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That is a moot point. The point that matters is that those multinationals generate immense amounts of wealth thanks to the resources and workforce of a country, and all the profts get shipped out to the company's HQ bank account in countries thousands of miles away. Meanwhile, the immense majority of people in that country live in abject poverty and don't see a penny from the massive wealth generated by their own country's resources and people.
Capitalism breeds money alright. But in the immense majority of cases it does not translate on investment for infrastructure, services, welfare or healthcare. Tax is often too low, in order to stop bullying companies from carrying out their threats to leave the country if they are taxed to any extent, and the companies themselves and the rich individuals who own them are certainly never prepared to donate some the profits they make to make the lives of people better.
How often do you see infrastructe voluntarily paid by private individuals and businesses that results in an adequate level of services for the public? Even in the richest country in the world they have some public services and welfare that are piss poor. Imagine how things are for far less wealthy nations.
There are still unnaceptable numbers of people living below the poverty line in the West. But by far the most serious problem is in developing nations as well as Third World countries. There are many Central and South American nations as well as Asian and even some African where there is a good amount of wealth about. But as ever, you have favelas and ghettoes for vast quantities of people while a small elite, often living no more than a couple of miles away from the shanty towns, enjoy a life of limitless luxury provided by the wealth geneated by the country's industries, services, resources and workforce.
Such situations are generated and promoted at least partly by the selfish nature of capitalism. And for as long as people and companies are not prepared to part with a good chunk of their profits and share them with the general population, world poverty will continue to exist for centuries to come.
Glad to help ;-0
No - the point that matters is that people in that country are better of becuase the MNC is there. It doesn't matter than the MNC is also better off (though it's hardly likely to be there otherwise). If the company wasn';t there people would be being paid less and having a lower standard of living and it's pretty irrelevant to them if the profits are kept in-country or not.
Protectionism has always been a failed policy, there may be some short-term gains, but there are major long-term losses
Tax is set at the level to be competitive. too low and you're minimising Government income, too high and you don't get any. However the tax paid by MNC's is actually a small proportion of tax revenue
MNCs employ people who are taxed. They buy local goods and services (everything from people building the factory to providers of catering services). These again employee people who are taxed (as are the providers). The employees then use some of their wages to buy goods and services of other local people (who are then taxed). And all these people by being employed are less a drain on the public sector and can pay for the basic neccesities.
Now, if you are saying there is corruption and that tax is not effectively collected - I'd agree. But the big evaders aren't often the MNCs - there books are looked at domestically and then by the owners Government. The costs of slipping a few quid to a dodgy accountant or taxman to cook your books is more expensive. There is also a bigger risk in that First World accountants and taxmen are harder to bribe (and have a more effective system to catch those that do) so the risk of being caught and having to pay more is greater.
who's saying they should? (though I could point you to the Birmingham under Chamberlain, or the Getty Collection, Carnegie or Bill Gates and Malaria to suggest it's not totally a one-way street). However there is nothing to tax without wealth created and the state has always been poorer at that the private sector.
Poverty is relative. I bet many a middle-class Victorian family would more than love to swap their lifestyle for a deprived family today - proper sewage, eradication of disease, life expectancy etc, etc. All of the great social reforms came from wealth generated by the private sector. It isn't a co-incidenence that the countries with the wealthiest private sectors were the ones who could introduce pensions, free health care etc
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who's arguing? I've mentioned several times that corruption is the big problem. These elites would still be these elites were there MNCs or not.
No they're not. A fair few of these countries with elites sitting on wealth and priviledge are as far from free market capitalism as you come. I would suggest neither Korea, nor Cuba are capitalists - but in one the two leaders are father and son and the other brothers. Neither family was elected and neither are in any way capitalist. I also hesisitate to call Mugabe an out and out free marketeer (and the problems of starvation in Zimbabwe don't stem from the wicked MNCs, but a cack handed attempt at distribution to his followers).
