STUDIES IN INTERNATIONAL FINANCE: PRIVATE INTEREST AND PUBLIC POLICY IN THE INTERNATIONAL POLITICAL ECONOMY (DEBT, BANKING, LATIN AMERICA)

This is a study of American international banks. American internationally-oriented finance is examined as a fraction of American capital which affects and is affected by U.S. government policy, the policies of foreign governments, and the position of other class fractions at home and abroad.

American international finance arose in the 1890s as an adjunct to American industry. By the end of World War One the interests of American international bankers had begun to separate from those of nationally-oriented heavy industry, and throughout the inter-war period these two principal sectors of U.S. capital struggled to dominate U.S. foreign policy. By the late 1930s finance had won out. In the post-war period, U.S. foreign economic policy has been driven by the concerns of American international finance. Nevertheless, other economic sectors remain politically powerful within the United States. As the impact of financial internationalization on nationally-based industrial sectors has increased, so too has the opposition of the affected sectors to the policy preferences of international finance.

Faced with a weak domestic political base and powerful opponents, American international bankers have looked for allies abroad as well as at home. Some of the most important have been major borrowers in the less developed countries. In both Mexico and Brazil since the mid-1960s, American bankers have worked with the dominant class fractions, essentially heavy industry. The alliance has helped fortify the domestic economic and political position of both the bankers and the major Mexican and Brazilian borrowers. The borrowers, indeed, have been so strengthened that the financial crisis of 1982-1984, which drove a wedge in this alliance, also made it possible for many of the borrowing firms to contemplate looser ties with international financial markets.