(This is copied from the original page at http://www.plp.org/vietnam/vn11.html, which is no longer online as of this writing, and from the archived version at http://web.archive.org/web/20090409042859/http://www.plp.org/vietnam/vn11.html which is sometimes down too.- GF)
APPENDIX 1
The Economics of Imperialism in Vietnam
"I am an investment banker by trade, and I speak as an investment banker when I say that today’s less developed nations are tomorrow’s richest economic and political asset." (Former Treasury Secretary, C. Douglas Dillon, Department of State Bulletin, May 6, 1958.)
"In the coming decades. .. American policy regarding raw materials will need to give close attention to the underdeveloped countries ... in Southeast Asia. Our purpose should be to encourage the expansion of low-cost production and to make sure that neither nationalistic policies nor Communist influences deny American industries access on reasonable terms to the basic materials necessary to the continued growth of the American economy." (Percy W. Bidwell, Former Director of Studies, Council on Foreign Relations, in Foreign Affairs, October 1958, vol. 137, No.1.)
"Our influence is used wherever it can be and persistently, through our Embassies on a day-to-day basis, in our aid discussions and in direct aid negotiations, to underline the importance of (U.S.) private investment." (Former Secretary of State, Dean Rusk, House Committee on Foreign Affairs, Expropriation of American-Owned Property, p. 24.)
"Let me use your pages (Wall Street Journal) to make this proposal: A massive invasion of South Vietnam by American industry...In the modest development effort that presently exists, a number of American-sponsored enterprises have been eminently successful." (Guy Francis Stark, chief industrial development advisor for U.S. foreign service in Taiwan and Saigon, Wall Street Journal, Nov. 11, 1967)
"Vietnam thus does not exist in a geographical vacuum—from it large storehouses of wealth and population can be influenced and undermined." (Henry Cabot Lodge, Boston Globe, Feb. 28, 1965.)
* * * * *
Many people are unsure what relationship exists between U.S. economic needs and the Vietnam war, or else they think there is no connection. We say the U.S. attempt to conquer Vietnam is the result of U.S. imperialism’s needs for cheap labor and raw materials, for market and investment outlets. Moreover, Vietnam is strategic for preserving the U.S. empire’s ability to satisfy those needs in the future.
Let’s look at several arguments that are often put forward against this view:
ARGUMENT #1: The U.S. is not economically imperialist. U.S. foreign investment is of no great importance to the system as a whole. Foreign investment doesn’t yield much profit for the capitalists—it mainly helps poor countries develop.
ARGUMENT #2: It’s true that the U.S. is economically imperialist—but this mainly affects Canada and western Europe. U.S. rulers have very little economic stake in "poor" countries.
ARGUMENT #3: The U.S. may need—and engage in—economic imperialism all over the world. But this can’t by why the U.S. government is fighting in Vietnam—after all, U.S. businessmen don’t have big investments in that country.
This appendix presents facts to disprove these arguments. For a more thorough-going theoretical explanation of why imperialism is a necessary stage of capitalism, see V.I. LENIN, IMPERIALISM: THE HIGHEST STAGE OF CAPITALISM. Here we’ll only sketch how U.S. capitalism has operated around the world since World War II—especially in Asia—and how all this relates to the Vietnam war.
OVERSEAS INVESTMENTS: CRUCIAL TO U.S. CAPITALISM
The U.S. economy is dominated by an immensely powerful part of the population—about 0.5 percent of the total. (1) But these U.S. capitalists don’t just operate at home. As a matter of fact, they run the biggest capitalistic empire in history. The British Empire used to be the biggest.
At its peak, the British capitalists had about $13 billion invested around the world. (2) But as of 1968, U.S. capitalists had close to 120 billion dollars in assets and investments abroad—and half of that was direct investments. (3)
U.S. corporations depend on these huge holdings overseas—in fact, they need to have these holdings expand. The biggest U.S companies get about half their profits from outside the U.S. (4) And these profits don’t mainly come from exporting products made in domestic factories. Quite the contrary, the more than 3000 foreign subsidiaries of U.S. corporations all together bring in more than twice as much sales-money as all U.S. exports combined. Or here is another striking comparison. When the total value of the export-sales and overseas production of all countries was figured in 1967, the sum was around $250 billion. What was the U.S. share? U.S. exports amounted to $30 billion. But U.S.-owned owned plants operating abroad produced $150 billion! (5) Between 1957 and 1965, the capacity of U.S.-owned plants overseas went up .150 percent while manufacturing capacity within the U.S. only rose just 39 percent in the same period. (6)
Clearly, exploiting foreign workers is crucial for U.S. businessmen.
