Page images
PDF
EPUB

Question #1 continued

The consequences of all of this are reflected in capital
intensive production industries, lack of proper emphasis
on the creation of employment; failure of export industries
to grow at a rate necessary to absorb the labor that
enters the market. Governments aid this process through
their policies and tend to react to crisis rather than to
develop preventive measures. This reflects their ideolo-
gical biases. The persistence of unemployment forces many
people to look to emigration as an alternative. The govern-
ments invariably accepts this and it can be seen reflected
in their population policies. Therefore, it is necessary
for there to be policies that begin with the creation of
jobs and the feeding of the population as priority considera-
tions. Emigration might then become secondary.

2. What is the relationship between private overseas direct investment and emigration? Does this relationship say anything about the potential impact of external development assistance on emigration?

ANSWER:

In so

This relationship between private overseas direct investment
(PODI) and emigration is an indirect relationship.
far as governments in Caribbean countries tend to link foreign
investment to their development objectives including produc-
tivity, industrialization, competition in the international
market and the creation of jobs, we can speak of some kind
of relationship between PODI and emigration. If PODI does
not contribute to the realization of development objectives,
if PODI does not find it, profitable to invest in the target
areas identified by these governments areas in which high
levels of unemployment persist--which are themselves depen-
dent on external capital, and if foreign capital is dominant
in most of these economies, then we can argue that there is
some relationship between government policy, PODI, and
unemployment. It is at this point that the relationship
between unemployment and emigration may emerge. All of this
should be seen in terms of the international division of
labor since I have been arguing that Caribbean countries
can be said to be labor exporting countries.

In terms of the "potential impact of external assistance
on emigration," I suggest that it is necessary to look at
the following: the "target" priorities of external assis-
tance; the nature and terms of the assistance; the role of

Question #2 continued

3.

the host country in determining needs and kinds of external
assistance, etc. Any form of external assistance that is
aimed at halting emigration of say professional, skilled,
semi-skilled or unskilled labor should have as its objec-
tive the creation of appropriate forms of employment (the
technology employed may be indicative of results); develop-
ment of opportunities of professional development, training
opportunities, challenging career goals, development of
resources and the modernization of industry and bureaucracy.
Clearly this contains political implications. More than that,
however, it calls into question the very basis of the prevail-
ing international division of labor.

Most external assistance programs tend to have certain struc-
tural biases that have the effect of punishing those who may
wish to alter the system of economic specializations. Part
of the conflict between governments in neocolonial countries
and major foreign powers in developed market economies as well
as with various international development institutions has
to do with the structure of the internal division of labor
and capital accumulation (e.g. problems associated with the
call for a New International Economic Order (NIEO)) The point
is that current external development assistance programs
should not be expected to solve the emigration problem because
those programs reflect the biases in the international market
economy to which the developing countries belong.

How does the potential for a higher rate of profit for foreign capital in the source countries compare with the potential in non-source countries?

ANSWER:

At the broadest level the potential for a higher rate of
profit in the source countries is determined by the set of
circumstances--political, economic and technical--in the
international economy, primarily in terms of how they are
articulated in both components of this world economy. For
my purposes, however, I would like to focus on some specific

factors.

It is assumed that investment of capital takes place in order to yield profit to investors; that the tendency of investors is to invest the capital at their disposal where opportunities for a higher return are available, ceteris paribus; and that capital seeks a political climate in which these opportunities can be exploited.

Question #3 continued

As far as source countries are concerned, we make the follow-
ing observations: development, technology, and productivity
to be higher because of the level of the development of the
productive forces; social legislation that is designed to
facilitate the development of certain standards of produc-
tivity and reward capital for investment activity is enacted
for the purpose of maintaining forms of competition that
tend to reflect the stage of the development of the mode of
production (e.g. the degree of competition, monopoly, etc.);
management tends to have at its disposal the means to modify
the impact of social legislation designed to protect rights
of workers; workers have the right to bargain and unions
are generally well developed in key sectors of the economy;
labor tends to be vigilant in the pursuit of means to obtain
an expanding share of the value of its output; labor may be
able to offset the conditions that might lead to a much higher
level of exploitation. These factors contribute to the lower-
ing of the rate of profit especially when considered along
with others that derive from the crisis in production (out-
put, employment, sales, inflation, etc.).

