| |
 The political economy of development |
|
| Home- Themes- Reports- Statistics/Search- Lecture notes/News- People's Century- Puro Chile- Mapuche |
|
Ecumenical Reflexions on Political Economy. A summary of ten
years 3. Technology, TNCs and Human Development Introduction For the ten years that it has been in existence, the AGEM has attempted
Why did the AGEM choose to focus a consultation on the interaction of technology, transnational corporations and human development? The answer lies in the contradiction which modern technology represents, which can be summed up in the paradox of plenty and poverty. On the basis of scientific and technological accomplishments, we now find ourselves capable for the first time of meeting the basic material needs of all human beings and of doing so in ways which would develop the creative powers and potential of both individuals and societies. At the same time the advance of scientific technology does not always serve the common interests of humanity. Often the results of its growth are ambiguous. The paradox is that, while the potential for fulfilling human needs has grown at a phenomenal rate, we are face to face with a world of Technology, TNCs and Human Development 19 incredible human want, with the number of people without meaningful work or access to adequate food, shelter, health care or education larger than ever before. The AGEM addressed these questions in Rome in October 1980. It analyzed the role of TNCs in the internationalization of trade, finance and the production creation and marketing of different types of technology. It also examined the values and logic which underlie the investment decisions and technological choices in the framework of the world market system and discussed whether or not that logic can lead to the creation of a new world order based on the values of justice, participation and sustainability. The concepts which are developed in the study on technology and transnational corporations are those of human development and participation. Concepts and contexts What is technology? Technology embraces three inter-related elements: tools and machines, knowledge and skills, institutions and values. On the concrete level tools, machines and equipment are used to produce goods and services. This answers the question with what to transform nature. On a more abstract level there is the materialization of knowledge which answers the question how to transform nature. Finally, there is the level of operational concepts which answers the questions of for what, for whose benefit and within what limits to transform reality. This level requires a value framework for technology and is the result of the historical and contextual processes of the society to which it belongs and therefore cannot be understood in the abstract outside its objective corelatives of time, place, society, economic power, distribution and conflict. It is important to point out that the kind of technology we are talking about, the kind of technology that dominates our world today, has its philosophic origins in European rationalist thought. This philosophy is based on the conception of human progress as consisting of an unlimited and unrestrained endeavour to transform nature and to accumulate material goods. It assumes that individual happiness will inevitably result from general advances in material wealth, and that economic growth is equivalent to progress. Among other characteristics of this philosophy are its emphasis on autocratic and hierarchical rather than participatory forms of behaviour and its ethnocentrism in supposing that Europeans, or the creators of technology, are more rational than others. 20 Ecumenical Reflections on Political Economy This philosophic basis of the secular faith in technology and the -potentially contradictory - concept that technology can only be understood within its historical and social contexts do not lend weight jo the contention that technology is neutral or, more precisely, that the selection and use of technology can be neutral. The intensive use of the three leading factors of capitalist production - capital, knowledge and organization -tends to concentrate on key decisions regulating the creation, choice, distribution and the price of technology and removes them from public accountability. Seen from this perspective the neutrality of technology is a myth. Rather, there is a struggle over which technology to develop and to use which involves questions of who controls power, how vertical the productive system and its organization should be, what countries and what social sectors should produce and consume what products and what services, and who should be in the centre and who on the periphery. The dynamics of technology No two settings are identical, but certain elements exist in each setting which inform and shape the meaning and dynamics of technology in that context. Two of the most miportant of these elements are power and participation. Much of the element of power in technology comes from its underlying logic. The choice of technologies to be developed and of the manner in which they will be utilized has historically been rooted in the logic of the holders of power, the logic of the centralization of wealth, power and knowledge, and not in the logic of the majority which is that of basic human needs, of participation and of countervailing power or changes in existing power relationships. Who are the chief actors to determine who participates in the formation and use of technology? They are transnational corporations, governments in industrialized capitalist countries, governments and state enterprises of the socialist industrialized economies, and universities and scientific societies. The lesser actors are governments in the South and trade unions