increasingly competitive. Warren argued that by the 1970s there were
favourable prospects for capitalism in many developing countries, there had
been a loosening of relations of dependence in the global economy and there
was clear empirical evidence of rapid industrialization. Independence broke
the monopoly of the colonial power and the then Cold War allowed developing
countries to play off capitalist states against each other, communists against
capitalists, and individual firms, especially those from different national
origins, against each other.
Oil companies were long seen as the archetypal exploiting MNC and so
were the subject of neo-Marxist polemics:
Nothing compares with this ‘black gold’ as a magnet for foreign capital,
nothing earns such lush profits, no jewel in the diadem of capitalism is so
monopolised, and no businessmen wielded the global political power of the
great petroleum corporations. Standard Oil and Shell seat and unseat kings
and presidents,finance palace plots and coup d’étâts,have innumerable
generals, ministers, and James Bonds at their command, and make deci-
sions about peace or war in every field and every language. (Galeano,
2009:157)The reality was very different. Soon after independence developing coun-
tries began to assert control over foreign firms, including oil companies,
located in their territories. Examples included the forcible nationalization of
oil in Iraq, and British assets in Uganda and in Egypt (the Suez Canal).
Linkages within developing countries have almost universally increased
through more widespread refining and processing of raw materials, such as
copper, iron and bauxite, in the country of extraction (Warren, 1973). In both
minerals and fuels developing countries retained an increasing share of profits
over time; their share of profits on crude oil rose from 10–15 per cent in the
1920s to about 85 per cent in 1972. In Chile taxes paid by large copper compa-
nies rose from under 10 per cent of the value of the product in the 1920s to
about 30 per cent in 1964. Tax charges on the Zambian copper industry from
1965 significantly reduced the net outflow of profits and by the late-1960s
Zambia received about 80 per cent of the international value of the product
(Warren, 1973).
By other measures, such as trade diversification (judged by the geographi-
cal destination or the commodity composition of exports), controls on FDI
(including the widespread nationalization of resource-based enterprises),
structural change (including a reduction of the enclave features of FDI) and
development of greater backward linkages, economic power steadily became
more dispersed (Warren, 1980). The leading sector for post-World War II
developing countries has been manufacturing for the domestic market. In
Pakistan,for example,between 1951–52 and 1954–55, 96.6 per cent of total
growth in manufacturing was met through import substitution and near-total
domestic self-sufficiency was achieved in sectors such as sugar, cotton,
Colonialism 197