Multinational Companies Essay, Research Paper
Multinational Companies: Out for Profit Without Regard for Life
What a company usually wants for its business is for it to be an successful establishment and to make an abundance of profit. Some businesses do not pose any concern on what they have to do to make this profit as long as it done. Multinational companies are firms with their home base in one country and operations in many other nations. (Molyeux, 133). Most of these very immense firms establish in third word countries were they can manufacture the same identical product for very low costs compared to establishing the same firm in the western Countries producing that product. Most of these multinational companies are heartless and treat workers as slaves giving them diminutive wages for their work. The lifeboat ethics concept is the best way to describe these heartless firms. The concept of Lifeboat Ethics is fairly lucid. It is based upon choosing who lives, and who departs. Environmentalists argue that no single being or institution has the right to extinguish, waste, or use more than a fair share of its resources (Psychology Today, 54). Obviously, this is not happening. The philosophy of Lifeboat Ethics sees each wealthy nation as a lifeboat full of rich people. In the ocean outside the lifeboat are the less fortunate citizens of the world swimming around the lifeboat wanting to get in, or at least wanting to share some of the wealth with the well off. What should the rich do? In the heart of all of this are the multinational companies that practically control every developing country in the world. These companies have a very significant impact on who lives and who dies, and at the same time, they have a grim grip on the needy nations of the world all in the name of profit. These multinationals exploit the people of these countries as well as their land by the practice of slave labour in both China and the Dominican Republic, as well as many other Third World countries. Other multinational companies prey on innocent mothers promoting infant formula which ends up in advertently killing millions of infants each year.
In the third world, around ninety percent of the people lack sufficient resources, education, and ultimately money. In the West, on the other hand, we have an abundance of resources at our disposal, good educational systems, and a significantly higher average income than the Third World. The higher income allows us to have these resources at our disposal, as well as the good education systems. Along with this capital comes power held in the hands of the multinational companies which has an adverse effect on many Third World communities.
The Dominican Republic is one of the poorest nations of the word, with an average annual income of just over one thousand dollars per year (Hilsum, 1). Most of these people can barely afford the necessities of life such as food, clean water, and shelter. These somewhat degrading conditions are a perfect dwelling for a multinational company such as Gulf and western to “set up shop”. Almost fifty percent of the Dominicans export is sugar; on third of that sugar is from Gulf and Western. The locals have a name for this company, El Pulpo, meaning octopus (Hilsum, 1). When a company’s own employees to be calling it an ‘octopus’, meaning that the companies control everything such as resources and most of the land of the country, something has to be blatantly wrong. The main reason for this is that since G&W has come into the Dominican Republic, they have bought out much of the land for sugar cultivation and cattle ranching. Now, almost seventy-five percent of peasants are without land (Hilsum, 1). This presents an overwhelming problem for the peasants; how will they eat? Before G&W came into the Dominican Republic, most of the people relied on subsidence farming for their food. Since G&W settled in the country, they have been consuming valuable land that could be used for food cultivation. Because of this, many Dominicans perished. This argument has been brought to G&W, but they allege that they are helping the people by giving them jobs in the sugar cane fields.
This notion of giving the peasants jobs in the fields is merely an excuse that many multinational companies use for their actions. How can a company claim to be helping people when they only pay them about two dollars a day? (Newsday, 1) The labourers in the sugar cane fields are treated like slaves, many times unable to keep possessions, and often they are cheated out of remuneration. This is all coming from the “respected” companies that most of us in the west support diligently. These same companies are exploiting the land and the people of the country, all in the name of profit. Since all of these companies are out to maximize profit, they will do anything it takes to come out on top; weather it is employing slave labour, or not providing its employees with the basic necessities of life. If this is what it takes to maximize profit, then the company will not hesitate. Because of the firm grip these companies have on people, most of the peoples’ lives do not improve. One must ask oneself, does the Third world need multinationals? The answer is clearly no. When it comes to multinationals, everything is done with “dollar signs” in mind. The most money is made in the agricultural business, mainly involving cash crops. These cash crops are destined for the First World (Barnet, 147). This fact dispels a widely accepted myth about the Third World. Most people in our society believe that we cater for the Third world since they cannot support themselves, when in fact it is them that are nourishing us. Our hunger for luxury crops such as coffee, costs many peoples lives in the process. In Columbia a hectare of wheat brings in 12,500 pesos; carnations for exporting bring in one million (Barnet, 147). All of this is happening in a country that is suffering from severe malnutrition because they do not cultivate enough grain. It just does not make any sense as to why these countries put themselves in this kind of position.