and agricultural workers' organizations in the North and South. But the majority of the people affected by technology, especially the poorest, are excluded from any significant say in the determination of production goals and objectives or how they are achieved. In addition to power and participation there are other common elements that play an important role in the dynamics of technology such as: - access to information and accountability, which is closely linked to questions of participation; Technology, TNCs and Human Development 21 - scale of production and efficiency, which determines the types of technology that are produced and used; - the ideology of development which, like the underlying logic of technology, has a major influence on the direction and force of technological change; - nationalism which, as a force, can foster or retard technological change within countries and across frontiers. All these elements are important in understanding twentieth-century science and technology, for today's technology cannot be understood outside its historical context. It is not something unique or with6ut roots. However, it is quantitatively and qualitatively different in the following ways: 1) the pace of technological change has accelerated; 2) European domination linked to increased change has affected more people in more areas and more societies; 3) the links between knowledge generation, application and utilization for social and political ends by both TNCs and states have changed qualitatively and quantitatively; 4) technological achievements and communication advances have led to the integration in the hands of single TNCs of the entire production process from raw materials to final product; 5) the increased scope and spread of technological change has often created widening inequalities in power, status and income between and within nations. These differences must be clearly understood as we seek to maximize the positive effects and minimize the negative effects of today's technology. Promises and problems Technology in the twentieth century has transformed the way we live. The last forty years have seen dramatic technological changes in key sectors. In food production new seeds, chemicals and machinery-intensive agricultural techniques and processing developments have led to significant increases in output. The revolution in telecommunications, electronics and transportation has made distances smaller, brought all countries into one economic network, and led the way for the present technological revolution of computerization and robotization. But technological innovations are also lull of problems. Some of the promises are in the areas of labour-saving, comfort, and protection from the environment which make our life easier. Technology also liberates us from the power of custom and tradition and makes possible the production 22 Ecumenical Reflections on Political Economy of unprecedented quantities of goods and services. However, the use of capital and input-intensive agricultural technology requires increasing amounts of energy to obtain constant or decreasing output. The environmental problems both of goods and of waste and the problems of unconstrained use of limited natural resources need to be faced and acted upon. On the employment front technology is problematic because it places jobs at risk, particularly in the short term before adjustment occurs. In addition there is an increasing polarization between skilled and unskilled jobs, decision-making is becoming more centralized, transnational control is growing, and the forms of dominance and unequal exchange, if different from five hundred years ago, tend to retain the same substance. In its effects on the third world, technology can also be said to present both promises and problems. It opens up new possibilities for achieving democracy through education and communications, but the power to educate can be perverted into the power to indoctrinate and to repress. Development from the sixteenth to mid-twentieth century brought material prosperity to many people in metropolitan countries and to minorities within the underdeveloped countries of the periphery. This same duality of effects will almost certainly characterize the technieal revolution of the late twentieth century for the third world unless conscious action is taken to prevent such an outcome. Transnational corporations The role of big corporations has been on the agenda of the ecumenical movement since the early part of this century. It was, however, the WCC Assembly in Nairobi, 1975, that recommended that a special study - and action programme - be initiated on this matter. This programme lasted from 1976 to 1982. The purpose was to motivate churches and the ecumenical movement to seek a better understanding of the role of TNCs, and to explore this issue from a perspective of solidarity with the victims of TNC operations. Although the issue of TNCs is by no means new, the post-second world war period brought about a spectacular growth of foreign investments, an acceleration of the process of internationalization of capital and labour, and increasing unification and homogenization of the world market. TNCs may vary in size, degree of horizontal or vertical integration, origin and power, but they have two things in common. Individually they are centres of decision-making - and therefore of power - that control productive processes in more than one country. Collectively they have Technology, TNCs and Human Development 23 become the main agent of transnationalization of production, finance, trade and information, as well as an important channel for the expansion of an economic ideology which emphasizes "freedom of choice". Underlying their activities is the belief that growth is equivalent to progress