Few companies have attracted as much opprobrium as multinationals. Long before the emergence of modern joint-stock companies, the Medicis and Rothschilds exuded an air of sinister power and fleet-footed mystery. Multinationals have always aroused suspicion—from national elites (who have seen them as threats to their rightful authority), from conservative populists (who have condemned them as agents of cosmopolitanism), and, later, from socialists (who have anathematized them as “the highest stage of capitalism”). The young Merchant of Prato’s hurried flight from Avignon in 1382 would have seemed woefully familiar to Jewish business families in Europe in the 1930s, or more recently to overseas Chinese tycoons in Asia.

There is more to this prejudice than xenophobia. Nation-states like to think of themselves as masters of their own domains; multinationals have loyalties that transcend national boundaries. In poorer parts of the world, the political power, real or imagined, of rich-world companies can seem particularly intrusive. In Asia, Latin America, and Africa, foreign companies built much of the local infrastructure, and uncovered much of the wealth. Yet even when the foreigner’s sympathies lay with the country—think of Charles Gould in Nostromo—it has been easy for locals to assume otherwise. Even in rich countries, where the threat to the state is nonexistent, multinationals arouse suspicion.

The only reason why a multinational thrives in a foreign country is that, through fair means or foul, it is better at selling its goods and services than its local competitors. That is seldom a popular proposition.


Inevitably, the history of the multinational mirrors that of the company as a whole: it was an idea that started in Europe and first flowered in nineteenth-century Britain, but has since been taken over by the Americans.

The first businesses to coordinate their activities across borders on a large scale were banks. In the Middle Ages, Italian bankers representing the papacy collected part of the English wool crop in Church taxes, transferred it overseas, and took their cut from the transaction. In the sixteenth century, German bankers, such as the Fuggers and the Hochstetters, built up multinational networks whose core business was lending money to cash-hungry rulers—most notably the Holy Roman Emperor and the king of Spain; they then sprawled into other businesses such as mining.

The next conspicuous set of multinationals—the chartered companies such as the East India Company—owed even more to the state (see chapter 2). But the history of the modern multinational—like that of the modern company itself—begins in Britain with the railways.

From the start, the railway was seen as an export industry. Robert Stephenson, the inventor of the Rocket, acted as a surveyor for a railway in Caracas. (The company that employed him had such extensive interests in Latin America that it maintained a newspaper in London called the American Monitor.)1 The early Belgian rail network was almost entirely British-owned, while the first connections from Paris to the French Channel ports were developed by the London and Southampton Railway Company. Thomas Brassey, one of the greatest mid-Victorian entrepreneurs, constructed almost eight thousand miles of railways in almost every European country. He employed a vast army of eighty thousand engineers and navvies, maintained a locomotive and carriage works in Rouen, and, at one time, was at work on railways and docks in five continents.2

In the United States, British companies were largely passive investors. But elsewhere they often built the railways themselves, shipping in British managers, materials, equipment, and labor. Early railway companies often had two boards of directors, one based in London and mainly concerned with financial management, the other in the relevant countries, concerned with day-to-day operations.

The Victorian joint-stock companies copied this model in their other big foray overseas—the search for valuable raw materials. Gold, diamonds, and copper in Africa, tin in Malaya and Bolivia, rubber in Malaya, tea in India, oil in the Middle East: getting hold of these substances entailed establishing multinational companies, with different boards in different places. Hence the mixed ancestry of many of the most famous extractors, such as De Beers (British and South African), Rio Tinto (British and Spanish), and even Shell (British and Dutch).

In the last quarter of the nineteenth century, the multinational changed shape in two ways. First, it broke free from its heavy industrial casing: railways and miners lost their preeminence to companies venturing overseas to sell pharmaceuticals, cigarettes, chocolate, soap, margarine, sewing machines, and ready-made clothes. These were helped by the fact that the world was shrinking faster than ever before, thanks to railroads, steamships, the telegraph and telephone, and, at the end of the period, the automobile. But the second way in which the multinational changed shape was that it had to contort itself to deal with politics—particularly tariffs.

