Conventional discussions of state power have tended to list a state's resources or capabilities for power in a straightforward and unambiguousway. True, the caveat is offered that there is a difference between potential and actual power, but the difference is usually spelled out in terms either of problems of modernization (seen itself as a technique of transforming capabilities) or in terms of the will and skill of the state under discussion.1 But in a world of highly interdependent political economies, this utilization gapdepends not only on the conditions that create and sustain the state's ability tocontrol its own resources, but also on the conditions that determine 1) theaccess of others to these capabilities, and 2) the access of the state to theresources of other states. For what purposes and in what situations are astate's resources usable by it? In what situations can the state be a gatekeeper with respect to the access by others to its resources? The answers to thesequestions determine, in part, whether potential becomes actual (relative)power in present or future state-to-state relations. It is to this neglecteddimension of power that this paper is devoted.
I would like to acknowledge the helpful critiques of Anne Cahn and Robert Kaufman who read an early version and of Frank Chalk, Antal Deutsch, Annette Baker Fox, Robert Gilpin, Harriet Hollenberg, Pierre-Paul Proulx, Yaakov Rabkin, Robert W. Russell and colleagues at the Inter-University Seminar in International-Relations and the International Studies Association who responded to later drafts. None, of course, are responsible for errors of fact or interpretation which remain.
1 On “bases” of power: Dahl, R. A., “The Concept of Power,” Behavioral Science 2 (1957): 201–215; generally on state power: Holsti, K. J., “The Concept of Power in the Study of International Relations,” Background, The Journal of the International Studies Association 7 (02 1964): 179–192; Hans, Morgenthau, Power Among Nations (New York: Knopf, 1967); Knorr, K., Military Power and Potential (Lexington, Mass.: Heath Lexington Books, 1970)Wolfers, A., “Power and Influence: The Means of Foreign Policy,” Discord and Collaboration (Baltimore, Maryland: Johns Hopkins, 1962): 103–115; on pervasive effects of power: Bachrach, P. and Baratz, M. S., “Decisions and Non-Decisions,” The American Political Science Review 57, 3: 632–642; on correlation with success: Baldwin, D., “Inter-Nation Influence Revisited,” Journal of Conflict Resolution 15 (1971): 471–486; Stanley, Hoffmann, Gulliver's Troubles; or the Setting of American Foreign Policy (New York, N.Y.: McGraw-Hill, 1968); on the relationship between generalized capabilities and bargaining strategies: Haskel, B. G., “Disparities, Strategies, and Opportunity Costs,” International Studies Quarterly 18, 1 (1974): 3–30.
David Baldwin has argued that the very concept of “capabilities” should be changed to include the likelihood of successful conversion into actual power and the likelihood of sufficient commitment; otherwise, he maintains, one is repeatedly confronted with analyses which call on the variables of last resort, “will” and/or “skill” (i.e. often fudge factors) to explain what he calls “the paradox of unrealized power.” He calls for “contextual analysis” that specifies what resource is likely to be useful for what particular purpose in what particular context. (Baldwin, David A., “Power Analysis and World Politics: New Trends versus Old Tendencies,” World Politics 31, 2 [01 1979]: 161–94.)
I am very sympathetic to this point of view particularly as Baldwin makes clear that he is intending this as a corrective. He is right when he says that if you take this point of view literally you vitiate the idea of a “power structure” and also the notion of “big, medium, and small powers.” Here, however, I think he throws the baby out with the bathwater. There is implicit, I believe, in the idea of a “big (medium, small) power” a probability estimate, even if a very imprecise one. If a power considered “big” were to fail often enough or significantly enough (i.e. at the expense of some generally agreed vital interest or when pitted against enough opponents), then with some lag, it would come to be considered no longer “big.” Occasional failures might not have this effect but continual failures would. In other words, while I think in single case analyses Baldwin's requirements are helpful, they do prevent us from making probability estimates for classes of cases or making general assessments.
Here I am going to side-step the issue Baldwin raises, for two reasons. It does not make a basic difference to my analysis whether I start with the notion of fungible or non-fungible power potential. My question in this paper is: whatever one is toting up as potentially useful for either future bargaining purposes or general purposes of multiplying one's wealth or military might, on the assumption that these will contribute to bargaining strength, 1) is one able to control the disposition of it, and 2) who else has access to it? Second, I am not attempting comprehensive assessment of the current relative power resources or relative effective power of particular countries or of types of countries; that is far beyond my scope. I am drawing attention to what I think is one neglected dimension, the dimension of access by country A to the resources of others and by others to country A's resources.
2 Hirschman, Albert O., “Exit, Voice, and the State,” World Politics, 31, 1 (10 1978): 90–107. Hirschman notes that those whose interest was in curbing the growing power of the state saw these effects as healthy (98–99).
