Page 47 - Global Political Economy_Understanding The International Economic Order

CHA PTER T WO
activities, behaves in the same way that all others behave. All corpo-
rate leaders make their decisions in response to market signals and in
order to maximize their profits. (Or, as the economist told the stu-
dents, the purpose of the postman is to deliver the mail regardless of
the color of the uniform.) Economists in general believe that, whether
the firm is American, European, or Japanese, it must optimize within
given constraints and respond effectively to market opportunities in
highly competitive markets or go out of business. The fact that a firm
happens to be of a particular nationality and competes in a world
market through establishment of overseas subsidiaries does not sig-
nificantly change matters. In language that a Marxist or a realist
would use, the ownership of the means of production and the na-
tional origins of a business firm are totally irrelevant.
This experience illustrates the view of neoclassical economics re-
garding the nature of economic actors. The world of the economist is
populated solely by individuals (consumers and producers) pursuing
their self-interest; firms, states, or other economic actors are assumed
to be merely aggregates of such individual actors. Every individual
(regardless of ethnicity, class, or national identity) is assumed to act
rationally (employing a cost/benefit calculation) in pursuit of his or
her self-interest. There are no fundamental differences among Ameri-
can, Japanese, or Bantu economic actors. Everyone is assumed to be
seeking the same broad range of economic objectives. The only things
that differ from one society to another are the external constraints on
decision-making and the opportunities among which the individual
must choose.
Within other intellectual perspectives, the nature of economic
actors appears very different. A Marxist, for example, regards eco-
nomic classes (defined by the ownership or nonownership of the basic
means of production) or such representatives of class interests as poli-
ticians or interest groups as the fundamental actors in economic af-
fairs. According to this view, all corporations (national or multina-
tional) are representatives of the capitalist class that dominates every
capitalist economy. For proponents of a state-centric approach, on
the other hand, the primary economic actors are nation-states or
other powerful political groups, and, therefore, the nationality of the
MNC is of great importance because its behavior is strongly influ-
enced by the policies and culture of its home society. Viewed from
this perspective, a “multinational” corporation is, in its essence, a
corporation of a particular nationality whose international activities
are, on the whole, intended to promote the primary interests (eco-
nomic, political, or even security) of its nation of origin.
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