The Export of Capital and the Contest for economic spheres of influence

November 26, 2017

 

 

Capitalism is not a fixed or static economic system, but one in which change is constant. Over the past century, the characteristics of international capitalist production have undergone an immense transformation. The most notable of which, is the way industrialized states have shifted from the export of commodities and manufactured goods to the export of capital— that is, the export of capital with the intention of creating surplus value abroad. This can take place in two different forms; migrating abroad as either interest-bearing or profit-yielding capital— the latter of which may function as industrial, commercial or bank capital. This process is not entirely new, but has become far easier given the development of finance capital and has accelerated greatly due to the alignment of banks with productive industry (who increasingly seek to employ inactive finance capital into active capital, i.e - capital producing a profit).

           

A number of factors necessitate/promote this export of capital. The most obvious is differences in the rate of profit; or on the degree of capitalist development. The more advanced a nation’s capitalist development, the lower the rate of profits. It is for this same reason an investor in a developed country must seek to invest abroad if they wish to see satisfactory returns on capital, as the domestic market becomes saturated and growth rates become limited. Hence the tendency of capital exports to gravitate towards underdeveloped African, South-American and South-East Asian countries. ‘Entrepreneurial’ profit here is also higher because production costs in land and labour are exceptionally cheap. Similarly, the rate of interest is higher where developing countries lack extensive credit and banking facilities.

           

The export of capital is a feature of capitalism’s monopoly stage of development. Free-trade and competition, once the most obvious features of capitalist production, have become obstacles to the power of international monopolies and cartels. The economic security of these firms is for the most part guaranteed by protectionist tariffs to maintain a national monopoly at the very least, meanwhile their competitiveness on an international stage is given a helping hand through subsidies. This of course stunts free-trade, and so these monopolies must turn to the export of capital to expand their economic territories. These patterns are readily observable in real life, as competing factions of finance capital and economic spheres of influence are tied to powerful states like the US, China and Europe (collectively). To provide ideal economic conditions, the US necessarily displays an affinity for South-American land in a manner similar to Chinese affinity for African land-grabs— all the while, each state’s firms are in competition with one another, utilizing the productive capacities and resources of their economic territories. A form of economic colonialism that superficially guarantees the sovereignty of subject nations so as to disguise its true nature— that is the outflow of profits/interest payments back to the wealthier, capital-exporting country.

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