and that accumulation of material wealth is the key to human happiness and fulfilment. Development is reduced to economic growth as a linear process. TNCs manifest an optimistic view according to which almost all problems of society, and certainly of the so-called developing countries, can be solved by the transfer of capital and technology, and the expansion of international trade. In industrialized countries, large private corporations have gained considerable influence over governments and in the South accelerated transnationalization would have been impossible without the cooperation of local ruling groups which often control the politico-military apparatus. The process of regional consultations implemented by the WCC programme on TNCs has shown that many churches, especially those in the South, have a more realistic view of the processes of change in their countries than the TNCs. This is mainly due to the fact that they try to relate to the poor and the vulnerable people in society who suffer enormously from the effects of economic, social and political systems and changes. They have indicated that trade very often means dependency, that technology does not always resolve the problem of unemployment, and that large sectors of the world's population are excluded from the market. It was also pointed out that TNCs, by their own logic, seek to avoid accountability. Although managers of TNCs, as individuals, can be responsible persons, it was clearly stated that: From the Christian perspective, the principle of corporate responsibility cannot he reduced to individual morality or accountability. Although accountability should encompass individual corporate officials, its central focus should be the corporation as an institutional entity. 1 In pushing for accountability and social responsibility, churches are called to use their moral, social and other powers in a way consistent with their cominitment to the poor. However, many Christians, especially in the South, argue that more accountability or setting constraints on TNC activities is not enough to overcome structures of oppression. They suggest that the market system 24 Ecumenical Reflections on Political Economy (its logic, values and institutions) must be called into question. They assert that, in the light of the vision of a just, participatory and sustainable society, the market system should be transformed if a holistic human society is to emerge. One of the lessons of the WCC programme on TNCs is therefore that TNCs must be analyzed and addressed in the context of the world market system as a whole. If it is true that Jesus did not teach economic theories, it is undeniable that through his life and words he gave clear indications about how human beings should deal with one another: with love (Luke 10:25-37), with generosity (Luke 18:18-34), with honesty (Luke 19:1-10), and with a deeply-rooted sense of justice (Luke 6:20-26). Proclaiming Jesus as Lord excludes the acceptance of idols such as mammon and false security, dominance of unlimited growth, irresponsible accumulation and profit-making based on injustice and the violation of other people's rights. The TNC programme led to several recommendations to the churches: - they are called upon to analyze and review their relations with TNCs; - they should seek to see TNCs as they are, not as what they present themselves as being, nor as the source of all social and economic evil; - they should meet with, listen to, and give support to those oppressed by TNCs; - they must not forget their pastoral ministry regarding the victims of TNC actions as well as those working in TNCs as executives. 2 The AGEM's concern with the activities and impact of TNCs goes back to its first meeting in Oaxtepec where TNCs were identified as the dominant institutional form of capitalism today. They account for about one-third of the output and half the international trade of industrial capitalist and third worid countries and have increasing links with socialist industrial economies. They are massively present -especially in knowledge, finance, manufacturing and commerce - in the structures of production and distribution in first and third world states. Furthermore, the AGEM pointed out that: The growth of oligopolistic power and the increase in the profits of INCs in the 1970s seem to have a positive correlation with the growing difficulties with which nations and peoples are confronted. The prosperity TNCs have created in these critical years sharply contrasts with the increasing poverty and unemployment not only in the peripheral countries where they operate but also Technology, TNCs and Human Development 25 in their own countries of origin. In general, global corporations have tended to aggravate, not to solve, the world's greatest problems. The extent of TNCs' potential influence is enormous for it was estimated that in the mid-1970s TNCs accounted for 15 percent of total world output, with socialist countries included, If socialist countries are not included the total rises to 20 percent. It is also estimated that if the current trend continues, it could lead to the emergence of a system whereby 300-400 TNCs control 60-70 percent of the world's industrial output, with the concentration in transport, communications, energy, finance and international marketing probably even higher. In order to understand the logic and functioning of a TNC we must understand the elements essential to its structure. In Transnational Corporations, Technology and Human Development, the AGEM identified the following essential elements of a TNC: - a horizontal network of linkages between sub-sectors of production (rather than specializing in just one product); - a vertical network of linkages between the various stages of production, exchange, marketing, distribution