3 Maier, Charles S., Recasting Bourgeois Europe, Stabilization in France, Germany, and Italy in the Decade After World War I (Princeton: Princeton University Press, 1975); Beer, Samuel H., British Politics in the Collectivist Age (New York: Vintage, 1969); Stein, Rokkan, “Numerical Democracy and Corporate Pluralism,” Political Oppositions in Western Democracies, Dahl, Robert A., ed. (New Haven, Conn, and London: Yale University Press, 1966): 70–115; Rimlinger, Gerhard V., Welfare Policy and Industrialization in Europe, America, and Russia (New York: Wiley, 1971); Andrew, Shonfield, Modern Capitalism, The Changing Balance of Public and Private Power (Oxford: Oxford University Press, 1965).
4 Robert, Gilpin, “Economic Interdependence and National Security in Historical Perspective,” Economic Issues and National Security, Knorr, K. and Trager, F. N., eds. (Kansas City: Regents Press of Kansas, 1977): 19–66; David, Baldwin, “International Political Economy and the International Monetary System,” International Organization 32,2 (Spring 1978): 497–512.
5 Katzenstein, Peter J., “International Relations and Domestic Structures: Foreign Economic Policies of Advanced Industrialized States,” International Organization 30, 1 (Winter 1976): 15; “Domestic and International Forces and Foreign Economic Strategies,” International Organization 31, 4 (Autumn 1977): 603. Katzenstein's forthcoming work on small European states continues this line of analysis.
6 Krasner, Stephen D., “Domestic Constraints on International Economic Leverage,” Knorr, and Trager, , eds., op. cit: 160–182. According to Krasner, the state's strength along a weak-to-strong continuum can be gauged by answering the questions: “1) Can central decision makers autonomously formulate policies that are designed to further the collective or general goals of the country? 2) Can central decision makers implement their policy preferences?”, p. 161. See also his “U.S. commercial and monetary policy: unravelling the paradox of external strength and internal weakness,” in Between Power and Plenty, Foreign Economic Policies of Advanced Industrial States, Katzenstein, Peter J., ed. (Minneapolis: University of Minnesota Press, 1978).
7 Hirschman, Albert O., National Power and the Structure of Foreign Trade (Berkeley: University of California Press, 1969). (First printed 1945; written 1941–1942).
8 Richard, Cooper, “Economic Interdependence and Foreign Policy in the Seventies,” World Politics 24 (01 1972): 159–181.
9 Keohane, Robert O. and Nye, Joseph S., “World Politics and the International Economic System,” in The Future of the International Economic Order: An Agenda for Research, C. Fred, Bergsten, ed. (Lexington, Mass.: Lexington Press, 1973), pp. 115–180. For the concept of asymmetries as generating power, see also Stinchcombe, Arthur L., “Organized Dependency Relations and Social Stratification,” in Handbook of Organizations, James, March, ed. (Chicago: Rand McNally, 1965).
10 Robert, Gilpin, “Three models of the future,” International Organization 29, 1 (Winter 1975): 37–62; Jeanne Kirk, Laux, “Global Interdependence and State Intervention,” in Canada's Foreign Policy: Analysis and Trends, Tomlin, Brian W., ed. (Toronto: Methuen, 1978), pp. 110–137; John, Zysman, “The State as Trader,” International Affairs 54, 2 (04 1978): 264–281. Richard Cooper's original article also dealt with “coping responses.”
11 Cameron, David R., “The Expansion of the Public Economy: A Comparative Analysis,” The American Political Science Review 72, 4 (12 1978): 1243–1261. Cameron shows that in small, highly organized economies (both on the business and labor sides), the impact of the international economy has been to give an incentive to shift certain costs of production (labor costs in the form of benefits) away from the firm (where they would count in costs vis-à-vis competitors abroad) and to the public budget as a social expenditure.
12 Raymond, Vernon, Sovereignty at Bay. The Multinational Spread of U.S. Enterprises (New York: Basic Books, 1971): 65–77.
13 Huntington, Samuel P., “Transnational Organizations in World Politics,” World Politics 25, 3 (04 1973): 330–368, especially, 342, 344, 355.
14 The distinction is not perfect since MNCs buy as well as produce and sell, but their raison d'etre is either production or marketing or both.
15 Denis, Goulet, “The Dynamics of International Technology Flows,” Technology Review (05 1978): 32–39. (I am indebted to Deborah Stone of MIT for pointing out this article to me.) In 1978, 22 percent of Harvard Business School's graduating class went to work for management consulting firms. John, Thackray, “Winning the Game with a Hot Theory. Companies Seek Advice of Boston Consulting Group,” The New York Times, (hereafter NYT), 15 04 1979.
