Introduction

This chapter sets out with two rather ambitious objectives. The first follows from an attempt to place international economic expansion in the twentieth century in its historical context. One aspect of this expansion has been the evolution of the multinational enterprise (MNE). The aim here is to distinguish four phases in the evolution of the international firm, corresponding to four different periods which appear to have characterised an emerging international economic system since around 1600.

The chosen division between periods consequently reflects an essentially macroeconomic rather than a business history perspective. In particular, the objective is to identify the major underlying forces behind international economic growth, and how they have changed as the world economy has become more integrated. It is suggested that the components comprising the mainspring of capital accumulation in each period were at the same time shaping the typical form of expansion of the firm.

It is argued that the MNE is representative of the type of international economy that has grown up since 1945, in the sense that the rise of new technologies and products, a wider international division of labour, and the greater integration of production and services across countries have all been associated with the rapid growth of MNEs. However, this argument is seen to suggest rejection rather than support for the commonly held view (especially prevalent among economic nationalists) that MNEs behave sufficiently differently from other firms to warrant an entirely separate kind of analysis.