The American Empire & the US Economy, p. 67 to 90

1. The American Empire & the US Economy, p. 67 to 90

Common views:

• a. economic imperialism is NOT the root. Political aims/national security ARE the primary motivating factors of US foreign policy
• b. economic imperialism CAN NOT be the root of US economic policy because foreign trade/foreign investment are such a small part of the economy
• c. if we developed other countries in a humanitarian way, they could buy our products so our economy could grow more
• d. wars were fought to institute Christianity
• e. wars were fought to open new trade routes
• f. anti-commercial is thought to be immoral in American culture
• g. political freedom is equated with Western style democracy

Foreign Aid

• a. an immediate market for US goods
• b. new overseas markets are developed
• c. orients other countries towards a free enterprise system
• d. exports are less than 5% of GDP
• e. foreign investment is less than 10% of domestic investment
• f. the importance of foreign economic activity is increasing
• g. abroad profits became an important part of total profits
• h. foreign earnings were understated
• i. international operations minimized taxes
• j. GE executive wanted America to keep expanding its overseas operations
• k. The US Army helped steal land from Indians

military functions

1. a. protect actual & possible raw materials
2. b. safeguard foreign markets/foreign investments
3. c. conserve commercial sea & air routes
4. d. preserve spheres of influence where US can get new markets
5. e. create foreign customers/investments with military aid/economic aid
6. f. maintain the structure of world capitalist markets
7. g. GNP: blocks of billions of dollars
8. h. GNP: useful statistical tool
9. i. Need to: examine the requirements of the industrial structure and dynamics elements of economic behavior

Cyclical Economic behavior:

• a. consumption can be continued with welfare checks, unemployment relief, depletion of consumer savings
• b. investment by businessmen decreases because they want a profit to be made
• c. purchases only declined 19% in the Great Depression
• d. investment dropped 71% to 80% during the Great Depression
• e. military products: main part of economy
• f. foreign markets buy military/consumer goods so minor depressions aren’t as bad
• g. military goods have long term contracts with the government
• i. military sales are a major source of profitability (p. 82 ?)
• j. 100 corporations own 55% of all assets
• k. 5 corporations own 15% of assets
• l. many cross-industry mergers occur with ties to the military
• m. 163 firms hold 80% of all investment
• n.US oil companies controlled 66% of the world’s oil in the 1960s
• o. military bases all over the world keep markets secure
• p. foreign aid is to secure raw materials
• q. integration > not self reliance/ independence
• r. economic self sufficiency is lost/ dependence occurs
• s. Latin America has to import agricultural products and minerals
• t.control markets
• u. minimize costs of production
• v. more profits to produce abroad than to increase domestic consumption
• w. try to get a larger, more secure share of the foreign market
• x. US firms in Britain are 10% of its exports
• y. US makes foreign countries reliant on its technology
• z. US forbids too many imports of luxury products

• 1. US imports many foreign raw materials
• 2. US has a severe balance of payments problem
• 3. fighting Communism is good for profits