American Multinationals and American Interests
By C. Fred Bergsten, Thomas Horst and Theodore H. Moran
Brookings, 1978, 535 pp.
Agnostic and eclectic are words for this valuable and remarkably comprehensive study. The first applies to the analysis, which rejects generalizations about foreign investment and registers doubt about its net effect on the American economy. The policy prescriptions are eclectic. A number of measures are aimed at governmental neutrality toward most investment. But taxes and O.P.I.C. are to be used to push U.S. companies out of the ownership of foreign raw materials and into selling their services on contract. Development of the poorest countries is to be helped but other foreign subsidies to American investment are to be resisted. Transactions with communist countries are to be licensed. The authors have done original research on a number of points and have especially good chapters on taxes and the relation of foreign investment to domestic market positions and profits. Much familiar ground is surveyed at length and some of that space ought to have been given over to a fuller discussion of proposals, made in the last 30 pages, for U.S. leadership in international agreements and a case-by-case system of U.S. supervision that could lead to the banning of some investment.