Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/5/84; site uwmacc.UUCP Path: utzoo!linus!philabs!cmcl2!seismo!uwvax!uwmacc!myers From: myers@uwmacc.UUCP (Jeff Myers) Newsgroups: net.flame,net.politics Subject: Re: Re: White greed (about foreign policy) Message-ID: <766@uwmacc.UUCP> Date: Tue, 5-Mar-85 17:45:21 EST Article-I.D.: uwmacc.766 Posted: Tue Mar 5 17:45:21 1985 Date-Received: Sat, 9-Mar-85 19:10:00 EST References: <293@cmu-cs-cad.ARPA> <80@spar.UUCP> <311@cadre.ARPA> <314@cadre.ARPA> <316@cadre.ARPA> <320@talcott.UUCP> Distribution: net Organization: UWisconsin-Madison Academic Comp Center Lines: 62 Xref: linus net.flame:7682 net.politics:7218 > > I disagree. Almost by definition, the Third World countries are poor. > This is usually due to crummy internal economic policies, which gave the > economies of these countries a slow exponential growth, as opposed to the > West, whose economies have risen like a bat out of hell, up until the last > few decades. These countries, now much poorer than the Western countries, > would very much like to have some of the wealth/happiness/power of the > West, so they beg us for loans, charity, etc. > > Greg Kuperberg > harvard!talcott!gjk Like most apologists of economic imperialism, Greg states that we are doing these countries a favor by investing in them. Let's take a look at some figures about US foreign investment. Are we doing these countries a favor? (1) (2) (3) (4) (5) 1979 24.8 4.2 29.0 38.6 +9.6 1978 18.0 3.8 21.8 26.9 +5.1 1977 13.0 3.3 16.3 21.5 +5.2 1976 12.8 3.2 16.0 20.2 +4.2 1975 13.9 3.1 17.0 18.1 +1.1 Billions of US $$. Columns (1) & (4) from the US Dept. of Commerce *Survey of Current Business*, August, 1980. Column (2) from the 1983 *Economic Report of the President*. (1) Change in the book value of direct foreign investment held by US corporations. I.e., private capital flow US -> foreign nations. (2) US Federal Govt transfer payments to foreigners. I.e., capital "gifts" to foreign countries. (3) Total of (1) and (2). (4) 90% of the profit from direct foreign investment. I.e., capital flow foreign nations -> US, adjusted downward 10% for the hell of it. (5) (4) - (3). I.e., net capital flow into the US, US "profits". Unfortunately, these figures do not divide third world from developed countries, but my expectation would be that capital outflow from third world countries would be occuring at at least as fast a rate as indicated by the aggregate figures, because although foreign aid to these countries might be higher, the cost of labor is quite lower. It is clear from the above that the US gains in economic terms from our economic relationships with foreign countries. Now, you may ask, "Wouldn't we make MORE money simply by moving our investments back into the US itself?". If the answer to this was yes, one would expect to see profits from foreign investment becoming less and less important over the years. As you've probably already guessed, this is not the case. The proportion of profits from foreign investments to total profits for US corporations has risen from 12.2% in 1960 to 23.0% in 1979, though the trend stabilized in the middle seventies. Criticism of the validity of these figures, or extensions for the 1980's are welcome. -- Jeff Myers The views above may or may not University of Wisconsin-Madison reflect the views of any other Madison Academic Computing Center person or group at UW-Madison. ARPA: uwmacc!myers@wisc-rsch.arpa uucp: ..!{ucbvax,allegra,heurikon,ihnp4,seismo}!uwvax!uwmacc!myers