The Dialectics of Globalization (page 3 of 5)
By Jerry Harris

Nationalist and Globalist Corporate Base

In exploring the relationship between the US and Europe we can look at the economic base of nationalist and transnational corporations. The economic base of US militarism is composed of corporations protected from transnational competition through state monopoly contracts and legal restrictions on sharing key technologies with foreign partners. The big four weapons manufactures, Lockheed Martin, Boeing, Northrop Grumman and Raytheon clearly have a national base for production, profits and employment. Lockheed Martin has 939 facilities in 457 cities spread over 45 US states. In 2003, 78% of its business came from US government contracts and only 18% from international sales. (Lockheed Martin) At the 1999 Republican National Convention Lockheed’s vice-president for corporate strategy boasted he ‘wrote the Republican Party’s foreign policy platform.’ As the world’s largest manufacturer of planes Boeing is more diversified than Lockheed, but their defense related production employs about 83,000 workers in 38 states, and is more profitable and stable than its commercial arm. (Boeing) Northrop Grumman has production sites in 44 states and in 2003 it was the third largest Federal contractor by revenue and the government’s second largest contractor for information technologies. Secretary of Defense Rumsfeld served on its advisory board and James Roche, secretary of the air force spent 20 years as a Northrop executive. (Northrop Grumman) Lastly, Raytheon maintains 79 facilities located in 24 states. In the Defense Appropriations Bill of 2002 it was included in 450 major programs and has a backlog of over 4,000 military funded projects. (Raytheon) All of these corporations have benefited from the large increases in defense and homeland security spending under the Bush administration.

The picture is very different when we investigate transnational corporations (TNCs). The United Nations Conference on Trade and Development (UNCTD) has developed a transnationality index that ranks corporations by three ratios: foreign held assets to total assets, foreign employment to total employment and foreign sales to total sales. For the top 100 TNCs the average overall ratio was 59.4. (UNCTD 5) No European or US weapons manufacturers listed in the top 100. Not only are well over half of assets, employment and sales outside the country of origin but many of these assets are held in joint ventures or equity deals involving corporations of different countries. Also common are webs of technological and product alliances that cross national boundaries. The results of this integration are accumulation strategies that encompass multiple national relationships as each TNC seeks the right combination of cross border factors to establish themselves as a global monopoly.

Capitalists who control transnational corporations compose the most powerful economic and political sector of the bourgeoisie. Any current class analysis must recognize this concentration of power and its domination over nationally based capital. Nationalist politics may have a broader political base of support but nationalism is no longer a leading ideological current among the capitalist class. Even the success of national champions, while still important, occupies a diminished economic and political sphere relative to TNCs.

We can take a brief look at German capital to understand the dominant position of the globalist wing. Among the 30 largest German corporations 11 appeared among the world’s top 100 non-financial TNCs in 2001. The following chart shows their world position rank by foreign assets and their transnationality index (TNI).

Clearly evident is that the most powerful German corporations have a majority of their economic interests outside of Germany. BASF describes itself as a “transnational company focused primarily on Europe, the USA, Latin America and the Far East.” Of its 14 most important sites only two are in Germany with three in the US. (BASF) Bayer defines itself in similar terms writing “the cornerstone of our business activities are in Europe, N. America and the Far East.” Bayer owns 350 companies operating on all continents with its combined European sales representing just 40% of its totals. (Bayer) DamilerChrysler, describes itself a “truly global company” with a “global workforce and a global shareholder base.” It operates manufacturing sites in 17 countries and sells its stocks in Frankfort, New York and Tokyo. (DamilerChrysler) Siemens, which just missed the 100 list in 2001, is the world’s largest electrical engineering and electronics company with economic interests in 190 countries and 600 manufacturing sites. About 60% of its workforce is employed outside Germany and it operates in all 50 states of the US. (Siemens) With 70,000 workers Siemens is now among the top 100 employers in America, while over the past 12 years its German workforce has dropped by 86,000.

The European capitalist class doesn’t want to out compete America in some replay of nation-centric industrial era politics. The economies are co-dependent because the globalist structure of accumulation integrates national capital, labor and resources into a world wide web of production and profits. Of course competitions continues, but not through national networks and identities, but through transnationalized corporations creating the most integrated and competitive structures. TNCs are political invested in the stability of every market and interpenetrated with global capital through stock ownership, equity holdings, merges and acquisitions. True, TNCs will use their national origin to protect their markets with appeals to protectionist policies. But from a global perspective it becomes one competitive tool used in one market. More >>