Transnational Capitalism

Although they are often used interchangeably, the idea of transnational capitalism should be clearly distinguished from the idea of international capitalism. International capitalism refers to the relations between capitalist entities doing business within the national economies of all the countries in the world considered to be capitalist and between these countries (international trade). Transnational capitalism refers to the sum of all the relations between economic agents whether they are state or private or of other mixed forms, any part of which crosses state borders. Whereas, for many practical purposes, the world is still organized in terms of discrete national economies, transnational capitalists conceptualize their interests in terms of markets, which may or may not coincide with a specific country or part of it, and the global market. Domestic firms, defined as those serving an exclusively sovereign state market, employing only local co-nationals, whose activities consist entirely of domestic services (notably finance and marketing), components, and materials are now a rapidly shrinking feature of contemporary economies. Most business, particularly big business, is now transnational.

In practice, the distinction boils down to the analytic choice between an international (state-centrist) analysis of capitalism and a transnational (globalizing) analysis of capitalism, its economic actors, practices, and institutions. This distinctive idea of transnational capitalism comes from globalization theorists and researchers who have identified globalizing corporations and their local affiliates, those who own and control them, and those in influential positions who serve their interests as the dominant economic forces in the world today, conceptualized as a transnational capitalist class by Leslie Sklair. Theory and research on transnational capitalism have focused on several interrelated phenomena, increasingly significant since the 1960s. The transnational corporations (TNCs) have attracted an unprecedented level of attention in this period, not only from academic researchers but also from activists in the fields of human rights in general and child labor, sweatshops, and environmental justice in particular. The ways in which, and the consequences of how, TNCs have facilitated the globalization of capital and the production of goods and services, the rise of new global forms of organization of the capitalist class based on ownership and control of TNCs, and transformations in the global scope of the corporations that own and control the mass media are no longer the sole province of international economists and trade specialists but are now widely discussed throughout the social sciences as well as in best sellers, notably by Naomi Klein, read by students and concerned citizens alike. In this respect, at least, the idea of transnational capitalism has become popularized.

Interest in the rise of transnational capitalism—more or less synonymous with an increasingly globalizing capitalism dominated by TNCs—grew perceptibly from the 1960s and has begun to replace research on competing national capitalisms in the international economy, the basis of theories of colonialism and imperialism. This is overlaid with several versions of the theory that capitalist states could more or less successfully plan their own economic futures, also known as the theory of the development state. As direct imperialism and colonialism came to an end in the latter part of the twentieth century and as more and more large TNCs began to emerge, attention began to shift decisively from international to transnational capitalism and from the developmental state to capitalist globalization. This is the gist of the influential argument of the international relations scholar Susan Strange. Stirrings of this were apparent in the sociology of development, where the dependency approach to development and underdevelopment of Andre Gunder Frank and the related world-systems approach of Immanuel Wallerstein highlighted the systemic nature of capitalism as a worldwide phenomenon over several centuries.

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