Re: The new Iraqi Flag ( imperialist booty)

[Anthony D'Costa <dcosta@xxxxxxxxxxxxxxxx>]

A belated question: why should we calculate profits as a ratio of GDP, as
Doug does?  I don't think any country (other than the smaller W european
countries) will have a high ratio?  For the US obviously much less so,
given the size of the domestic market.  Why don't we look at the profit
rates as return to domestic and foreign investment separately?  Perhaps
the numbers if available will show us something different.

You can't extract too much out of really impoverished countries--it's
already been done.  However, the better off poorer countries (that are also
growing) are likely to provide certain niches of high profitability.  In
this instance the Asian NICs and China clearly illustrate this.

Lastly, when we look at capital inflows and outflows, we find that many
developing and I might add impoversished countries at this time are really
net exporters of capital.  Past investments seem to provide a steady
stream of income (this also included interest payments, royalties, and
licensing fees, dividends, etc.)

Cheers, anthony
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Anthony P. D'Costa, Associate Professor
Comparative International Development
University of Washington                        Campus Box 358436
1900 Commerce Street
Tacoma, WA 98402, USA

Phone: (253) 692-4462
Fax :  (253) 692-5718
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On Thu, 6 May 2004, Doug Henwood wrote:

> 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
>