On Thu, 27 Mar 1997, Karl Carlile wrote:
> KARL CARLILE:Can anyone offer an explanation as to why capital flows
> to sub-Saharan Africa have dminised to a trickle flow over the last
> decade or more?
> Given that the rate of profit must be higher in this region why and
> how does it happen that capital fails to accumulate there in a
> substantive way.
One point is that the rate of profit that the corporations in
charge of most private 'capital flows' are interested in are hard currency
profits. The rate of profit of a 'capital' inflow may be tremendous in
terms of command over locally production, but if it there is warranted
uncertainty regarding whether it can be successfully translated into hard
currency profits, the reluctance to divert hard currency finance to
sub-Saharan African countries is also warranted, according to the
commercial logic by which corporations gain and exercise power. The
Marxists on the list will have to comment on whether this observation is
compatible with one or several Marxisms, but I don't see any reason why it
wouldn't be.
Another point is that there is more than a little conflict between
the basis for international corporate power and the requirements of a
successful growth economy for countries at the bottom of the heap in terms
of international economic power. The 'structural adjustment' policies of
the IMF / World Bank are pretty poorly conceived as economic development
policies, but are right on target for maintaining the economic power of
international corporations. Assuming that the people who won the fights
over the shape of these policies are not simply stupid (always a dangerous
assumption, even if occasionally a valid one), it would seem that
maintaining the economic power of international corporations was a higher
priority than the economic growth of the countries concerned when
formulating these policies. Now, assuming that the corporations are not
run by people who are stupid, why invest hard currency in the face of the
hammering that these economies are going to be experiencing "for their own
good" while undergoing structural adjustment? Wait until it is clear
which economies have been more successful at surviving structural
adjustment policies, and when they have recovered and are able to resume
economic gorwth, invest at that time. For much of sub-Saharan Africa,
the phase of surviving 'structural adjustment' and its aftermath is the
current phase. Again, Marxist political economists on the list would have
to comment on the compatibility of that explanation with Marxist political
economy, but I suspect that there are several strands of MPE that would be
entirely compatible.
Virtually,
Bruce R. McFarling, Newcastle, NSW
ecbm@cc.newcastle.edu.au