16 Ann, Crittenden, “Apolitical American Consultants, Third World Uses Firms' Expertise,” NYT, 28 09 1979. Where not otherwise credited, the examples in the next four paragraphs are from Crittenden's article.
17 NYT, 25 June 1976. See James, Bedore and Louis, Turner, “The Industrialization of the Middle Eastern Oil Producers,” World Today (09 1977): 326–334. They note that while no region dominates the economic relationship with the oil producers Europe leads in trade. Several Third-World countries such as Korea, India, and Pakistan are large suppliers, and these plus Yemen, Lebanon, and Egypt send large numbers of laborers.
18 NYT, 23 June 1976, and Eric, Pace, “Factories to Rise in Saudi Village,” NYT, 13 02 1978. Ibrahim, Youssef M., ‘Bechtel Orchestrates Construction of New Industrial City for Saudis,’ NYT, 13 02 1978. Likewise Algeria called for bids from large international accounting companies to improve cost-accounting procedures and remedy inefficiencies in its state-owned factories. Henry Giniger, NYT, 8 August 1976.
19 Ibrahim, NYT, 13 February 1978.
20 Crittenden, , NYT, 28 09 1975. McKinsey & Co., a consulting firm restructured the prime minister's office in socialist Tanzania.
21 Ibrahim, NYT, 24 April 1978.
22 For example, “The Global Scramble for Phone Billions,” NYT, 13 November 1977.
23 Goulet, on “decisional technologies”: 37–38. Consultants also function as expert critics in helping countries evaluate plans. Goulet points out, however, that (as elsewhere) their “advice” is often wanted more for prestigious endorsement.
24 Robert Gilpin drew my attention to the point about invisibles. The question of whether the service or the product is primary may be a matter of point of view and relatively difficult to disentangle. For Bell Telephone or Bechtel, it is sometimes difficult to decide whether the incentive for service development is the promotion of the product (telephones, construction project components). It would probably be a matter of whether in the specific instance greater profit is to be made on the service or the product. (Perhaps one should conceive of the two together along the lines of the “upstream, downstream” model of vertical integration.)
25 The Gazette (Montreal), 24 September 178. The Gazette hereafter.
26 There are 110 refining and metallurgy projects underway in the Middle East and North Africa. Louis, Turner and James, Bedore, “The Trade Policies of Middle Eastern Industrialization,” Foreign Affairs (Winter 1978/1979): 306–322.
27 NYT, 13 February 1978.
28 “Sam Wallace's bid to build a Saudi ‘missile city,’ ” Business Week, 4 September 1978. Since the early 1970s the U.S. contracts in Saudi Arabia declined from about one-third to one-eighth.
29 Peter, Cook, “Canadians Reaching for Third World Riches,” The Gazette, 25 09 1978. The James Bay Energy Corporation, a subsidiary of Hydro Quebec, has an annual budget one-sixth the size of the province's government expenditures or 4 percent of Quebec's GDP of $50 billion. The Gazette, 14 October 1978. “Quebec Eyes China Hydro Contract,” The Gazette, 28 02 1979.
30 “Quebec Eyes China Hydro Contract,” The Gazette, 23 02 1979.
31 Ian, Anderson, “One Contractor's Gamble. Experience with Dams at James Bay Means Chances for Huge International Contracts Later,” The Gazette, 14 10 1978.
32 Franko, Lawrence G., “Multinational: The End of U.S. Dominance?” Harvard Business Review (11–12 1978): 93–101. Citations, 94, 100.
33 NYT, 15 November 1975.
34 The Gazette, 21 October 1978.
35 Upsala Nya Tidning, 18 October 1976, reported in UD Pressöversikt, 20 October 1976.
36 David, Sloan, “The Halls of Ivy,” NYT, 3 04 1978. The government of Communist China has learned from this and recently gone directly to individual U.S. universities, although elsewhere they have gone to governments (like the Canadian government) to negotiate places for their students. University Affairs (December 1978): 9. “The Canadian Council of Education Ministers” is currently arranging for 500 Chinese students to study in Canada. The Gazette, 2 March 1979.
37 Hechinger, Fred M., “Iranians' Plight Puts a Spotlight on U.S. Colleges,” NYT, 02 1979.
38 The information in this paragraph is based on a talk by Minister of Education Dr. Abdul Salam Majali, 1 June 1978. Amman, Jordan. Pakistan is also training people for the oil producers' market. Bedore and Turner, p. 333.
