You take it Ray. That government you worked for this summer came to power by murdering 500,000 people. And the murders didn't even make the front page of the Times. I think all that it got was a short article in Life. But then as Bob Bowie said earlier,

"If you tried to gauge the polities of a government, you'd never work for anyone. There are very few democratic governments around." (I am staring at his following sentence in my notebook to convince myself that he really said it.) "We look at economic processes as an ongoing phenomenon, regardless of the course the population chooses for its government. Development is something that continues regardless of government."

Ray Vernon continued. "Three of us went there this summer to try to help Indonesia make foreign investments an asset instead of a liability. We found that Indonesia had been underestimating its capacity for investments. We recommended first a primer on how to judge strength for investments, and second, that they be less forthcoming with tax-exemptions to foreign investors. We find, however, that it is not a zero-sum game, if Ican use the jargon of the trade."

"Don't," Bowie said.

"In other words, both investors and the government stand to gain by advantageous policies. This is characteristic work for the DAS. We do the same thing in Ghana, Liberia, and Argentina.

He meant Ghana, Liberia, Pakistan, Malaysia, Columbia, and formerly Argentina, Greece, and Iran.

"Liberia is another good example. It is sustained largely by foreign investment, Firestone and Beth Steel. We had to tool up the Liberians to become effective bargainers with the main concessionaires. We taught them quite a lot about corporate tax practices. We gave them seminars, went through contracts with them, and showed them how to get more government revenue to speed internal growth."

I THINK I'll talk about the DAS right now. I can't bear to let that argument stand, even provisionally.

While it appears from Vernon's statement that the DAS is hurting foreign investment and helping the native countries, the reality, I think, is quite different. Increasing a government's revenue in an underdeveloped country also increases its stability. That in turn makes investment safer for a longer term. Taxing foreign investors creates support at home, and provides the illusion of helping the country.

Bowie later gave me two contradictory criteria to evaluate the Center. Either, he said, they chose what they do to serve imperialism, or they do it to understand "the forces at work in the modern world, to see whether we can understand the process of development."

As you can guess, the straw-men fell fast that morning. Very simply, neither of the two criteria explain the problem. Throughout the literature of the Center, there are reports stressing the progress towards a true market economy that a given nation is making. Through some process, whether by true beliefs or by economic or personal interest, they all believe that a market economy is the best way for a country to "develop."

I think that I could demonstrate, however, that American investment has results inimical to the people of underdeveloped countries. Vernon said,

"If you think that all foreign investment is bad, then what we're doing is bad."

Here again, that is not the point. Foreign investment is not, of itself, bad. But American investment usually brings with it the American military to protect those investments. American investment further creates or solidifies a small class that becomes both powerful and dependent upon U.S. presence. When popular governments are restored, the U.S. military acts immediately to unseat them. Brazil, Iran, the Dominican Republic, Guatemala, and Cuba are all good examples. Often the American investment forces the economy to serve the needs of the American economy rather than the needs of the people of the country. The country becomes increasingly dependent upon a few products, and its economy is increasingly unstable as the prices of the few products fluctuate. Because of the overwhelmingly large numbers of unemployed, American firms are able to keep wages far below those in more developed countries.

Besides preventing socialism, however, I think that American investment also prevents the development of a capitalist economy. It enforces a very unequal distribution of wealth which prevents the economy from growing, and often prevents the growth of a local bourgeoisie.