okie, after spending my weekend being a geek - and playing computer games - ah! I shall see if I remember anything about TNCs and their lovely hosts.

Do TNCs benefit or disadvantage their hosts?

After discussing at length about the mercantilist fear that TNCs would empower hosts with the infusion of capital and knowledge, hereby improving the hosts' relative position in the global economy, we wonder if TNCs truly benefit their hosts.

Do TNCs aid Economic Development?
- FDI is more stable and long-term; costs of withdrawing capital higher thus improving the hosts' bargaining position
At the same time, because TNCs are foreign, they cannot be expected to CARE about national interests; and in times of crisis, naturally choose to retain their factories at home
- Diffusion of skills and technology to the host countries, equipping its workforce
Assuming of course that TNCs would want to hire locals and train them, also assuming that locals will not be averse to their business culture and resistant to picking up new skills; Madeley also argues that since only a specific stage of production is located within the host, workers do not pick up useful skills and knowledge of the whole process - subsidiaries are mere appendages
- Monopoly of TNCs due to their superior knowledge and greater financial access: hire locals and borrow money, depriving local entrepreneurs of resources; making use of economies of scale and advantages to oust out local industries -> creates high dependence on TNCs and not self-reliant growth
- Inappropriate technology: capital-intensive rather than labour-intensive (and labour is presumably the comparative advantage developing countries have); high unemployment, especially since labour-intensive, inefficient local industries are ousted out

TNCs rob states and its people of power
- Transfer pricing and sophisticated accountants - tax evasion in host countries: California's unitary tax laws an utter failure
- INfluence and impact World Trade ORganization: contributed to Trade-Related Intellectual Property Rights - allowing them to patent their products and host farmers (who have been planting a certain drug crop for generations) suddenly have to pay royalties to drug companies who has the money and resources to patent them
- Manipulation through trade: Kissinger on righting the 'irresponsibility' of citizens who voted Socialism and with help of US corporations ITT (International Telephone and Telegraph) helped overthrow President Gossens in Latin America in 1973

TNCs contribute to decline in citizen's welfare
- Democratic deficit: Exploitative alliance with authoritarian governments
- Race to the Bottom: Governments, trying to attract TNCs, has less resources for welfare, education, health care; promises low wage, tax free agreements
- Lack of product appropriateness: Nestle producing milk powder in West Africa where there isn't clean water; produces systematic bias against poor
- Cultural imperialism: erosion of traditional cultural and social values in marketing and advertisements, encourage demands for luxury goods
- Irresponsible TNCs in the case of catastrophes 1984 Union Carbide plant exhalation of toxic gases in the city of Bhopal; corporate responsibilities more like public relations; vagrant environmental destruction - Canada cannot prevent US corporations from emitting gases that contribute to acid rain that falls on Canadian forests

Note: In Asian NICs (Newly Industrialized Countries), component-parts-producing industries have a spill over effect, propelling the emergence of other industries, spurring economic development as a whole. Capital intensive industries create overall economic growth, which created jobs, and reduced unemployment e.g. Singapore, Taiwan, South Korea
While TNCs may be at fault, some problems e.g. cultural imperialism, inequality, decline in welfare inherent in economic development; some problems may be due to poor policy-making in host countries or to the structural weakness of host countries

Very boring.
Just like me... now. Boring. Ugh.