39 Roberts, Steven V., “The Saudi Connection, Fred Dutton,” NYT, 2 04 1978. Dutton had advised many Democratic campaigns. Algeria hired Clark Clifford. Currently fifty countries have media advisers in the U.S. (Sloan, David M., “More Nations Seek a PR Polish on their U.S. Image,” NYT, 6 08 1978.
On exemptions in the anti-boycott legislation: two significant exemptions to the requirements of the Export Administration Act (EAA) of 1977 permit 1) “unilateral selection” of suppliers. 2) “compliance with local law” in purchases “for their own use” by firms based abroad, even if American controlled. The department of commerce regards turn-key projects as falling within the concept of “for their own use.” However, if a pattern of supplier selection is discerned which indicates that a blacklist is being followed, that is then subject to penalty under EAA. Moreover, the Tax Reform Act of 1976 subjects to penalties some things permitted by EAA. In addition, actions are also brought under the Civil Rights Act of 1964 and the Sherman Anti-Trust Act. The department of justice brought a suit against Bechtel, before the EAA was passed, alleging a blacklist compliance pattern amounting to “conspiracy in restraint of trade”; even after the EAA, a federal court in January 1979 upheld the consent agreement between Bechtel and Justice.
40 Anthony Sutton argues that the Soviet Union has always had it. His assessment (not generally shared) is that the main factor in Soviet economic development has been technology transfer from the West. Western Technology and Soviet Economic Development 1917–1965, 3 vols. (Stanford, Ca.: Hoover Institute, 1968–1973).
Philip Hanson uses current day machinery deliveries as a proxy for international commercial technology transfers on the grounds that given the hard currency scarcity of the Soviet Union, imports must be used to maximize productivity. Philip, Hanson, “Western Technology in the Soviet Economy”, Problems of Communism (11–12 1978): 20–30, here p. 25.
41 United States Senate, Committee on Foreign Relations, Hearings before the Subcommittee on Multinational Corporations, 93rd Congress, 2nd Session, 17 July 1974. (Testimony by Zbigniew Brzezinski).
42 Franklyn D. Holzman notes that the Soviet Union has long tried to obtain the benefits of GATT membership like MFN without joining GATT. See his description of the variety of efforts, none of which worked until the network of bilateral trade agreements of the 1960s and 1970s. International Trade under Communism, Politics and Economics (New York: Basic Book, 1976), pp. 157–159.
Holzman suggests that the Soviet refusal was based not only on the linkage to emigration but also on the diminished utility of the agreement to the Soviets because 1) in the meantime they had received $3 billion a year windfall profits from the increase in the price of gold and of oil, and 2) American legislation severely limited the Export-Import Bank's authority to extend credits to the Soviet Union. (Ibid.pp. 169–170.) Holzman adds that many knowledgeable observers believe the Soviet Union to have been more interested in these subsidized credits than in the MFN issue.
It has been suggested that the real equivalent of Most Favored Nation status in a centrally planned economy would be 1) an end to the operational role of the geographic administration within the ministry of foreign trade which allocates geographically all but the most important and visible of the foreign trade; 2) an end to bilateral trade balance targets which are inherently discriminatory, and 3) an end to abnormally long trade agreements. Edward, Hewett, “Most-Favored Nation Treatment in Trade Under Central Planning,” Slavic Review, 37, 1 (03 1978): 25–39; proposals cited here, 34–35.
Interestingly, it was noted by Marshall Shulman that the number of Jews being permitted to emigrate rose substantially in 1978; he interpreted this as a signal for the desire for trade. Thirty-three thousand left in 1973, 11,000 in 1974, about 20,000 in 1978. The Gazette, 28 September 1978. (Senator Jackson had been aiming at 60,000 per year.) This would suggest a covert link, even if one not accepted as legitimate by the Soviets.
43 I am aware that this is something of an oversimplification since to some extent Soviet ministries can be taken as representing different economic sectors, since ministerial rivalries reinforce this, and since there have been efforts to make contact with plant level people. But on the whole, the situation is still that of a relatively centralized government on one side and private business on the other.
A fascinating example, not of one of the ministries adopting its own policies but of a Soviet multinational carrying on its own policy parallel to that of the government or possibly with the consent of the government, was that of a Belgian-Soviet shipping firm, Nafta-B set up in 1968, operating directly under the Soviet ministry of merchant marines, and now having a turnover of about $1 billion. During the Arab oil embargo, when the Soviet government was encouraging the Arabs, Nafta-B sold crude oil to the Europeans. Christian Science Monitor, 10 August 1978.
Leon Smolinski has pointed out that one possible implication of the 1973 Production Association reform in the Soviet Union might be the possibility for more direct foreign trade links between these giant associations (something like a Soviet vertically integrated corporation) and outside buyers and sellers. It should thus make foreign trade more feasible. (Leon, Smolinski, Associations and Soviet Foreign Trade, unpublished paper, 06 1978, pp. 10–11, 25–26.)