FIRST IN WESTERN EUROPE, JAPAN, CANADA....
"Late in the 1940's—and with increasing speed all through the 1950's and up to the present—...in industry after industry, U.S. companies found that their return on investment abroad was frequently much higher than in the U.S. As earnings began to rise, profit margins from domestic operations started to shrink; costs in the U.S. climbed faster than prices, competition stiffened as markets neared their saturation points." (Business Week, 4/20/63, p. 70)
After the Second World War, the U.S. businessman’s government put about $30 billion (from taxes) into Europe in Marshall Plan and other "aid." This was pictured as a big sacrifice, a noble act. Actually the reasons were not so nice. This "aid" was key in propping up reactionary governments and holding off revolution. Since their government had made Europe "safe" with all this aid (most of which came from U.S. workers’ taxes), U.S. businessmen felt secure in investing $30 billion in the area. When the final tally is taken, the will have raked in about $60 billion in profits. (7) (Pretty good reward for a philanthropist!) The same pattern was repeated in Japan and Canada, only with a lot less "aid."
Revolution was checked. Huge investments—very profitable—were made. And today U.S. capitalism is one of the biggest employers in these countries; and, especially in England, U.S. economic strength is key in making sure that U.S. policies are followed.
In Canada, by 1963, U.S. rulers controlled 60 percent of the manufacturing industry, 74 percent of the petroleum and natural gas industry, 57 percent of mining and smelting and about 90 percent (!) Of the food-canning industry. (8) U.S. businessmen own about 50 percent of all modern British industry. They control 80 percent of Europe’s computer business, 90 percent of its micro-circuit industry and 40 percent of its auto industry. (9)
From 1950 to 1962 direct investments abroad by U.S. companies grew from $11.7 billion to $31.1 billion. ($10 billion of that increase was in manufacturing, which grew from $3.8 billion to $31.1 billion. ($10 billion of that increase was in manufacturing, which grew from $3.8 billion to $13.2 billion.) During that same period, $29 billion came back—in earnings, interest payments, management fees, and royalties from these same investments. (10)
These tremendous U.S. investments overseas are reflected in employment figures. Thus, while the domestic production work force grew 4 percent from 1957 to 1966, at the same time, production workers employed by the U.S. overseas increased 88 percent—from 3.2 million to over 6 million workers.
The so-called "developed" areas—Europe, Canada and Japan—were the main targets of U.S. industrial investment for the first 15 years after World War II. But all the while, these countries were developing their own economies to compete with the U.S. all over the world. This was one of the main reasons for the much-increased U.S. expansion into the so-called poor countries.
...AND THEN IN THE "POOR COUNTRIES"
With so much excess capacity already existing in the U.S. and demand growing so slowly, there is little or no reason to believe that if the $1 billion (yearly industrial outlay) were prevented from leaving the U.S., it would be invested in more domestic capacity. (Business Week, 12/3/60)
In the last decade there’s been a U.S. investment push into the poor countries that’s just as big as the earlier push into Europe, Japan and Canada.
What happened?
FIRST—The U.S. rulers’ share in international trade started slipping. Their share of exports of key manufactured goods from major industrial suppliers declined 10 percent between 1954/56 and 1961. (11) The U.S. businessmen’s share of markets in poor countries fell from 9 to 24 percent in various places. As we noted earlier, the other "rich" countries were getting back on their feet and beginning to pose a very serious threat. (This was especially true of Japan.)
