Question
What political and economic arguments support the Marxist stance? What are the implications of these for firms seeking to internationalize?
Answer
Political and Economical Supporting the Marxist Stance and Implications for Internationalizing
Marxism is a philosophical view that is based upon the economic and political theories presented by Karl Marx and Friedrich Engels. The theory associated with such social system is often considered as the central elements that bring changes to the societies. There are numerous political and economic views in supporting the Marxist stance. In considering the political arguments, Enderle (2015) implied that the Marxist stance invites the retaliation, which can trigger the trade wars. It is to be stated that intervene in the trade policy may create the enormous pressure on the trade barriers for producing an ongoing cycle. For example, the international trade policy of US against Cuba is determining such threats in the policies. It creates the limitation in trading with the countries. The current argument present in the Marxist stance is determining that Marx had the profound effects on the world. The political arguments are surrounded with the protection of jobs and industries, retaliation, national security, protection of human rights, protection of consumers, and protection of the environment (Casson 2015).
On the other hand, the economic arguments for intervention are highlighting the temporary support of trade policy in strengthening the position of a new industry. It is argued that in spite of receiving almost 30 years if protection, their industry is signified as one of the most inefficient industries in the world (Enderle 2015). The Marxist stance claims that the government is able to raise the international income if the domestic firm gains the advantages in the industry (Casson 2015). On the contrary, it has been noticed that the government provides the help to domestic firms to overcome the barriers relate to the foreign entry. It will be much helpful for these firms to gain the first-move advantage.
Considering such political and economic arguments, some of the preferable implications can be provided for the internalization process. Before entering any new country, it is necessary for the firms to gain sufficient knowledge about the external market of the country (Casson 2015). It will be much helpful for the firms to make some of the essential comparisons to other countries. After making the comparisons, the most beneficial countries are needed to be selected for entering and establishing the business. As per the Marxist Stance, the firm that seeks internationalization needs to identify the elements of the governmental regulations and policies. Some of the instruments related to the trade policies are tariffs, import quotas, subsidies, and administrative policies (Enderle 2015). The firms can receive the instruments of imperial domination. However, in terms of internationalization process, the firms may face difficulties to push for the free trades. The foreign investors sometimes find it much unprofitable to invest in a socialist country. The high trade barriers as well as the strict trade policies are the may create difficulties for the firms. The enormous competition from the local firms with the subsidies of government may lose the competitive edge.
References
Casson, M., 2015. Coase and international business: The origin and development of internalisation theory. Managerial and Decision Economics, 36(1), pp.55-66.
Enderle, G., 2015. Exploring and conceptualizing international business ethics. Journal of Business Ethics, 127(4), pp.723-735.