Much, much more money stays in the country than is taken out in profits. Profits are only a small part of turnover and as I said above much of that turnover is multiplied many times by people buying goods from their neighbours with their wages from the MNC.
They're also the ones that are most likely to exploit poorer countries in order to get their products cheaper and afford them the spare money to buy more luxuries, while demanding a higher standard of worker rights themselves. Take every 3rd world country to the same level of development as us, economically and in terms of rights for workers, and what would that do to the standard of living in Europe?
I agree with you in general though now. You might've noticed that China and India are now at the stage where multinational corporations aren't calling the shots, and local people are starting to take control economically. The Chinese now own IBM (Lenovo), and an Indian company have just bought Jaguar and Land Rover. Interesting side note: the richest person in China is a woman.
Hard to tell, though the evidence (such that it is) of Europe catching up to the UK standards in the late 19th century doesn't necessarily suggest the UK will become poorer by having wealthier trading partners.
To get them up to our standards of living would require investment in tech and less corruption, which reduces costs. So whilst labour costs would increase, productivity (which impacts on how much of stuff they can sell us and how much we can sell to them) would increase
Yep.Look at South Korea vs North Korea - one encouraged inward investment and MNCs and is now one of the richest countries in Asia (with a democratic Government). One went in on itself and is one of the pooerest and most despotic countries in the world.
For smaller nations which main income is through natural resources, not so little.
And then there is the question of how much tax is too much. The UK has higher taxes than countless nations yet companies abound, and so do their profits.
The big issue here isn’t about tax or corruption, which other than in a few extreme cases in Africa doesn’t account for much of the disparity in fortunes of people. The issue is a system where a very small proportion of the population keep the immense majority of wealth generated through trading and business that everyone else contributes too but get peanuts in return.
This is the case at all levels: at company level, where CEOs and directors earn tens (or sometimes even hundreds) of times what the floor workers get; at national level, where the combined wealth of the 1,000 richest people would be enough to provide every man, woman and child in Britain with £60,000 (if memory serves); and it works at global level, where half the total private wealth in the world is said to be in the hands of 350 individuals while billions live on 2 dollars a day.
Any system that allows such barbarity to occur is morally corrupt and deeply flawed, and of course it is by large the main cause of poverty in the world.
Sure poverty is relative. A poor man today is a lot better off than a poor man a century ago. But a poor man today is still unnaceptably worse off than a wealthy man. This is made worse by the fact that there is plenty of wealth to take everyone out of poverty- only it is distributed and kept mostly amongst a privileged few.
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See my point earlier on this post. Corruption is not the root problem. If they were all as straight as an arrow (say to British level) you would still have a privilege few keeping the immense majority of wealth and profits created by business and trading.
Whether the wealth of a rich man was obtained by legal or illegal means would be of little consequence to a poor family who knows either way they’re going to see none of it.
But the problem remains that very few people work for those MNCs. Many millions more benefit little from a few thousand people in their country being able to afford a TV and a car. The key issue is that even if wealth does stay in the country, it will still be kept by an elite and to a lesser extent by a few lucky employees that cannot account for more than 1-2% of the workforce of a nation.
As I said earlier, any system that sits well with the fact that 350 people own as much money as 6.5 billion and has no intention or desire to redress the balance to any significant extent is not only amoral but also the main cause of poverty today.
Except there's a reason why MNCs exploit the resources and that's because local companies can't do it efficiently. Germany for example pays £50k per coal miner to subsidise - that's a hell of a lot of money that could have gone elsewhere from state coffers
Er? Not so little what? they still have to set their corporation tax so it attracts business.
Yes, but then the UK has other advantages - highly skilled workforce, strong contractual law, limited corruption and high understanding of English (and we certainly loose out on some things to Ireland)
It pretty much does account for the disparity. there was limited difference between Korea and kenya in 1960 - there is now. a major part of that is that Korea was more succesful in tackling corruption and allowing business to thrive (through attracting in investment - which allowed it to eventually start its own large companies)
It's not corruption though is it? (and the £60,000 figure is true only if we could all have a scrap of paintings, if the stock price in this country didn't collapse, if we didn't have to reduce land holdings to such small sizes they became uneconomical. We might have £60k on Weds, by Thurs it would be £30k and by the weekend we'd be owing the Government money...)