One country after another raised protective tariffs in a bid to stimulate its native industries, starting with America in 1883 and Germany in 1887. By the First World War, Britain and the Netherlands were the only important countries that still flew the free-trade flag. This forced companies that might have preferred to be exporters to become multinationals. William Lever, the British soap king who ended up with factories throughout Europe, Australasia, and America, even claimed that in a free-trading world, there would be no need for him to manufacture soap anywhere but in Britain.3

Such barriers affected multinationals of all sorts—but the most exposed were the British, who pioneered the form. In the late nineteenth century, Britain exported capital equivalent to 5 to 10 percent of its GNP. Much of that went into buying foreign stocks, but one historian, John Dunning, has calculated that Britain was responsible for about 45 percent of the $14.3 billion in accumulated foreign direct investment by 1914.4 It had around two hundred big multinational companies, roughly five times as many as America. And while American (and for that matter German) companies tended to invest in their backyards, Britain took the whole world as its playpen.

The simplest sort of British multinational was a successful domestic firm that ventured abroad in search of markets and supplies. Roughly half of Britain’s thirty largest companies had at least one factory abroad by 1914, with consumer-goods firms, such as Lever and J&P Coats, leading the pack.5 Unlike the Americans, who tended to venture abroad only when they reached a critical size at home, some relatively small British firms went international. The Gramophone Company (which eventually became EMI) had factories in India, Russia, France, Spain, and Austria by 1914. Albright & Wilson, a small phosphorus company in the West Midlands with a staff of a few hundred, had factories in both Canada and the United States in the same year. In the chocolate business, Mackintosh, a small firm, established factories in the United States and Germany, while the market leaders, Cadbury, Fry, and Rowntree, contented themselves with exporting.6

However, Britain had another set of multinational companies that were specifically founded on overseas trade. The most numerous sort, the so-called “free-standing companies,” were normally headquartered in London, but specifically created to do business in another country.7 These companies gloried in names like the Anglo-Argentine, the Anglo-Australian, and the Anglo-Russian. Each of them was highly specialized, but together they covered the entire gamut of business, from meatpacking in Argentina to mortgages in Australia. In a slightly different bracket, there was also a group of overseas traders, led by Swire and Jardine Matheson, that were established by Britons in the colonies, in order to facilitate trade around the region. The traders soon developed factories of their own. In 1895, for instance, Jardine established the Ewo Cotton Spinning and Weaving Company in Shanghai.

Yet, for all their pioneering spirit, the British were hobbled abroad by the same thing that hobbled them at home—unprofessional management. It was considered ungentlemanly for parent companies to exercise too much control over their foreign subsidiaries. Before the First World War, the foreign branches of firms like Dunlop, Courtaulds, and Vickers reported their affairs when and where they wanted.8 The head offices of most British multinationals were not famed for their dynamism: witness Psmith in the City, P. G Wodehouse’s 1910 novel about a young Etonian trying to avoid hard work at the New Asiatic Bank, based on the author’s own brief stint at the Hong Kong & Shanghai Banking Corporation.

The Germans were more systematic, if less adventurous. Germany also had plenty of overseas trading companies—or mercantile houses, as they were known. Yet, the typical German multinational was a successful domestic company that expanded abroad in search of markets and raw materials—first to Austria-Hungary and soon afterward to the United States, where German immigrants provided both willing customers and a ready-made network of contacts.

Germany was much more successful than Britain in producing high-tech multinationals, particularly in the chemical and electrical sectors. It also began to develop international consumer brands. A. W. Faber, the famous pencil company, expanded overseas as early as the 1870s, with branches in Paris and London, an agency in Vienna, and a factory in Brooklyn, New York.9 And where German manufacturers went, so did their banks, working much like the British trading houses, opening up markets, such as oil in the Middle East, for their customers.

Most other European countries spawned multinationals. France was the second-largest capital exporter in Europe after Britain. The St. Gobain glassworks had already built a branch plant in Germany by 1850: by 1914, it was also manufacturing in Italy, Belgium, Holland, Spain, and Austria-Hungary. Société Schneider et Cie owned utility companies in Morocco, invested in collieries in Belgium, and helped to develop the Russian armaments industry.10 Société Générale de Belgique made direct investments in Latin America, China, and the Congo, as well as a clutch of European countries. The Swiss probably invested more abroad than at home. By 1900, Nestlé had built factories in America, France, Norway, Austria, and Great Britain.11 Even Europe’s weaker economies succeeded in producing a few multinationals. Fiat expanded from its Turin base with factories in Austria, the United States, and Russia by 1913. By the same year, the First Bulgarian Insurance Company of Roustchouk operated in nine countries.