44 For the board of directors of the Council and the membership list, see pp. 194–195 and 193 of the Senate hearings, in footnote 41 above.
45 Fonim, B. (a Soviet economics professor, at the time on leave to UNCTAD), NYT, 20 December 1973.
46 See questioning by Senators Church and Case, pp. 18–34 in hearings cited in footnote 55.
47 Fonim, , NYT, 20 December 1973.
48 NYT, 2 August 1976.
49 NYT, 27 February 1978, on Chase Manhattan representative in Moscow. The $600 million credit compares with the 1973 attempt at a $6 billion Yakutsk liquified natural gas project which, it was hoped, would be over two-thirds government subsidized through the Export-Import Bank and government guarantees.
50 Robert, Gilpin, “Technology and the National Economy,” in Science and the Future Navy, National Academy of Science, 1977, pp. 25, 27–28, 30. Gilpin's argument should really be that the United States cannot count on others to hold dollars as under the pre-1971 fixed exchange rate system; to the extent that they still do, the United States can still use inflation to cover its import bills.
See also Meyer, Herbert E., “Those Worrisome Technology Exports,” Fortune, 22 05 1978, pp. 106–109. Meyer, like Gilpin, discusses the report of J. Fred Bucy, vice president of Texas Instruments, to the department of defense. Bucy advocates “voluntary” export restrictions by U.S. companies. There is worry that European and Japanese buyers are now going after “front-end” rather than “mature” technologies as they used to.
Cf.PhilipHanson(Ibid., pp. 21–22) who says that the Soviets usually buy the latest “proven” technologies, what he calls “the state of the art,” rather than the “cutting edge.” Hanson attributes this both to the continuing efficacy of the strategic embargo (p. 22, footnote 27) and to the fact that their principal concern is in reducing the productivity gap.
51 NYT, 12 July 1978.
52 Sperry-Rand's chairman said “This is the first time the president has stepped in on a fairly routine application. That raises the question of future applications. Are they going to require presidential approval?” He did not question the decision but said “we do question the information that led to it” (i.e. how different this was from other computer sales, what kind of capacities the computer would give TASS). “Computer-Sale Bar Irks Sperry,” NYT, 27 July 1978.
53 NYT, 21 July 1978. The argument would have been that a license was being revoked on grounds unrelated to controls in existence when the license was granted. This might have led to Supreme Court review of the whole Export Administration Act.
54 Jim, Hoagland, “Economic Diplomacy to Roll Back Soviets,” The Manchester Guardian, 10 September 1978. See Huntington, 's “Trade, Technology, and Leverage: Economic Diplomacy,” Foreign Policy (Fall 1978). It is unclear whether these recommendations were ever endorsed by the administration.
The only clear indication that procedures involving the NSC in the export control process were implemented is in the testimony of the Secretary of Commerce, Juanita Kreps. She stated that the study of technology transfer (directed by Huntington in the NSC) with conclusions in Presidential Memorandum #31 “institutionalized NSC's role in the procedure, by making the NSC an advisory member of the Operating Committee and the Advisory Committee on Export Policy” (presumably within the department of commerce). United States Senate, Committee on Banking, Housing, and Urban Affairs, Hearings (“U.S. Export Control Policy and Extension of the Export Administration Act”) 96th Congress, 1st Session, 5–6 March 1979, p. 56.
55 NYT, 7 December 1978; The Economist, 6–12 January 1979; in October 1978 there were Congressional hearings on export controls; eventually four different bills were introduced to make the export license system more selective, more efficient, and to put the burden of proof on the administration for any denials. United States Senate, Committee on Banking, Housing, and Urban Affairs, Hearings (“Use of Export Controls and Export Credits for Foreign Policy Purposes”) 95th Congress, 2nd Session, 10–11 October, 1978; “U.S. Export Policy,” A Report submitted by the sub-committee on International Finance, February 1979. Senator Adlai Stevenson, chairman of the committee, is the author of one of the bills. The author of another is Congressman Jonathan Bingham. See Bingham, Jonathan B. and Johnson, Victor C., “A Rational Approach to Export Controls,” Foreign Affairs 57, 4: 894–920.
