the first secretary of the Treasury, developed tariff plans thatnwould ensure the development of the new republic’s infantnindustries. Only since World War II has that Hamiltoniannview not prevailed, and that is because in 1945 the UnitednStates was the only country in the wodd with undarriagednindustrial facilities.nToday things are different. Countries that forty years agonreceived vast US assistance to rebuild their economiesnhave now become powerful competitors. Their factories arenmore modern and efficient, and as a general rule they havenmanaged to keep their labor costs under control, while oursnhave soared. We have lost our lead in most major technologies,nand are holding on to others by a thread. Our spendingnon scientific and technological research has declined. Foreignnpenetration of our universities and laboratories hasnbecome a problem, because foreign grants to these institutionsnhave given other countries the benefits of Americannresearch. In Washington, massive foreign lobbying, involvingnhundreds of millions of dollars a year, continues toninfluence US government policy. (An example of this is thenmuting of government protests regarding the behavior ofnJapan’s Toshiba Corporation, which sold secret submarinentechnology to the Soviet Union. The cost of this will run innthe billions of dollars, not to mention the strategic damage.)nAs more products used by Americans and produced bynAmerican-owned companies are manufactured abroad, itnisn’t surprising the idea has emerged that Americandomiciledncompanies can and should be allowed to operatenas though they didn’t have any responsibility to the labornneeds of the American people. This desire to operatenwithout any national limitations is clearly seen in the drivenby companies in the US-USSR Trade and EconomicnCouncil to press for US-Soviet strategic trade in order tonmaximize short-term profits, all at the expense of the USnnational interest.nThe underlying ideology of transnationalism has itsnappeal. For many of its proponents transnationalism is partnof the grand design for remaking the world — a new versionnof the old one-worldism, envisioned now in a new supercorporatenform.nTo people who are less greedy or less idealistic than thentransnationalists, the question of how Americans will benemployed in the future is of great national concern.nRunaway factories constitute a threat to our well-being. Thenthirteen hundred American-owned factories on the Mexicannside of our Southern border represent severe losses tonAmerican communities where they would have beennlocated—losses of jobs, payrolls, taxes, and opportunities fornthe future. So it is with American factories that have gone tonSingapore, Taiwan, Brazil, and other countries where laborncosts are low.nIf transnational business is encouraged, the Americannpeople will suffer. Thousands of small and mid-size companiesnalso will suffer, for they will lose their role as suppliers.nAt the same time, one can be sure that the cash holdings ofnthe offshore plants will go into banks around the world, notninto American-owned financial institutions. And the fundsngenerated by these offshore entities, or at least a large part ofnthem, will be available for investments in other countries —nfor job opportunities, research, and education in thosencountries — all to the disadvantage of the American people.nEmployment will decline, and serious public resentmentnand unrest may carry over into politics. American institutions,nincluding universities and hospitals, will be deprived ofnfunds now provided by American-based companies innhundreds of communities. In brief, the American economynwill be hollowed out. The free enterprise system will rapidlynlose support among the American people. It will lack thenindustrial base and technological resources — and thenmoney — to maintain a strong national defense.nIf the American-domiciled transnational company —ndistinct from the American company with foreign subsidiaries—-isndeemed to be contrary to the public interest, it cannbe required to adhere to the national interest by a number ofnmeans already established in law. For instance, restrictionsnon strategic trade have been in effect for many years.nReporting of fund transfers has been greatly expanded innrecent years because of money laundering. Domestic Contentnlaws may be imposed by Congress in order to limitnforeign sourcing. The tax code offers innumerable possibilitiesnby way of ensuring that funds earned abroad arenrepatriated and invested here. Laws can be enacted tonrequire that all US operations abroad adhere to the samensafety and environmental rules that govern plants in thenUnited States.nIf these measures prove inadequate, additional steps cannbe taken. H.P. Minsky, a professor of economics at WashingtonnUniversity, has pointed out that it is possible to revisencorporate forms in American society, including a “move tonsome form of national incorporation law, perhaps only forngiant corporations.” The terms of incorporation under suchna law could include insistence on a national or conventionalninternational business strategy and exclude the transnationalnapproach that works against the national interest.nSuch a law or package of laws would be comparable to thenSherman Antitrust Act of 1890, which transformed Americannbusiness and prevented the participation of US companiesnin the domestic and international cartels then existing innthe world. Like the Sherman Act, which President TheodorenRoosevelt vigorously enforced, it would establish a newneconomic policy confirming national sovereignty in economicnpolicy. The Sherman Act denied to monopolies andncartels the right to set economic policy for the nation. Itsnconstitutionality has been confirmed time and again in thenpast century.nIt should be recognized that such laws would onlynapproximate what other democratic countries insist upon bynway of ensuring that their nations’ overseas economicnoperations satisfy the needs of these countries. It’s unthinkable,nfor instance, that large Japanese companies operatingnabroad would oppose Ministry of International Trade andnIndustry (MITI) guidance in operations that could benhurtful to the Japanese national interest. The British alsonhave rules designed to safeguard the country’s strategicnindustries against foreign takeovers. As Peter Drucker pointsnout, France, too, has strict rules on foreign investment thatnare political in character. Why should we be any different?nThe primacy of national politics — national interests — isncertain to endure even as transnational companies strive tonbecome sovereign economic units on their own.nnnJANUARY 1990/27n