economy shares interests in common with labour.

The existence of such incorporated labour points to an alliance of material and political interests which cuts across class and nation and which forms a historic bloc of transnational forces. Marx envisaged world- wide proletarian revolution in some such way. Instead, the most privileged sections of the working class form subaltern parts of a historic bloc led by the capitalists and managers of the transnational corporations. Also in this bloc are the personnel in the institutional apparatuses of the core states and in the periphery whose interests ally them with the internationalisation of production and exchange.

Neo-liberalism advocating deregulation and free markets is the hegemonic ideology which establishes the parameters of thought, action and politics this transnational bloc of forces. Liberal economists such as Milton Friedman, Hayek and Mises are cited as key authorities in the neo-liberal ideology.

  1. (PDF) INDUSTRY AND EUROPE Pt 3 Transnational Monopoly Capitalism | Peter Critchley - ofunawin.tk!
  2. Brief History of TNCs.
  3. (PDF) INDUSTRY AND EUROPE Pt 3 Transnational Monopoly Capitalism | Peter Critchley - ofunawin.tk.

Which once more begs the question of whether the ideas of these thinkers should be examined as pure economics or whether one should seek the philosophical assumptions and political purposes that lie behind their advocacy. Cox identifies three sets of social forces: 1. These social forces interact at the levels of production, of state-civil society relations, and of world orders.

Whilst Cox typically proceeds from domestic production relations the mode of production , these three levels are interlinked, meaning that analysis could proceed from any of the three social forces, from any of the three levels. Forces and levels interlink and interact in a dynamic and dialectical way and no unilinear determinism exists between them. From a Gramscian perspective, the most effective use of direct power is not coercive in a physical institutional sense but involves a hegemonic vision of self- reproducing structural power.

Such a long term strategy combines both the economic and the ideological. The more successful such a strategy is in embedding ideas and values within practices, the less necessary and less visible will the coercive use of power become. A consensus which is shared by both the dominant and subaltern classes is developed around the basis of shared values, ideas and material interests. What is crucial to such hegemony is that ideas and institutions come to be seen and accepted as natural, inevitable and legitimate; they achieve this status by becoming embedded in the frameworks of thought and action of substantial sectors of the population, the politically and economically powerful, certainly, but also those subject to such power.

The hegemonic structure of thought and action thus promotes a certain conception of the right and proper organisation of society and social purposes and defends this view against movements in favour of alternate political, economic and social arrangements. The Gramscian approach sheds important light on the class dimension of international economic relations. The failure to grasp this opportunity makes little sense in strictly economic terms. A rational calculus of long-term costs and benefits strongly suggest that the UK should have been a key and influential player in the formation of the European Community.

A Gramscian analysis of the nature of British political leadership, its traditions and purposes, its links to banking and finance, helps to explain the course of action taken which, from the perspective of the long term interests of the domestic economy seems quite irrational.

John Ruggie describes the international economic order which has emerged in the capitalist part of the world as a system of 'embedded liberalism'. The 'fusion' of power, interests, and 'legitimate social purpose' in the major capitalist states savours more than a little of a Gramscian, hegemonic coalescence of social forces. In time, this system achieved ever more extensive degrees of acceptance, encompassing more and more nations. Ruggie also points to the evolving internationalisation of authority in a non- state form through the establishment of such international institutions as the IMF, World Bank and GATT, alongside corresponding international regimes for money and trade Ruggie One factor stands out clearly, the high degree of internationalisation of British capital, both industrial and financial.

In the United Kingdom accounted for It is significant that foreign direct investment is much more important for the United Kingdom than for the United States. The ease with which capital can be shifted abroad implies that the rate of investment in the domestic economy may be retarded. This is most clear in cases where investment abroad is used to replace the domestic sourcing of the British market by foreign sourcing, or where exports from Britain are being replaced by overseas production.

But the point can also apply more generally as the financing of British investment tends to dry up. Whilst large companies should find it relatively easy to obtain the finance they require, newer and smaller firms will find it difficult. In consequence, such firms will possess a highly vulnerable position in the domestic UK economy, in contrast to the other European economies and the United States. This is a powerful explanation as to why the British economy has a much weaker small firm sector than major industrial powers like Germany and the United States.

