The Sovereignty at Bay school represents the liberal view of the role of the MNC in the MNC-nation-state phenomenon. The name of the school is derived from Raymond Vernon's classic work, published over fifteen years ago, entitled Sovereignty at Bay. 1 In this book Vernon argues that increasing economic interdependence and technological advances in communications and transportation are making the nation-state an anachronism.
These economic and technological developments are said to have undermined the traditional economic rationale for the nation-state. In the interest of world efficiency and domestic economic welfare, the nation-state's control over economic affairs will continue to give way to the multinational corporation, the Eurodollar market, and international institutions better suited to meet economic needs. In the words of Charles Kindleberger, "The nation-state is just about through as an economic unit." In this interdependent world, domestic national goals can only be understood in terms of their relation to domestic economic goals, which can only be accomplished through participation in the world. In this liberal vision of the future, the multinational corporation, freed from the shackles of the nation-state, is the critical transmitter of capital, ideas, and growth.
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