Vernon, Raymond

NELLCO Consortium Legal Scholarship Repository

The Nation-State and Transnational Corporations in
Conflict, with Special Reference to Latin America
by Jon P. Gunnemann; Corporate Power in an
African State: the Political Impact of Multinational
Mining Companies in Zambia by Richard L. Sklar

Digital Commons @ UM Law

Maryland Journal of International LawVolume 2 | Issue 1 Article 5The Nation-State and Transnational Corporationsin Conflict, with Special Reference to LatinAmerica by Jon P. Gunnemann; Corporate Powerin an African State: the Political Impact ofMultinational Mining Companies in Zambia byRichard L. SklarRaymond VernonFollow this and additional works at: http://digitalcommons.law.umaryland.edu/mjilPart of the International Trade CommonsThis Book Review is brought to you for free and open access by DigitalCommons@UM Carey Law. It has been accepted for inclusion in MarylandJournal of International Law by an authorized administrator of DigitalCommons@UM Carey Law. For more information, please contactsmccarty@law.umaryland.edu.Recommended CitationRaymond Vernon, The Nation-State and Transnational Corporations in Conflict, with Special Reference to Latin America by Jon P.Gunnemann; Corporate Power in an African State: the Political Impact of Multinational Mining Companies in Zambia by Richard L. Sklar, 2Md. J. Int'l L. 109 (1977).Available at: http://digitalcommons.law.umaryland.edu/mjil/vol2/iss1/5The Nation-State and Transnational Corporations in Conflict,With Special Reference to Latin America by Jon P. Gunne-mann. New York, Praeger Publishers, 1975. Pp. 272, $17.50.Corporate Power in an African State: The Political Impact ofMultinational Mining Companies in Zambia by Richard L.Sklar. Berkeley, University of California Press, 1975. Pp.245, $12.00.What The Nation State demonstrates is that the consulta-tions and debates of 29 people sitting in the salubrious surround-ings of Aspen for a few days do not add up to a book. Thisparticular group of 29 contained more than its share of knowl-edgeable, thoughtful and reasonable people. Their papers andtheir words were packaged with more than the usual care, bya conscientious and thoughtful editor. But what was producedin the end was the record of a debate, not a book. A tyro onthe subject would come away confused, unsure why so manygood and earnest men could produce so little consensus. Anexpert on the subject will cull a few tidbits from the proceedings,but at a cost that may not justify the effort.The book is structured loosely around three areas: an open-ing presentation of the conflict between multinational enterprisesand nation states; a discussion of some legal and political aspectsof the conflict; and an explanation of the possibilities of inter-national action.The book suffers from the fact that so much of it is pre-sented in the form of debate, with an occasional neutral com-mentator thrown in to analyze the argument of the adversaries.The opening debate, which involves the chairman of a big multi-national enterprise on one side and an economist advisor ofPresident Echevarria of Mexico on the other, illustrates thelimitations of the format. The two thoughtful statements of theprotagonists move majestically past each other, making scarcelyany contact as they go. A neutral observer, assigned the role ofbridging the two statements, makes his own sophisticated andplausible contribution. But the gulf in the end is just as wideas it ever was.Because of the fragmented structure of the discussion, somesubjects get particularly inadequate treatment. One of these isthe economic dimensions of the operations of the multinational-(109)THE INTERNATIONAL TRADE LAW JOURNALenterprises. In the spirit of the adversary proceeding, Ronald E.Miller of Global Reach fame,1 is assigned the task of introducingthe subject. His statement has the virtue of brevity. But its con-clusions are a replay drawn from the adversary's brief in GlobalReach. The heated responses of the businessmen present do noth-ing to clarify the issues.The highlights of The Nation State are two: a summary andanalysis by the editor, Jon P. Gunnemann, who tries valiantly topackage the discussion and fill the holes; and an earnest and in-formative defense of Gulf Oil's operations in Venezuela by aGulf Oil official, Luis Alcala Sucre. But $17.50 is too much to payfor the opportunity of reading these proceedings.Richard L. Sklar's Corporate Power in an African State isanother matter altogether. This is a rare and important book.It falls in a class with Charles F. Goodsell's American Corpora-tions and Peruvian Politics,2 and T. H. Moran's Copper in Chile.'However, it is in some respects superior to