Moran: Foreign Expansion as an Institutional Necessity for US Corporate Capitalism

Moran, “Foreign Expansion as an Institutional Necessity for US Corporate Capitalism: The Search for a Radical Model,” World Politics 25, no. 3 (1973): 369-386.

"Is foreign economic expansion in some sense an 'institutional necessity' for corporate capitalism in the United States? Is there something inherent in the internal dynamics of American capitalism that creates such strong pressures for foreign private investment that the US Government must consider the creation and preservation of an international system that facilitates such expansion to be among our most vital national interests? What yardstick can measure the opportunities, the needs, the necessity of investing abroad, or the cost and risk if the option of foreign private investment is threatened?" (369).

Moran explains briefly theories of imperialism stemming from developed countries' perceived inability to reabsorb surplus value or surplus capital. It is argued that these countries must absorb this excess production through conspicuous consumption, military growth or foreign investment. Moran argues that developed countries do not, in fact, have a hard time absorbing extra surplus, as they are the most attractive for capital investment. What about reliance on investment in under developed countries because of raw material dependencies? Moran also argues that the US could rely on domestic production of raw materials but does not. "...direct economic penetration to secure natural resources is not a compelling need for the functioning of corporate capitalism in the United States" (370).

"...foreign investment has always been and will continue to be a 'convenience' more than a 'necessity,' and foreign economic expansion is not an 'institutional need' of US corporate capitalism" (371).

"In this paper I will argue that an emphasis on the stake that multinational corporations have in direct foreign expansion is more plausible than the models of surplus capital" (371). "Concentrating only on US manufacturing companies, I will show why the pressures to invest abroad are much stronger and the costs of giving up the foreign option are much higher in corporate decision-making than conventionally understood by either neoclassical or neo-0Marxist analysis" (372).

"The study of corporate growth in the United States shows that economic expansion abroad results from the struggle to expand and defend the capacity to exact oligopoly rents" (379).

"The study of the product cycle and the growth of the firm explains why the largest, the fastest growing, and the most technologically advanced American manufacturing companies have been under intense pressures to expand into other countries, both developed and underdeveloped. This intensity is far greater than is revealed by conventional figures on relative profitability; it is an intensity that has indeed been intrinsic to the dynamics of unstable imperfect competition in the United States" (385).

"But there is something fundamental to American corporate capitalism...that creates strong pressures for foreign investment. As long as American corporations exercise their virtues of inventiveness and aggressiveness, their government will feel intense, even frantic pressures to create and preserve and international system that facilitates foreign economic expansion" (386).