Social science is still essentially national,¹ but social problems are increasingly global, as is the division of labor. Global studies initiating from Africa, Latin America and The Middle East, such as those of Wallerstein (1967), Frank (1967), and Amin (1974), have awakened many scholars to the interconnections among what are often seen either as problems “abroad” or as problems “at home.” But most of the papers submitted to Social Problems, however theoretically stated, usually focus on one nation, usually the United States. Last year Dick Colvard and I decided that having a special issue on some international processes increasingly involved in what is oversimply referred to a economic development might help to reduce such scientific parochialism, at least by showing that what often seem to be domestic problems now have transnational origins.

       Given the growth of transnational corporations today, a policy decision, e.g., to close down a plant in Detroit or Chicago and to transfer its infrastructure and job categories to Brazil or Korea, creates two sets of problems simultaneously. In Detroit or Chicago this transfer of technology and job categories adds to the growing ranks of the unemployed, and it is a new kind of unemployment in that as long as the function of production is transferred, a whole category of labor (thousands of occupations) in a “developed” country has been more or less permanently cast off. This is not the sort of transnational division of labor which characterized colonialism and protectoratism. Such unemployment will not be remedied by application of Keynesian policies because the nation-state in question no long has control of these major fiscal matters at home.

       In countries receiving this same transfer of a productive function, a secondary transfer is quite likely: one removing works from seasonal labor and from indigenous modes of production and reattaching them to the job categories implanted there from Detroit or Chicago. It is often claimed that the transfer of capital and technology automatically reduces unemployment in a given third world nation, but those who make the claim often neglect to ask where the workers were employed before taking jobs in a foreign enterprise. To transfer labor from a traditional mode of production to an imported one is hardly a reduction in unemployment. Transfers create new jobs at going rates; they do necessarily create new employment, merely new employers. It often happens that once labor is removed from agricultural or other native production in this manner, women and children who worked beside their men in the fields must work longer hours and intensify their effort if production is to remain at the same needed level as before. Then when women also move into new job categories the cry arises for more mechanization in agriculture. Tractor imports, made possible by long-term credits and loans from international financing agencies, are purchased at near-retail prices to fill the gap.

       The point is that a top-level decision to expatriate productive functions creates problems both in the home country of the firm and the “host” country as well. In either case the governments of each nation-state are virtually powerless, at present, to control these problems. usually, the best that such governments on either side can do now is to absorb the social costs of treating the symptoms of the problems. of course, a host country could close the door to this penetration; that is hypothetically possible, but seldom done for many reasons which will be brought out in the rest of this special issue, which eventually emphasizes Infitah - a new type of open door policy in Egypt.

       For introductory purposes it is necessary first to identify an open door economic policy (ODEP) precisely enough to include our authors’ various usages yet broadly enough to acknowledge earlier national and cross-national forms. an open door economic policy exists when a ruling party sanctions transfers of capital, technology, and labor form foreign sources into the nation it governs. The key word is transfer, whether this involves machine tools, consumer goods, service systems, or even tourists. Adopting such a policy may be a primarily internal, peaceful and public decision of a party long in power. It may be part of an externally influenced, clandestine or paramilitary movement consolidating a recently established party’s power.² It may be part of an externally directed, open military movement putting a new party in power in what is essentially a colony or protectorate.3 It may be a combination of such factors, and many others. Whatever the case - who opens the door, how far, what flows through it, from what directions, and in what quantities are all vital questions. We assume here that case and comparative studies of various answers to such types of questions can help in efforts to shape development policies that could, e.g., more successfully narrow the gaps between rich and poor, whether urban or rural and whether within or among nations, although we acknowledge that such a goal is not always preeminent, or even present, in many attempts at economic development.

OVERVIEW OF THE ARTICLES

In the stormy interrelated histories of colonizing, postcolonial, and neocolonial societies, distinct open-to-closed-door “swings” are quite evident. Sometimes they involve riots, political movements and general political destabilization. h. Field Haviland’s essay in our first section, about initial issues and comparisons, offers some constructively critical assessments both of ends and means in many of the development efforts encouraged in some recent phases of U.S. foreign policy, especially the less military, more “human rights” components of efforts undertaken in the Carter era now ending. Then Bornschier and Hoby, in questioning standard assumptions about multinational penetration and rising Gross national product, deepen our historical perspective on policy fluctuations in the less-developed countries (LDCs) by providing data on 91 such nations from 1960 to 1975. Next, Raymond Baker offers a brief, critical look at internal opposition to “Sadat’s open Door,” foreshadowing several aspects of the complex Egyptian case on which the authors in the central section of this special issue concentrate. Finally, Nicholas Hopkins contrasts tunisian and Egyptian experiences in opening the door to economic transfers from western nations, a process often involving “secondary transfers” of labor from agricultural production to imported enterprises subsidiary to multinational corporations - a crucial aspect of the growing globalization of the division of labor indirectly evident in many of our papers here and emphasized in this editorial essay.

