THE CRACK-UP OF THE NATION
All such developments—the new economic problems, the new environmental problems, and the new communications technologies— are, converging to undermine the position of the nation-state in the global scheme of things. What’s more, they come together at precisely the moment when potent new actors appear on the world scene to challenge national power.
The best-publicized and most powerful of these new forces is the transnational or, more commonly, the multinational corporation.
What we have seen in the past 25 years is an extraordinary globalization of production, based not merely on the export of raw materials or finished manufactured goods from one country to another, but on the organization of production across national lines.
The transnational corporation (or TNC) may do research in one country, manufacture components in another, assemble them in a third, sell the manufactured goods in a fourth, deposit its surplus funds in a fifth, and so on. It may have op-crating affiliates in dozens of countries. The size, importance, and political power of this new player in the global game has skyrocketed since the mid-1950’s. Today at least 10,000 companies based in the non-communist high-technology nations have affiliates outside their own countries. Over 2,000 have alliMates in six or more host countries.
Of 382 major industrial firms with sales over $1 billion, fully 242 had 25 percent or more “foreign content” measured in terms of sales, assets, exports, earnings, or employment. And while economists disagree wildly on how to define and evaluate (and therefore classify and count) these corpora-lions, it is clear that they represent a crucial new factor in the world system—and a challenge to the nation-state.
To glimpse their scale, it helps to know that on a given day In 1971 they held $268 billion hi short-term liquid assets. ‘I’Iiis, according to the International Trade Subcommittee of I ho United States Senate, was “more than twice the total of nil international monetary institutions in the world on the »»mo date.” The total annual U.N. budget, by comparison, i« i > resented less than 1/268 or 0.0037 of that amount.
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