Dan Usher on Imperialism
Categories: [economic geography]
Excerpts Tags: [imperialism], [investment]
Dan Usher on writing on the role of investment and the security of investment.
"As has often been mentioned, it is when there are large foreign investments that imperialism becomes really profitable.18 Often the geography of the colony, its agricultural or mineral resources, can be the source of high rates of return, provided the investment is politically secure. Imperialism is a guardian of investment; it is a means of insuring that the local population, whatever its initial reaction to the investment, does not subsequently act on the belief 'that the preponderant gains rightly belong to the residents of the country whose natural resources provide the essential ingredients for economic expansion.'"
There's good discussion in the footnote too.
18 Discussing the ideas of Hilferding, Hannah Arendt wrote: "Only when they [foreign investors] demanded government protection of their investments (after the initial stage of swindle had opened their eyes to the possible use of politics against the risk of gambling) did they re-enter the life of the nation. In this appeal, however, they followed the established tradition of bourgeois society, always to consider political institutions exclusively for the protection of individual property... " The Origins of Totalitarianism, pp. 49-50. John Strachey has expressed similar ideas. "...if investment took 'place overseas, it exposed the investor to all the risks consequent upon his money having come under the jurisdiction of a foreign government, at least it did so unless his own government's writ followed his money ... this ... was on the whole the most important reason why the outward flowing stream of profit-seeking foreign investment from about 187 0 onwards carried on its current paraphernalia of British imperialism ... " op. cit., p. 280. In fairness to these authors, it should be mentioned that these fragments are chosen to illustrate only one aspect of their views. Both also believe that imperialism is often involved with the drive to prop up a feeble mature capitalist society by exporting surplus capital abroad; there is no logical contradiction in associating imperialism with political risk and with "surplus" capital.
From Usher, Dan. 1965. “Political Risk.” Economic Development & Cultural Change 13 (4): 453. https://doi.org/10.1086/450126.