1. See, for example, Albert Fishlow, “A Proposal for a United States Economic Policy for Latin America” in Latin America and the World Economy: A Changing International Order, ed. Joseph Grunwald (Beverly Hills, Cal.: Sage Publications, 1978), pp. 37–88.

2. See, for instance, the following articles written by Karl Marx for the New York Daily Tribune: “The Future Results of British Rule in India” (8 August 1853), “British Incomes in India” (21 September 1857), “Opium and Monopoly” (September 1858) and “Great Trouble in Indian Finances” (30 April 1859) in Marx on Colonialism and Modernization, ed. Shlomo Avineri (Garden City N.Y.: Anchor Books, 1969).

3. On the subject of structural dependency see, as a mere introduction, Fernando H. Cardoso and Enzo Faletto, Dependency and Development in Latin America (Berkeley, Cal.: University of California Press, 1979); Fernando H. Cardoso, “Notas sobre el estado actual de los estudios de la dependencia,” in Sergio Bagú et al., Problemas del subdesarrollo latinoamericano (México, D.F.: Editorial Nuestro Tiempo 1973); Octavio Ianni “La dependencia estructural,” in América Latina: dependencia y subdesarrollo, eds. A. M. Frasinetti and G. Boils (San José de Costa Rica: Editorial Universitaria Centroamericana, 1973); Theotonio Dos Santos, Dependencia y cambio social (Santiago de Chile: CESO, Universidad de Chile, 1970); Theotonio Dos Santos, Imperialismo y dependencia (México, D.F.: Ediciones Era, 1978); and Osvaldo Sunkel and Pedro Paz, El subdesarrollo latinoamericano y la teoría del desarrollo (México, D.F.: Siglo XXI Editores, 1970).

4. Operationally, we consider “strategic” any material that is a nonrenewable resource, is concentrated in relatively few hands (fifteen countries or less), and has recognized economic and military applications.

5. Theoretically, the import of cheap raw materials could lead to an increase in the average rate of profit of the core country in question, but only in the case that lower-priced raw materials permit an increase in the amount of labor used so that more surplus is created.

6. Satish Raichur, “Toward a Theory of International Exchange: Some Preliminaries,” paper presented at the Conference on International Relations and Third World Development, University of Denver, Denver, Colorado, 20–22 June 1979, p. 17.

7. Celso Furtado, “Power Resources—The Five Controls,” IFDA Dossier (May 1979), p. 6.

8. International Economic Studies Institute, “Dependence of the Industrialized World on Imported Materials,” in Raw Materials and Foreign Policy (Washington, D.C.: International Economic Studies Institute, 1976), p. 12.

9. See Comisión Económica para América Latina, El financiamiento externo de América Latina (Nueva York: Naciones Unidas, 1964), particularly table 15 on page 14.

10. See Akira Iriye, Pacific Estrangement: Japanese and American Expansion, 1897–1911 (Cambridge, Mass.: Harvard University Press, 1972) p. 38; and, on U.S. investment activity in Latin America as a result of the war, Joseph S. Tulchin, The Aftermath of War: The Latin American Policy of the United States 1917–1924 (New York: New York University Press, 1971).

11. Yoshiro Ohara, Japan and Latin America (Santa Monica, Cal.: The Rand Corporation, 1967), pp. 42–43.

12. See Ministry of International Trade and Industry, White Paper on Economic Cooperation (Tokyo: MITI, 1966). In the case of Japan, detailed figures on foreign investment are rather difficult to obtain. Available data are generally on “approved” rather than “materialized” overseas investment. According to one researcher “it is also not clear in which countries the investments were made” (see Nagahide Shioda, “The Sogoshosha and Its Functions on Direct Foreign Investment,” The Developing Economies 14, no. 4 [December 1976], p. 410). It is estimated, however, that the quantity of Japanese external investment has grown rapidly since the beginning of the 1970s, and that about 40 percent of total Japanese overseas investments “are of so-called natural ‘resource-oriented’ types, while the remaining 60 percent are of the ‘market-oriented’ types” (Yoshihiro Tsurumi, “The Multinational Spread of Japanese Firms and Asian Neighbors' Reactions,” in The Multinational Corporation and Social Change, eds. David E. Apter and Louis W. Goodman [New York: Praeger, 1976], p. 123).

13. Henry C. Wallich, quoted by Michael Kreile, “West Germany: The Dynamics of Expansion,” International Organization 31, no. 4 (Autumn 1977), p. 776.

14. See Albrecht von Gleich, Germany and Latin America (Santa Monica, Cal.: The Rand Corporation, June 1968), p. 53.

15. For a detailed analysis of strategic dependency, the oil crisis, and its effects on the foreign policies of the U.S., Japan, and West Germany, see Heraldo Muñoz, “Strategic Dependency: The Relations between Core Powers and Mineral-Exporting Periphery Countries,” in The Political Economy of Foreign Policy Behavior, eds. Charles Kegley, Jr. and Patrick McGowan (Beverly Hills and London: SAGE Publications, 1980).