It also explains why the large transnational corporations tend to be much more dominant in the British economy. The argument that economies of scale are essential for dynamism and international competitiveness which informs a large part of EC economic policy are contradicted by the fact that Britain, with the bulk of the largest firms in Europe, is also one of the most undynamic and uncompetitive economies of the EC. The British economy has spent most of the twentieth century in crisis.

The British economy seems to be locked inside a vicious circle of continuous relative decline of the domestic economy precisely because of the special international connections and orientations of British capital. In complete contrast, the European economies and Japan have concentrated upon exploiting foreign markets from a domestic production base, thereby entering into the virtuous circle of cumulative causation, with productivity growth responding to the growth in output as a result of external demand.

It is important to note here that the arguments concerning British economic decline are overwhelmingly focused on the level of the national economy. Given the international character and orientation of the British capitalist class, one can expect the relative neglect of the domestic economy, no matter how large a priority it may be for British people and workers. There is a need, then, to distinguish between national economies and national capitals. What constitutes success for the one does not necessarily imply success with respect to the other.

The scale of the decline British manufacturing industry has now reached such levels that it can no longer be ignored. The response has been to devalue the importance of industry and extol the virtues of the service economy. This is a rationalisation which conceals the fact that British policy makers have long since committed themselves to the national capital over and even against the national economy. The argument is accompanied by figures revealing the profitability and hence centrality of services to the British economy. However, taking a long term perspective, it is clear that if the relative demise of the national economy proceeds so far that the nation can no longer pays its way in the world, the effect on the national capital can only be deleterious.

No matter how strong and pervasive the UK international connections, the continued failure on the part of UK national capital to develop a strong domestic base has involved the country in an ongoing struggle for economic health and will seriously harm the future prospects of the country as a whole. As this thesis has argued throughout, manufactures are more tradable, more capable of productivity, are the key to a nation being able to pay its way in the world. The globalisation of economic relations will in the long run open up the world economy to new players, in industry but also in finance.

The apparent strength of UK finance and services cannot be assumed in the long run, not on the trends of a continually crumbling domestic base. The obvious question as to why the British state has not intervened to seek an escape from the vicious circle of continuous relative decline is answered clearly so long as one makes the distinction between the national economy and the national capital.

The national capital — the internationally oriented UK business and finance — takes priority over the national economy. And this priority is now the tacit assumption on which British economic policy rests. After writing a paper on the central importance of the City and finance in British economic decline, shadow minister Robin Cook has been kept away from an economic portfolio by a Labour Party intent on forming a government. Throughout this period of decline, brief periods of expansion being followed by sharp cutbacks - the stop-go history of the s and s, which finally came to a stop in the mids.

With something like one third of British manufacturing capacity being eliminated in the first Thatcher government of , the British seemed finally to give up the ghost and pretend that manufacturing no longer matters. World trade figures reveal that manufacturing very certainly does matter. The bulk of world trade is in manufactures. Britain, in deficit since , is less and less able to pay its way in the world. There is substantial evidence relating to the role played by the transnational in the deindustrialisation of the British economy. Stopford and Turner report that report that, out of the sample of 58 UK transnationals over the period , the total domestic job loss was ,, whereas jobs overseas went up by , These figures confirm the general arguments made.

This is quite a reversal in expectations and experience. In , Jean-Jacques Servan-Schreiber's wrote in The American Challenge, that 'in fifteen years' time, the third largest industrial power in the world, after the United States and the Soviet Union, may well turn out to be, not Europe, but American industry in Europe.

In September , Fortune magazine asked whether 'Made in the USA' was in the process of becoming an obsolete expression. The American jobs miracle is frequently cited. The fact that so much could be made of this is a sure indication that something is fundamentally wrong in the US economy and words, like figures, are being spun to cover this up. True, some 18 million jobs were created in the USA in the s.

Most of them were in services, as jobs in industry continued to decline.