The Great Depression of the '30s gave rise to a concept which at that time appeared revolutionary, and which conservatives therfore considered to be in flagrant opposition to liberal capitalism: that of the planned economy. Planned, of course, by public, national authorities (there were no others, not even in embryonic form). The works of Lord Keynes and Henri de man were well-known as was the Benelux "Plan du Travail" and Roosevelt's "New Deal" in the United States. In the Scandinavian countries, in particular Sweden, social democratic governments had considerable success in softening the blow of the recession.
It was therefore natural that in the immediate post-war years and up to 1970 or thereabouts, exponents of the official economic wisdom and, later, the general public should believe that cyclical movements would in future be under control. Of course, there would be periodic fluctuations, but these would have scarcely any effect on the basic structure of social life.
But with this illusion shattered and the West in the tight grip of a disastrous "crisis", both right- and left-wing (national governments) remembered Keynesianism and began to inject a considerable amount of money into the ailing economy; in addition they initiated large-scale public works projects, still believing in the salutary effects of deficit spending by the state. But there, once again, they were soon disillusioned. Unemployment rose everywhere or, at least, remained at an unacceptable level. The "right to work", proclaimed by Proudhon 1848, and written by many nations into their constitutions after 1945, was nothing more than a vain hope. Each country was clearly unable to make it succeed in practice, although some conservative measures worked better in one country than in other. In short, stagnation was endemic, and while the increase in the money supply did nothing to tackle underemployment, it certainly had the effect of leading governments into a dangerous inflationary spiral.
What, then, had happened? Why did the supposedly infallible stabilizing mechanisms fail to function as they should have?
Many things had happened, but, in particular, the economy of the West had finally entered upon the world scene. True, there were still Ministries bearing the name, in future obsolete, "Ministry of National Economy", and German students still engaged in research on "National-Oekonomie". But the real state of affairs was no longer national, at least in an increasing number of areas, precisely those areas that were most interesting and new.
It might have been expected that the traditional national Right wing would have looked upon this with horror, while the Left, with its internationalist aspirations, would have welcomed it. But not at all. At the same time as a certain social conservatism, closely connected with Management, greeted with enthusiasm the progressive removal of national frontiers and customes barriers, a large proportion of the labour or socialist worker movement came down firmly on the side of threatened national sovereignty: for example, the British Labour Party, with its traditional hostility toward the continent, and the French communists with their jingoistic chauvinism fed by memories of revolution. Nationalism had become a passion and a political strategy of the Left.
This paradox is not totally inexplicable (unable to be explained or accounted for). Even at the birth of socialism Louis Blanc had prophesied that the state (national, of course) would cease (bring to an end) to be the prerogative (a right or privilege exclusive to a particular class) of the rich, becoming instead "the banker of the poor". History has proved him right, and the great transfer of wealth to the underprivileged strata, administered by public authorities, has not only reconciled workers to state intervention, but also made them expect the state to protect them against all the vagaries of the business cycle. As for Internationalism, it is of course true that resolutions were still being passed condemning dictatorships of the Right - not that this made any difference to them! - but events would not always turned out noticeably different had the ideal of Internationalism never emerged.
Thus the term "multinationals" acquired a pejorative (contempt or disapproval) meaning, and undoubtedly, the existence of large scale capitalist organizations, with subsidiaries in many countries, poses considerable problems - we shall come back to these. But it seems illogical to make multi-nationality a crime in itself. Effectively, we are being confronted with a phenomenon anticipated by Hobson and Lenin: the birth of a global "imperialism", developing massive powers of domination and, by virtue of this fact, beyond the control of national anti-trust legislation. Is this the "final phase" or the highest form of capitalism? Now, if Marx was correct in predicting that the birth of socialism could not take place until capitalism had exhausted all its possibilities of expansion and all its capacity to make the "forces of production" realise their potential, then Marxists ought to see multinationals as an element of progress. Multinationals can be reproached for many things, but surely not for having destroyed the narrow framework of national organizations.
This to some extend is Ernest Mandel's conclusion, in his study already referred to. There is no disputing his judgment of capitalism as generator of unemployment and inflation. But on a single point he recognizes that the bourgeoisie has made a positive contribution - in its own class interest, of course, but all the same: in the fact of an increasingly multinational economy, it set up the European Economic Community. He merely reproaches (addresses in such a way as to express disapproval or disappointment) it for its excessive timidity (showing a lack of confidence or courage): It lacked the necessary courage to go on to create a common European currency. With a non-national economy, it should have been a trans-national economy, it should have been a transnational monetary organisation which was created. It was necessary, in his view, to go well beyond the simple "common market". In his words:
"There is a real contradiction between the political and monetary stagnation and paralysis of the E.E.C. on the one hand, and the strengthening of machinery for commercial interaction on the other" (p. 138)
It could not have been better put. All that remains is to draw a conclusion, our own being as follows: "multinationalism" is a fact of history and constitutes an objective step forward compared with economics described as purely "national" - it clearly presents problems of power and, as a consequence, of democratic control - and solutions to these problems ought to be sought within the framework of structures sufficiently strong, up to date and politically federal in character. On the other hand, the desire to combat the crisis by measures confined within the straitjacket of national frontiers is thoroughly retrogressive in the literal sense of the word.
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