On the other hand, in the non-source countries it can be said
that development, technology (except in foreign-owned indus-
tries), and productivity are generally lower than in source
countries; monopoly structure and power also tend to develop
through the support of those governments; greater control
tends to be exerted over the wage rate in terms of prevent-
ing it from rising even where productivity is increasing;
governments tend to provide management with considerable
countervailing power through incentives; on the average,
labor receives a much smaller share of the value of its
output (in wages) even where its productivity is equal to
that of comparable labor in the developed markert economy.
Labor is therefore cheaper in the non-source countries and
therefore, there tends to be greater exploitation of this
labor; government policy and bias reinforces this situation.
These non-source countries produce and export a small range
of commodities based on capital intensive production generally
under the control of PODI.

As a result, the potential for the export of profits is higher
within a given structure of exploitation: primary produc-
tion, higher labor exploitation; the export of profits, the
ability of foreign capital to obtain direct concessions from
governments in non-source countries, and the practice of
raising some investment capital in these countries combine
to enhance the possibility for a higher rate of return in

Question #3 continued

4.

the latter countries.

This should not be taken to mean that there is a higher level of foreign investment in non-source countries because capital operates on an international scale. The level of investment and the rate of exploitation relative to the level of the development of the productives forces are two different though related processes. It has also been argued that non-source countries receive less in exchange for production and exportation for production of equal productivity: hence, the theory of unequal exchange and unequal development.

On page fourteen, you indicate that U.S. capital as private overseas direct investment contributes to the reproduction of economic extraversion and the "blockage of transition." Would you explain that sentence?

ANSWER:

Specific reference to U.S. private overseas direct investment (PODI) is the result of the dominant position of U.S. capital in these countries (see tables 4-5, pp 12-13). Otherwise my argument could apply to PODI from other source countries. "Economic extraversion" refers to the condition associated with openness of these economies resulting from the dominant position of PODI in their economic processes; their dependence on foreign trade; the high rate of imports to exports in their external position; the importance of primary production specialization; their susceptibility to the dictates and actions of international financial institutions (public and private), and to fluctuations in international commodity and capital flows; their structure of external indebtedness; and its impact on the allocation of foreign reserves between paying debts, remaining solvent and promoting development. The question of "blockage of transition" has to do with the problem of breaking out of so-called underdevelopment into a sustained process of autocentric development. The idea is that openness should be reduced and/or eliminated. It has been argued that the internal market must become the motor and regulator of growth. This would call for a more aggressive policy toward PODI such as may lead to a higher retention of surplus; a redefinition of development priorities in quantitative and qualitative terms. This question of eliminating the "blockage of transition" requires a new conceptualization of international interdependence: one that derives from a need for and the ability to foster equality rather than one which proceeds from the accepted legitimacy of the invisible ideology and structure of the prevailing international division of labor.

APPENDIX 12

ARTICLE FROM LOS ANGELES TIMES, JUNE 6, 1978, ENTITLED, “COLBY CALLS MEXICO BIGGER THREAT THAN RUSSIA TO U.S." WRITTEN BY ROBERT SCHEER

Former CIA Director William E. Colby said Monday that the main threat against the United States is from the "have not" nations of the world, such as Mexico, rather than from the Soviet Union.

"The greatest danger of violence and difficulty in the world is between the "haves" and the "have nots" them against us, Colby said in

an interview with The Times.

[ocr errors]

He said that "one of the most serious problems we have to face" is the doubling of the population of Mexico by the end of the century, which, Colby said, would drive an additional 20 million illegal aliens across the border into the United States.

"You cannot stop the (population) growth at this point," he said. "The women are alive today who are going to bear those children. So you can have all the birth control you want between now and the end of the century. It isn't going to change those figures in real terms.

"So what's going to happen to that extra 60-odd million Mexicans? Twenty (million) of them are going to be right here."

Colby said the United States did not have the means to stop the illegal migration of millions of jobless Mexicans.

"You're not going to be able to mount a wall there; you're being immensely unsuccessful doing that today," he said. "You're not going to be more brutal about it. The only way to keep them out.. is to develop some light industry base and agriculture in Mexico, to give them something to do."

He said, however, that Mexico resisted aid from the United States and was "tense" about being a satellite of this country.

"Yet what they are doing is exporting their unemployed to the United States," the former CIA director said.

The migration of the Mexicans "is exactly what we did with black rural poor of the South in the 20's," he said. "We sent them all to the central cities. It was a better life for them but the social costs for our country have been fantastic. We've managed to ruin our public school system and created ghettos."

Colby, who was CIA director from 1973 to 1976, stressed what he said was the continuing danger of Soviet influence in Africa but said he believed that the United States should not allow the problems in Africa to interfere with progress toward a strategic arms limitation treaty with the Soviet Union.

« PreviousContinue »