both, because of itsability to link an individual case to a larger set of important ideas.The book represents the sophisticated effort of a politicalscientist to test some major generalizations about multinationalenterprises and nation states, using the case of the copper com-panies and Zambia. It avoids stridency, advocacy, and cant.In the end, it succeeds in hardening and enriching some basicideas in the literature, and launching a few new ones.Like Moran, one of Sklar's objectives is to help the readerunderstand the interplay between the economic and politicalneeds of a developing nation and the business imperatives of aninternational industry. Sklar's task is a little easier than that ofMoran because Zambia is a less economically sophisticated state.But the large lesson offered by the two works is not dissimilar.The key actors in both systems are caught up in a conditioningmechanism that leaves them only limited room for choice. With-in the areas of choice, a surprising amount of restraint, rationality,and accommodation is encountered. If the relationship betweenthe mining companies and the host state is headed for a break-down, it will be the result of these restraints, not the result ofindividual acts of malevolence or stupidity or unbridled greed.1. R. Barnet and R. Mfiller, Global Reach (1975).2. C. Goodsell, American Corporations and Purvian Politics (1974).3. T. Moran, Multinational Corporations and The Politics of Dependence(1974). See Review in 1 INT'L TRADE L.J., No. 2 (1976).BOOK REvIEwsSklar emphasizes another point that is central to an under-standing of the relations between the copper companies andZambia. There has been no disagreement between them overone objective: to maintain high and stable prices for Zambia'scopper. The copper firms could conceivably provide higher andmore stable prices if they were allowed to link their Zambianores firmly to their own downstream smelters and fabricatingfacilities in other parts of the world; but that seeming solutionwould be patently unacceptable to Zambia. The obvious alterna-tive for Zambia has been to develop a cartel among the copper-exporting states; but that stratagem has predictably failed, victimto the fact that the copper of the exporting states has had tocompete with copper and other metals from uncontrolled sources.Despite the fact that Zambia and the copper companies sharea common objective, therefore, they have been unable to find acomfortable basis for a long-term relationship.Sklar offers a particularly sensitive analysis of the ambiva-lence of various key groups involved in the interactive processbetween states and enterprises. Inside the Zambian subsidiariesof the foreign firms, officials are seen walking a tightrope betweenthe demands of the Zambian government and the needs of thecopper companies. Sklar himself is bemused by the extent towhich these officials manage to respond to both sets of interestsbefore the irreconcilable elements in their positions are en-countered.Meanwhile, on the Zambian side, various elites are seenemerging, not unlike those that have been identified by theLatin American scholars of dependencia persuasion. A "mana-gerial bourgeoisie" is identified, entrepreneurial and conservative,partly inside the government bureaucracy and partly outside of it.Its half-conscious strategy is to use the foreigner as an interimprop, but never to lose sight of its objective of controlling Zambia'senterprises and professions. Another Zambian group consists ofa labor aristocracy, the miners themselves, eager to maintain theirelevated wage levels and perquisites in Zambian society.In the end, the author sees the most interesting and mostimportant issue for Zambian development as one internal toZambia - a struggle between bureaucratic and popular power,with the bureaucratic wing trying to use its links to the inter-national economy as a way of advancing its internal position.Shades of Mao Tse Tung and Lin Piao, cast in an African setting.THE INTERNATIONAL TRADE LAW JOURNALOne point of criticism of the Sklar work, lest this review seemaltogether unbalanced. Most of the field work on the book wascompleted by 1968; events after that date are covered by obser-vations that are not tightly integrated into the structure of thebook. That is a pity; a book written unambiguously from the per-spective of 1973 might have been even more rewarding.Raymond Vernon*

The Nation-State and Transnational Corporations in Conflict, with Special Reference to Latin America by Jon P. Gunnemann; Corporate Power in an African State: the Political Impact of Multinational Mining Companies in Zambia by Richard L. Sklar

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