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1. See, e.g., Giddens (1978-79).

2. Latin American nations with military juntas which are clients of foreign governments and transnational corporations are cases in point. See Frank (1977). It is more than a little ironic that when one country forces another to accept exploitation no one speaks of this as good for the poor, but when the same steps are taken by internal encouragement the policy is often rationalized that way.

3. See Grieg (1930). The foreword to this book was by William E. Rappard, a commissioner on what, ironically, was called the Permanent Mandates Commission. Grieg was an interesting and important advocate of a change from colonialism and its focused dependency to protectorates, in which mandated territories would be “open” to all nations. he was especially ecstatic about Syria, Iraq. what was then Trans-Jordan, and Palestine - as exemplars of the “natural progress” possible through free trade’s transfers of technology and capital, and the related elimination of superstition and “primitive,” “irrational” conduct. haviland’s paper here shows that more sophisticated versions of some of these ethnocentric enthusiasms are still evident in some of U.S. foreign policy and the related efforts of, e.g., the IMF and the World Bank.
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Sometimes, the door may be opened to one country and closed to another with no major change in the economic or political system of the host country expected. Other times, such a swinging may have great significance for the host’s economic system and influence on the patterns and conditions of existence o many of its social problems. Gouda Abdel-Khalek’s paper - the initial one in our main section, “The Egyptian Case: More Intensive Analyses” - deals expressly with this “turning” phenomenon but with a postrevolutionary one, away form a form of socialism to a new comprador variant of colonialized capitalism. This is more than an ideological change for it involves a major shift geopolitically, a turning to the U.S. and to Europe - “to the Northwest” as he puts it. Abdel-Khalek recognizes that because economic doors rarely are completely closed and political commerce entirely cut off, the metaphor of the closed door is really an analytical ideal type. Isolation and autarky have never existed for Egypt, and Egypt’s “opening” is best conceived as a gradual turning away from one geopolitical direction toward another.

       Some of our authors argue that adopting and implementing an open door policy has the effects intended - i.e., that taking such steps accomplishes, or is accomplishing, the declared goals and that in Egypt today such results are generally beneficial. Others see the impact as more demonstrably negative than beneficial, except to the elite and to the multinational corporations and Western nations toward which Egypt has turned. Ali Dessouki, however, maintains that ODEP has had little impact, and that what some take to be negative consequences of ODEP actually come form other sources. Karima Korayem details much of the evolution of an important rural/urban income gap in Egypt but she does not present this problem explicitly as a direct result of the open door policy. And Galal Amin, after making some contrasts with Egypt’s first open door policy (under Mohammed Ali), argues that the nation’s present westernization is not only driving out local production but also stultifying the sources of Egyptian identity and creativity. What all this means for the problem of conceptualizing the open door policy is that a society may be open without having an open door policy, that any condition of openness could allow for much selective borrowing of culture traits, and that such borrowing could easily set in motion social movements going in quire different - even quite conflicting - directions.

       It is imperative today to recognize that a host country often deals, politically, with the transnational network of corporate power rather than with nations, e.g., in the western complex of nations. Our call for papers was a very broad one, welcoming all viewpoints and scholarly disciplines;⁴ but the studies received, that were intellectually strong enough to include, generally focused on interconnections among a host country - most often Egypt - in and other nations’ financial and corporate organizations. Occasionally reference is made to a host country’s relations with such transnational networks of power as the Soviet or Eastern bloc, or to quantitative changes in a nation’s relationships with such a bloc after the nation reestablishes trade with the rival Euro-American complex of economic power. But Inter-Arab (national) relations and ODEP are not considered in this set of papers. Nor is there a study on relations between Sadat's push for peace and political “stability” in the Middle east and further enticements for multinational corporations to invest in the Arab world. Instead, most of the papers analyze internal changes directly and indirectly involved when a country opens its doors. For example, encouraging foreign sources to transfer capital, technology, and sometimes labor and other economic goods and services often requires certain modifications of the legal climate of the host country, of its risk-cost climate, and of, e.g., the industrial and financial facilities that the foreign interest would utilize quite freely. Many such inner economic and political alteration s in the host country are stated requirements that must be met before capital will be transferred on a loan or long-term credit basis. A common example in many third world countries’ relations with western capitalist nations is the stipulation that a given country must remove some of its domestic price subsidies, creating at least the illusion of free trade and an open market economy. Such requirements are often made both by the World Bank and the International Monetary Fund. (Abdel-Khalek refers to the Egyptian “discontent” of 1977, referred to by several authors, as the “IMF riots.”)

