The Transnational Capitalist Class

Thumbs up for the Transnational Capitalist Class?
Thumbs up for the Transnational Capitalist Class?

This is my best effort so far at making some fairly complex ideas understanable to a typical 17 year old Sociology student – read it and good luck!

Held and Mcgrew (2007) suggest that Global Corporations have become the driving force behind ‘economic globalisation’ and wield considerable power in determining where in the world production takes place[1]. Today, 50 of the 100 largest economies in the world are run by TNCs rather than Nation States and Transnational Corporations account 80% of world industrial output, and approximately 40% of world merchandise trade.

Leslie Sklaire argues that the leaders of transnational corporations and their powerful political allies (4) in the world’s richest countries together form a ‘Transnational Capitalist Class’.

This class wields disproportionate power within two global economic organisations – The World Trade Organisation (WTO) and The International Monetary Fund (IMF)  which were initially established after World War Two to facilitate redevelopment through co-ordinating the expanding global economy. Through these organisations, leading politicians of countries and international business leaders meet at least once a year to agree on economic policies in order to improve trade relations – the WTO establishes ‘rules of trade’ between nations and the IMF regulates the global supply of money and, when necessary, lends money to nation states.

Left wing critics argue that these institutions have ended up working in the interests of global elites and global corporations. One such critic is Joseph Stiglitz[2] who argues that since the 1970s these institutions have forced dozens of developing countries to adopt neo-liberalism. Neo- liberalism is an economic and political ideology that believes state control over the economy is undesirable and seeks to transfer control of the economy from the state to the private sector. Neo-Liberalism involves three main policies –

  • Deregulation – Nation States placing less restraint on private industry. In practise this means fewer laws that restrict companies making a profit – making it easier for companies to fire workers, pay them less, and allowing them to pollute.
  • Privatisation – where possible public services such as transport and education should be handed over to private interests for them to run for a profit.
  • Cut backs in public spending – taxes should be low and so investment in public services would be cut back.

While the transnational captialist class claim that neo-liberal polices are necessary to bring about economic growth, critics point out that that economic growth has in fact been slower in some neo-liberal countries compared to more social democratic countries (where the state plays a more active role in protecting social welfare). This is because neo-liberal policies have allowed economically powerful actors such as Transnational Corporations to do things such as open sweat shops, pollute local areas, and take profits away without giving very much back.

There is a long list of countries that have adopted elements of neo-liberalism (often encouraged or coerced by the above institutions, lead by the USA[3]) over the last four decades – starting with Chile and a whole host of other Latin American countries in 1970s, Britain in the early 1980s, many of the ex-communist Eastern bloc countries in the early 1990s, through to Iraq today. While all of these countries have seen economic growth, they have also all witnessed increased inequality, and related social problems such as worsening labour rights and social services, and quite often neo-liberal policies have been pushed through by oppressive regimes.

So to summarise, a class based analysis of society is still relevant because globally we have a situation where the Transnational Capitalist Class, operating through Transnational Corporations and the global financial institutions of the World Bank, World Trade Organisation and International Monetary Fund encourage or coerce developing countries into accepting neo-liberal economic policies that are primarily designed to benefit Corporations and broader Transnational Capitalist Class; it is the wider general public, you and I, who bear the costs of these neo-liberal policies – in terms of worsening social services and inreasing inequalities.


[1] Held D and Mcgrew, A (2007) – Globalisation/ Anti Globalisation: beyond the great divide – Polity.

[2] See Stiglitz – Globalisation and its Discontents

[3] One way in which the IMF can encourage countries to liberalise is by only providing development loans if the country deregulates the economy – this happened in one city in Bolivia in the early 1990s when it was required to privatise its water supply to get a development loan – this mean a French company took over the running of the public water supply and started charging people half of their disposable income for a service that was previously free –  This is detailed in this five minute clip of The Corporation – 



(4) Sklaire actually argues the TCC can be broken down into four main factions.

  • Owners and controllers of Transnational Corporations and their local affiliates;
  • Globalizing bureaucrats and politicians;
  • Globalizing professionals;
  • Consumerist elites (merchants and media)
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