issue 167 - January 1987
Patterns of power
There were empires in the ancient world but they did not span the world.
It was not until ocean going ships and the guns they carried were improved
that imperialism could create a world-wide economic system. The extent of
such dominance can be seem below - along with its present-day effects.
THE LEGACY OF PILLAGE
The fabulous profits of opium dealing with China, slaving between Africa and the Americas and other trade with colonies helped to make possible the Industrial Revolution in Europe and the US.
TRADE: EXPORTS LOSING VALUE
Nearly half the fall of inflation in industrial nations between 1980 and 1984 was paid for by the commodity price collapse in the Third World.6
Between 1980 and 1985 the prices of food and raw materials exported by developing countries fell by a fifth in real terms.7 In other words, by 1985 developing countries had to export 20 per cent more sugar, cotton or tin, for example, simply to be able to import the same quantity of water pumps, trucks or fertilizer8
Between 1981 and 1985 developing countries lost $5,300 million on average every year because of damaging changes in 'terms of trade' (the movement of the prices of a nation's principal exports in the international markets in relation to those of its major imports). Commodity prices (excluding oil) fell by 18 per cent between January and September 1986 measured against a basket of world currencies Oil prices are now at halt their 1985 levels.9
Since 1945 the US intervened on average once every 18 months somewhere in the world.
Dates given above are the first year of intervention; occasionally this becomes semi-permanent. For example Soviet intervention began in Ethiopia in 1977 and still continues.10
POUND OF FLESH
Between 1950 and 1967 new US investment in Latin America was $3,900 million. It was only a third of the $12,800 million profits repatriated from Latin America by the US companies over the same period.15
The financial rate of return on the investments of multinational companies in the Third World is twice as high as the profits in industrial countries.16
These days more weapons are sold to developing countries by the superpowers than are given away. The volume of the world arms trade is increasing by roughly 10 per cent annually.11 The weapons are sold to boost export earnings and win political friends and influence people overseas.
The US and the USSR supplied two thirds of the weapons imported by the Third World between 1981 and 1985 to a value of $44,000 million.12
The superpowers often provide sizable subsidies to Third World purchasers. The US in 1986 provided $3,100 million in military aid to Israel and Egypt, and another $4,100 million in economic aid.13
Major Arms exporters 1981 - 198514
In 1983 the combined sales of the world's top 200 corporations exceeded $3,000,000 million, which is the equivalent of one third of the total gross domestic product of this planet. 40 per cent of all international trade is conducted between these multinational companies.18
In 1985 the sales of the tobacco, coffee and beer corporation Philip Morris in the US totalled $16,000 million. That is more than 3 times the gross domestic product (GDP) of Kenya, greater than the GDP of Bangladesh and only a little less than the annual GDP of Peru.19
80 per cent of the world's oil is traded by just 7 major oil companies all based in industrial countries. 75 per cent of all coffee is traded by US-based Philip Morris and Swiss-owned Nestlé. 75 per cent of the tobacco business is controlled by just 7 companies, 67 per cent of the banana business by 3 firms and 35 per cent of the tea trade handled by Unilever.20
In 1983, of the world's 200 largest industrial companies, 96 were based in North America, 60 in Western Europe, 25 in Japan and 19 had their headquarters in the Third World.
This report was compiled by John Tanner
1 Mandel, E Marxist Economic Theory, 1962.
2 Galeano, E Open Veins of Latin America.
3 Mukerjee, R The Rise and Fall of the British East India Company, 1974.
4 Mandel, E op. Cit.
5 James, C L R The Black Jacobins.
6 UNCTAD Trade and Development Report, 1986
7 UNCTAD op. Cit.
8 UNCTAD op. Cit.
9 UNCTAD (telephone enquiry)
10 Keesings Contemporary Archives and Adomeit, H Soviet Risk-Taking and Crisis behaviour 1982.
11 Peace Pledge Union, The British Connection, UK 1986.
12 1 Stockholm International Peace Research Institute (SIPRI) Yearbook 1986
13 SIPRI op.cit.
14 SIPRI Op cit
15 Galeano E Open Veins of Latin America, 1974
16 Harris, N Of Bread and Guns, 1983
17 Annual Reports of Unilever, Lonrho, Rio Tinto Zinc 1985.
18 Transnational Information Exchange (TIE) Netherlands
19 Philip Morris Annual Report 1986
20 Tanner, J Beggar My Neighbour NALGO Education Dept.
21 TIE Netherlands