Meanwhile, Asian companies also began to expand overseas. By 1914, Japan was investing about a tenth of its GNP abroad—a good deal of it in the form of direct investment in China (particularly Manchuria).12 Trading companies such as Mitsui opened branches in China from the late 1870s onward. In 1902, Mitsui started a fashion for building cotton plants in China. Ten years later, the Japanese owned 886 power looms in China, even more than the British.13 The Japanese also tiptoed into the United States. As early as 1881, fourteen Japanese trading companies had branches in New York.14 Three trading companies later opened offices in Texas to handle their cotton business.15 In 1892, Kikkoman built a factory in Denver, Colorado, to make soy sauce for Japanese immigrants.16

Many nineteenth-century multinationals—particularly the European ones—were bound up with imperialism, though never quite to the extent of the East India Company. The most ghastly abuses occurred in the Congo Free State, the private empire set up in the 1880s by King Leopold of Belgium. Strapped for cash, the king sold off parts of the country to various concessionaire companies, in which he often kept half the shares himself. In the 1890s, when demand for rubber surged, the concessionaire companies assembled their workforce through torture. The profits were so large that the French imitated the concessionaire system in their part of the Congo in 1900. But public outcry, prompted by the publication of a damning report by the British consul, Roger Casement, mounted, and in 1908, the Belgian government was forced to annex the Congo Free State, paying off Leopold.

More often, though, multinationals were not so much imperialist despoilers as imperialist builders—of institutions, of infrastructure, and of confidence. In Africa and Latin America, mining companies found themselves obliged to invest in railways and schools. The princely hongs of Jardine and Swire did as much to create Hong Kong as the British government. Many colonial officers retired to join British companies, taking their Kiplingesque ideas about imperial duty with them.

Yet, the link between the nineteenth-century multinationals and imperialism has often been exaggerated, particularly by devotees of the Marxist idea that imperialism was the highest stage of capitalism. Most foreign direct investment in the period flowed to other developed countries rather than to the colonies. The impoverished tribesmen of Africa hardly provided much demand for Western products. For the most part, the logic of nineteenth-century imperialism was strategic rather than commercial. The competitive landgrabs by European countries in Africa brought few commercial gains. Some businessmen may have made money in these distant colonies; most did not. The embittered rubber planters of Somerset Maugham’s short stories were more typical of the breed than Cecil Rhodes or the Oppenheimers.


One indirect sign of this is that the strongest challenge to Britain’s lead came not from its fellow European imperialists but from American business. By 1914, a growing number of American companies had factories abroad, including such familiar names as Ford, Eastman Kodak, Quaker Oats, and Coca-Cola. Direct foreign investment amounted to about 7 percent of America’s gross national product.17 By 1950, at the latest, America had firmly replaced Britain as the world’s premier progenitor of multinationals.

The most important reason for the rise of the Americans is the one that we have discussed in chapter 4. The same skills that allowed American firms to command a continent-sized market at home also enabled them to sell their products around the world. They were the first to learn how to exploit an economy in which labor was relatively scarce and workers were reasonably well paid, the first to master mass production and mass marketing.

Industrial companies were the first Americans to make their mark abroad. In 1867, the Singer Sewing Machine Company opened a plant in Britain. In 1884, Thomson-Houston, one of the many firms that were later absorbed into General Electric, established an international division. Ford built a plant at Trafford Park in Manchester in 1908, assembling its cars from imported components; a mere five years later, Ford was Britain’s largest car producer. In 1914, two of the largest businesses in Russia were Singer and International Harvester. Singer had a workforce of 27,000 and a sales force whose travels took them to outermost Siberia.18

This makes the Americans seem remorseless. In fact, many of them acquired their overseas operations in the same way the British acquired their empire—“in a fit of absence of mind.” American firms established makeshift foreign marketing departments to cope with spontaneous demand for their products. But once they had entered foreign markets, they found themselves sucked in farther, often, ironically, by protectionists trying to keep out imports. In 1897, for example, Count Goluchowski, the Austrian foreign minister, distributed a circular letter to other European leaders urging them to band together against the American invaders. By establishing affiliates in Europe, American firms could leap over tariffs, get their goods to market faster, and adapt them to local taste. Inevitably, there was a snowball effect: no sooner had a company like Ford moved abroad than its competitors and suppliers felt compelled to do likewise.