56 The Economist, 15–21 July 1978, pp. 31–32 for the automatic assumption that grain sales would not be touched.
57 The military security area is the pattern example of what we have called contingent access. In this area above all, one would expect the state to control, and it does—ultimately. But even here the line between private and public can be obscure, and the relationships subtle and shifting. Some examples: in 1978 a U.S. company anticipating a sale of advanced airborn equipment for geological exploration had already invited, obtained visas for, and begun to train a Communist Chinese scientific team, when the application for export was refused on security grounds (NYT, 9 May 1978).Or: in a deal instigated by the Northrop Corporation and backed by the Navy as a way of reducing its own costs, the Iranian government offered to help finance the construction of a new plane which would have had modifications specially designed for Iran (NYT, 28 September 1976). Eventually President Carter's administration barred the sale on several grounds, one of them—objection in principle to developing or modifying weapons solely for export. What these two anecdotes indicate is that in each case in someone's educated guess—someone with authority to back his bet with money—the sales might have gone through.
In turn this signifies the possibility for penetration of the decision-making process on weaponry by alliances made up of foreign governments, domestic industry, and often parts of the domestic government itself. Several years ago Robert Keohane observed this pattern of “pitting government against itself” in his account of the possibilities for relationships of even small allies with an element in the bureaucracy of the “hub state.” These possibilities were particularly available if that element of the bureaucracy had become partially dependent for the success of its own mission upon the cooperation of the state which seemed to be its clientele. (Keohane, Robert O., “The Big Influence of Small Allies,” Foreign Policy 2 (Spring 1971): 161–182, here 172.) In later years Keohane and Joseph Nye elaborated on what they called “transgovernmentalism,” that is, the implicit and explicit coalitions involving sub-units of different governments and by implication often circumventing the expressed or implied will of that government. As they put it, transgovernmental relations differ from interstate relations by “the extent to which actors are behaving in conformity to roles specified or reasonably implied by the formal foreign policy structure of the state.” (“Transnational Relations and World Politics,” International Organization 24, 3 [Summer 1971]: 721–748, here 733.)
A different example of contigent access comes from Israeli-American relations. The United Jewish Appeal collects private contributions from Americans for a combination of domestic Jewish charities and aid to Israeli organizations and purposes; the sums donated to Israel are significant. U.S. law has been interpreted to accord the UJA tax-exempt status (as a charity). It has also been held to prohibit the use of these tax-exempt funds “outside the Green Line” (i.e. beyond the Israeli borders of 1967). The Jerusalem Post, 6 September 1977. Thus Israeli ‘access’ to (American) society is actually conditional (for its tax-exempt status, a crucial aid in fundraising) upon U.S. foreign policy decisions. This, then, is a case where usually unhindered ‘access’ was, through the expressed willingness to use the tax laws, really made into contingent access.
58 Senator Percy in subcommittee hearings (footnote 37): p. 200; Donald Kendall in answer to a question on the sale of police equipment: pp. 205–206.
59 Competition among Western governments kept credit terms “softer” than was usual and the absence of coordination except for the strategic embargos resulted in limited control. Hansen, ,Ibid, p. 30.
See also Raymond, Vernon, “The Fragile Foundations of East-West Trade,” Foreign Affairs 57, 5 (Summer 1979): 1035–51. Vernon believes neither general technology controls nor “case-bycase-linkage” will work, the latter because the Soviets often have other alternatives and because the American executive is working in such a “grossly unpromising environment” for such a strategy. Since his main argument is that the rapid growth of East-West trade will strain trading relations among Western states and distribute benefits disproportionately to the East—he also used ‘The Gresham's law’ analogy—he concludes that there should be an effort to get OECD to agree upon one trade strategy “based on economics” or “net economic benefit” to the whole group. For why I think such a principle is unlikely to tempt the rest of the OECD see my “Disparities, Strategies, and Opportunity Costs,” International Studies Quarterly 18, 1 (03 1974): 3–30. For an account of actual frustrated attempts to curb competitive export credits (not exclusively to Eastern countries) see the Pithy, summary in The Economist, 4 03 1978, pp. 67–68.
60 Levy, Walter J., “OPEC's Future,” NYT, 5 01 1979.
61 Dave, Boldt, “The mystery man behind the Iranian revolution,” The Montreal Gazette, 17 02 1979, discusses the spread of the ideas of an Iranian religious dissident whose ideas were prohibited within Iran, among Iranian students in the United States.
62 There is just a bit of Schadenfreude in discovering that the large construction company, Starrett, having decided several years ago (in the wake of New York's financial difficulties, no doubt) that New York was too risky a place to do business, diversified—into Iran! NYT, 5 January 1979. More seriously, social scientists are diversifying into a new occupation: “risk-assessment,” increasingly demanded by international businesses. See Leonard, Silk, “Business Wary of ‘Next Iran,’ ” NYT, 14 02 1979.
63 Joseph, Berliner, The Innovation Decision in Soviet Industry (Cambridge, Mass.: M.I.T. Press, 1976); David, Granick, “Managerial Incentives in the USSR and in Western Firms: Implications for Behaviour,” Journal of Comparative Administration 5, 2 (08 1973): 169–199.
