COLBY COLLEGE
Department of Government
Prof. Rodman
Miller 255 x3270
Spring 1996

BUSINESS AND AMERICAN FOREIGN POLICY
Government 331

COURSE DESCRIPTION

This course is to explores the relationship between business and government in the conduct of foreign policy. Part I begins by contrasting different theoretical approaches to the impact of the global spread of American business on American national interests and the impact corporate interests on American foreign policy. These theories will be assessed in Parts II-IV examining (a) the impact of multinational corporations on US policy in Latin America and the Middle East, (b) trade policy, focusing primarily in Japanese-American relations, and (c) political efforts to use corporations and banks as instruments of coercive economic statecraft.

READING ASSIGNMENTS

Students are expected to read required assignments prior to the lecture to which they pertain. The following books are required and I recommend you purchase them at the bookstore:

Baldwin, Economic Statecraft Destler, American Trade Politics (3rd edition) Krasner, Defending the National Interest: Raw Materials Investments and U.S. Foreign Policy Pastor, Congress and the Politics of U.S. Foreign Economic Policy Sigmund, Multinationals in Latin America: The Politics of Nationalization Cohen, In Whose Interest? International Banking and American Foreign Policy O'Shea, "The U.S.-Japanese Semiconductor Problem"

Finally, I have prepared an anthology of readings was can be purchased. Reproduction costs come to $5.00. The readings will be handed out in four installments coinciding with each part of the class.

WRITTEN AND ORAL ASSIGNMENTS

(1) Each student is responsible for three papers and class presentations. For each project, the student is required to: (a) submit three copies of a 6-10 page paper to my office no later the day before the class at 5:00; and (b) give no more than a 5-10 minute presentation of his/her argument and defend it against questions from the class. A list of potential paper topics will be handed out on the first day of class and student preferences should be submitted by February 9. Each paper will count for 20% of your final grade

(2) A Final Examination given during the regularly scheduled examination period (30%).

(3) Class participation is structured into the class and will count for 10% of the final grade. Discussion assignments will be handed out prior to each section.



COURSE OUTLINE

I. THEORETICAL INTRODUCTION

February 6 & 8: Economic Liberalism and its Critics

Required: Krasner, pp. 35-54 Baldwin, pp. 70-95 Reader (Ball, Barnet & Mueller, Kapstein)

Recommended: For an excellent overview of the three perspectives on international political economy, see Gilpin, U.S. Power and the Multinational Corporation, pp. 20-43. An anthology that does an excellent jobs presenting the competing perspectives in the original is Lake & Frieden, eds., The International Political Economy.

February 13: Pluralism versus Statism

Required: Krasner, pp. 5-34, 55-90 Pastor, pp. 26-65 Cohen, ch. 3 Reader (Lindblom)

Recommended: For more on Lindblom's model, see his "The Market as a Prison" in Ferguson & Rogers, eds., The Political Economy, pp. 3-11. For critiques of Lindblom, see Wilson, Business and Politics, ch. 1 & 2, and Vogel, "Political Science and the Study of Corporate Power: A Dissent from the New Orthodoxy"

February 15: Marxism versus Statism

Required: Krasner, pp. 313-326, 329-352 Reader (Parenti, Magdoff, Petras, Moran)

Recommended: For Marxist critiques of American foreign policy, see Magdoff, The Age of Imperialism, ch. 6, and Kolko, The Roots of American Foreign Policy, pp. 44-85 and Confronting the Third World. For a power elite interpretation, see Sklar, ed., The Trilateral Commission, and, for a journalistic version of this view, Kwitny, Endless Enemies. For a Structural Marxist view, see Morley, Imperial State and Revolution: The United States and Cuba, 1952-1986 , Block, "The Ruling Class Does Not Rule" in Ferguson & Rogers, ed., The Political Economy, pp. 32-44, and Joseph, Cracks in the Empire, ch.1 (pp. 13-20), 2. For a radical argument that focuses on the role of natural resource needs, see Dean, "Scarce Resources: The Dynamic of American Imperialism" in Fann & Hodges, eds., Readings in U.S. Imperialism, pp. 139-154

For critiques of the radical model, see Gilpin, U.S. Power and the Multinational Corporation, pp. 99-103 & 138-150 and Slater, "Is U.S. Foreign Policy Imperialist or Imperial?" Political Science Quarterly (Spring 1976), pp. 63-88. For a moderate left critique, see Barnet, Roots of War, chs. 6-8.