After the First World War, the Americans became more methodical. Even Britain, the last free-trading nation, introduced tariffs on some goods, including cars, in 1916, before fully surrendering to protectionism in 1932. Yet none of the tariff barriers were proof against Yankee ingenuity. In the 1920s, General Motors bought Britain’s Vauxhall car company and Germany’s Opel to get around the new tariffs. “We had to devise some methods of living with restrictive regulations and duties,” recalled Alfred Sloan. “We had to work out a special form of organization that would be suitable overseas.” (In some cases, this desire “to go local” led to an unhealthy cohabitation with tyrants: witness the way that IBM and Ford cozied up to Hitler.) Meanwhile, the Americans also began to spread their wings beyond the safety of Canada and Western Europe. In the Depression-racked 1930s, a miserable time for multinationals of all sorts, the Americans found their fastest growth in Latin America.

By 1938, the total stock of foreign direct investment had grown, by Dunning’s estimates, to $26.4 billion, of which 40 percent was British and 28 percent was American. The postwar years saw the United States decisively seize Britain’s lead. The Second World War might almost have been designed to give American multinationals the final edge over their European competitors. After the war, rising European living standards, courtesy of the Marshall Plan, stimulated consumer demand, which America’s healthier companies were best placed to satisfy. The introduction of the General Agreement on Tariffs and Trade (GATT) in 1947 swept away most of the previous tariff barriers, and American firms pushed overseas rapidly. By 1960, the global stock of accumulated foreign direct investment had swollen to $66 billion—and the United States held 49 percent of this, compared with Britain’s 16 percent.19

One of America’s secret weapons was the passenger jet. The itinerant international manager was not new. Expatriate managers from Shell and Unilever were to be found the world over, but their job was to put down local roots rather than flit hither and thither. The new breed of American multinational men spent their lives traveling on jets between one anonymous hotel room and another. They could jet across the Atlantic (or the “pond” as the more irritating among them called it) in seven hours. They could stay in touch with their offices back home by phone and telex. The obvious downside of this was superficiality, but it also allowed the Americans to look upon their companies as global entities rather than as a collection of national companies.

The 1960s were the heyday of the American multinational. Europeans watched in horror as American direct investment in the Continent grew from $1.7 billion in 1950 to $24.5 billion in 1970, and an army of American invaders—IBM, Ford, Kellogg, Heinz, Procter & Gamble—marched across their continent. In The American Challenge (1967), Jean-Jacques Servan-Schreiber argued that America’s superior ability to manage big companies over wide geographical areas was making it impossible for European companies to compete. The Americans, he pointed out, had mastered the tools of organization that held the key to prosperity; the Europeans, on the other hand, were held back by their commitment to family firms and their cult of flair rather than science.

For critics everywhere, the evil of the new breed was symbolized by ITT. Born as a tiny telephone business in Puerto Rico in 1920, the conglomerate first distinguished itself by sucking up to assorted dictators, including Franco in Spain and Hitler in Germany. (ITT’s German subsidiaries had a hand in making Hitler’s Focke-Wulf bombers, and after the war the company successfully claimed compensation for the destruction of the Focke-Wulf plants by Allied bombers.)20 In the postwar period, it sprawled across the world, bribing and cajoling local politicians as it went. In the 1970s, the company intervened in Chile in an attempt to stop Allende’s left-wing government coming to power. The Securities and Exchange Commission eventually revealed that ITT had spent a total of $8.7 million in illegal activities in countries such as Indonesia, Iran, the Philippines, Algeria, Mexico, Italy, and Turkey.


In fact, the idea that the Americans would sweep all before them collapsed in the 1970s. The devaluation of the dollar in 1971 made foreign assets look more costly to American firms and American ones cheaper to foreigners. The oil-price hikes in the middle of the decade and the subsequent rise in commodity prices boosted the demand for energy-saving devices that Americans had little experience in producing. Inflation and recession further dented their self-confidence. By the early 1980s, the Americans were on the defensive, pinned back by German multinationals and humiliated by the Japanese (see chapter 7).

Trying to view the history of multinationals through nationalistic lenses becomes harder in the final quarter of the twentieth century. This, after all, was a time when the business sections of bookshops groaned with titles such as The Borderless World, The Twilight of Sovereignty, and Sovereignty at Bay. A famous essay in the Harvard Business Review in 1983 by Theodore Levitt argued that “the earth is round but for most purposes, it is sensible to treat it as flat.” That was overstating it. Geography did still matter. In 1995, the top one hundred companies by market valuation included forty-three from the United States, twenty-seven from Japan, eleven from Great Britain, and five from Germany. Countries as big as Russia, China, India, Canada, Indonesia, and Brazil could not claim any.21 Yet, this was the period when multinationals could appear from anywhere. Two of the world’s most successful mobile-telephone companies, Nokia and Ericksson, sprang up on the edge of the Arctic Circle. Acer, the third largest computer company in the world by 2000, was founded in Taiwan, a place that was once synonymous with cheap radios.22

