Which approach to MNCs is the most relevant in your opinion?

Use three examples of MNCs

in order to sustain your argument.

In Gilpin’s examination of the political economies of the multinational corporation, three main
paradigms are being shown: Liberalism, Marxism and Mercantilism1. However, the Marxist
perception seems to prevail when approaching multinational corporations (MNCs).

First of all, the Marxist approach sees the trend of western and mature capitalist economies
exercising a form of imperialism. Through the investment of their surplus of capital in foreign
economies, such as China, they seek to: 1) promote mass production of their products, 2)
increase their profit via the new penetrated market and often the cheap labor and 3) exercise a
new form of economic imperialism by controlling trade, businesses and resources2. One main
resource, despite raw material, is manpower which has been controlled in a way through the
investment of Western MNCs. This way is expressed by Ngai and Smith’s research3 on the
“dormitory labor regime”. China Silver Garments is a chinese corporation that promotes this
regime, with which the manpower can be controlled all-day long, by providing accommodation
with degrading living conditions near–or sometimes inside–the factory to make sure that the
production standards set out by the Western specifications are met and the production needs of
the European or American MNC that has invested in, are covered. This effect promotes the
exploitation of the working-class through foreign MNCs. Then once the worker is
accommodated near the factory, is complemented with low-wages that maximize the MNC’s
profit even more.

Furthermore, according to Marxism, economics do influence politics and creates international

conflicts. A great example is the role of ExxonMobil–among others–in the world in Iraq. In
this specific case, politics and international conflict came in hand in dealing with two major
issues “standing in the way” of the expansion of western oil companies: the Hussein regime
and Iraq’s legal system4. So, the US dealt with the first one directly and indirectly solved the
second through the coalition government in Iraq and the change of Iraq’s oil laws, that opened
the way for foreign direct investments of oil companies.

Lastly, Marxist perception, MNC are used by capitalist elites as a means to exercise their
domination and exploit the less-developed economies and the working class. An example is
Apple Inc. Apple has cutting-edge technology products that are designed in California but are
assembled in China. Its headquarters in Cupertino in California, are state-of the art buildings
where all the cutting-edge technology is being designed. However, they are manufactured in
the “outskirts of the Shenzhen megalopolis”5, by using the chinese company Foxconn. In this
giga-factory, the working conditions are nowhere near the ones in Apple’s headquarters as
people cannot bear the humiliating work conditions inside it, that decide to throw “themselves
off the towering dorm buildings”6. It can be understood how this exploitation in working
conditions, along with the abovementioned situation of the exploitation regarding the wage, is
confirming the Marxist rationale of exploitation of working classes and underdeveloped
countries by the elites of Western MNCs.

1 Gilpin, Robert, Kari Levitt, Jagdish Bhagwati, and Raymond Vernon. “The Political Economy of the Multinational
Corporation: Three Contrasting Perspectives.” The American Political Science Review 70, no. 1 (March 1976): 184.
https://doi.org/10.2307/1960333.
2 Chigozie, Nnuriam Paul. “Multinationals as Agents of Imperialism: A Case Study of the Third World Countries.” Equatorial

Journal of Communication Technology 2 (2018): 8.

3 Ngai, Pun, and Chris Smith. “Putting Transnational Labor Process in Its Place: The Dormitory Labor Regime in Post-Socialist

China.” Work, Employment and Society 21, no. 1 (March 2007): 27–45. https://doi.org/10.1177/0950017007073611.
4 https://edition.cnn.com/2013/03/19/opinion/iraq-war-oil-juhasz/index.html
5https://www.theguardian.com/technology/2017/jun/18/foxconn-life-death-forbidden-city-longhua-suicide-apple-iphone-

brian-merchant-one-device-extract
6 Ibid.
Bibliography:

Chigozie, Nnuriam Paul. “Multinationals as Agents of Imperialism: A Case Study of the Third
World Countries.” Equatorial Journal of Communication Technology 2 (2018): 8.

Gilpin, Robert, Kari Levitt, Jagdish Bhagwati, and Raymond Vernon. “The Political Economy
of the Multinational Corporation: Three Contrasting Perspectives.” The American Political
Science Review 70, no. 1 (March 1976): 184. https://doi.org/10.2307/1960333.

Ngai, Pun, and Chris Smith. “Putting Transnational Labor Process in Its Place: The Dormitory
Labor Regime in Post-Socialist China.” Work, Employment and Society 21, no. 1 (March
2007): 27–45. https://doi.org/10.1177/0950017007073611.

Internet sources:

https://edition.cnn.com/2013/03/19/opinion/iraq-war-oil-juhasz/index.html

https://www.theguardian.com/technology/2017/jun/18/foxconn-life-death-forbidden-city-
longhua-suicide-apple-iphone-brian-merchant-one-device-extract