II. CORPORATE INTERESTS AND FOREIGN POLICY BEHAVIOR

A. Multinationals in Latin America

February 20: Introduction: The Mexican Nationalizations

Required: Krasner, chs. 5, 6 (pp. 155-188) Sigmund, chs. 1-3

February 22: Investment Disputes in the 1950s & 1960s

Required: Krasner, chs. 7 (pp. 217-235), & 8 (pp. 274-298) Pastor, pp. 285-301 Sigmund, ch. 4 Reader (Schlesinger & Kinzer, Lipson)

February 27: Peru & Chile

Required: Krasner, ch. 7 (pp. 235-245) & 8 (pp. 298-313) Reader (Petras & LaPorte)

February 29: Contemporary Cases

Required: Sigmund, chs. 7, 8 Cohen, ch. 8 Reader (Purcell)

Recommended: Several of the Latin American cases are covered in Blaiser, The Hovering Giant, Kolko, Confronting the Third World, and Rodman, Sanctity versus Sovereignty, chs. 4, 6, 7, 9.

B. Oil Companies and U.S. Policy in the Middle East

March 5: Saudi Arabia and Iran in the 1950s

Required: Krasner, ch. 4 (pp. 106-128), & ch. 5 (pp. 188-216) Reader (Keddie, Painter)

March 7: The OPEC Challenge in the early 1970s

Required: Krasner, ch. 7 (pp. 245-273)

March 12: The Oil Embargo and Beyond

Required: Reader (Yergin, Gladwin & Walter, Turner, Smith)

Recommended: The best books on oil companies and foreign policy are Yergin, The Prize, Sampson, The Seven Sisters, Engler, The Politics of Oil and the Brotherhood of Oil, Painter, Oil and the American Century, Rustow, Oil and Turmoil, Turner, Oil Companies in the International System, Vernon, ed., The Oil Crisis, and Cowhey, The Politics of Plenty: Energy Policy and International Relations.

III. BUSINESS AND TRADE POLICY

March 14: American Hegemony and the Liberal Trade Order

Required: Pastor, chs. 1, 3, 4 (pp. 105-123) Destler, chs. 1, 2

Recommended: Gilpin, ñThe Politics of Transnational Economic Relationsî in Maghroori & Ramberg, eds., Globalism versus Realism, pp. 171-195 Krasner, ñUnited States Commercial and Monetary Policy: Unravelling the Paradox of External Strength and Internal Weaknessî in Katzenstein, Between Power and Plenty, pp. 51-87

March 19 & 21: Retreat from Economic Liberalism? US Trade Policy in the 1970s and 1980s

Required: Pastor, chs 4 (pp. 123-135), 5 Destler, chs. 3, 4, 5 (pp. 105-128), 6

April 2: Japanese-American Trade Relations

Required: O'Shea, pp. 1-32 Reader (Wilson, Fallows)

Recommended: For an excellent overview of the Japanese system, see Hart, Rival Capitalists, ch. 2. For an overview of US-Japanese trade disputes, see Cohen, Paul & Blecker, Fundamentals of US Foreign Trade Policy, ch. 9 and Mochizuki, "To Change or Contain: Dilemmas of American Policy Toward Japan" in Oye Lieber & Rothchild, eds., Eagle in a New World.

An excellent overview of the debate between orthodox free traders and revisionists in provided in Mastanduno, "Do Relative Gains Matter? America's Response to Japanese Industrial Policy" International Security (Summer 1991): 73-114. The best examples of revisionist writings are Prestowitz, Trading Places, Chalmers Johnson, Japan, Who Governs? The Rise of the Developmental State, and Fallows, Looking at the Sun: The Rise of the East Asian Economic and Political System. For a critique of this view, see Bhagwati, "Samurais No More" Foreign Affairs(May-June 1994) and Kuroda, "Super 301 and Japan" in Bhagwati and Patrick, eds., Aggressive Unilateralism: America's 301 Trade Policy and the World Trading System.