       Other open door policies, of course, can go and have gone the other way, as in Nasserite Egypt earlier - toward transferring capital from socialist countries, enlarging public sector enterprises and reducing those in the private sector. Raymond Hinnebusch’s paper deals with the inner changes in the sociopolitical organization of Egypt as the door swung from Nasserism and populism to the highly elaborated system of elites and subelites in the post-populist period during President El-Sadat’s rule. His object is not so much to explain Infitah as to account for the historical emergence of the present regime, although his intensive analysis does not preclude the role of external pressures encouraging an ODEP and a class espousing its virtues. Hinnenbusch - as Baker had earlier - raises the question whether the present regime can cope with various types of growing discontent, which he documents in considerable historical detail. Fadwa El Guindi’s “Veiling Infitah With Muslim Ethic” appropriately broadens our perspective again at the end of this main section. her analysis of cultural changes - and continuities - in an Egypt opened (again) to the West, identifies and explains an extremely interesting and important type of retraditionalization, especially among highly-educated Egyptian women - one clearly related to but by no means wholly dependent on the change of Egypt’s economic policies.

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4. The subject of the open door policy is a sensitive one, and fear of speaking out, even on empirical grounds, would not be unfounded in most Latin American countries, in some African countries and elsewhere in the third world. Fortunately, and under President El-Sadat’s policy of freedom of expression, i.e., responsible freedom of expression, without censorship, there would be little reason to avoid stating informed opinions on the subject of Infitah and its political, social, cultural and economic implications. in fact, it is my experience that the present regime would welcome sound empirical critiques of a policy which is believed popularly to be heightening the prosperity of all classes in Egyptian society. If such a policy is not achieving this end, then I feel certain that those who rule Egypt would want to know why. No doubt in part because many scholars working directly on development problems were not able to take the time to contribute, we did not receive papers really favorable to Infitah.
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OLD PROBLEMS AND NEW OPEN DOOR POLICIES

It is probably no surprise to some that the rhetoric of free trade and open door policies as the way to “progress” is really very little different for today’s rhetoric of development among many IMF and World Bank people, executives of the multinational corporations, and their clients now in positions of leadership in third world countries. however unfree “free trade” has actually become with its monopolies, trusts, and conglomerates since World War II, the “management programs” proliferating all over the third world still stir many of the old enthusiasms. The old “free trade - free world” rhetoric may mollify a few doubters and encourage some client classes but it increasingly loses credibility among students of capital flow and the newly developing global division of labor. What most of our authors make clear, if indirectly, is that the sort of policy Egypt’s Infitah represents is a new open door policy, one of a postcolonial and postsocialist kind. In a sub-Saharan Africa, for example, experiencing the intrusions of people like Rhodes and Krueger, native societies by forceful and indirect means were literally dismembered. Their system of colonial capitalism, as had been the case earlier in Latin America.

       Colonialism, a modified feudalism, was an essential component of the development of industrial capitalism in Europe, one involving what was then a new kind of intercontinental division of labor. Where independence movements in the colonies and protectorates succeeded and where local capitalism did not take hold, socialist movements later began closing the doors on commerce, on the sources of colonial rule, as far as possible. They turned where possible to older socialist regimes for economic assistance, markets for their raw and finished products, and for trade in kind when a convertible currency was lacking.

       The new open door policy, then, is a postsocialist open door policy. This means not simply that countries under it are becoming “dependent” on outside sources of economic “assistance” (for while dependency is present, assistance is doubtful). Dependence now means a gradual giving up of hope for national self-determination when the ODEP functions to attach third world labor to this new, postcolonial form of international division of labor - the controls of which lie outside of any given country and its fiscal policy. It means more economic and political penetrations by multinational corporations and the consequent flooding of third world markets with foreign goods while native goods vanish form the shelves in the stores and from the kitchens of the poor. It means the replacement of traditional culture, of traditional modalities of creativity.

       In the united States approximately up to World War II, unemployment was determined by national business cycles, and the problem of getting production units going again to full productive capacity might more reasonably be dealt with by Keynesian government investments. But now the United States “allows” its corporations to transfer factories and leave the old labor force behind; this creates an occupational vacuum not solvable without creating alternative modes of production form scratch, so to speak. The Reagan administration cannot logistically ignore this new form of unemployment. Transfer of even one job category associated with U.S. production may transfer thousands of practically irreplaceable jobs. it is the conglomerate corporations, not the governments of developed countries, which control such exports.

       It could be argued that the developed countries are undeveloping and are themselves joining the third world. But I really believe that the sort of defunctionalization I have described in the “developed” countries is balanced by “refunctionalization” in the less-developed countries, with the whole being a push in the directions of what Raymond Aron would call the global industrial society. It is possible, of course, to look upon the multinationals’ decisions to transfer factories as denationalization.⁵ But to set up such a plant (or its equivalent) in a third world country does not ordinarily mean its renationalization, although a multinational may have its holdings nationalized once the subsidiary is established abroad - unless the open door agreements involved guarantee that this will not happen or else provide for that risk in advance. What the multinationals want most, apparently, is denationalization without renationalization.

