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C00002 00002	Professor Stevan Dedijer
C00010 00003		My friend Professor Miroslav Todorovich, in whose organization
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Professor Stevan Dedijer
Business Management Department
Lund University
Lund Sweden

Dear Professor Dedijer:

	Thank you for your letter and your interesting paper {\it Multinationals,
Intelligence and Development}.  I enclose a paper, {\it Ascribing Mental
Qualities to Machines}, which I think is relevant to your concerns,
because some of the same considerations apply to ascribing mental
qualities to organizations.  An essential point is that while mental
qualities may often be usefully ascribed to machines and organizations,
they won't necessarily have the full spectrum of human mental qualities.
Assuming that they do can lead to error.

	Let me make some comments on your paper apart from my own
field of expertise.

	1. The notion of "exploitation" given on page 7 lacks the
traditional economic properties usually ascribed to exploitation.
The MNCs cannot primarily be considered as "opponents" of the LDCs
nor can the LDCs set themselves the hostile goal of "decreasing the
advantages of the MNC".  Their goal should be to increase their own
advantages, whether this harms or helps the MNC - always understanding
that the MNC will simply go away if it finds continuing the relationship
disadvantageous.  In my view, which tends to be rather more sympathetic
to the MNC than to the LDC, many MNCs have mistakenly continued
disadvantageous relationships with LDCs.

	It can even be argued that those LDCs have advanced the fastest
that allowed their labor to be most readily exploited - the Asian
capitalist countries South Korea, Taiwan, Hong Kong and Singapore
are the cases in point.  They all saturated their supplies of cheap
labor which caused wages to rise.  Now they often have their own MNCs.
Thus the Taiwan company Tatung manufactures TVs in the U.S. and Britain as
well as in Taiwan.

	2. LDCs cannot afford to imitate Sweden in developing
a heavily research-based relation to MNCs.  They
have insufficient expert personnel to successfully
develop and carry out very complex policies.  Therefore, they should
adopt relatively simple and comprehensible and stable policies towards
MNCs as well as in other areas.  Even more than in the developed countries,
their smart young men tend to prefer bureaucracy to business.  This is
to the detriment of the country.

	The situation seems to me to be analogous to the situation that
arose in the U.S. in the 1970s when many laws were passed requiring the
intense regulation of industry.  {\it If the regulators are to fully
optimise the activities of a business, they must understand it at least
as well as its managers.  Not even the United States can afford to
duplicate industrial management}.  Therefore, regulation has to be
limited to external aspects of the business being regulated.

	This issue is related to another not raised in your paper
but which I have been thinking about - namely "appropriate technology".
It seems to me that the "appropriate technology" movement has demanded
the resource which is in shortest supply in LDCs, the ability to
recognize unmet needs and discover profitable ways of meeting them.
I recently read in {\it New Scientist} about a group of "appropriate
technologists" who invented an "appropriate" cooking stove for some
area in Africa.  It was energy-efficient and built of local materials.
After great efforts at local organization, 250 of them were built and
put into use.  In the mean time, a much worse cook stove made of sheet
metal was marketed through normal commercial channels and sold 10,000.
The moral seems to be that a commercial structure is just as much of
a necessity and an asset to a country as a technological structure, and
commercial innovation is even harder than technological innovation, because
it is less transportable from one country to another.

	The MacDonald's hamburger chain represents a discovery of
some kind that science has not begun to understand.  When I spent
some months in Japan in 1975, I was amazed that its operation there
was identical to its operation in the U.S.  It had the same enormous
sales volume, and it was the only place I found in Japan where one
could buy a cup of coffee for 100 yen.  For an LDC specialist in
MNC affairs to arbitrarily regulate MacDonald's without understanding
the combination of factors that make it successful would either
drive it out or deprive the country of the special features that
so many millions of people have found worth patronising.

	My friend Professor Miroslav Todorovich, in whose organization
Scientists and Engineers for Secure Energy I am active, asks me to send
you his best regards.