April 4: Simulation - The Japanese-American Semiconductor Accord

Required: OÍShea, pp. 33-68 Destler, ch. 5 (pp. 128-138)

Recommended: Prestowitz, Trading Places, ch. 2 John S. Odell -- U.S.-Japan Negotiations on Construction and Semiconductors, 1985-1988" in Evans, Jacobson & Putnam, Double-Edged Diplomacy

April 9: Contemporary Issues in US-Japanese Trade Policy

Required: Destler, chs. 7-10 (read selectively focusing on Japan and the WTO) Reader (USTR, Mastanduno, Altman, Bhagwati)

Recommended: Krasner, ñTrade Conflicts and the Common Defense: The United States and Japanî Political Science Quarterly (1986), pp. 787-806 Van Wolferen, ñThe Japan Problem Revisitedî Foreign Affairs (Fall 1990), pp. 42-55 Nye, ñCoping with Japanî Foreign Policy (Winter 1992-93), pp. 96-115 Cowhey & Aronson, ñA New Trade Order,î Foreign Affairs: America and the World 1992/93, pp. 183-196 Garten, ñClintonÍs Emerging Trade Policyî Foreign Affairs (Summer 1993), pp. 182-189

IV. BUSINESS AND ECONOMIC STATECRAFT

A. Multinational Corporations and Economic Sanctions

April 11: Theories of Economic Sanctions

Required: Baldwin, chs. 2, 3, 6, 7, 8 (pp. 145-174) Reader (Krasner, Gladwin & Walter)

Recommended: Hufbauer & Schott, Economic Sanctions Reconsidered, chs. 3-5

April 16: Case Studies: Cuba, Rhodesia

Required: Baldwin, ch. 8 (pp. 174-205) Reader (Morley, Kobrin, Gladwin & Walter)

Recommended: Morley, Imperial State and Revolution Leyton-Brown, The Utility of International Economic Sanctions

B. International Banking and Financial Sanctions

April 18: The Impact of Petrodollar Recycling

Required: Cohen, chs. 2, 4

April 23: Case Studies: The "Arab Money Weapon" & Iran Asset Freeze

Required: Cohen, chs. 5, 6, 9 Baldwin, ch. 9 (pp. 251-261)

Recommended: For analyses of the Iranian Asset Freeze, see Carswell, ñEconomic Sanctions and the Iran Experienceî Foreign Affairs (Winter 1981-82), pp. 247-266, Carswell & Davis, "Crafting the Financial Settlement" in Christopher, ed., The American Hostages in Iran, and Lissakers, "Money and Manipulation," Foreign Policy. Also see Alerasool, Freezing Assets: The Most Effective Economic Sanction.

C. Cold War Economic Statecraft

April 25: Strategies of East-West Trade: From Economic Warfare through the Grain Embargo

Required: Baldwin, ch. 9 (pp. 206-251, 261-278) Reader (Mastanduno, Paarlberg)

Recommended: Martin, Coercive Cooperation, chs. 8, 9 Mastanduno, Economic Containment: CoCom and the Politics of East-West Trade

April 30: Simulation: The Pipeline Sanctions

Required: Baldwin, pp. 278-289 Cohen, ch. 7 Reader (Crawford Articles on Pipeline and Toshiba)

Recommended: Mastanduno, Economic Containment, chs. 7, 8 Jentleson, Pipeline Politics, ch. 6

D. Corporate Social Responsibility

May 2: Simulation - South African Sanctions

Required: Reader (Treverton & Varley, Minter, Relly)

Recommended: The Reagan Strategy on South Africa is best spelled out in Crocker, "South Africa: Strategy for Change" Foreign Affairs (Winter 1980-81), pp. 323-351. For scholarly works from a variety of perspectives, see Hull, American Enterprise in South Africa, Minter, King Solomon's Mines Revisited, Lipton, Capitalism and Apartheid, Sampson, Black and Gold, Lewis, The Economics of Apartheid, Coker, The United States and South Africa, 1968-1985: Constructive Engagement and its Critics, and Davis, "Sanctions and Apartheid" in Cortight & Lopez, eds., Economic Sanctions: Panacea or Peace-Building in a Post-Cold War World.

May 7: Case Studies

Required: Baldwin, pp. 189-204 Reader (Ullman, Price)

May 9: Nongovernmental Pressures on Multinationals

Required: Reader (Vogel, Rodman, Sikkink)

Recommended: The classic work on citizen lobbies and corporations is David Vogel's, Lobbying the Corporation. Also see Donaldson, The Ethics of International Business