Critical discussion on: “Multinational corporations are more powerful than national governments”

economics

Critical discussion on: “Multinational corporations are more powerful than national
governments”.
The essay brings out a critical discussion on the way multinational corporations started
playing main role in running the national economies. Liberalisation and globalisation has
widened the scope of power imposed by multinational corporations, as it enables foreign
direct investment and foreign institutional investment. This essay states both how government
influences the operations of the MNCs and on the other hand, how a MNC or group of
powerful MNCs affects the government decisions. Form the current situation, it can be seen
that national government has no longer power enforcement while managing its domestic
economies. The purpose of the essay is to critically discuss the impact of government and
business on each other (Caner, 2015).
A MNC (multinational company) is a large corporation, which is incorporated in one country
but operates globally and also sells its goods and services in other countries (Moyo, 2017).
Two main characteristics are large sized and operating worldwide who is centrally controlled
by parent company. Existence of multinational company creates jobs in the world. Inward
investment in the developing countries through multinationals creates foreign currency. The
size and scale of operations facilitate them to get benefit from economies of scale that enables
lower prices for consumers and average costs (Moyo, 2017). While evaluating the impact of
MNCs on the government, it can be seen that countries are well known to be company`s
legislative subsidiaries for the organisation. It is often said that one who has gold makes the
rules. These days, corporations have money and resources in order to set the legislative
agenda in many countries by passing laws that can suit their needs. In other sense, it can be
said that corporations are more powerful than country but still they can still lobby those
government to get the preferences for the laws so ultimately, power lies in the hands of states.

From the realistic perspective view, power comes from a gun in the hand until corporations
have their own army forces. Another instance exemplifies that corporations are more
powerful than China. They control corporations and the activities in their country
demonstrate which is still possible for the states to become more powerful (Moyo, 2017).
Companies have top government executives on their payrolls. The companies dictate
government policies even when government take action because it the companies first ask the
government to do so but behind the scenes, it executes and do everything and lobby changes
for the policies so that it can benefit them and ask them to rank the officials to lobby with
officials of other countries. Several reasons proves that MNCs are powerful than countries.
Money makes world go round. Rich and wealthy people often run large companies and this is
the reason why no outright comes into play. If a rich, popular, charismatic person tries to
stand in politics, he/she easily get the power and position or a political seat because they have
enough funds to support who stands in elections. People in power and position helps the
MNCs to reach at the top position. Security contracting and spacious private operations
already exist in place. Large corporate entities are able to mass large armies, hire private
soldiers, and finally equip them to sustain without worrying about the public outrage and for
unpredictable spending. New space flight and private satellites is not allowed without
surveillance and communications that ultimately rival the government (Elmi, Kerosi, and
Tirimba, 2015). Corporations are not very powerful because they will associate the financial
spiral turning downwards, which further may generate destroying effects for the individual
global and national economies that does not prove that companies are more powerful than
countries. Although, company is able to create economic collapse but they can not wholly
affect the public policy or control the government in the country directly that certainly have
various shades of conspiracy written all around it. Corporations have an omnipresent in the
world but claims they are more powerful than other individual nations that met with complete