We need more than multinationals to achieve economic well-being.
For some years now, I’ve been collecting early 20th-century photographs of street scenes in Naples, Italy, where my father was born. The images portray the minutiae of daily life: women and children selling goods or playing in the streets and men displaying the catches they made at sea. When I gaze at these images, I’m always surprised by how similar the standard of living depicted therein seems to the one I see in photographs from the same era in America: The children are well fed, their feet are shod, they wear caps to protect their faces from the sun. There’s no litter on the streets and the buildings and roads seem in fair repair.
Then I traveled to other countries. In Pondicherry (India), Bangkok, Panama City, Lima and Havana, I saw the same pictures. During the 1920s, people around the world seemed to be at about the same spot, from a social development point of view, as each other. The cities show a mix of horses with wagons and early automobiles along with light rail and bicycles. The water’s edge has buildings lined up to look toward the water with large public piazzas or parks before them. Sometimes, you find pictures of students in classrooms lined up with their teachers. These pictures look very much alike.
This morning I searched the Internet for Cairo, Rio de Janeiro, Johannesburg and Addis Ababa. It was the same in each of these cities as in Naples: well-fed children, street vendors in gay moods, solid buildings lining parks or waterways and almost everyone in shoes. So what happened? How could so many of these once-great cities of the world have fallen into such disrepair? What global scourge hit the southern hemisphere so much harder than the northern? How did we go from a time when societies globally were traveling along their paths at roughly the same pace, at least in so far as is revealed in old city photographs, to the disparities we see today?
It’s hard not to blame the development of multinational corporations. Certainly, we can look at corruption, population growth, transportation issues, but in the end, one has to acknowledge that local, vibrant, even charming societies have been turned into horrifying masses of misery while others have thrived. I’m not the first to suspect world trade, driven by corporate demands. In 2005, the international development charity Christian Aid published a report on the costs of free trade. The group estimated that Malawi, for instance, would have had a gross domestic product 8 percent higher after liberalization had it not opened itself up to cheap imports.
The truth is that people need production, not simply consumption, to maintain a functioning economy. In 1994, the World Trade Organization offered Haiti protection (the country had been in the hands of the military for three years and was re-entering democracy) in exchange for greatly reduced tariffs. Agricultural companies wanted to sell their goods to the people of the Caribbean. Cheap rice and chicken parts flooded Haiti, and the indigenous agricultural businesses folded. Poverty rates rose, and joblessness and hopelessness became pervasive. The case is widely used for study, but the extrapolation is not. Using multinational companies as the sole means of achieving economic well-being is a failed model. The North is robbing the South of hope.
Realistically, we’re not going to do away with multinationals, but we can hold them more accountable. We can demand they take increasing ownership of the problems they create. On a very small scale, this is happening. Domini Social Investments recently helped convince the steel company Nucor that it could reduce human misery, even slavery, by being careful about how it bought raw materials.
Responsible investors have dozens, perhaps hundreds, of small victories to share, but it’s like fighting a mudslide. Global forces are so very strong. The possibility of Addis Ababa and Lima resembling New York or London during my lifetime is slim. Nonetheless, it’s essential to keep trying. Bringing hope and dignity to 1,000 or 100,000 people may not save the planet, but it counts.