16. E. Chin, “The Mineral Industry of Japan,” Bureau of Mines Minerals Yearbook (Washington, D.C.: U.S. Department of the Interior, 1975), pp. 1–2.

17. Richard Barnet and Ronald Müller, Global Reach: The Power of Multinational Corporations (New York: Simon and Schuster, 1974), p. 202.

18. Wendell Woodbury, “The U.S. and Japan and Latin America's Mineral Resources,” Senior Seminar in Foreign Policy, U.S. Department of State, 16th Session, 1973–74, p. 13.

19. See OECD, Geographical Distribution of Financial Flows to Developing Countries: Data on Disbursements 1969 to 1975 (Paris: OECD, 1977), p. 184.

20. John A. Hannah, “New Responses to the Challenge of Development,” Department of State Bulletin 67, (25 Dec. 1972): 734–35.

21. See International Economic Studies Institute, “Foreign Assistance and Material Needs,” in Raw Materials and Foreign Policy, p. 334.

22. Sukehiro Hasegawa, Japanese Foreign Aid: Policy and Practice (New York: Praeger Publishers, 1975), pp. 66–67.

23. Council on International Economic Policy, Executive Office of the President, Special Report: Critical Imported Materials (Washington, D.C.: U.S. Government Printing Office, December 1974), p. 48.

24. Jack L. Knusel, West German Aid to Developing Nations (New York: Praeger Publishers, 1968), p. 13.

25. Japanese Ministry of Foreign Affairs, “Foreign Policy,” in White Papers of Japan (Tokyo: 1975), p. 81.

26. Folker Fröbel, Jürgen Heinrichs, Otto Kreye, “The New Industrial Division of Labor,” Social Science Information 17, no. 1 (1978), p. 138.

27. Louis Turner, Multinational Companies and the Third World (New York: Hill and Wang, 1973), p. 175.

28. Fröbel, Heinrichs and Kreye, “The New Industrial Division,” p. 130.

29. Alfredo Eric Calcagno, Informe sobre las inversiones directas extranjeras en América Latina, E/CEPAL/G.1108 (Santiago de Chile, 1980), p. 14.

30. CEPAL, El desarrollo económico y social y las relaciones económicas externas de América Latina, E/CEPAL/1061, vol. II, 31 de enero de 1979, p. 192.

31. See U.S. Senate, Implications of Multinational Firms for World Trade and Investment and for U.S. Trade and Labor (Washington, D.C.: U.S. Government Printing Office, February 1973), chapter 7.

32. Studies by Louis Wells have shown that, in underdeveloped countries, foreign-owned firms that compete primarily on the basis of price are more likely to use labor-intensive techniques than those that compete principally on the basis of brand names. Many multinational enterprises that have established “off-shore” production facilities have been driven by “price competition” to locate their labor-intensive stages in the periphery. (See Theodore Moran, “Multinational Corporations and Dependency: A Dialogue for Dependentistas and Non-dependentistas,” International Organization 38, no. 1 [Winter 1978], p. 88).

33. Other factors related to the low cost of labor that stimulate the transfer of some firms from the centers to the periphery are that (1) as a rule, the working day in underdeveloped, low-wage societies is longer than in developed countries; (2) the labor force in the periphery can be hired or fired with greater ease than in the core; and (3) the wide availability of a reserve army allows for an “optimal” selection of the most suitable labor force according to age, sex, etc. According to this last criterion, often the “most suitable” labor force is constituted mainly of young women. See Fröbel, Heinrichs, and Kreye, “The New Industrial Division,” pp. 126–27.

34. Turner, Multinational Companies, pp. 184–85.

35. Ibid., p. 184.

36. Fröbel, Heinrichs, and Kreye, “The New Industrial Division,” p. 120.

37. Barnet and Müller, Global Reach, pp. 300–8.

38. See Fröbel, Heinrichs, and Kreye, “The New Industrial Division,” pp. 135–37. These figures did not take into account contract production for, for instance, large department stores. In the case of West Germany, the corporations have access to low-priced labor not only by transferring production facilities to periphery nations, but also by importing “temporary guest-workers” from European countries with relatively cheap labor (e.g., Portugal, Spain, Greece).

39. Barnet and Müller, Global Reach, p. 305.

40. Robert Frank and Richard Freeman, The Distributional Consequences of Direct Foreign Investment (Washington, D.C.: The Department of Labor, 2–3 December 1976); Robert Stobaugh et al., Nine Investments Abroad and Their Impact at Home: Case Studies on Multinational Enterprises and the U.S. Economy (Boston, Mass.: Harvard Business School, 1976).

