The Internationalization of Capital Stephen Hymer The multinational corporation,or the multinational corporate system, has three related sides:international capital movements:international capitalist production;and international government. By international capital movements I refer first to the direct in- vestment of corporations in their overseas branches and subsidiaries, which.at present amounts to about $80 billion for American multi- nationals and about $50 billion for non-American multinationals.Sec- ond,I refer to the associated flows of short-term,long-term,and equity capital stimulated by the multinational corporation,which in turn stimu- late the growth of international finance,that is,deposits in foreign banks, investments in the Eurocurrency and Eurobond market,investments in corporate stock of multinational firms by non-nationals,and so forth. The direct foreign investment by corporations has served as a base for a vast superstructure of credit drawing capital from all over the world;the associated noncorporate private capital flows from one country to anoth- er are at least as large as direct investments by corporations,and probably are growing faster. International capitalist production refers to the incorporation of labor from many countries into an integrated worldwide corporate productive structure.American firms,for example,directly employ from 5 to 7 million people in foreign countries,and a growing but unknown number indirectly through subcontracting,licensing,and so forth.By com- parison,the total employment of the 500 largest American firms is 13 or 14 million (this figure includes some,but not all,foreign employees), The author is Professor of Economics,New School for Social Research,New York,New York.This paper was presented at the Annual Meeting of the Association for Evolutionary Economics,New Orleans,Louisiana,27-28 December 1971. 91 This content downloaded from 202.120.14.154 on Mon,04 Jan 2016 03:31:29 UTC All use subject to JSTOR Terms and ConditionsThe Internationalization of Capital Stephen Hymer The multinational corporation, or the multinational corporate system, has three related sides: international capital movements; international capitalist production; and international government. By international capital movements I refer first to the direct in￾vestment of corporations in their overseas branches and subsidiaries, which. at present amounts to about $80 billion for American multi￾nationals and about $50 billion for non-American multinationals. Sec￾ond, I refer to the associated flows of short-term, long-term, and equity capital stimulated by the multinational corporation, which in turn stimu￾late the growth of international finance, that is, deposits in foreign banks, investments in the Eurocurrency and Eurobond market, investments in corporate stock of multinational firms by non-nationals, and so forth. The direct foreign investment by corporations has served as a base for a vast superstructure of credit drawing capital from all over the world; the associated noncorporate private capital flows from one country to anoth￾er are at least as large as direct investments by corporations, and probably are growing faster. International capitalist production refers to the incorporation of labor from many countries into an integrated worldwide corporate productive structure. American firms, for example, directly employ from 5 to 7 million people in foreign countries, and a growing but unknown number indirectly through subcontracting, licensing, and so forth. By com￾parison, the total employment of the 500 largest American firms is 13 or 14 million (this figure includes some, but not all, foreign employees), The author is Professor of Economics, New School for Social Research, New York, New York. This paper was presented at the Annual Meeting of the Association for Evolutionary Economics, New Orleans, Louisiana, 27-28 December 1971. 91 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