>>> Max Sawicky <[EMAIL PROTECTED]> 03/30/00 04:25PM >>> CB: Several months ago, I had the impression that you and Brad D.were arguing that capitalist investment in developing countries was raising their GDP's, and that was sort of evidence for the success of capitalism in raising the living standards of the world. Aren't the U.S. trade deficits a necessary consequence of this capitalist success story ? >>>>>>>>> These things are not necessarily connected. Foreign investment might raise GDP, but it is not the only way to do it. ________ CB: Of course, GDP in a developing country might be raised by mainly domestic means, but at that time I think you were talking about investment from developed countries being the main way it has actually happened, and thus impliedly giving a gold star on the forehead to the investment from outside. ________ GDP might go up, but we might not call this a success for human welfare. _________ CB: Last time we discussed this , this was my line, or Lou's ________ I recall saying there had been an increase in GDP and an improvement in other indicators of well-being (i.e., infant mortality), although it was extremely uneven. That doesn't mean U.S. investment was the only way or best way to bring such an outcome about. Nor that it was the best of all possible outcomes. _________ CB: Gee, I just had deja vu about me saying something about Dr. Pangloss the last time we discussed this. ________ The main point was that the extent of improvement that has been observed contradicts the more fevered scenarios of comprehensive worldwide economic and social disintegration. __________ CB: Was it a strawman who had that fever ? I remember mentioning that you all didn't take into account all the imperialist imposed wars on the developing countries in your cost/benefit calculus. _________ U.S. trade deficits are much more recent (circa 1982 and after) than U.S. foreign investment and Third World development. So if there has been some GDP growth, development, or progress in the Third World, however you'd like to characterize it, it is not dependent on U.S. trade deficits. _________ CB: There's a good point for your side. So, should you are saying U.S. foreign investment was good until about 1982, but now it has exhausted its benefits ? _________ In my primitive understanding, a trade deficit means we are buying more than we sell. Our demand for foreign goods raises GDP elsewhere. Since we buy more than we sell, instead of taking goods foreigners take dollars. These dollars are claims on capital in the U.S. In textbook language, we are importing capital in net terms, not exporting it. _________ CB: I discussed this with an economist once ( since export of capital is one of the defining characteristics of imperialism in Leninist terms). He said, no, the U.S. is still a net exporter of capital overall, but some other imperialist countries (Japan, Germany) were exporting a lot of capital to the U.S. because of highly skilled labor, developed distribution system and stable politics. Isn't U.S. investment in other countries export of capital ? We build plants overseas ,and then the goods are sold here, thus the TRADE deficit, not capital import "deficit". _________ The fact that we run a big trade deficit with China, for example, does not reflect increased U.S. penetration of China, but just the opposite. __________ CB: Surely there is not increased penetration of Chinese capital in the U.S. The U.S. is building plants in China, and the goods are exported to the U.S., thus the trade deficit. __________ A caveat to this boilerplate is that even though the aggregate balance could be negative, there is still U.S. investment in China and other countries with whom the U.s. has trade deficits. _________ CB: I can buy that. __________ The working class 'producerist' interest is to export more and import less. The internationalist translation of this is roughly balanced trade. What we're getting is increasing imbalance, thanks in part to the free trade regime of which the WTO is a part. __________ CB: The working class 'producerist' interest is narrow and shortsided. The larger working class interest is to consider balanced trade, as you say. Yea down with free trade , i.e. freedom for imperialist capital to do hit and runs in the neo-colonies. CB