41. Barnet and Müller, Global Reach, p. 304.

42. Ibid., pp. 308–9.

43. The AFL/CIO's actions in support of opposition labor groups included threats of boycotts of all Chilean trade if workers' rights continued to be violated by Chile's military government. See “Washington Centro de Operaciones,” Hoy, no. 86 (17–23 enero 1979), pp. 6–9; “Qué Pasó con el Boicot,” Hoy, no. 87 (24–30 enero 1979), pp. 12–13; “Trade Union Rights in Chile,” AFL/CIO Free Trade Union News 33, no. 10 (Oct. 1978); “Chile Moves to Head Off Boycott,” Latin America Political Report 13, no. 1 (Jan. 1979), pp. 1–2. From a more political viewpoint, the AFL/CIO's actions in Chile could also reflect recent U.S. policy towards Chile, and the effort on the part of the American government to widen its influence upon the Chilean labor movement, which traditionally was controlled by the left.

44. Fernando Henrique Cardoso, “Dependency and Development in Latin America,” New Left Review, no. 74, (July–August 1973), p. 90. See also, F. H. Cardoso, “Associated-Dependent Development: Theoretical and Practical Implications,” in Authoritarian Brazil, ed. Alfred Stepan (New Haven: Yale University Press, 1973).

45. Cardoso, “Dependency and Development,” p. 90.

46. CEPAL, El desarrollo económico y social y las relaciones externas de América Latina, E/CEPAL/1023, 16 de junio 1977, pp. 183–84.

47. CEPAL, El desarrollo, enero de 1979, p. 138. Latin America is also important for the centers as a key market for armaments production. Although an increasing number of countries in the region are manufacturing and exporting their own weapons (indigenously designed, under license, or in cooperation with other states), South America's weapons purchases jumped, in terms of constant 1975 dollars, from $72 million in 1963 to $804 million in 1977. The principal suppliers to South America were the U.S., the U.K., and France. See Stockholm International Peace Research Institute, Armaments or Disarmament? The Crucial Choice (Stockholm: SIPRI, 1978), pp. 20–22. At the Latin American and Third World level, the Soviet Union is also an important supplier of weapons.

48. See C. Fred Bergsten, Thomas Horst, and Theodore H. Moran, American Multinationals and American Interests (Washington, D.C.: The Brookings Institution, 1978), p. 9. According to the authors, the 1957 and 1974 figures are inflated by abnormally high profits from oil companies; but the ratio for manufacturing alone more than quadrupled in the 18 years.

49. Howard M. Wachtel, The New Gnomes: Multinational Banks in the Third World (Washington, D.C.: Transnational Institute, 1977), p. 9.

50. Xavier Gorostiaga, Los banqueros del imperio (EDUCA, 1978).

51. The private component of Latin America's total external debt jumped from 39.4% in 1966 to 58.6% in 1976. Apparently, the Latin American countries also prefer private financing because through this alternative they can reject “tied” economic assistance—like U.S. foreign aid under the Carter Administration which was denied (although with important exceptions) to countries that violated human rights.

52. Bank for International Settlements, Forty-Eighth Annual Report (Basel, 12 June 1978), pp. 94–95.

53. See Robert Devlin, “International Commercial Bank Finance and the Economic Development of Poor Countries: Congruence and Conflict,” Working Paper, Economic Development Division of CEPAL, March 1979, pp. 1–3. According to one author, “the severity of the debt burden faced by many [Latin American] countries could propel them to action to evade it. The effects on individual financial institutions, on our overall money markets, and on the U.S. balance of payments, could all be severe” (C. Fred Bergsten, “The Threat from the Third World,” Foreign Policy, no. 11 [Summer 1973], p. 114).

54. An interesting point is that, despite the stagnation of the world economy in the last few years, the average annual increase in direct investment in Latin America was much greater during 1972–75 than 1968–71, rising sharply from 6.7% to 12%. In the 1972–75 period, the biggest increases were in Peru (18.9%), Mexico (18.3%), Brazil (15.6%), and the tax havens such as Panama and Bermuda (See CEPAL, Economic Survey of Latin America: 1978, E/CEPAL/G1103, 27 December 1979, p. 932).

55. CEPAL, El desarrollo, enero de 1979, p. 189.

56. CEPAL, El desarrollo, junio de 1977, p. 195.

57. U.S. Department of Commerce data cited in Latin America Weekly Report, WR-79-03 (16 November 1979), p. 32.

58. See summaries of report in “Aumentan las inversiones europeas en América Latina,” El Mercurio, 24 February 1980, p. B2; and Oscar Palma, “Crecen las inversiones de la RFA en Latinoamérica,” El Día (México, D.F.), 14 January 1980.

