Why Democrats Should Think Multinational Corporations Will Save The World

Two short essays have recently been published that express

values and policy positions that I think many faithful Democrats would
share. What bothers me about both pieces is that neither has anything positive to say about the role of multinational corporations in reducing global poverty or in advancing the political goals of Democrats.

The first is "The moral scandal of global poverty," written
by Archbishop George H. Niederauer of San Francisco (San Francisco Chronicle,
October 26) and the second is "We answer to the name of liberals," by Bruce
Ackerman and Todd Gitlin (The American Prospect, online).

What bothers me about both pieces is the complete absence of
any positive discussion of the role of multinational corporations (MNCs). Yes, I know, liberal ideology insists that we
demonize MNCs, and some of them are worth demonizing. However, the overwhelming majority of them
are not. As an illustration of this
point, consider that in 2003, William Greider, a long time liberal, quotes Paul
Hawken who says "There are 70,000 to 80,000 companies in the U.S. now whose
purpose is…sustainability" (source: The
Soul of Capitalism: Opening Paths to a Moral Economy, p. 200). Have you ever noticed that we almost never
hear about these companies in anti-corporation discussions? More importantly, it can rather easily be
argued that MNCs will continue to have more power to shape our future than any
other entity, governments included. If
progressively minded people want to help to channel this power in the right
direction, we should speak as constructively about MNCs as we can.

Three books have been published in the last few years that
indicate exactly how MNCs are likely to shape our global future for the
better. The best is Stuart Hart's Capitalism at the Crossroads: The Unlimited
Business Opportunities in Solving the World's Most Difficult Problems
(Wharton School Publishing, 2005). Two
other good books are The Fortune at the
Bottom of the Pyramid by C.K. Prahalad (Wharton School Publishing, 2005)
and Transforming the Development
Landscape: The Role of the Private Sector (Brookings Institution Press,
2006), edited by Lael Brainard.

All of these books make two essential points. First, changes in the global economy brought
about by weakness in developed economies and instability in developing markets are
going to force companies to look to the 4 billion or more people who live on
two dollars a day or less (the "bottom" or "base" of the economic
pyramid). Second, when MNCs start to
treat the base of the pyramid as a market to be served, rather than as a source
of cheap labor, then some very good things will start to happen. First, there will be a massive reduction in
global poverty as MNCs create market-oriented ecosystems that produce
long-terms jobs and wealth (as opposed to short term philanthropy). Second, given the unique requirements of
serving the base of the pyramid, technological innovations will emerge that emphasize
clean and sustainable products and production.
This technology can then leapfrog to the top of the economic pyramid. The books give lots of examples of how MNCs
are already doing both of these things.

I know, I know. Some
of you will find in this post further evidence that I am a Republican
mole. I am not. I only want my fellow faithful Democrats to
keep an open mind as they work to make the world a better place for everyone.