Big Business, Poor Peoples: The Impact of Transnational Corporations on the World’s Poor

Big Business, Poor Peoples: The Impact of Transnational Corporations on the World’s Poor

Bancroft, Angus

John Madeley Big Business, Poor Peoples: The Impact of Transnational Corporations on the World’s Poor Zed Books, London, 1999. pp. 2217. ISBN 1-85649-672-4 (pbk) L14.95

Reviewed by Angus Bancroft


Rosa Martinez produces apparel for us markets on her sewing machine in El Salvador. You can hire her for 33 cents an hour. Rosa is more than just colorful. She and her co-workers are known for their industriousness, reliability and quick learning. They make El Salvador into one of the best buys. In addition, El Salvador has excellent road and sea transportation (including Central America’s most modern airport)… and there are no quotas.’

The above is the text of an advert issued by the government of El Salvador to attract Trans-National Corporations (TNCS), reproduced as part of an exhibition in the USA on sweatshops. It was printed alongside a photo of a happy worker next to her sewing machine. It illustrates many of the arguments contained in Big Business, Poor Peoples, but also contradicts them in some key aspects.

John Madeley is a former TNC employee, now a journalist investigating their activities. His book is a sweeping assessment of the power and influence TNCS wield over the poorest countries and peoples in the world. No stone is left unturned. Debt, cash cropping, environmental damage, the effects on health, education, inequality, the litany of havoc wrought by TNcs is comprehensively covered. Written forcefully and with a passion, Madeley indicts the TNcs and the governments and international bodies that have featherbedded them. He rounds up the usual suspects: the International Monetary Fund, the World Bank and the World Trade Organisation. Consumers in the West are obsessed with the products we buy, their calorie count, Feng Shui significance and animalfriendliness. Yet seldom do we care about the armies of children and underpaid adults slaving to produce them, or the fact that Michael Jordan makes more money from Nike annually than all of the Nike factory workers in Malaysia combined.

Perhaps, however, Madeley is too sweeping. He has a tendency to blame the TNCS for every ill in the world: they even carry the can for global warming. The worst spin is put on every development they are involved in. For instance, he sees the development of genetically modified foods as the start of a terrible loss of biodiversity, reduced crop yields, environmental damage, loss of income for poor farmers, and an irreversible shift of power to TNCS. There is no suggestion that the technology might have any benefit. This sounds a bit like the affluent Westerner romanticising the `traditional methods’ of the poor. His discussion of dam projects makes it appear as if the only people who wanted them built were Western governments keen to see kickbacks for their companies. China’s massive Three Gorges dam project belies this-it is destructive and will displace millions, but the Chinese government sees it as a key part of its modernisation. In his keenness to blame TNCS for environmental degradation he doesn’t appreciate that the interests of the Third World and ecologists may diverge.

He is hasty to judge the effect of the South East Asian slump, as most left-wing commentators have been. Most countries have bounced back quite quickly from it, precisely because they are not exploited by foreign TNCS in the way he describes. Madeley adheres far too rigidly to a division of the world into an exploiting North and an exploited South, perhaps not really appreciating the aspirations of people in the Third World:

`The poor have been persuaded to spend some of their scarce resources on luxury goods such as …cigarettes and canned baby foods. TNCs have successfully persuaded people in developing countries to adopt products such as Coca-Cola, Seven-Up, Pepsi [etc.]’ (P.7)

Persuaded how exactly? What he views as the effect of mind-numbing propaganda might have as much to do with the aspirations of the poor. If TNcs were so awful then the poor would just refuse to buv their products. Likewise I’m not entirely convinced by Madeley’s explanation of why Third World countries try and attract TNcs even when, according to him, they are of no benefit. I am left with a sense that Madeley’s focus is a bit one sided. It is acceptable for a polemic, and it is hard to avoid a sense of righteous outrage at the activities of Rio Tinto Zinc et al, but perhaps more space could have been spent on moderating the tone a little. Instead we are left with a picture of the Third World as a helpless victim.

Madeley’s list of top 20 TNCS (p.3) doesn’t entirely bear his thesis out. I can see how Exxon or Shell are engaged in exploiting the Third World poor, but not how Microsoft, Intel, or British Telecom are. He gives little sense of the place of the poor in the information/service economy, which is important as many low-grade data entry jobs are being farmed out to the Third World. The whole book has the feel of being a retread of issues that have already been quite well publicised.

Here’s another point of view:

`We should not make the mistake of believing globalisation means unfettered large companies trampling all over the world … Reports of the unregulated multinational operating above sovereign law are greatly exaggerated’. John Bond, Chair of HSBC

Bond makes the point that 3 billion people each live on less than 2 dollars a day. He even argues for effective state intervention and equitable wealth distribution, which certainly puts him to the left of New Labour. Madeley may blame TNCS for poverty, but it isn’t in their interest to have people poor. Their interest lies in generating consumers. Third and First World governments share in the blame for the problems of the Third World, which can’t all be put down to TNcs. I am concerned that the picture painted of the overweening power of TNCS to control opinion, governments and just about everything we eat, buy and do, detracts from placing the responsibility where it should belong.

A large amount of employment in Britain’s post-industrial areas is in TNcs. In SouthWales a major employer is the South Korean LG Electronics, who located there in exchange for some incentives from the Welsh Development Agency and the Newport Development Board. It is instructive to see how the Welsh Office presented the Welsh workforce in its bid to attract LG. They were portrayed almost exactly as the Salvadorean government represented ‘Rosa’: skilled, educated, cheap (wages are lower in South Wales than in South Korea), compliant, and located within easy reach of major markets.

In spite of my criticisms, this is a well-researched, readable and compelling book on an important issue, and I would recommend it to anyone unfamiliar with the exploitation of the Third World. However the situation calls for a fresher perspective perhaps including how TNcs and First World governments have been involved in `Third Worldising’ some large chunks of the labour force in the First World.

Angus Bancroft is a Research Fellow in the Department of Community Health Sciences, University of Edinburgh.

Copyright Conference of Socialist Economists Autumn 2001

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