       But consider the other side of this decision to relocate a productive unit abroad. Within a Brazil or Tunisia, this same transfer of a productive function may itself initiate a secondary transfer such as Hopkins observes in this issue - the transfer of seasonal (and other local) laborers from agricultural and native industrial jobs to the new job categories that were transferred from a foreign county (in our illustration, from Detroit or Chicago). As males move into these new jobs, work of females in the fields may intensify as longer hours are also spent at this old kind of labor. But, as Hopkins observes, the new urban jobs also attract women, creating another employment vacuum in the country importing the factory. And because these lacunae in agriculture have to be filled, pressure may be exerted for the mechanization of agriculture, despite growing urban unemployment. If a host country moves to respond to the agricultural gap yet lacks machine tools needed to make farm machinery, it must import them - often at near-retail prices and on the basis of interest-bearing long-term credits of loans.

       Such processes as these are converting the older modes of production which emerged under colonialism and protectoratism into what is literally a new global division of labor. Just as the colonial international division of labor (so necessary to early capitalism) literally dismembered traditional folk and peasant societies in the third world, so now, through the relocation of “developed” industrial units into once colonial areas, the colonial modes of production remaining in the third world are being phased out by the chains of job transfers just described.

       The claim that these new jobs reduce host country unemployment cannot be substantiated by counting the numbers of workers employed in them. One must contrast how many shifted from native productive jobs and how many came off the streets. Moreover, increased employment itself does not necessarily offset the expenditures for mechanization in rural areas or the social costs - rural and urban - involved in importing productive functions and products.

       It seems to make no difference whether a transnational corporation exports an industrial function as an operation of its own subsidiary abroad or whether that function is transferred into the hands of private sector enterprises in the third world country as a part of the structure of comprador capitalism in that country. Either way, the results do not include either the absorption of third world unemployment or the transfer of technological knowledge, as is often claimed. For, as I’ve argued elsewhere (in Braverman, 1974: 444), contrary to popular opinion, learning a job in mass production systems is a matter of minutes, and after that it is dexterity (most of which has been learned on the farm) and not skill at complex tasks that is learned. Frank made a very similar observation quite recently, and succinctly.

The technical improvement of the labor force and the technological development of the economy through manufacturing export promotion is also much more mythological than real. The technical improvement of the labor force in general and the training of skilled or even semi-skilled workers is belied by the very logic inherent in the extensive experience with this kind of . . . manufacturing around the third World: the predominant 90 percent reliance on unskilled labor in this manufacturing in Mexico . . . and Asia . . .: the . . . 90 percent and more predominance of women aged 15 to 25 in many of these operations . . . their ‘training’ in often no more than three weeks time . . . and their very rapid job turnover of 50 percent to 100 percent a year belie the ‘technical training.’ On the contrary, this export manufacturing signifies a “deskilling” of labor on the global level, to the extent that handicrafts ad small industry in the Third World are replaced by large industry (1979: 16).

The penetration of certain peripheral economies by transnationals in search of low-cost labor has features similar to those of a substantial surrender of sovereignty over part of the whole of the nation’s territory, with effects reminiscent of the traditional enclaves of extractive industry. There is a subtle difference between them. The traditional form produces something approaching a transfer of land along with the labor living there. The more recent trend is towards a transfer of the labor along with the land underneath them. The combination of circumstances that we have mentioned make it unlikely that this model of worldwide expansion by transnationals will turn into a process of sustained accumulation for receiving countries (cited in Frank, 1979:22-23).

PART V. OPEN DOOR ECONOMIC POLICIES AND THE SPREAD GLOBAL CAPITALISM.

Introduction:

Not all revolutions are bloody. Some are peaceful, at least at first. Transitions form socialism to a market economy can be accomplished by legislative means. But voluntary or not these changes in government and economy generally call for drafting an open door economic policy - a legal paper inviting foreign corporations to enter country in question while also announcing legislation pleasing to such corporations and thus ‘opening’ the door to western capitalism. It is through such open doors that corporations go in the fields, for example, of production, marketing, service and banking. The first article deals briefly with the adoption of an open door policy in Egypt, as a prelude to the penetration of foreign corporations there. The second article deals with the processes by which once national corporations became, multinational and transnational global in scope and operation and deals as well with the problems caused both in the home country as well as the host country. In all the economic and political transformation which has gone on in the creation of a new world order, we wonder how better this new world order will be.

       A. “Open Doors, Transnationals, and The Global Division of Labor.”
       B. “The New Global Network of Corporate Power and the Decline of National Self-determination.”
       C. “Requiem for the Old World Order. How Better Would any New One Be?”

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