Except other systems are even worse - even if morally purer. I suspect that's the main difference between us you want a system which is morally pure even if it fails to work, I don't care about the purity, but want one that works.
and? under your system they both be poorer and worse of in real terms, even if in relative terms they are closer together.
You don't know what corruption is do you? If I want to get a planning application for a factory in the UK there are rules and regulations - sometimes complex. But I won't get it by bunging a few hundred quid at the authority. i can't stop Bob building a competiting factory by bunging another few hundred. This allows fair competition and means that I know the risk when I'm going in.
Same as when I transport some goods or people across the country I know I'm not going to have to pay bribes to peelers to let me through.
http://www.transparency.org/policy_research/surveys_indices/cpi/2007
It's no co-incidence the most corrupt countries are also amongst the poorest.
But the a strong legal system allows entrepeneurship to work and that's what generates money.
and it will do without MNC's. Though the MNC generates money which allows, in non-corrupt countries, people to set up their own businesses, employ people, generate earnings for tax revenue and keep the profits in country. without MNCs they're just stuck their with not enough cash coming in to invest, and at best, stuck at subsitence level farming.
It's the best system there is. At least it allows countries the chance to escape poverty over a period of time. Your attitude seems to be to fuck the poor as long as we fuck big business at the same time.
As a final thought how come somewhere like India or South Korea is doing so well compared to places such as Cameroon that don't?
Cheap labour, whenever workers in India and Korea begin forming effective Unions and demanding higher wages, MNC's will ship off to Africa.
Yep, after already improving the standard of living so that they can build their own companies (and are you suggesting that Korea and India has cheaper labour than Cameroon?)
PS US MNCs 70% of their income is generated in the US, of the remainder 80% comes from high income countries.
The problems with Africa isn't that they have too many MNCs investing in them, but too few...
Firstly, some goods are shipped, some are grown in British greenhouses and use up a lot of energy. It all depends on whether or not they are in season... And also, how processed the goods are.
There are some 250 countries in the world. There are but a handful you could mention as examples of non-capitalist systems where things are bad. But you know as well as I all the others are capitalist systems, and in all of them, even the richest, there are poor people. And sadly, in at least two thirds of those countries poor people outweigh comfortable and rich ones by many, many factors.
Then again instead of just giving people cash to burn we could use the money to give everyone a home, a decent one at that; to help those in need and at risk; and to dramatically improve all our public services and infrastructure.
And you haven't addressed the most significant figure of all: the one about 350 individuals owning as much as the other 6,499,999,650, while a large chunk of the latter don't even have running water, electricity or more than a couple of dollars a day to live on.
That is one fact that will never be justified in any way, and that shames mankind in general and capitalism in particular.
Why not have a hybrid of both? There is no reason why it wouldn't work. Despite the scaremongering bullshit you can expect from those too selfish to part with any significant part of their vast fortunes.
What different does it make to poor people at the end of the day? Even if a country is relatively wealthy, invariably the wealth is in the hands of a few individuals.
Corruption is not the key to the problem. Never has been, never will be. Disproprotionate distribution of wealth (most of which obtained through perfeclty legal means, rather than corruption), is and will always be the key.
You really put far too much relevance in MNCs. Even in those countries where they have a strong presence, the population at large does not see benefits from it, let alone share its profits.
Unless we're talking about a country where 100% of the workforce is employed by a MNC. But no such place exists.
And here we go again. You're actually proving my point. Are you aware of the horrendous poverty affecting hundreds of millions in India? How come a country that's doing so well can let such thing be?
Because of a capitalist system that does not approve of equal or at least more proportionate distribution of profits amongst all its workers, that's how.
