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Summary: The troubled prospects of multinational enterprises
Review: The book's subtitle reveals the author's position. Thirty years ago, Raymond Vernon was one of the first economists to document the increasing importance of globalization and of the multinational corporations that benefited most directly from the trend. In this, his last book before his recent death, he revisits the subject, and finds cause for growing concern about the future of the multinationals, despite the fact that they have grown tremendously in terms of size and power. Once their expansion was viewed with suspicion and hostility by many of their new host countries, but now multinationals are actively wooed throughout most of the world for their job-creating investments in local economies. However, within their own home countries (predominantly the advanced economies of the U.S., Europe, and Japan), the multinationals are increasingly a source of political tension. There is a fundamental conflict between the desire of the state to maximize the well-being of its own people and the desire of a multinational to optimize its global system regardless of the impact that might have within any individual country, including its own home country. The combination of global competition and aging populations has increased the demand for government sponsored social support in the most advanced economies, even as the same pressures encourage multinationals to move investments and jobs out of their high-cost home countries. Although globalization is not likely to be reversed, the multinationals may increasingly find themselves used as convenient scapegoats for the problems caused by this massive restructuring of the global economy. The recent WTO riots in Seattle may only be the beginning.
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