Internationalization of Capital 99 the credit system.The formation of a world capital market has only begun,but if its development continues at the present rate,it soon will be a factor of great significance in the world economy. The multinational corporation and the international capital market should be seen as parallel,symbiotic developments.The multinational corporation's need for short-term loans and investment arising from the continuous inflow and outfow of money from all nations,never quite in balance,has encouraged international banking and has helped integrate short-term money markets;its long-term financial requirements and ex- cellent credit rating have broadened the demand for international bond and equity capital.This provides an impetus for free international capital mobility. The Eurobond market,for example,attracts capital from all over the surface of the globe(a significant portion comes from underdeveloped countries,particularly the oil wealth of the Middle East and the war wealth of Southeast Asia),concentrates it in an organized mass,and redirects it via multinational corporations and other intermediaries back to the country from which it came.It then bears the stamp of in- ternational capital and its privileges. The development of the international capital market,in turn,gives multinational corporations increased access to the savings of many na- tions,enables larger undertakings to be formed,and fosters mergers and consolidations.Most important,it helps forge an identity of interests between competing national capitals,a vital ingredient for the survival of the multinational corporate system.We saw in the last section how international competition in the product market raised the horizons of corporations from the national to the international plane.Similarly,the international fow of private capital,through the multinational corpo- ration or alongside it,gives individual wealthholders a stake in the international capitalist system as a whole,in proportion as their income comes less and less from their home country,and more and more from the world economy at large. The overseas expansion of American firms,for example,has substan- tially diversified the investment portfolio of American shareholders in- ternationally.In addition,Americans have purchased stock in non-American corporations,or invested in land or other assets abroad, and thus further transferred their interests from the United States to the world as a whole.Given the prospects for industrial growth outside the United States and the social and political problems within the United States,this diversification is likely to continue as a sort of capital flight. At the same time,capitalists from other countries have been buying corporate stock in the United States,lending money to multinationals in This content downloaded from 202.120.14.154 on Mon,04 Jan 2016 03:31:29 UTC All use subject to JSTOR Terms and ConditionsInternationalization of Capital 99 the credit system. The formation of a world capital market has only begun, but if its development continues at the present rate, it soon will be a factor of great significance in the world economy. The multinational corporation and the international capital market should be seen as parallel, symbiotic developments. The multinational corporation's need for short-term loans and investment arising from the continuous inflow and outflow of money from all nations, never quite in balance, has encouraged international banking and has helped integrate short-term money markets; its long-term financial requirements and ex￾cellent credit rating have broadened the demand for international bond and equity capital. This provides an impetus for free international capital mobility. The Eurobond market, for example, attracts capital from all over the surface of the globe (a significant portion comes from underdeveloped countries, particularly the oil wealth of the Middle East and the war wealth of Southeast Asia), concentrates it in an organized mass, and redirects it via multinational corporations and other intermediaries back to the country from which it came. It then bears the stamp of in￾ternational capital and its privileges. The development of the international capital market, in turn, gives multinational corporations increased access to the savings of many na￾tions, enables larger undertakings to be formed, and fosters mergers and consolidations. Most important, it helps forge an identity of interests between competing national capitals, a vital ingredient for the survival of the multinational corporate system. We saw in the last section how international competition in the product market raised the horizons of corporations from the national to the international plane. Similarly, the international flow of private capital, through the multinational corpo￾ration or alongside it, gives individual wealthholders a stake in the international capitalist system as a whole, in proportion as their income comes less and less from their home country, and more and more from the world economy at large. The overseas expansion of American firms, for example, has substan￾tially diversified the investment portfolio of American shareholders in￾ternationally. In addition, Americans have purchased stock in non-American corporations, or invested in land or other assets abroad, and thus further transferred their interests from the United States to the world as a whole. Given the prospects for industrial growth outside the United States and the social and political problems within the United States, this diversification is likely to continue as a sort of capital flight. At the same time, capitalists from other countries have been buying corporate stock in the United States, lending money to multinationals in This content downloaded from 202.120.14.154 on Mon, 04 Jan 2016 03:31:29 UTC All use subject to JSTOR Terms and Conditions