• Late medeival - Peruzzi et al. no-transcontinental, but cross-border
• 16th-18th C - great trading companies (Dutch East India Trading Co. et al) - intra-empire
• 1850-1914 Indutrial Age, Gold Standard Era: FDI, overseas manufacturing, extraction industries. Beginning of formation of multinationals along the lines of Standard Oil et al, reduced frictional costs
• 1914-1945 Still largely between a limited number of economies (European, American, Latin American, Canadian; and most international business still concentrated in the primary products sector (these MNCs provided much of the investment capital for these economies
• 1945-present - Rise of the MNC and the Transnationalization of Production - overwhelming American superiority until Japanese/European rise to power in the 70s; slowed in the 80's, then FDI boomed in the 90s with European Union, NAFTA and APEC's Osaka Declaration (removing trade and capital barriers); 1991-6 almost 100% of the 600 changes in national FDI regulations liberalized arrangements; much of the flow in the 90's went to places like Russia/E Europe/Latin America in the frenzy of privatization
  Extensity - 3800 indigenous MNCs in developing countries in the late 80s --> 7600 by mid 90s
  Intensity - increased % of FDI/total capital formation; increase from 10-15% in 1970s foreign affiliate sales/world GDP to 25% today
  Stratification - MNCs from just 8 (OECD) countries account for more than 3/4 of world FDI stocks; US, Britain and Canada losing, Germany, Japan, France, etc gaining; Us - pre-1970 net exporter of FDI, recently as its competitive edge has eroded, other countries setting up shop here. China - huge influx of FDI to the extent that about 25% of manufacturing is done by foreign MNCs
  Information and transportation revolutions have helped the transnationalization immensely (less centralized/outward flow-only management style, thus relying on locally-based knowledge; more contracting out the SMEs due to greater market knowledge; more joint ventures)
  
  Very little internationally-based governance or restraint on MNCS due to opposition, in 70s, from OECD states; but some at national level (though we've seen the dimunition in bargaining power of nation-states, especially in the developing countries, due to their relative weakness to MNCs, and because of concesions extracted by World Bank et al)
  
  1990s Benchmarks: MAI - Multilateral Agreement on Investment, 1998, an attempt to remove virtually all national controls on FDI (almost passed); TRIPS - MNC rights enhanced in matters of patents, trademarks, other intelelctual property rights and GATS - liberalization of services trade. All these arrangements tend to standardize international relations, yet weaken the relative power of nation states (especially developing nations) relative to the power of MNCs and globalization in general
  
  Domestic Impacts
  Globalization of trade, finance and labor makes national economies and the communities within them more interconnected (duh). Ongoing battle of corporate priorities v. those of governments/people on national/local levels - ability of MNCs to shift capital and operations freely between nations diminishes the effectiveness of traditional macroeconomic policies
  
  Likely until there is an international set of standards which regulate labor practices (and capital movement, and environment standard enforecement, and...), local and national economies will have diminished power relative to MNCs
  
  MNCs can also circumvent local taxation by way of transfer policy, in which profits are shifted to operations located in countries with lower tax rates
  
  Transnational production has injected global competititon into local markets such that labor cost-cutting measures increase in attractiveness; hence, if developing countries are competing for the promised benefits of allowing MNCs to tap into their unregulated, un-unionized, underpaid pool of labor, then chances are that unless some sort of universal labor standards are implemented, then whichever government offers the most labor-abusive environment will "win" the (temporary spoils. Even if MNCs and SMEs are brought to bear under the pressure of activist organizations/3rd and 4th party certification, their localized subsidiaries (who are absolutely dependent on their orders) seem out of the realm of effect
  
  FDI seems to have a positive effect only in those countries which already have a ssignificant level of infrastructure and skills base, but may actually be detrimental to the poorest of the developing countries
  
  Summary
  MNCs have become truly transnational in nature; they show no allegience to any particular nation, only to their investors; their profit motive is not regulated by an moral directive and as such, they are emblematic of capitalism at its unregulated worst. capitalism is not a social policy, and is successful in the long run only when it operates within the paramters established by a social order (state, religion, international organization)

• codes of conduct
• production guidelines
• monitoring standards

• weakness of national governments
• weak/ineffectual ILO
• weakness of local labor unions

1. a set of rules, principles, or guidelines (usually in the form of a code of conduct)
2. a reporting or monitoring mechanism (i.e. how well the rules are being followed

1. First-party certification - done by the company
2. Second-party certification - industry or trade association (e.g. American Chemistry Council)
3. Third-party certification - external group, often an NGO (e.g. Council on Economic Priorities, Apparel Industry Partnership, Worker Rights Consortium , The Rainforest Action Network, Greenpeace, Natural Resources Defense Council, Forest Stewardship Council)
4. Fourth-party certification - government or multilateral agencies

• Three Mile Island, 1979 --> Nuclear Power Operations --> privately evaluates the industry through the provision of standards and inspections
• Chernobyl, 1986 --> World Association of Nuclear Operators
• Union carbide bhopal, 1984 --> Responsible Care

Of course, companies do not always deal with factory abuses so readily. In February 2001, the Global Alliance for Workers and Communities released a 106-page, Nike-funded report on the labor conditions at nine Nike contract factories in Indonesia. The report detailed a variety of labor problems, including low wages, denial of the right to unionize, verbal and physical abuse by supervisors, sexual harassment, and forced overtime. The contents of the report are not surprising; similar findings were asserted throughout the 1990s. What is new about this report is that Nike paid for it, released it—and can't deny it. Nike's response to these problems will set new benchmarks that other apparel and footwear companies must match or else risk incurring relentless scrutiny by industry critics.