MULTINATIONALS AND DEVELOPMENT has moved away from industrial capital into financial capital, the bankification of the world system.3 TRANSFORMATIVE POWER The common factor, and the explanatory factor, underlying the genesis and the continued existence of the Third World is the colonial past.4 The appearance of the colonial powers in quite a few countries which had reached a reasonable level of development -reasonable at least in comparison with the European countries of that epoch- had a devastating effect on the local industries and on the regional trading networks. Burgeoning local artisanal production got liquidated (e.g. the mousseline in Bengal), a balanced trading network got replaced by a western surplus realisation mechanism (e.g. textiles into India, opium into China and spices, tea and bullion into England), agriculture was destabilised into a plantation and tax endeavour. Entire populations with an intricate social and economic network were decimated (as in Latin America), packed off into overseas slave trade (as in Africa) or internally shifted into plantation territory (a.o. Wolf 1982: 129-261; Hobsbawm 1969). The recollection of the genesis of colonialism helps us to remember that in this first phase of 'globalisation' the asymmetrical world structure came into being. Aided by the resource inflow from the colonised world, England, and later other European countries, could start on its industrial revolution and could start structuring the world division of labour in the interests of its pattern and needs of industrialisation. Colonial expansion and economic retardation in the conquered world went hand in hand (Bagchi 1982). Industrialisation which much later entered the colonialised countries, by and large not earlier than the beginning of the twentieth century, was initiated by foreign companies, either alone or in association with local brokers as indigenous partners. By that time, industrialisation had passed from its localised, competitive 'manufacturing' stage to the industrial stage, and from a broad-based competitive form of capitalism into a monopoly stage in which the scale of capital investment and technology and the external economies changed the parameters. Probably the most important consequence, more important than the foreign control, was the fact that the broad-based competitive and labour-intensive system had been bypassed. A lopsided development, rather than development of underdevelopment, was the outcome. The optimal process of integration of the small scale production