64 Mytelka, Lynn K., “Technological Dependence in the Andean Group,” International Organization 32, 1 (Winter 1978): 101–139. Mytelka argues that Japan has used licensing to expand its horizons while the Andean states have used it as a “surrogate for outward orientation”; since she also notes that state as well as non-state firms have tended to license even relatively simple technology, it would appear that the behavioral difference between these countries and Japan reflects some other factor not examined.
65 Moran, Theodore H., Multinational Corporations and the Politics of Dependence, Copper in Chile (Princeton: Princeton University Press, 1974) p. 254.
66 Geoffrey, Kemp, “Arms Transfers and the ‘Back-end’ Problems in Developing Countries,” in Arms Transfers in the Modern World, Stephanie, Neuman and Robert, Harkavy, eds. (New York, N.Y.: Praeger, 1979).
67 Göran, Ohlin, “Debts, development and default,” in A World Divided, The less developed countries in the international economy, Helleiner, G. K., ed. (Cambridge, Eng.: Cambridge University Press, 1976), p. 207–224.
68 On the establishment of the Caisse de la Dette and its increasing involvement in Egyptian governance see Tignot, Robert L., Modernization and British Colonial Rule in Egypt, 1882–1949 (Princeton: Princeton University Press, 1966), Chapter One.
69 The Montreal Star, 7 April 1973.
To underline this point: polling is another capability-for-hire. Poll-takers are purchasable. This came up in connection with one of then candidate Jimmy Carter's poll-takers, public opinion analyst and tactical adviser Patrick Caddell. Caddell had among his nearly thirty other commercial clients foreign banks, large corporations, and the Saudi Arabian government. The issue is in no way exclusively international. Rather, the problems of conflict of interest are most likely primarily domestic as when Caddell surveyed on nuclear issues both for Westinghouse (a member of the Atomic Industry Forum) and for Scientists' Institute for Public Information— until the latter found out. Caddell did political polling under Cambridge Survey Research, and commercial polling under Cambridge Reports. The latter, however, sells “a massive ‘in-depth’ survey of U.S. national attitudes on economic, political, and even social questions.” The line between information, analysis, and advice, is often a thin one as The New York Times’Charles Mohr makes clear (NYT, 2 August 1976). The point is simply that anybody—with money—has access to this kind of politically relevant information.
70 Wilczynski, J., The Multinationals and East-West Relations: Towards Transideological Collaboration (Boulder, Col.: Colorado, Westview Press, 1976), p. 148. There are conflicting theories of the origin of the Eurocurrency market. See footnote 23, p. 62 in Spero, Joan E., The Politics of International Economic Relations (New York: St. Martin's Press, 1977).
71 In a sense, the holders of Eurodollars, in “circumventing” these requirements, are benefiting from the system without contributing to the “insurance” features which help sustain it. Second, they help undermine the government's tool of varying the reserve requirements as a tool of economic policy.
I am indebted to a discussion with Professor Thomas Velk of the Department of Economics, McGill, , for a number of these points. See his “The Petro-Dollar Market: How Does it Work? Can it be Controlled?” Social Praxis 4, 3–4 (1977).
72 There is a basic argument here. One view is that the Eurocurrency system is a more “efficient” “channel,” but is basically identical to domestic money markets, not, in other words a new constraint on governments. See “Eurocurrency market controls,” World Financial Markets (published by Morgan Guaranty Trust Company) 03 1979: 4–13; “Demystifying the Euromarkets,” Monthly Economic Letter (published by Citibank) 08 1979: 5–8. The opposite view is that domestic payments systems have the property of a “collective good” whose services (for example, regulation) are not allocated by the market, hence will not be optimally produced by it. (See George, Grantham, Tom, Velk and Arthur, Fraas, “On the Microeconomics of the Supply of Money,” Oxford Economic Papers, 29, 3 (11 1977): 339–356.) They see the Eurocurrency market as one in a series of evasions of these regulations, understandable in the sense that any system of regulations provides incentives to evade them.
73 NYT, 3 May 1972, 5 May 1977. That the U.S. government itself has not pursued a single minded policy is evidenced by the May 1978 release of commodity credits to Chilean farmers and ranchers. While the State Department argued that there was some evidence of improved behavior by Chile, it also is clear that the program helps U.S. farmers. It is a good prototype of the program which is legally controllable by the government, but in which the government is subjected to predictable and sustained pressure not to control it.
74 See NYT, 26 January 1977 for report of Levesque's speech, NYT, 29 January 1977 and The Montreal Star, 28 January 1977 for Levesque's references to an “Anglo-Canadian fifth column” “strategically deployed at most tables.”
