International Interdependence and the Nation-State : An Exploratory View

Susan Strange , "International Economics and International Relations: A Case of Mutual Neglect," International Affairs, Vol. 46, No. 2, April 1970, p. 310.

For an interesting, if controversial, account of interest rate " aggression " and "escalation." see Eric Chalmers , International Interest Rate War (London: Macmillan, 1972 ).

See Richard N. Cooper's article with the telling title "Trade Policy is Foreign Policy," Foreign Policy, No. 9, Winter 1972-73. See also H.B. Malmgren , " Managing Foreign Economic Policy," Foreign Policy, No. 6, Spring 1972.

Japanese-American trade negotiations and their connection to Pacific political and security relations are discussed more fully in Cooper, op. cit ; and H.B. Malmgren , " Coming Trade Wars? " Foreign Policy, No. 1, Winter 1970 -71.

This prospect is viewed with some scepticism in Bension Varon and Kenji Takeuchi , " Developing Countries and Non-Fuel Minerals," Foreign Affairs, Vol. 52, No. 3, April 1974. But the authors do not categorically deny its possibility, particularly with regard to bauxite and phosphate rock.

While it is true that foreign policy and defence issues have rarely, if ever, had a dominant influence in British general elections, they have also rarely been so overwhelmed by domestic issues as in 1974.

This definition owes much to the ground-breaking analysis in Richard Cooper's, The Economics of Interdependence: Economic Policy in the American Community (New York: McGraw-Hill, 1968).

That the gold standard did in fact operate automatically. i.e., without government intervention, is open to debate. See Robert Triffin's treatment of government action under the gold standard in his book, The Evolution of the International Monetary System: Historical Reappraisal and Future Perspectives (Princeton, N.J.: Princeton University Press, 1964). Yet even when government policies were implemented either to offset or reinforce the gold standard mechanism, most of the evidence suggests that the classical theory provided a reasonably close approximation of the international adjustment process.

European support for American objectives was often support in theory rather than in practice, and when American negotiators pressed for more concrete assistance in liberalising the international economy, they regularly found the European governments decidedly unenthusiastic. On the key issue of currency convertibility, the Europeans were profoundly affected by the British experience with a premature and disastrous return (at American insistence) to an untenable parity for the pound in 1947. See Richard N. Gardner , Sterling-Dollar Dipfomacy: The Origins and Prospects of Our International Economic Order (2nd ed., New York: McGraw-Hill, 1968), especially Part IV.

For an interesting analysis of the rising predominance of private international financial enterprises in the 1950s and 1960s, see Lawrence Krause , " Private International Finance," International Organization , Vol. XXV, No. 3, Summer 1971.

It. For a more detailed analysis of the post-war trends in international trade, see Cooper, The Economics of Interdependence, Chap. 3. A more recent statistical summary is in David P. Calico and Benjamin M. Rowland , Araterica and World Political Economy: Atlantic Dreams and National Realities ( Bloomington and London: Indiana University Press, 1973), pp. 144-161.

See Raymond Vernon , Sovereignty at Bay: The Multinational Spread of U.S. Enterprises ( New York: Basic Books, 1971), p. 17 and pp. 123-125. There is a measure of controversy here as to the total values of American foreign assets and gross foreign production. For example, in contrast to Vcrnon's 1969 estimate of $71 billion for the book value of U.S. foreign assets, Leo Model sets its book value in 1966 at S86 billion in his article, " The Politics of Private Foreign Investment," Foreign Affairs, Vol. 45, 1967, p. 640. In any case, there is widespread consensus that the annual sales of U.S. multinationals by far exceeds the S100 billion mark and is rapidly approaching, if it has not already surpassed, the $150 billion mark. Moreover, it is notable that the foreign production of U.S. multinationals is growing at a considerably faster rate than U.S. domestic production. Unfortunately, comparable data on European multinationals is simply not available.

For a fuller discussion of some of the more significant structural changes in the world economy since the Second World War, see Cooper , The Economics of Interdependence, especially Chaps. 3-5.

Krause , op. cit, p. 525.

A great deal has been written on the growth and development of the Eurodollar market. Two of the best books are E. Wayne Clendenning , The Eurodollar Market (Oxford: Clarendon Press , 1970); and Paul Einzig , The Eurodollar System: Practice and Theory of International Interest Rates (5th ed., London: Macmillan, 1973).

Strange , op. cit, p. 311.

In the following two examples I have drawn heavily from Krause , op. cit, pp. 525-527.

The great strength of the German mark in the 1960s, which was derived from the large German balance of payments surpluses, no doubt provided an additional attraction for speculative funds, and further complicated the attempts at monetary restraint.

Susan Strange , "The Dollar Crisis 1971," International Affairs, Vol. 48, No. 2, April 1972, pp. 198-200.

An interesting side-effect of the franc crisis was the change in French attitudes to international monetary reform. Until 1968 the French had been adamantly opposed to any kind of basic reform, but finding the tables turned and the franc in trouble, they finally threw their support behind the Special Drawing Rights scheme.

See for example James Tobin , National Economic Policy ( New Haven and London: Yale University Press, 1966) especially Chap. 12; and J.K. Galbraith , " Some Thoughts on Public Policy and the Dollar Problem," in Seymour Harris , ed., The Dollar in Crisis ( New York: Harcourt, Brace and World, 1961), pp. 90-93.

Richard N. Cooper , " Towards an International Capital Market? ", in John H. Dunning (ed.), International Investment (Harmondsworth: Penguin Books), p. 238.

See for example Seymour Harris , Economics of the Kennedy Years (New York: Harper and Row, 1964), pp. 246-250.

Krause , op. cit, p. 530.

The addition of vast volatile sums of liquid funds to the reserves of the oil-producing Arab states may yet provide them with a weapon as powerful as the oil embargo in negotiating for political and economic concessions from the West.

See in this regard J.N. Behrman , National Interests and the Rise of the Multinational Enterprise (Chapel Hill; N.C.: University of North Carolina Press, 1969); Gilles Paquet (ed.), The Multinational Firm and the Nation-State (Toronto: Collier-Macmillan, 1972); and Vernon , op. cit

Robert Heilbroner , "The Multinational Corporation and the Nation-State," The New York Review of Books, February 11, 1971, p. 21.

J.F. Galloway , " Worldwide Corporations and International Integration " International Organizatian, Vol. 24, No. 3, Summer 1970, p. 508.

Werner J. Feld , Non-governmental Forces and World Politics, New York: Praeger, 1972, p. 4. See also table 2.14 on p. 49.

See George Modelski , " The Corporation in World Society," Yearbook of World Affairs, 1968. For a deeper look into the concentration of international production, see the so-called " 300-hypothesis " of Howard V. Perlmutter in " The Tortuous Evolution of the Multinational Corporation," Columbia Journal of World Business , January-February 1968, pp. 9-18. See also Richard A. Barber , The American Corporation (New York: E. P. Dutton , 1970), Chap. 17; and Stephen Hymer , " The Efficiency (Contradictions) of Multi-national Corporations," American Economic Review, Vol. 60, No. 2, May 1970, pp. 441-448.

See especially Raymond Vernon , op. cit, Chaps. 3-4; and Feld , op. cit, p. 107 and passim.