Enterprises and B Phases: The Overseas Expansion of U.S. Auto Companies in the 1920s and Japanese Auto Companies in the 1980s

This article addresses a neglected aspect of long wave theory—the increase in certain types of investments during a B phase. Drawing on Arrighi's conceptualization of long waves, a theoretical explanation is developed for increased investments, especially foreign investments, during a B phase. Two examples of foreign investment during a B phase are then examined: American automobile companies in Europe during the 1920s and Japanese automobile companies in the United States during the 1980s. It is demonstrated that there are several parallels between the two which can be explained by the theoretical model developed in the first section. Finally, it is argued that the parallels between the foreign activities of American automobile companies in the 1920s and the foreign activities of Japanese automobile companies in the 1980s will continue and the fate of Japanese companies in the United States during the 1990s will be similar to the fate of American companies in Europe during the 1930s.