(text in box on page 53)
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EM-16
A WEAPON FOR GIs IN STRUGGLE
FREE TO ALL GIs AND GI WIVES
ISSUE NUMBER: ONE
25 MARCH 1970
FORT CAMPBELL AND FORT KNOX
This issue includes several articles on racism in the Army. A black GI was beaten so severely in the Frankfurt, Germany, stockade by MPs that he suffered permanent brain damage was not discharged—is being court-martialed for disrespect to an MP officer, as well as assault. Question of racism in the Army and the system as a whole is looked at from several points of view. A Nam vet asks whether Sir Charles is the real enemy. A group of GI wives tell about the bad conditions they face. The facts about Long Binh Jail (LBJ), related by the majority of editors who spent time there. Cartoons which you won’t find in the Army Times. Special last minute article on the use of GIs as scabs to break the Mail Strike. Readers will see the difference between EM-16 and FTA, which we feel has outlived its usefulness. Remember, this paper is your personal property—even according to Army regulations, believe it or not. The only way the Army can take it from you is if you let them. If your CO, Security Officer, 62, MI, CID, or other forces of reaction ask you where you got EM-16, tell them "Article 31 all the way, sir." Pass EM-16 on to another after you are done. If you don’t know, learn; if you know, teach!
PO Box 363,
Madcliff, Kentucky 40160
(page 55)
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WORKERS AND STUDENTS: FIGHT RACISM!
The U.S. imperialist system has one primary need: to amass maximum profits. Therefore the terrible oppression o black and other non-white workers at home and in Africa, Asia and Latin America is no accident. The imperialist system can’t live unless it does these things.
Racism is the political expression of imperialism. As an ideology, racism pictures blacks as lazy, dirty beasts. "They get what they deserve," is the line. Thus racist ideas "justify" imperialism’s best domestic money maker—the supper-profitable exploitation of black workers. Consider these figures.
The average white family income is double the average black family income.
Sixty percent (60%) of all black families earn less than $4,000, while only 28% of all white families earn less than this amount. Add to this the fact that the size of the average black family is larger than the white family.
44% of all housing for black people is classified as sub-standard (slum), while only 13% of all white housing falls into this category. A greater proportion (numerically) of the black population lives in than 44% classified as slum housing than in the remaining 56% classified as standard.
Between 1960-61, black families were forced to spend almost 10% more (proportionately) for food, housing, and clothing than white families. Black people are charged exorbitant rents for slum housing, and they are systematically robbed by corrupt merchants who have a captive market in the ghetto.
(Figure are from PLP pamphlet, "Don’t Be a Sucker," available at 10 cents a copy from PLPL, 1 Union Square West, NY, NY. 10003.)
This means the rules make $$billions off wage differences between black and white workers. They make $$billions more by denying black working people to social services necessary for survival. The terrible oppression of blacks is money in the bank for the billionaires who run things.
Because they are hit hardest, black workers fight back hardest. They have led many wildcat strikes. And the great black rebellions of the last 7 years are working class revolts. The issues are jobs, filthy living conditions and incredible police attacks aimed at squashing attempts to fight back. Many while workers have followed the militant lead of blacks. A magnificent example is the 1970 nation-wide postal strike. It was started by the workers in a mainly black and Puerto Rican letter carriers local in New York City. White workers have also been involved in some of the black working class rebellions. Thus whites played a role in the New Bedford, Mass. Rebellion of July, 1970. One key reason the rules push racism is to get white workers to reject this militant leadership.
Too often, white working people accept racist theories and practices. This has to be fought all the time. The majority of white workers can and must be won to supporting militant blacks. We ask all white workers to consider these questions:
Do black workers bust strikes? Do they pay low wages? Do they speed-up and automate workers out of jobs. Do they close plants to run away to low wage areas? Do they pass anti-union laws? Do they hire scabs? Do they make young workers fight and die in wars against oppressed people for the sole sake of profits—like in Vietnam? You know what the answers are: we have only one real enemy: the companies and those that represent them in the Government and in our unions.
As long as racism has a strong hold, the rulers can maintain power. They can use racism to reverse any struggle. The working class cannot possibly free itself of imperialist political control unless it smashes this crucial ruling class weapon.
We say let there be no business-as-usual response to racism. We should fight it and fight it hard wherever it rears its head. Racist attacks should be answered with high school rebellions, wildcat strikes, mass demonstrations. Whenever black rebellions occur like Asbury Park, NJ, or New Bedford, Mass., or earlier rebellions in Detroit or Harlem, they has to be an immediate response. There should be mass demonstrations and mass leafleting supporting the rebels. Struggles should be launched to back these fights.
