Moral Issues and Multinational Corporations

151 Pages·1991·14.629 MB·English

by  Gerard Elfstrom (auth.)

MORAL ISSUES AND MULTINATIONAL CORPORATIONS
Also by Gerard Elfstrom
ETHICS FOR A SHRINKING WORLD
MILITARY ETHICS (with N. Fotion)
Moral Issues and
Multinational
Corporations
Gerard Elfstrom
Assistant Professor of Philosophy
Auburn University, Alabama
Palgrave Macmillan
©Gerard Elfstrom, 1991
Softcover reprint of the hardcover 1st edition 1991
All rights reserved. For information, write:
Scholarly and Reference Division,
St. Martin's Press, Inc., 175 Fifth Avenue,
New York, N.Y. 10010
First published in the United States of America in 1991
Library of Congress Cataloging-in-Publication Data
Elfstrom, G. (Gerard)
Moral issues and multinational corporations/Gerard Elfstrom.
p. em.
Includes bibliographical references and index.
ISBN 978-1-349-21259-0 ISBN 978-1-349-21257-6 (eBook)
DOI 10.1007/978-1-349-21257-6
I. International Business enterprises-Moral and ethical aspects.
I. Title
HD2755.5.E467 1991
174'.4-dc20 90--42644
ClP
Contents
Introduction 1
The Evolution of Multinational Commerce 4
A Mature Moral Order 7
Plan of the Chapters 10
1 Corporate Moral Accountability 12
Corporate Moral Agency 13
The Hobbesian Situation 16
The Obligation to Seek Profits 18
Corporate Moral Initiative 19
2 Structure of Response 24
The Options 24
Basic and Secondary Wants 27
The Obligations of Corporations and of People Within Them 30
3 Corporate Size and Power 35
The Dangers of Corporate Leviathans 36
The Benefits of Multinationals 38
Present Conditions 40
4 Cultural and Economic Diversity 48
Cultural and Ideological Differences 48
Diverse Economic Conditions 51
Sketch of Possible Responses 54
5 Corporate Mobility 63
The Mobility of Products 63
Evasion of Control 71
The Mobility of Resources 73
6 Political Manipulation 77
The Role of Corporations in Weapons Transfers 79
The Case of Panama 81
The Role of Governments 83
v
vi Contents
7 South Africa 90
The Moral Wrong of Apartheid 91
The Role of Corporations in South Africa 92
The Case for Corporate Withdrawal from South Africa 94
8 Conclusion 100
Current Barriers to Moral Accountability 101
Prospects for the Near Future 104
The Mature Moral Order 106
Notes 111
References 133
Index 139
Introduction
Future historians may come to view the economic integration of the
globe as the single most important development of the twentieth
century, far surpassing the threat of nuclear war, the spread of
Marxism or the human disruption of the environment in its broad and
continuing influence on human life. None can presently see the final
shape of this evolution, and it is probably in its early phases; yet each
passing day brings a single world-wide economy closer to hand.
There are currently single global markets for electronic equipment,
computers, armaments, aircraft, automobiles and food. Even unlikely
areas, such as advertising and publishing, are rapidly becoming global
in scope. 1 Corporate leaders are wont to claim that the pressures of
competition make it impossible to cultivate only one corner of the
world. They find increasingly that they must compete globally or not at
all. 2 Along with the globalization of markets, financial institutions and
currency regulation are increasingly world encompassing. Marxist
nations have also recognized that they must join the larger economic
order if they are to hope for increased material well-being, as was
powerfully affirmed in Mikhail Gorbachev's striking 'European Home'
address presented to the Council of Europe in Strasbourg in July of
1989.3 His views are underscored by the fate of nations that have
sought to opt out of the global economy. The price, as discovered by
Albania and the Republic of Myanmar (formerly Burma), is miserable
poverty.4
The same advances in transportation and communication that allow
a global economy, in fact mandate global competition, also foster the
creation of enterprises - multinational corporations - able to scatter
portions of their corporate organism across the globe.5 Multinational
corporations are at the center of the globalization, homogenization and
growing interdependence of the world economy and will continue to
nurture this evolution. Over the years, however, their activity has been
blanketed by intense controversy. This controversy has been so fervid
and so entangled in national aspiration, political intrigue and material
greed that partisans have often been unable to agree on the most basic
facts describing multinational corporate endeavor.6 Nonetheless, it is
undeniable that the activities of multinational corporations have
sometimes resulted in human suffering, death, social upheaval and
1
2 Moral Issues and Multinational Corporations
economic disruption. In addition, their practices have occasionally
transgressed minimal standards of decency and fairness in dealing with
others, whether competitors, governments or individual human beings.
Environmental pollution, unemployment, unsafe labor standards,
shoddy and dangerous goods, and the ever-expanding traffic in
