Global Companies and Emerging Market Economies
| Published date | 01 May 2013 |
| DOI | http://doi.org/10.1111/1758-5899.12050 |
| Date | 01 May 2013 |
| Author | John Mikler |
Global Companies and Emerging Market
Economies
John Mikler
University of Sydney
The articles in this Special Section are based on contribu-
tions made by the authors to a Handbook of Global Com-
panies (Mikler, 2013) to be released contiguously with
this issue of Global Policy. The theme driving all the con-
tributions to the Handbook is that global companies are
central actors in global policy and governance, and
therefore central to conceptualizing the economic, social
and political transformations in world affairs that are
encapsulated in the term ‘globalization’. As editor of this
volume, it was a delight to be able to approach both
established and emerging scholars who treat global com-
panies as the subject, rather than object, of analysis in
global policy and governance, and who understand them
relationally in terms of their interaction with states, soci-
ety and international organizations. The three articles
found here by Andrea Goldstein, Shiufai Wong and
Sung-Young Kim were selected because their contribu-
tions particularly animated the important topic of global
companies and emerging market economies.
Their contributions may be seen firstly as an(other)
attack on the initial declarations of the hyper-globalists
that the market would increasingly be ‘in charge’rather
than nation states, and that the state would be small if
not in size then in strategic capacity. Nobody has put the
case for this better than the redoubtable Susan Strange
who foresaw a diffusion of authority away from states,
such that ‘where states were once the masters of mar-
kets, now it is the markets …which are the masters over
the governments of states’(Strange, 1996, p. 6). The
result would be that ‘power over outcomes is exercised
impersonally by markets’(Strange, 1996, pp. 13–14).
However, the global economy is highly oligopolistic. The
point made by the contributors to this Special Section, as
in the Handbook more generally, is that power is not dif-
fuse in markets but concentrated in global companies.
All the world’s major industrialized sectors are now con-
trolled by five multinational corporations (MNCs) at most,
while 28 per cent have one corporation that accounts for
more than 40 per cent of global sales (Harrod, 2006,
p. 25; see also Fuchs, 2007). Global companies are vast
conglomerates that underpin not just national economies
but the world economy. Therefore, power is also not
exercised impersonally. Rather than abstractions such as
Adam Smith’s‘invisible hand’of the market, we have the
reality of the visible hand of these companies.
Secondly, given their economic dominance, it is also
the case that the home bases of the world’s largest cor-
porations are like a map of where economic, and there-
fore political, power resides in the world. The FT Global
500 companies
1
are responsible for 30 per cent of world
output, 70 per cent of international trade and at least 80
per cent of the world’s stock of foreign direct investment,
and they are not placeless entities: the top ten states by
headquarters account for 79 per cent of them (Financial
Times, 2011).
2
What has changed in the past decade is
that China and India are now among these states. In fact,
Goldstein notes that between 2005 and 2012 the number
of FT Global 500 companies from Brazil, Russia, India and
China (the ‘BRICs’) rose from 27 to 96. Their companies
have also risen up the ranking quite dramatically. The
question is: how? Less than a decade ago, it was possible
to say that ‘a statistical profile for the current corporation
indicates that it is predominantly Anglo-American’(Har-
rod, 2006, pp. 27–28). This was a key part in an Anglo-
Saxon laissez-faire ideal of the inevitability and desirability
of free markets, and therefore freedom for these corpora-
tions, becoming the conventional wisdom. It underpinned
what Wade (2010) calls the Globalization Consensus.
3
The
passive, facilitative state that made regulations but did
not intervene strategically in economic affairs was seen as
the only viable alternative, and also a desirable one: any
states that resisted this policy ‘golden straightjacket’
(Friedman, 2000) would be denied the benefits from dee-
per integration with the global economy. However, in the
post-2008 financial crisis world, and with the emergence
of new MNCs from the rapidly rising emerging market
economies of Asia and South America in particular, it is
clearer than ever that there is nothing inevitable about
the market being in charge, nor the state being small and
weak. All the contributors to this Special Section highlight
the point that the emerging market economies have
never fully subscribed to the Globalization Consensus,
whether ideologically or in practice,
4
nor do they seem
inclined to do so.
©2013 University of Durham and John Wiley & Sons, Ltd. Global Policy (2013) 4:2 doi: 10.1111/1758-5899.12050
Global Policy Volume 4 . Issue 2 . May 2013
160
Special Section Article
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