Fight racist ideas and practices!
An injury to one is an injury to all!
Back black rebels!
* * * * *
p. 61
SECOND -- In 1962 the rate of profit on U.S. investments in Europe took a big slide. (12)
THIRD -- Along with these developments, competition was growing sharper in the countries where U.S. businessmen were trying to invest capital and sell goods. (13) John G. McLean, a director of Continental Oil and Anderson, Clayton Co., had this comment:
manufacturers ... have been forced to establish plants abroad to retain their business ... (U.S.) industries are finding their traditional export markets preempted by the growth of efficient, indigenous producers. The development of local industries abroad has ... made it impossible from a competitive and economical standpoint to continue shipments from this country .... (14)
Thus, to compete with other powerful capitalist countries, the US. ruling class has to rely increasingly on overseas production, more and more using the cheap labor "available" in the "poor" countries. The rulers have also stepped-up milking of foreign (especially "poor" countries') resources.
MILKING "POOR" COUNTRIES' RESOURCES
A government research team wrote (in 1952) that the U.S. was importing 94 percent of the manganese, 100 percent of the chromite, 98 percent of the cobalt, 86 percent of the nickel, 43 percent of the tungsten, 78 percent of the tin, and 85 percent of the aluminum bauxite that it used. U.S. businessmen's "native" country (the U.S.) has about 8 percent of the world's population. Yet the government was already planning, back in '52, to "hold onto" (read: steal!) 50-100 percent of various of the world's mineral resources. (15)
A major part of U.S. policy in the "poor" countries consists in taking those resources. Malaya, Indonesia and Thailand alone have 2/3 of the world's tin reserves. India is a major source of supply for American manganese. When European governments got Marshall Plan "aid" after World War II, they had to agree to (1) give up 5 percent of local currencies for raw materials purchases and (2) open Europe and European colonies to U.S. rulers' investments. In the same way, today, U.S. "aid" programs to the poor countries always require that major resources get handed over to U.S. bosses "in exchange." (16)
"INVESTMENTS": TAKING OVER ECONOMICS OF "POOR" COUNTRIES
Today, the U.S. imperialist economy -- which built itself up through world-wide plunder, starting way back with the highly profitable slave trade -- this pirate-colossus now has at its disposal the vast quantities of capital accumulated (or, more accurately, stolen from workers here and abroad) over the past 2 centuries. Based on this immense economic power, it is moving to take over the "poor" countries' economics completely.
From 1950-1965, the U.S. invested $9 billion in the "poor" countries. $25.6 billion came back to the U.S. rulers in profits. (Much of this profit -- less and less towards the end of this period -- was derived from raw materials and petroleum.) Compare the profits the U.S. ruling class made in the "poor" countries with what it made in so-called "developed" areas. U.S. businessmen invested $14.9 billion in Europe and Canada in this period but made "only" $11.4 in profit. Thus, while direct investments in the "poor" countries were $6 billion less, they yielded $14.2 billion more in profits. Thus the rate of profit is clearly much higher in the "poor" countries. (17)
The first big target (after Europe, Canada and Japan, that is) for U.S. rulers' investment-plunder after World War II was Latin America. Already in 1946 the U.S. held $3 billion in direct investments in Latin America -- according to former Assistant Secretary of State, Spruille Braden in a boastful speech to an executives' club. 76 percent of this was in manufacturing, public utilities, minerals and oil. As time went on, Latin America became even more the apple of the finance-capitalists' eye than Europe. Business Week noted this a few years ago:
U.S. companies are slowing down the place of their investment build-up in Europe, and shifting more and more attention to Latin America. Surprisingly, the up-turn in investment in Latin America is stronger in manufacturing than in mining, and at least on a par with oil. (Business Week, 10/14/67)
This U.S. investment involves, for example, building vast petrochemical and auto plants. At the same time it means taking over all major banking facilities. (Which means that entire economies get taken over, since these major banks control most of those "native" industries that the U.S. businessmen don't directly take over.) U.S. investments move into Latin America at a rate of over 1/2 billion dollars every year. In addition, Latin America provides a $3.5 billion a year market for U.S. exports.
