[Marxism] Foreign Direct Investment and globalisation

Jurriaan Bendien andromeda246 at hetnet.nl
Fri Jul 16 03:10:52 MDT 2004


 <Scotlive at aol.com> commented:

"It all still amounts to US control of national economies. Whether that
control is exercised through direct federal investment or private
investment, the end result is an outflow of profit and resources."

It sounds sexy, but what I am trying to get at, is the forms this control
takes, and the extent to which that is really true. If the Iraq experience
is any indication, it shows how difficult it actually is to maintain control
of another country nowadays, even if you invade it militarily.

The international "bargaining strength" enabling control of the US in the
world order, and the appropriation of wealth, is based on factors such as:

(1) military superiority, and technological superiority in particular
industries (aerospace etc.)
(2) the largest single market by value, with a common language and one legal
system,
(3) superior productivity in some industrial sectors, and in the farm
sector,
(4) the use of the US dollar as the main currency in world trade
(5) dollarisation in foreign countries and foreign US dollar reserve
holdings,
(6) US foreign direct investment in strategic industries overseas.
(7) advantageous international trade agreements
(8) a large degree of control or influence over international financial
institutions and credit institutions

For the rest, US hegemony is mainly based on faith in "the self-balancing
nature of free markets", shared by those foreign investors who own $6
trillion or so of assets in the US.

I would tend to agree with Immanuel Wallerstein though that US hegemony
internationally is now in decline. In a couple of decades, for example,
China is likely to both produce more net output, and export more of it, than
the USA.

However, in considering the significance of international trade, one ought
always to compare the total value of international trade and international
investment with the total value of domestic trade and domestic investment.
In this sense, the metropoles of the US, Western Europe and Japan are
actually much more self-sufficient than many leftists make them out to be -
except for particular resources, such as oil.

In the final analysis, though, the relative strength and bargaining power of
nations in the capitalist world market is always based on relative
labor-productivity and their degree of control over strategic resources.

Jurriaan





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