U.S. Power and the Multinational Corporation: The Political Economy of Foreign Direct Investment

by William Gilpin

An examination of multinational corporations and foreign investment, their interactions with and impact on domestic and international politics, and the attendant costs and benefits to the United States

Genres: Economics, International Relations, Politics

291 pages, Hardcover

First published January 1, 1975

About the author

William Gilpin was an English artist, Anglican cleric, schoolmaster and author. He is best known as one of those who originated the idea of the picturesque.

Gilpin was born in Cumberland, the son of Captain John Bernard Gilpin, a soldier and amateur artist. From an early age he was an enthusiastic sketcher and collector of prints, but while his brother Sawrey Gilpin became a professional painter, William opted for a career in the church, graduating from Queen's College, Oxford in 1748.

In 1768 Gilpin published his popular Essay on Prints where he defined the picturesque as '"that kind of beauty which is agreeable in a picture" and began to expound his "principles of picturesque beauty", based largely on his knowledge of landscape painting. During the late 1760s and 1770s Gilpin travelled extensively in the summer holidays and applied these principles to the landscapes he saw, committing his thoughts and spontaneous sketches to notebooks.

Reviews

[Ted Tyler · Rating 5 out of 5]

Best book I read in 2021. It was very intimidating to read, but I came away with nothing but admiration for the brilliant intellect of the late Bob Gilpin. What's made this book intriguing was how in 1975, he was asking all the questions that modern society is now asking about the role of multinational corporations (MNCs). He moves beyond the normative view that MNCs are "bad" and instead explores the role that MNCs play in international relations. By examining Dutch, British, and American MNCs, Gilpin shows how the power of a nation-state largely gives leeway to the behavior that MNCs can pursue. His theory convincingly argues that as corporations conduct commercial activity abroad, their expansion is what undermines national power. Corporations slowly lose influence over weak governments as technology, managerial know-how, and capital trickle into peripheral countries. As a result, an MNC begins to lose leverage over a now stronger government. Only when a powerful country like American can step-in, does the MNC regain its leverage. But as Gilpin observes, American grand strategy called for the US government to deliberately undermine the domestic economy during the Cold War. The US encouraged the economic growth of West Germany and Japan at the expense of its own domestic economic growth. This weakened (in relative terms) the hand of the US government to intervene on behalf of its MNCs. As the domestic economy weakened, rich, powerful American enterprises are now the focus of attention. Why does the American government let American companies export jobs abroad and contribute to the hollowing out of the US economy? For Gilpin, it's a logic motivated by first-order security concerns.

[Kw Estes · Rating 4 out of 5]

Gilpin has a very straight-forward writing style, and his realist outlook on international political economy is no doubt--while being less than parsimonious--one of the most empirically verified.