Five years ago, in 1965, the Far East stood where Latin America was in 1946. There was about the same volume of direct investment in manufacturing and oil. Between 1961 and 1969 the number of new establishments and expansionary moves into the two regions (Latin America and the Far East) were the same. Thus in 1968, the market for U.S. goods in 17 Asian countries (excluding Japan) was nearly $3.5 billion -- that is, the same as Latin America. (18)
JOBS FOR "POOR" COUNTRY WORKERS...AT 20 CENTS AN HOUR
We are often told that U.S. companies provide good jobs at high pay for "poor" country workers. This is a bitter joke. A U.S. capitalist buys a pair of hands to work a ten hour day in, for example, his 1000 man Motorola factory in South Korea for pennies a day -- for half of what the U.S. rulers pay in Latin America! (19)
AVERAGE HOURLY EARNINGS IN MANUFACTURING FOR ASIAN COUNTRIES
Source: UN Monthly Bulletin of Statistics and International Labor Organization Quarterly Bulletins and Yearbook
BURMA...................................22¢, 1966, males only
HONG KONG.........................41¢, 1969, skilled construction
INDIA.......................................13¢, 199
SOUTH KOREA.......................13¢, 1969, rising lately due to militant struggle
WEST MALAYSIA....................35¢, 1969
PAKISTAN.................................28¢, 1969, skilled construction
PHILIPPINES..............................22¢, 1969
SINGAPORE..............................35¢, 1969, skilled construction
TAIWAN....................................17¢, 1969, includes family allotments and/or bonuses;
rising lately due to labor struggle
THAILAND................................16¢, 1967
SOUTH VIETNAM ....................36¢, 1969, skilled construction. As in the U.S.,
skilled construction workers get twice as
much as regular manufacturing workers
Despite increased competition from Japanese capitalists in the Far East, the U.S. is of late becoming economically dominant in inter-imperialist competition in that area. In India, for instance, the U.S. is now the main capital-importer.
WHY WE CALL IT PLUNDER
Let's examine what happens when U.S. bankers and industrialists move in on an entire Far Eastern economy. First of all they destroy what was there and replace it with production for U.S. bosses' interests -- not for the interests of local workers and peasants. Thus if there used to be petty-production of clothing and household items and food production,, this is gradually disintegrated by the inflation that is caused by U.S. rulers' economic presence, or else it's driven out of business by imperialist competition. Take India, for example. The local subsistence economy has been destroyed, and the economy is more and more dependent on the U.S. for food. Very few Indian workers -- in absolute or relative terms -- are employed by the "new industry" imperialism brings in. Many are driven from the land. Huge numbers of Indians have been made landless and unemployed. Their numbers continue to swell. (20) India's growth of per capita output for 1953-1960 was only 1/4 percent per year! (21) This miserable figure is the average for all "poor" countries, from 1955-1965. (22)
Contrary to the "we give them jobs" baloney that apologists for the imperialists dish out -- contrary to these claims, in Burma, Ceylon, India, Indonesia, South Korea, the Philippines, Singapore, etc., unemployment among people who once had jobs or are looking for their first job more than doubled in the first five years of the sixties. In South Korea, the "story book showcase" of U.S. capitalist "goodness" in the East -- there are now close to a million officially unemployed workers. (23) (These official figures are notoriously low -- the real figure is much, much higher.) In Rangoon and Mandalay (Burma) the number of unemployed increased tenfold from 1960 to 1965.
Imperialist investment, which creeps into every nook and cranny and devastates the local economy, leads to widespread unemployment. Then the imperialists' pay-for-hire "intellectuals" turn around and point to the "naturally" high rate of unemployment (in these for-some-strange-reason "poor" countries) as proof they need U.S. investments to supply jobs! It's like Dr. Jack the Ripper claiming that, what with the vast increase in assaults on women, there's a need for more surgeons like himself.
This ever-increasing unemployment is a constant depressant on wage rates in the "poor" countries. The lower the wages, the more the imperialists invest, the worse they wreck the economy, the greater the unemployment; and the greater the unemployment, the lower the wages …
The "purpose" of the land becomes providing exports; the "purpose" of people's existence becomes to consume imports and more important to be cheap workers for imperialist profits. The "purpose" of the entire country is not to feed and clothe itself but to enrich the U.S. ruling class.
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