and consumption within the individual subsectors; - a network of input linkages with complementary sectors: easy access to - or control of - finance, technology, raw materials, information, etc.; - a network of~output linkages with complementary sectors: commercial advertizing, education, etc.; - possibilities of manipulating demand for their output; - decision-making on a level higher than that of the individual nation-state; - and last but not least sheer size, usually absolutely but certainly relative to other actors. Another integral element in the functioning of a TNC, indeed its raison d'etre, is transnationalization. Transnationalization has extended the horizon of profit maximization beyond national borders. TNCs maximize growth and profit on a global scale. They go where the costs of production are lowest and the expected gains highest. This has caused profound disruptions in industrialized as well as in less-developed countries. The fact that TNCs can shift investments and technology according to the logic of their global interests may prove harmful to the level of employment and the balance of payments of the countries of origin. And the fact that they benefit from the low costs of labour means that they can 26 Ecumenical Reflections on Political Economy also benefit from the political and economic vulnerability of third-world countries. Perhaps the most disturbing result of the TNC structure is that their magnitude and mobility, their oligopolistic control over scientific knowledge, their ability to manipulate prices and to avoid or overcome national restrictive legislation, are all factors which limit their public accountability. Mechanisms which would bring TNCs under some sort of public control and make them accountable for their economic operations and the impact of their activities on societies and individuals are sorely lacking even within their "home" base countries and even more in the "host" countries on the periphery of their structures of hierarchical power. TNCs and technology The role of TNCs in technology is enormous for, through their control as producers and suppliers of hard, and even more of soft technology, TNCs have set themselves up as the major agents of "modernization of the world". The virtual oligopoly that TNCs have over technology leads to the ability of these firms to have a high degree of control over decisions about what, how, for whom and by whom to produce and over tastes, behaviour, values and even the identity of consumers. As the controllers and agents of technological change, TNCs also exercise a virtual monopoly over the transfer of technology to the third world. TNCs claim that the aim of technology transfer is to allow the receiving country to cope more efficiently with its development needs. But the reality is somewhat different. TNCs export tangibly and nearly tangibly finished pieces of technology while keeping control over the knowledge and skills which are required to generate, reproduce and maintain them. They do this in two main ways: 1) through contracts, training, and the location of research and development (R&D) units; 2) through a system of patents, trademarks, and licences which prevent the appropriation of technology. The result is reinforced ties between the periphery and the centre for so-called "helpful" technology. The impact of TNCs on the third world is a problematic question. On the one hand it is argued that TNCs bring necessary capital, technology and employment to developing countries. On the other hand the following points can be made: Technology, TNCs and Human Development 27 1. Four-fifths of TNC production in third-world countries centres on the production of energy and minerals exported either as concentrates or as raw material. This prevents these countries from making maximum use of indigenous raw material. 2. TNC production in the third world is often concentrated in the production of mass consumer goods for industrial countries and upper income groups and not geared to the basic needs of the poor. 3. The technologies transferred are often ill-suited to the host countries' production, distribution and ecological requirements. 4. The cost of TNC investment is high with a 20-25 percent discounted cash flow expected. Unless new TNC investment is very high, this means that the balance between payments for existing TNC capital and inflow of new capital is negative. 5. The total employment generated is relatively small in relation to the size of the labour force in most developing countries and often also in relation to the amount of capital invested. 6. Many TNC operations in third-world countries are characterized by bad work conditions, coopted unions and lax safety requirements, especially in the so-called free trade zones. Nor are the qualitative impacts negligible. TNCs have a significant influence on consumer patterns (e.g; bottle-feeding and highly-processed, high-cost food, often of a dubious nutritional character), as well as an important role in reinforcing the position of the elites. In sum, it seems to be true that the third world is reduced to a source of raw materials and cheap labour and market for the products and services engendered by the centre through the activities of TNCs. In this way the developing countries are not so much integrated as penetrated and captured by TNCs. Hardly surprising when one considers that even a moderate sized TNC is economically larger than many underdeveloped economies. Technology and human development What is the link between technology and development? It is not useful to ask "can technology bring about development?" and if one receives a positive answer, leave the issue there. For, as has been pointed out, it is necessary to specify the values informing the concept of development, the