p In the 1920s, the industrial and financial empire of Baron Noel Schoudler, a character from one postwar French novel, could have easily collapsed, despite its vast proportions, in the event of a drop in the stock-market quotations of the shares of only one of his enterprises, the Sonchelles Sugar Refinery.  [71•1  The TNCs now have a much firmer footing. With the control of the commanding heights of the economy at home, they have managed to secure strong positions in the economy of the host countries as well. By the end of the 1970s, their preferentially-owned subsidiaries (over 50 per cent of the stock) controlled almost 20 per cent of manufacturing output in Britain, Italy, the FRG, France, Austria and Australia, and over 50 per cent in Canada.  [71•2  In LDCs, they owned 25 per cent of industrial output in Chile, 33 per cent in Argentina, 39-44 per cent 72 in Mexico, Brazil, Peru, Colombia, and Malaysia, 83 per cent in Singapore, etc.  [72•1  Together with commercial operations, a handful of TNCs control 60 per cent of the world market of sugar and phosphates, 70-75 per cent of the rice, bananas, natural rubber, oil and tin, 80-90 per cent of the wheat, coffee, maize, cocoa, pineapples, tropical timber, cotton, jute, tobacco, copper, iron ore, bauxites, and so on. The result is that "entire branches of industry, not only in single countries, but all over the world, have been taken over by monopolists in the field of finance, property rights, and partly of production".  [72•2 

p For its part, foreign business has beefi increasing its share in the overall operations of such TNCs. Foreign operations by the major TNCs could come to well over 30 per cent of their total sales. The TNCs now penetrate not only into the sphere of production and traditional trade, but ever more actively into the sphere of the services and their international exchange, a sector of the capitalist economy that has been growing most rapidly, above all in the developed countries, but also in the LDCs. International trade in the services went up from $77 billion in 1970 to $540 billion in 1985, so far outstripping the growth of the trade in goods. The leading positions in this sector are held by TNCs, either specialised or combining their service activity with production.

p FOREIGN OPERATIONS AS A SHARE OF TURNOVER OF MAJOR US, WEST EUROPEAN AND JAPANESE TNCs (per cent)

Western Europe
Japan

p 41.4

p 32.6

p 15.7

p 16.0

p 4.9

p 3SSSSSL

p 1971 1985

p 1971 1985

p Scientific and technical potential has a growing and often crucial role to play in the competitive struggle at the present stage of the STR. This sphere is also dominated by the TNCs controlling a large part of the R&D and patents of the capitalist world, and also the bulk of the licence trade, which has become an important independent source of TNC foreign earnings.

p In industry, TNC control is being most actively spread to the manufacturing industries, above all those based on high technology. 73 In the early 1980s, up to one-half of the total, including foreign, sales by the TNCs was concentrated in the chemical and electronics industries, and in general and automotive engineering.

p These economic empires are run in conformity with the objective and structure of the head corporation. Where the TNCs operate in raw-material industries or where their enterprises in the host countries are involved in import-substitution, their affiliates are allowed to act fairly autonomously, being linked with the parent company mainly through their financial bonds and the supply of new technology. But this type of organisation is increasingly on the way out. With the switch to manufacturing and with affiliates simultaneously working for the local market and for export (or mainly for export), the affiliates and the parent company arrange co-production involving an exchange of parts and components, specialisation, allocation of production programmes, joint research and marketing. Many affiliates are oriented either towards the resupply of the parent company with cheaper products, or are even turned into "export platforms" oriented towards the world market as a whole. As a result, from 10 to 90 per cent of the industrial exports of some LDCs now consist of TNC affiliate products, with the share of such products coming to 10-15 per cent in France, 25 per cent in Britain, 33 per cent in Belgium, and so on.  [73•1 

p TNC technical policy also has its peculiarities. The TNCs tend to concentrate R&D at their headquarters in order to keep the results within the orbit of their property and control, so that the new technology is first used by the parent company and then by its affiliates and subsidiaries, whereupon it is transferred to individual producers (in the event of there being no other variants) in an obsolete form. Thus, US TNC affiliates and subsidiaries in developed capitalist countries receive new technology on an average of 5.8 years after its first use in the United States, LDCs—9.8 years later, and license-holders and mixed-company partners—13.1 years later, i.e., after the patent rights have elapsed. The same applies to managerial experience and commercial information, which are an important trump in competitive infighting today.

p Geographically, TNC investments abroad tend to cluster in countries with a voluminous internal market or large mineral reserves. That is why 75 per cent of these have gone to the developed capitalist countries, and 60 per cent of the total investments to the LDCs have gone to only a few countries: Brazil, Mexico, Argentina, Peru, Malaysia, India, Hong Kong, Singapore, and the Philippines. The TNCs usually stay out of the small and resource-poor countries, where they are attracted only by the cheap local labour-power.

p The TNCs which have built up their strength try to resort to monopoly price-formation even on the scale of the world market as a whole, both individually and through deals with each other, mainly in the form of cartels, price leadership, and joint action in bidding. Thus, in the mid-1970s, an international electric wire cartel consisting of TNCs from 20 countries, sold over 65 per cent of its 74 products at prices higher than the world prices. An international heavy electrical equipment cartel "exists for two purposes: to keep prices for its products as high as possible; and to keep its members’ share of the market as large as possible".  [74•1  The number of such examples could be easily multiplied.

It is no accident, therefore, that the TNCs usually have a higher growth rate and a higher profitability than the economy as a whole. The sales of the top 100 companies increased by almost 17 per cent a year during the 1970s, whereas the GNP of the imperialist countries grew at about 15 per cent a year. In that period, the rate of profit of the major TNCs and TNBs was also steadily higher than that of the other enterprises and did not fluctuate as much from year to year - -another indication of their firm control of the market.  [74•2