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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
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Posted: Tue Mar  5 17:45:21 1985
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> 
> 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.
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