This period saw three important changes that affected multinationals of all sorts. The first was a huge increase in their numbers. By 2001, there were about sixty-five thousand “transnational” companies in the world, roughly five times the number in 1975; around the globe they gathered together 850,000 foreign affiliates, employed 54 million people, and had revenues of $19 trillion. In the 1990s, foreign direct investment grew four times faster than world output and three times faster than world trade. Roughly a third of trade flows consisted of payments within individual companies, reflecting the way that multinational production systems stretched around the world. In 2000, the total global figure for FDI passed $1 trillion.

Second, smaller companies did as much to drive globalization in this period as bigger ones. The lowering of trade barriers, the spread of deregulation, the plummeting cost of transport and communication: all made it possible for Davids to challenge Goliaths. Freer trade made it possible for young companies, including Microsoft, to reach overseas markets, without having to build huge foreign offices. The deregulation of the capital markets allowed smaller companies to borrow serious money, while innovative management techniques, such as just-in-time production, allowed them to mimic the efficiencies of bigger competitors. Small companies also encountered fewer political prejudices than big ones.23

Third, multinationals tried harder to treat the world as a single market, embracing ugly names like “transnationals,” “metanationals,” and “new age multinationals.” The change was particularly marked in big companies. For most of the twentieth century, Ford was essentially a confederation of national companies. Each country had its own head offices, design facilities, and production plants. At one point, Ford even had two Escort cars on the road that had been designed and built entirely separately. Yet, by the 1990s, it was developing “world cars” with common parts, like the aptly named Mondeo, coordinating not just its manufacturing but its advertising on a global scale.

This all sounds rather imperial. In fact, good multinationals went to great lengths not just to adapt products to local taste (even dividing up the American market), but also to scour the world for ideas. Indeed, in an age where most markets could be accessed easily, the only justification for having people on the ground everywhere was to use their brains.24 Multinationals spent fortunes on new electronic systems to speed messages around their organizations, and they began to experiment with what might be called intellectual arbitrage—putting Italian designers together with Japanese specialists in miniaturization, for example.

Many of the organizational changes of these years were driven by the desire to combine global scale with local knowledge. Nestlé put the headquarters of its pasta business in Italy. At Asea Brown Boveri, a Swedish-Swiss merger set up in 1988, Percy Barnevik decentralized some things (dividing the firm into thirteen hundred separate companies that were also subdivided into five thousand profit centers) and centralized others: he made English his firm’s official language, although only a third of the employees spoke it as their mother tongue, and appointed a Praetorian guard of international managers to oversee the firm.

Yet this did not provide a definitive answer. ABB went into rapid decline in 2002, as its matrices got hopelessly complicated. A bigger problem was that too many multinationals still assumed that “global” simply meant “more international.” Most drew their leaders overwhelmingly from their home countries. Even such paragons of multiculturalism as Unilever and Shell could produce precious few senior officers from China and Brazil, two of the most promising markets of the twenty-first century. And some firms looked on the developing world as a source of cheap labor rather than ideas. This “Nike economy,” relying on cheap Third World workers, helped stir up a backlash against multinationals.


By the end of the twentieth century, multinationals were routinely denounced as the dark lords of globalization. Antiglobalization protesters rioted in Seattle, Washington, and London to protest against the awesome power of multinationals, raging against companies like McDonald’s, which by the mid-1990s was serving 3 million burgers a day in one hundred countries. Raymond Vernon, the author of one of the classic studies of multinationals, Sovereignty at Bay, used his last book, In the Hurricane’s Eye(1998), to predict a gloomy future for multinationals, as people turned against them.

Had they really become so powerful? Businesspeople were partly to blame for the notion. They had long dreamed, as the chairman of Dow Chemical once put it, “of buying an island owned by no nation and of establishing the world headquarters of the Dow company on the truly neutral ground of such an island, beholden to no nation or society.” It suited corporate chieftains to give the impression that their companies could raise camp and desert any government that disappointed them.