basic institutional context and the particular technology under consideration in an actual society over a specified period of time. It is true that technology and accumulation of surplus have created possibilities for development that did not exist a century ago. But the 28 Ecumenical Reflections on Political Economy logic undeflying this technology, the logic of maximum growth and surplus generation, has substantial contradictions with the human development of the majority of people and with their broader and deeper democratic participation in economic decision-taking. The basic questions that must be asked are: What kind of development do we want? Chosen by whom? For whose benefit? These same questions must be asked about technology. As outlined in chapter one, in the middle of the 1970s the ecumenical movement began to regard development as having to do with economic growth, social justice and self-reliance as an integrally related cluster of ends and of means. Development as a social, c~ltural, political and economic process demanded that the values upholding social justice, the right of people's participation and the importance of sustainability needed to be emphasized. These convictions led the WCC at its Assembly in Nairobi (1975) to talk about human development aiming at the achievement of a just, participatory and sustainable society. This is the vision with which the Advisory Group on Economic Matters of the WCC/CCPD has been working since its first meeting in 1979. The elements of justice, participation and sustainability go hand in hand with human development: - justice, because human development requires a global search for the wellbeing of all people; - participation, because human development requires belief in the right of all peoples and individuals to have control over their lives and histories, and in their ability to exert that control with autonomy; it also requires the gradual overcoming of all authoritarian structures and relationships - or the sharing of wealth, power and knowledge - pari passu with the development of new structures and relationships based on genuine participation of the people in all that concerns their social and personal, material and spiritual life; - sustainability, because human development requires appropriate integration of the human and natural woilds for the preservation of both; hope for the survival of the human race is contained within our conscious choice to abandon our aggressive attitude to nature and to each other, and to preserve and enhance life in all its forms. Human development and alternative technologies Technologies and technological strategies are integrally related to structures and strategies of development. Human development - Technology, TNCs and Human Development 29 oriented to the whole human being and to all human beings, and controlled by the people - requires a technology which serves the purposes of such a development. The major differences between current development models and technology and a model of human development and alternative technologies are in the logic of the criteria of technology choice and who participates. Human development models have a different logic from standard economic growtli and technological modernization models. Their logic is that of the majority's values and needs as articulated through popular organizations into goals, priorities and targets. The basic requirement of human technology for human development is choice: choice by as well as for the poor and powerless. Making these choices and defining technological choice in terms of values is fundamental to achieving human technologies for human development. But in any strategy of introducing alternative technologies for human development, participation remains the biggest stumbling block. Even if technologies are developed which can respond to the demands of the majority of the world's poor and powerless, putting them into use will remain problematic. This is because the main beneficiaries of the alternative technologies are presently precluded from participation in decision-making at the production level and from being the major beneficiaries of socio-political and political economic structures. In many cases alternative technologies have potential for responding to the real needs of the poor and the powerless. But while the political and social organizational forms consistent with these technological innovations (i.e. broad participation of the poor in political decision-making) run counter to dominant political economic forces and tendencies at the world or national level, the difficulties of actually applying alternative technologies are much more severe than would appear simply from studying technical and institutional alternatives at an intellectual level. The challenge of human development and alternative technologies is ultimately not a technical one but one rooted in social organization and distribution of power. If technology is to ensure that the needs and rights of all are met, as well as global sustainability, then we must work to ensure that the poorest and most oppressed participate meaningfully in, and indeed direct, the process of decision-making. Only through that process of transforming our structures of social, political and economic organization in favour of systems rooted in the logic of the majority, will it be possible to ensure that technological innovation 30 Ecumenical Reflections on Political Economy and choice reflect the needs and values of those who are now poor and powerless. NOTES 1) Transnational Corporations, the Churches and the Ecumenical Movement, report of the WCC international consultation on TNCs, Bad Boll, FRG, 1981, CCPD/WCC. 2) Churches and the Transnational Corporations, an ecumenical programme, CCPD/WCC, 1983. |