Charles Brown wrote:
CB: My thought on that is that the 30%-40% is the icing on the cake, and the icing is the "extra" profit ( so "super" means "extra" rather than "gigantic"; "above and beyond" the regular profit). I don't know if the concept of "margin" applies to this. The idea is that "super" means "extra" that wouldn't have been made had it not been invested in the "neo-globalist colonies ", because the return on investment domestically ( and in other rich countries) has been maxed out and begins to fall.
Total profits from MNC investment in poor countries - all except the rich industrial countries of Asia, Europe, and North America, plus the Asian NICs - was about $25 billion in 2002, or about 0.25% of U.S. GDP. That's a pretty thin layer of icing.
Here are the rates of return (profits/capital stock) for some major regions of the world for U.S. MNCs:
1982 2002 all 12.0% 8.1% Canada 6.7% 7.3% rich Europe 10.4% 7.4% rich Asia 7.9% 9.1% Asian NICs 22.4% 14.6% rest of world 19.5% 7.4% LatAm/Car 16.2% 6.2% China -6.1% 14.1%
Note that returns are lower in the poorer countries than richer ones.
To reiterate the last part of what I just said, doesn't the return on investment in the U.S. and other rich countries begin to fall ( overproduction)after a certain point ? Then the investment in the poor countries "rescues" the rate of return from its falling rate in the imperialist centers.
Pretty hard to see that in these stats.
Total profits from foreign investment were $123 billion in 2002, or just over 1% of U.S. GDP. That's not a gigantic number, and not much bribing of the U.S. working class can be financed out of it.
Also, I can see that a lot of the Cold War might be motivated, not by some immediate opportunities for "extra" profit ( as I describe that above), but for longer term, strategic holding of territory for _future_ potential investment and profits. That wouldn't be irrational from the standpoint of the interests of the capitalist class, and would explain oocupations that do not yield significant profit today.
The U.S. wants to keep the world safe for capitalism, no doubt about it. Keynes remarks somewhere, in The General Theory I think, that "liquidity" requires tremendous stability in the social and political environment. The Pentagon certainly contributes to that.
Thanks for hangin' in there with me on this debate, Doug.
My pleasure. I keep wanting to see some rigorous proof that the First World is rich primarily at the expense of the Third, which is something I hear people assert pretty often. I'm open to the argument, if someone wants to make it.
By the way, do hedge funds and other international financial institutions gather some of the booty ;and is that part of the statistics for profits from "foreign investments" ?
Hedge funds and such aren't in these calculations; this is just "productive" or "real" investment, not profits from pure financial activities. Nor does it include debt service, which is about $400 billion a year globally. That's a lot of money for the debtor countries, but the GDP of the creditor countries is probably around $25 billion.
Doug