armaments have all been charged to the corporate quest for profit.7
Complex and important moral issues thus envelop the activities of
multinational corporations. The parties to multinational commerce,
whether governments or corporations, have been less than exemplary
in their conduct. With complexity of this magnitude, it will not suffice
simply to assign blame or seek to apportion responsibilities and duties
to the various agents of international commerce. It is essential to
understand the circumstances in which these difficulties have arisen
and to determine what the circumstances will allow. This point is
emphasized by the evidence of the past few years, which shows that
those involved have gradually become more sensitive and responsible,
are moving toward a consensus on standards of conduct in some areas,
and are working fitfully to establish the institutions necessary to refine
and support these standards. Rancor and confusion remain, of course,
but there has also been progress.
The picture of moral endeavor developed in this work is neither
static nor abstracted from the uncertainties and limitations of human
life. In particular, the sphere of international commerce contains an
ethics in evolution. Intense global trade and the problems associated
with it burst on the world scene less than a half-century ago. Those
involved, given time, have begun to understand what they were about,
begun to address areas of difficulty and begun to construct institutional
mechanisms to cope with them. If the participants had more closely
resembled selfless and purely rational autonomous beings, and if the
conditions of international commerce more closely resembled those of
a moral Utopia, the problems of multinational commerce would
perhaps have been seen much earlier and addressed more decisively. As
it happens, human beings and human circumstances fall short of these
ideals. The human participants have begun to address these difficult
issues only gradually, and the institutions required to support and
nurture moral sensitivity in the sphere of international commerce have
been equally slow to emerge.
Nonetheless, a higher standard of moral accountability may be
demanded at present than would have been feasible a few decades ago.
As the circumstances of international commerce stabilize, it is possible
that a higher standard may reasonably be sought a few years hence.
Introduction 3
This does not imply that actions of the past, present or future are
beyond moral criticism. It can always be claimed that circumstances
allow a higher or broader scope of moral accountability than those
involved in fact displayed. But it remains true that context puts an
outer boundary on what may be demanded and shapes the responses
that are feasible.
As the title of this work implies, the following analysis will focus on
moral issues which are entangled with the existence and activity of
multinational corporations. It will not presume that they are the major
causal factors in bringing these problems about. Multinational
corporations are only one facet of the larger process of economic
globalization. Often the problems associated with corporate endeavor
can only be understood as part of this larger process and as shaped by
it. Furthermore, host and home nations are not simply passive victims
or imperialistic aggressors. Reality is far more complex than that, as
illustrated by the fact that the United States, which is the home nation
for the majority of multinational corporations, is also the host of more
foreign ventures than any other nation in the world save Canada, and
continues to attract foreign investment at ever-increasing rates. 8
Finally, in the past much attention has been devoted to the difficulties
caused for developing countries by the endeavors of avaricious
multinational enterprise. While poorer nations have often suffered as
a result of this globalization, they have also discovered resources for
coping and have unearthed important benefits of development and the
infusion of capital which can be gained from the attentions of
multinational concerns.
Advanced industrialized nations have claimed to be victimized by
multinational enterprise as often and as loudly as the outraged
governments of developing nations. Moreover, the complexity of these
issues is such that multinational corporations are occasionally
portrayed as victims rather than manipulators. They are sometimes
caught in the middle when governments wage economic warfare on one
another, as with US efforts to remove General Noriega from power in
Panama, European and American economic sanctions directed against
South Africa, or the Arab Oil Embargo of 1973. It has been claimed as
well that multinational corporations may become the tools of the
imperialistic aspirations of governments, and they sometimes make
great commitments of capital and human expertise over substantial
periods of time only to be summarily evicted from a nation.9
A competent analysis of the moral issues attending multinational
commerce must therefore acknowledge the roles and resources of all