ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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The Mythology of Foreign Capital

Foreign Investments in India by Michael Kidron; Oxford University Press, London, 1965; pp vx 4- 368, price Rs. 45.  

The role of foreign capital in economic development has been a subject of discussion among economists from early days. Both Adam Smith and Ricardo recognised the importance of the discovery of America in extending the size of the market.

The role of foreign capital in economic development has been a subject of discussion among economists from early days. Both Adam Smith and Ricardo recognised the importance of the discovery of America in extending the size of the market. Marx and the Marxists analysed the extension of the European empire in Africa in economic terms — as a cheap source of supplies and a valuable outlet for production, and, therefore, the final resort of capitalism in avoiding its downfall.

This framework had its logic in the economic situation prevailing in the latter half of the nineteenth century: this was the era of ultracheap money, the decline of investment opportunities (vide, for example, Schumpeter in "Capitalism, Socialism and Democracy"), and the large scale emigration of capital.The nineteenth century was not a particularly edifying stage in capitalist development at home — and there is no reason to believe that capitalism would have been less predatory abroad.

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