rate of return on capital

Carrol Cox cbcox at ilstu.edu
Tue Apr 16 21:21:45 PDT 2002


Diane Monaco wrote:
>
> At 01:47 PM 4/16/2002 -0400, you wrote:
> >One version of that can be estimated by looking at BEA's direct investment
> >data for the U.S. <http://www.bea.gov/bea/di/di1usdop.htm> - divide
> >profits by the capital stock. When I've done it, I've been surprised at
> >how low returns are in some "developing" countries, and how high they are
> >in some "developed" ones.
>
> Well that's precisely what I'm finding and it seems so counterintuitive not
> to mention unsupported by traditional theories like Solow's growth
> theory...hmm. Thanks.
>

Why is it counter-intuitive? I would assume that colonial profits have _never_ been higher in absolute terms than profits at "home" -- they are simply a requirement for the absorption of capital that otherwise would not be active at all.

Return in Developed Nation: X %

Return on additional investment in developed nation: 0 %

Return on Investment in Colony: X/2 %. Better than nothing.

This is why imperialism is _not_ a policy adopted by imperialist nations but the very mode of existence of capital.

It is also why capital (if not destroyed) will destroy the human species.

Carrol



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