These and other problems may be illustrated by the specifics of the
so-called multinational corporation. This term has come into such wide
usage that we refrain from using a more accurate description. In the
present state of affairs, a more accurate term would be the
transnationally operative corporation. The corporation may operate in many
countries, employ the citizens of many countries, and even sell shares to
the citizens of many countries, but unlike other types of international
organization -- which endeavour to establish governing bodies of
thoroughly international composition -- the multinational corporation
tends to be controlled within one particular country (36). The
greater number are, in fact, American internationally operative
Equitable share of profit is one of the problems posed by the operation of the multinational corporation, in the
absence of a global taxation-redistribution system. A subsidiary in a
particular country may show no great profit on paper in that country and thus provide low tax revenue therein (it may also, if highly automated, provide little in the way of employment). Yet its activities may contribute greatly to the net profit of the corporation's total system. Profits and tax revenue are inequitably creamed off in the parent jurisdiction.
On the other side of the ledger, when the multinational corporation establishes operations in other countries (than the country of control) in order to avail itself of lower wage levels, it is accused of exporting specific potential jobs. Sometimes people speak louder than money, and specific people speaker louder than others. The overall operation of the multinational corporation may produce net profit for the home country, but a specific union may capture the attention of the politician. The corporation may thus find itself in a position where, for political reasons, it prefers to employ at high rates in the home country and cut back on employment in other countries. This is one of the potential problems facing a developing country when it depends too heavily on foreign multinational corporations.
The multinational corporation may operate as a communicator of technique, enhancing technological
change in its host countries. (It is clear, however, to the author of a paper on "The multinational corporation as
international communicator" that in its advertizing and organizational techniques, the corporation does not merely export industrialization; the American corporation also tends to export a specifically American lifestyle.
Industrialization in general, and Americanization, are not exactly synonymous -- though often confused with each other).
On the other hand, the multinational corporation may not, in fact, export technique in a manner to be desired by
the recipient countries. It may retain at home base the more sophisticated aspects of its available technique. It
may drain to the home base the bulk of the research aspects which might
otherwise be characteristic of operations dispersed more widely. Its very
presence may, indeed, have an emasculating effect on the development of
research and advanced technology in host countries. The developing
country, in its haste to attract foreign investment and expertise, may
also receive a flood of professionals from abroad, competing with its own,
but its own professionals may find barriers if they in turn seek to move
in the opposite direction to avail themselves of specific opportunities
not open to them at home (38).
In answer to some of these criticisms, the multinational corporation
defends itself by pointing to the historic role of international investment in the development of the United States, and by asserting that in fact it promotes skill on
a system-wide basis without regard to citizenship. On close examination,
however, we find that European investment in American industrialization was largely debt investment; when the bonds were paid off, ownership passed into American hands. By contrast, the American multinational corporation usually seeks outright or
predominant ownership of its foreign operations; as these grow, so does
the current account drain on the host country's financial resources. (In Canada, for a complex of reasons involving banker caution, Canadian
self-denigration, the credit-rating of giant American corporations, etc., it has usually been easier for a
multinational corporation to secure financing than a Canadian
enterprise; the result has been that expanding American ownership in Canada has, perversely, been largely financed by Canadian savings).
With respect to the "we promote on skill, not
citizenship" argument, a close examination indicates that corporate
headquarters boards of directors are usually overwhelmingly one
nationality. Furthermore, apart from the latter feature, the multinational
corporation is an international non-governmental organization (though many
have net assets exceeding those of countries), and is faced with all the
facilitation problems of other international associations (albeit often
with more political influence to overcome facilitation
problems). Accordingly, when we look closely at the
"international" staff of corporate headquarters, we find subtle
pressures may have obliged them to acquire citizenship of the corporate
parent country. This is particularly evident in the case of American
multinational corporations (39).
The problems presented by the multinational corporation in these various respects would be alleviated
by a global taxation-redistribution system, accompanied by global mobility of labour. (Since the barriers are not going to come down in one fell swoop, countries have to consider carefully the manner in which they contribute
to a process of dismantling. One technique is the unilateral, or turn-the-other-cheek approach. At its best, this is based on the same philosophy as pacifism: that in the long run the advantage accrues to all mankind, not
just those who avail themselves of the immediate opportunities presented
a yielding neighbour (38). Another technique
is that of reciprocity, in
which two or more countries lower barriers between themselves on an
equitable basis (39). This still leaves us
with the problem, however,
of the concentration of corporate headquarters in a few leading centers, with the result that a disproportionate number of highly intelligent persons
tend to be drawn away from hinterlands.
As mentioned at the start of this section, it would be perhaps more equitable if different system-centers were
located throughout the world on a more dispersed basis. One of the reasons
why they presently tend to concentrate together, is that they have
symbiotic relationships, and proximity facilitates those relationships. In
a later chapter, we will visualize the potential of evolving
transportation and communications to render physical proximity less of a relevant factor. We will also visualize an even more fundamental possibility: the capacity of electronic technology to diminish the very concept of center, insofar as many aspects of information-sharing and decision-making are concerned.