Underdeveloped countries have three major weaknesses when dealing with multinational companies. Their laws are inadequate when dealing with modern accounting practices. They also lack trained personnel and unions to handle the ever dated laws they do have. The last weakness is that local businessmen have trouble competing with the massive companies (Elliot, 139). Throughout these weaknesses there is one common trait, a lack of resources. The Third world just cannot compete with the money and resources to which multinationals have access to. These multinationals also resort to very desperate tactics to get what they want, as seen in the boycott of Nestle in the 1980’s.
During the 1970’s and early 1980’s, Nestle began advertising infant formula to the people of the Third World through signs, and promoting formula throughout hospitals. The question is, What does the Third World want with baby formula when breast milk is free? The answer is simple, there is a colossal profit to be made in the developing countries of the world because they have a lot of children. Ever since the declining birth rates in western countries, formula manufacturers found themselves glancing at the Third World. They launched aggressive advertising campaigns to convince mothers that bottle feeding is “more modern” and that breast feeding is backward and primitive (Media Center, 1). Since most developing nations look up to the west, sadly, most Third World mothers bought into these campaigns. The largest difference was in Singapore where in 1951, 71% of all babies from low-income families were breast fed. Twenty years later, only 5% were (Media Center, 1). But this problem is much more serious than marketing an unnecessary product to people that do not need it. To use infant formula effectively, you must have uncontaminated water, refrigeration, funds to buy it, and methods of sterilization. All of these factors are not available to the average person in a developed country because many people cannot afford to buy the formula, they dilute it, which leads to malnutrition. This malnutrition causes brain damage in infants, and was so widespread that doctors called it “baby bottle disease”.
About this time in the 1980’s, Nestle was engaged in illegal practices of promoting their formula in developing countries. They hired milk nurses to go into the hospitals and promote their product to mothers with newborn children (Guess who is coming to breakfast). These milk nurses would give the mothers free samples of infant formula for about three weeks, then they would cut off the free samples. During this three week period, the mothers milk would dry up because it was not being used, and thus, the mother would than have no choice but to rely on formula she cannot afford. Because the mother can’t afford the formula, the chances of her baby dying of baby bottle disease is very high. Under law, the manufacturer of the product must state the hazards of the product on the label, but with a low literacy rate it does no good. Also, before the bottles are sold, the labels are often torn off by the store selling them so the label does no good anyhow (Infant formula Fact Sheet). Corporations such as Nestle were also found guilty of bribing doctors to recommend the product to patients (Macdonald, June 6).
The case with infant formula is a classic example of a multinational company’s total disregard for human life. By breaking the law, they showed the world that they cannot be trusted and that they only care about maximizing profit. Nestle used aggressive marketing tactics to vulnerable people in the Third world even when they knew that their product was causing many infant deaths. It is clear that the conditions for the safe use of formula were not present in the Third World, but Nestle was controlling who lives, and who dies. What kind of world is it coming to when western companies can come into Third World countries and brainwash new mothers in buying things that they do not even need and get away with it. The value of the buck in the companies eyes are worth more than keeping children alive and healthily.
There are solutions to the massive problem of multinational domination. Firstly, government legislation can keep multinationals on their toes providing minimum wage agreements, unions, and safe working conditions to help safeguard the lives of people working for large corporations in developing countries. Secondly, we in the First world can assist our brothers and sisters in the Third world countries by boycotting companies that subject their workers to low wages and slave labour. This was evident with the boycott of Nestle. Because of the boycott, Nestle and other companies had to abide by strict rules when selling products in developing countries. One could also look at the situation as being our fault because we are the ones that have the hunger for the products that the Third world is producing. Most of us do not realize that the banana we eat, or the juice we drink, could be causing pain and ultimately death to the peasant that cultivates it. This being said, it is ultimately us, not the multinationals that are causing death in the Third world? Are they just feeding off of our hunger and turning a profit? The bottom line is that if most of us knew about the deaths we were causing because of our practices, hopefully most of us would make a point not to do it anymore. Whereas in a multinational’s case, morals cannot stop them, only the law can. The poor people of the world can only take so much. We must stop these multinational companies before they conform into a slave labour establishment once again and cause death to the innocent trying to make an honest buck and created an except able livelihood for them and their families. All this just torture and greed just to make some money.