59. CEPAL, El desarrollo, junio de 1977, p. 195.

60. A recent study conducted by nine experts of the U.S. Commerce Department estimates that Chile is now a key market for the United States owing, among other things, “to Chile's liberal economic scheme.” Chile's imports from the U.S. now reach nearly $1 billion (see El Mercurio, 12 July 1980, p. A1).

61. “Latin America Opens the Door to Foreign Investment,” Business Week, 9 August 1976, p. 34.

62. The term was introduced by Raymond Vernon in his Sovereignty at Bay: The Multinational Spread of U.S. Enterprises (New York: Basic Books, 1971), pp. 46–59.

63. Bergsten, Horst, and Moran, American Multinationals, p. 133.

64. On this point see Abraham F. Lowenthal, “The United States and Latin America: Ending the Hegemonic Presumption,” Foreign Affairs 55, no. 1 (October 1976): 199–213.

65. For a detailed study on the options of Third World countries regarding multinational companies in the natural resources sector, see Benny Widyons, “Empresas transnacionales y productos básicos de exportación,” Revista de la CEPAL (First Semester 1978), especially pp. 150–69.

66. Immanuel Wallerstein, “Semi-Peripheral Countries and the Contemporary World Crisis,” Theory and Society, no. 3 (1976), p. 464.

67. In July 1980, Lord Carrington, the British Foreign Minister, accompanied by twelve executives of the largest British firms, visited Barbados, Brazil, Mexico, and Venezuela with the principal objective of negotiating agreements to increase British exports to these nations. Interestingly, the visit of Lord Carrington to Brazil, Mexico, and Venezuela was the first ever by a British Foreign Minister and, hence, it denoted the growing economic importance of the three Latin American countries (see “Canciller británico a Latinoamérica,” El Mercurio, 15 July 1980, p. A12). Incidentally, a study indicates that over the 1966–74 period, “investment in Latin America has apparently been more profitable than British overseas investment as a whole, and British investment in Brazil has consistently outperformed investment in the rest of the continent.” Moreover, “on the average British companies may recently have secured higher rates of return on their investments in Latin America than were earned by the average U.S. company operating in the same region. It would seem that recent British investments in Brazil have been remarkably profitable and that this has pulled up the average very sharply” (Laurence Whitehead, “Britain's Economic Relation with Latin America,” in Latin America and the World Economy, p. 94).

68. See Comisión Económica para América Latina, América Latina en el umbral de los años 80, E/CEPAL/G1106, noviembre 1979, pp. 198–201.

69. See “Ranking de las empresas: las 200 más grandes,” Ercilla, 15 October 1980, pp. 18–24.

70. John S. Odell, “Latin American Trade Negotiations with the United States,” International Organization 34, no. 2 (Spring 1980), p. 226. On the general theme of Latin America's bargaining power see also Ricardo Lagos, “América Latina: algunos hechos económicos recientes y su poder de negociación,” Estudios Internacionales 8 (no. 51, July-September 1980), pp. 291–308.

71. See Robert O. Keohane and Joseph S. Nye, Power and Interdependence: World Politics in Transition (Boston: Little, Brown and Co., 1977), pp. 224–26.

72. Interestingly, one of the few coincidences in the positions of Republican presidential candidate Ronald Reagan and then-President Jimmy Carter was the recognition of the vital importance of Mexico for the United States. The Republican political platform approved in Detroit stated that “the Republicans recognize the fundamental importance of Mexico, and, therefore, a first priority will be given to the restoration of an harmonious working relationship with that country. A new Republican administration will begin immediate wide-ranging negotiations at the highest levels to seek solutions to common problems on the basis of common interests, recognizing that each country has specific contributions to make in solving the practical problems” (cited in “Enmienda a la política de Carter a América Latina,” El Mercurio, 17 July 1980, p. A12).

73. Woodbury, “The U.S. and Japan,” p. 1.

74. C. Fred Bergsten, “U.S.-Latin American Relations to 1980,” in K. Silvert et al., The Americas in a Changing World (New York: New York Times Book Co., 1975), pp. 181–82.

75. See “Fiat uit Brazilië Komen naar Europa,” NRC Handelsblad, Rotterdam, 2 July 1979, p. 1.

76. See Latin America Political Report 13, no. 15, 13 April 1979, p. 117. Before the signing of the German-Brazilian accord, the government of Brasília held conversations with two U.S. corporations. Hence, when the White House pressured against the agreement, Helmut Schmidt replied that “part of the heated discussion could be clearly related to the concrete interests of the major U.S. [nuclear] firms” (Norman Gall, “Energía atómica para Brasil—Peligro para todos,” Estrategia, no. 42 [September-October 1976], p. 78).

77. See CIDE, “Algunos datos complementarios acerca de las relaciones Estados Unidos-Brasil bajo la administración Carter,” Cuadernos Semestrales–Estados Unidos: Perspectiva Latinoamericana, no. 5 (First Semester 1979), p. 202.