75 Levesque took additional trips to the United States in October 1978 and January 1979. Again, he spoke to businessmen (on topics like ‘Quebec and Canada: toward a new relationship’), to academics, and also had an appointment with Senator Muskie (from neighboring Maine). Muskie called a press conference to announce that “separation” did not seem the proper word for what Levesque was describing; he seemed rather to want a “new relationship” with the rest of Canada. The Gazette, 23 September 1978, 21 January 1979. By understanding the usefulness of the separation of powers in U.S. government, Levesque obtained a kind of “official” reassurance, again reported widely in Quebec.
76 The term “separation” elicits a negative response from the electorate and is considered a hostile term by the Parti Québecois. But they have progressively expunged the words “independence” and “independent state” from their terminology, as well as they have noted the poll data that show that their support peaked at about 20 percent using those terms. (Maurice, Pinard and Richard, Hamilton, “The Parti Québecois Comes to Power: An Analysis of the 1976 Quebec Election,” Canadian Journal of Political Science 11 (12 1978). The inventions which have up to now widened their support have been: 1) the promise in 1976 that a referendum would be held if they were to come to power—i.e. they would not take election itself as a mandate for separation; 2) the likely phrasing of the forthcoming referendum as only a mandate to negotiate; and 3) “sovereignty-association” as the formula for potential negotiation. “Sovereignty” taps the emotive, assertive nationalism partially latent in parts of the Quebec population, and certainly primary for PQ activists, and the “association” is intended to reassure anxious voters that the word does not mean what it says. The intent is to obtain a mandate which can be interpreted as being for “self-determination.” See the recent statement of the PQ itself, which says that if a negotiation for “sovereignty-association” fails, then the party is committed to the choice of “sovereignty” anyway. It adds that a PQ government will, in such a situation, again consult the population (although it does not specify whether this will be in a referendum or in an election).
The Gazette, 24 February 1979.
77 It also induced American industry to jump the tariff wall with subsidiaries, and then enjoy the protected market.
78 For the PQ argument see for example, The Montreal Star, 10 April 1978, 24 April 1978, and NYT, 15 May 1978. My version is a composite of these and other statements. What the PQ has not publically considered until recently is Western Canada. The West, which was disadvantaged by the tariff, would find little interest in reinstituting it under conditions in which they would not even obtain political unity in exchange. To pursue the logic of the argument, this leaves Ontario in the situation of choosing between Quebec and the West which includes booming oil-rich Alberta. In March 1979 Levesque argued to a regional meeting of the Parti Québecois that Alberta needed Quebec as a market for its beef, and that therefore they (and Ontario) will have “no choice” but to say yes to “sovereignty-association”! The Gazette, 3 March 1979.
“Rump Canada” is Antal Deutsch's term in “The Political Economy of Québec Libre,” in Issues in Canadian Economics, Officer, and Smith, , eds. (Toronto: McGraw-Hill, Ryerson, 1974), pp. 407–418.
Birch, Anthony H., “Minority Nationalist Movements and Theories of Political Integration,” World Politics 30, 3 (04 1978): 334–335.
80 Ibid: 335–336.
81 Haskel, Barbara G., “Recent Swedish-American Relations: Some Analytical Observations,” (Published as “Det moraliserande sverige” [“Moralising Sweden”]. Internationella studier 1 (Stockholm, 1976): 30–32.
82 Some of these, given the substance of the issue, would have simply been opposed.
83 For example, it is not at all clear that Kissinger could have delivered on his offer of technology to the North-South conference. (Robert Gilpin in lecture, Montreal 1978.)
84 Lowi, Theodore H., “Toward a Politics of Economics: The State of Permanent Receivership,” in Stress and Contradiction in Modern Capitalism, Public Policy and the Theory of the State, Lindberg, Leon N., et al. , eds. (Lexington, Mass.: Lexington Books, 1975), pp. 115–124.
85 NYT, 28 June 1978, Canadian Middle-East Digest (published by the Canada-Israel Committee) 4 02, 23 05 1978.
86 1) President Ford gave the athletes a send-off in the middle of the episode. NYT, 11 July 1976. 2) The head of the U.S. Olympics Committee was in touch with the chairman of President Ford's Domestic Council (NYT, 16 July 1976) thus testifying to the significance of the event for domestic politics, particularly in an election year. 3) The U.S. team had 425 members. NYT, 13 July 1976.
87 See the review by Erich Segal of The Olympic Games. The First Thousand Years by Finley, M. I. and Plekt, H. W.. The New Republic, 3, 10 07 1976. Canceling the Olympics or withdrawing major teams or events would have led to canceling lucrative TV royalties from which the IOC gained revenue.
88 NYT, 17,21 July 1976.
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