Why is that a problem? The MNC invests and gets the profits, the local economy get's well paid (compared to before), and technology and knowledge transfer. Both sides win
There's no non-capitalist country who is anywhere near as wealthy and healthy as the top capatalist countries. 3rd world countries who are capitalist are developing, those who aren't are stagnating (and in many cases getting worse)
No we couldn't - most value is in shares (whose price will rapidly go down when people can't keep the dividend), in developed land (where you can't build housing and depend on rent) and intangibles such as paintings (who's only value is in what rich people pay)
Yes, but with capitalism they are likely to get these things, with other systems they're doomed to live in poverty with more and more of the rest of the world joining them
No other system has come to near to solving it and most have just made it worse.
We do have a hybrid of both - MNCs pay tax etc, which is used by the less corrupt states to pay for services. But you don't seem to want a hybrid - you seem to want the evil MNCs to pay for their non-existent crimes
corruption stops wealth creation. Stopping wealth creation means the poor remain poor and any wealth they do make it taken by the elites. In corrupt countries money is made by mainly legal mains by the elite, but by skimming money off state coffers, bribes and racketeering.
In fact one of the reasons many MNCs are loath to invest in much of Africa (and pull them out of poverty) is the fact that there costs are multiplied by all the kick-backs they have to pay.
Of course MNCs aren't the only private sector employer. Even in the UK or USA they're not. However the benefits of them spread beyond direct employees to those whom the employee buy things from. In relatively poor countries the benefits to those well paid employees spending their money has disproportionate advanatages to everyone else.
I fail to proove your point at all - unless you think I'm arguing that MNCs wave a magic wand and all is well. They develop a country, but that will take years. I might as well ask if Socialism is so great how come there are still Shanty towns under Chavez
Why must the poorest in society suffer simply for the sake of allegedly saving a couple of polar bears? Why must we pay more just to go about our lives simply for the sake of "climate-change" scientists with an agenda?
Yes, that's all very well, but the point remains that there are hundreds of millions of poor people in those countries who continue to fail to see any improvement to their lives whatsover.
Do you think the quality of life the inhabitants of the favelas in Sau Paulo or Rio has improved at all in the last 30 years? What difference does it make to them that Brazil is doing better every year and has many successful industries? They will never benefit from it. And no, it's not a question of 'give it time'. There is no provision in capitalism to give those people any money or help them in any way whatsoever.
Really? How likely are they really to get all of that? How many centuries does capitalism need to finally spare some change for the millions of poor living at its feet?
At least the Soviets did provide free heating, housing and water. Three ultra-basic necessities no human being should be without in the 21st century.
So why doesn't capitalism do something about it? Or are you suggesting that the only way in which capitalism can be successful is if the rich are allowed to award themselves obsene wages tens of times higher than their slave workers, and that any attempt to redistribute wealth more fairly and equally will result in a total collapse of the system?
Nice Catch-22 if you can get it! :rolleyes:
I want the inhabitants of a nation to benefit the most from the natural resources their country possesses, rather than faceless shareholders and boardroom directors thousands of miles away.
How very evil and twisted of me to suggest CEOs might have to give up the 150ft yatch and make do with 30ft one so people in the country where they make their fortune can feed their children!
Not to everyone else, no. To a small circle of friends and local businesses they're associated with in their daily lives. The immense majority of the population will never be in contact with those employees, let alone benefit from it.
I never said Socialism was that great and in fact if you did a search you would find out that I have stated on this forum in the past that in reality capitalism appears to be the least bad working system that has been put into practice so far (it is still morally abhorrent, far more than most other systems, at least in the theory). But that doesn't mean it cannot be challenged, changed for the better, and for as long as it doesn't, blamed for many of the ills that plague the world.
Because it is in its power to all but end world poverty, and yet it doesn't. And it doesn't becase as things stand it is a system based on pure greed, selfishness and exploitation of the worker for the benefit of the employer.