Voluntary systems and activities
In the previous section we have discussed the multinational corporation,
to highlight the problems of relationship between center and hinterland. As we have noted, these perennial problems are compounded when a system such as the multinational corporation -- crosses and clashes with the boundaries and goals of other systems; in this case, that of the state. The multinational corporation is organised in space, but the territorial dimension is not its salient feature. Or, to put it another way, the multinational corporation seeks to evade the limitations of
territory. It is an example of an activity which would prefer, from one
perspective at least, that there be no territorial demarcation. This is
not to say that the multinational corporation desires the disappearance of
"the state," since the state provides the minimum degree of law
order without which the corporation cannot conduct its affairs. The
corporation would prefer, however, one global state if the management of that state
were such as to facilitate rather than hamper its activities.
The multinational corporation is not the only activity which evidences
ambivalence towards the system of sovereignties. Its cousin the
international non-governmental organisation is in the same position,
particularly such INGOs as the Roman Catholic Church. Furthermore, many
activities are carried on within a particular territorial jurisdiction which bear no necessary relationship to that jurisdiction. Their goals simply do not
relate to the territorial dimension in any particular manner, other than
the fact that individuals and activities are to be found at particular points in space. Their focus is towards some voluntary activity.
In a sense, every system is voluntary which permits its members to leave. The choice may involve losses, grave or not so grave. The territorial jurisdiction -- municipality, state or province, country -- is itself a voluntary system to the extent that it permits exit and entry. But within its confines, subject to the relatively weak suasion of
international law, the state asserts direction of those persons and
activities within its jurisdiction (40). It
delegate certain powers to organisations within its jurisdiction, but ultimately it remains the arbitrator of
conflicting activities. The function of coordination is as essential in a global state as in any other.
It is relatively easy for the coordinating level to delegate authority to sub-systems which operate in
fairly watertight compartments. Certain countries have delegated authority over civil status -- marriage, divorce, and the like -- to religious or ethnic courts. This procedure is effective to the extent that members of the sub-systems do not bring one "personal law" into contact with another. So long as Moslem marries Moslem there is no question as to which personal law pertains. When Moslem seeks to marry Christian, however, there is
lack of congruence between the two personal laws and the coordinating
level is obliged to intercede with other machinery. This factor is very
important in a world where cultural barriers are falling, and where cultural minorities are demanding not only that society permit them liberation but that it also permit them the benefit of "personal law". An example of the latter case is that of right of participation in tribal lands. Reserve Indians in parts of Canada fear that if non-Indian males secure participation in tribal land through the marriage of Indian women, the Indian character of such reserves will be lost. They seek retention of the "personal law" which excludes non-Indian males from such participation. At the same time, Indian women assert the same freedom to marry
non-Indian spouses, for a life on tribal land, as is enjoyed by Indian
males. A single standard could either lead to the cultural alienation of
tribal land, or to the exclusion of any Indian marrying outside the race.
We have noted that the territorial dimension is not the salient feature of
many systems. Nevertheless, location may be an important factor. The adherents of a religious denomination prefer to live near its church or temple. Skaters want to be in reasonable proximity to a rink. Individual tastes, such as a fondness for social activities in nightclubs, may be location-oriented. The question of which territorial jurisdiction will permit certain religious,
political, cultural or social activities to take place is of vital
importance for those individuals and groups seeking such activities
(40). To the extent such activities involve
direct contact with other
persons abhoring them, conflict is unavoidable. It is easy enough to call
for tolerance and liberation. But one person or group may demand
liberation for a particular activity, while another demands liberation from the effects of that activity. The corporation may demand liberty to conduct its business; the individual may demand liberty from the resulting pollution. The drug-advocate may demand the opportunity to "turn on" adolescents; parents may demand liberation from the problems which drug-use may present them with. A partial solution to such problems
is to recognise that individual psychology leads some persons to a natural
affinity with particular cultures, and to let "birds of the feather flock together" by differentiating between the norms of specific locations. In short, the
territorial demarcation has its uses if it permits the liberation of
particular cultural patterns, and if there is freedom to move from one such jurisdiction to another. In a later chapter we will discuss more specifically the manner in which electronic technology, and transportation, does and can effect voluntary systems and activities. Developments in these fields might prompt the idea that the world be organized or structured more in terms of activities than territories. The world has seen such many experiments -- as when life in Medieval Europe was divided between the "two swords" of the universal church on the one hand, and the particularism of the territorial jurisdiction on the other. Federalism itself is something of an experiment in this direction, in that two governments come to bear on the affairs of one activity in differing dimensions. There has to be a function of coordination in society, however, and it no more relieves us of conflicting system-boundaries to assign functions to various institutions, than to various territorial jurisdictions.