In fact, multinationals were considerably less powerful than their critics imagined. The idea, popular in antiglobalization circles, that companies accounted for fifty-one of the world’s one hundred biggest economies relied on comparing the sales of companies with the GDP of countries. But GDP is a measure of value added, not sales. Using a measure for value added for companies, only thirty-seven multinationals appeared in the one hundred biggest economies in the world in 2000; and only two of them scraped into the top fifty (Wal-Mart in forty-fourth place, and Exxon in forty-eighth). Wal-Mart was barely a quarter of the size of a fairly small European country, such as Belgium and Austria, though it was bigger than Pakistan and Peru. Far from gaining economic clout, the biggest multinationals were losing it. In the period 1980 to 2000, the world’s biggest fifty firms grew more slowly than the world economy as a whole.25

Besides, wealth is not the same as power. In 2000, Wal-Mart might have been richer than Peru, but set beside the government of even that dysfunctional country, it looked pretty feeble. Wal-Mart had no powers of coercion: it could not tax, raise armies, or imprison people. In each of the countries where it operated, it had to bow down to local governments. Previous giants such as ITT or the East India Company could muster real political power; Wal-Mart was simply rather good at retailing.

The history of multinationals points to two contradictory conclusions. The first is that multinationals have generally become a force for good—or, at the very least, that they have given up sinning quite so egregiously. The early chartered companies were state monopolies, with a penchant for conquest and exploitation. The initials of the Royal African Company were branded on the chests of thousands of slaves—and the RAC was warmly backed not just by the state (its first president was James, Duke of York, after whom New York was named), but also by civil society (its shareholders included John Locke, that great philosopher of liberty). “In the East, the laws of society, the laws of nature have been enormously violated,” argued the Burgoyne Committee in 1773 in its damnation of the East India Company. “Oppression in every shape has ground the faces of the poor defenseless natives; and tyranny in her bloodless form has stalked abroad.”26

This tradition of exploitation certainly continued into the nineteenth century. The report by the British consul, Roger Casement, on the administration of the Congo Free State makes horrifying reading. A sentry who worked for one of the concessionairecompanies explained how he was holding eleven women hostage until their husbands “brought in the right amount of rubber required of them on the next market day.”27 Yet, by the late twentieth century, the sins of the multinationals, with a few exceptions, such as ITT, tended to be less of commission than of omission: for instance, Shell was roundly criticized for not doing more to prevent the execution of Ken Sarowiwa, a Nigerian dissident, in 1995. They did not go around overthrowing governments.

What about the objection that multinationals paid abysmal wages? Here the vital question is whether the wages were “abysmal” by Western or local standards. In 1994, the average wage at the foreign affiliates of multinationals was one and a half times the local average; in the case of low-income countries the figure was double the local domestic manufacturing wage.28 Multinationals have usually abided by higher labor standards than their local rivals. The key to their success is not usually that they pay low wages. It is that they bring superior capital, skills, and ideas (which push up living standards and increase the choices open to local consumers).

The provision of better goods and services—everything from washing machines to checking accounts and even hamburgers—has always been the central justification of multinational business. It stands by itself. Yet, it is also worth recording that multinationals have not always been motivated solely by greed. Around the world, they have built schools and hospitals. Even the more sordid episodes in their history usually stand beside examples of decency. In 1910, William Lever traveled to the wretched Belgian Congo and took over a vast area of about seven enormous plantations, where he started to build a more rudimentary version of Port Sunlight. His model community included hospitals, schools, and roads. The Congo did not turn a single penny of profit in his lifetime, but Lever regarded these villages as one of his greatest achievements.29

The second conclusion is that multinationals have never been loved, either at home or abroad. We have already mentioned the xenophobia of Trollope and the Morning Post. In 1902, a British commentator, F. A. Mackenzie, published The American Invaders—a no-holds-barred denunciation of the American multinationals that were planting factories on British soil. For much of the twentieth century, the British Left fumed about foreign investment on the grounds that it was robbing an English workman somewhere of his livelihood, an argument that J. A. Hobson (and later Lenin) worked up into an entire theory of imperialism. Years later, Pat Buchanan and Ross Perot were singing from the same hymnbook.

It would be easy to pass these off as examples of economic illiteracy, political opportunism, and xenophobia. But multinationals clearly arouse fears that are too deep-rooted to be dug up with a few statistics. There is something worrying about the idea that your job is dependent on the decisions of managers who live in faraway places. Thus, multinationals will continue to represent much of what is best about companies: their capacity to improve productivity and therefore the living standards of ordinary people. But they will also continue to embody what is most worrying—perhaps most alienating—about companies as well.

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