Lecture 6 POLS2402 (MNCs and production)

Lecture 6 POLS2402 (MNCs and production) - POLS2402 Lecture...

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POLS2402 Lecture 6: 7 September 2011 Multinational corporations, the strategic focus of producers, structural change in the advanced countries and the international division of labour Capitalist production is never ‘fundamentally’ national; economic globalization is endogenous to the logic of markets and profit-seeking and restless/ relentless urges to expand the scale and geographic spread of production. Economic activity and economies have always been international, resources are often available only from other countries, and (new) markets can be found there too. Globalization implies changes to the location, investment, production, employment, research and competitive behaviours of corporations. It s not just a logic of growth and geographic expansion (which could have predicted in the abstract from the presumption of a restless search for profits), but an outcome of changes in transportation costs, ICTs, new production process technologies (CAD), new sources of materials (recycling), lighter but stronger materials, new organizational possibilities, new ‘global cities’ and an altered regulatory environment. It has created entirely new realms of strategic planning – over where to locate production, R&D, sales efforts; whether to prioritize economies of scale or not, whether to produce ‘in-house’ (at home) or to ‘outsource’ (internationally). A result: constant processes of restructuring, reorganization, rationalization…
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Production is the key to any economy; in a capitalist economy capitalist production is the key, i.e. production under private auspices, production according to market criteria, profitability determines investment & production, commodity production is the norm (including involvement /exploitation of labour on a commodified basis) and undemocratic production arrangements. It might be that in a ‘global economy’, financial activity is the most spectacular characteristic or manifestation of cross-national activity. But it’s what’s happening in the sphere of production that holds the causal key to what’s occurring, what the dynamic forces are, and how the ‘ forces of production (societal wealth) are developed. And we’re entitled to ask whether the ‘logic’ poses problems for the polity… i.e. whether production involves more than just chasing profits.
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Obviously MNCs & TNCs (‘globally integrated enterprises’) are the major bearers of globalized production, mainly through FDI, portfolio investment, mergers & acquisitions (esp since 1960s). They’re the ‘actors’/ institutions which do interconnectedness and ‘spatial outreach’. The main characteristic is that they can plan, organize & control production across national borders.
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Lecture 6 POLS2402 (MNCs and production) - POLS2402 Lecture...

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