International capital goes where it wants to, seeking to maximise profits and production, and neither Parliament nor any other national legislature can do much about it, any more than they can, on their own, do much about global warming or pollution.
They could do if they wanted. These legal entities do have the necessary tools to keep the capital in place, they just deliberately chose not to use them.
That's why I think that all governments in Europe should not only make their own *Exit, but also should take back all the powers they're supposed to have: Instead of allowing the capital to bribe and blackmail political representatives, and even "suggesting" entire laws, the governments should show the capital its place: that the capital should do what the governments want, not the other way around. That the capital has to stay where the government wants it to, go where the government wants it to, do what the government wants it to do - and be it by the threat of freezing bank accounts or any other measures
any government could impose if it wanted.
Here's what I think would be the optimal way:
If I had a say, any
big company or bank that wants money from the state (be it that it wants tax reductions, tax-paid land to build a new place on, other tax-paid support, or some tax-paid bail-out for example), would instead be taken over by the state completely, 100% nationalized. They don't want to be taken over, they don't get a dime from the state, easy as that. A company or bank wants to close down their plants and move production elsewhere? Hostile takeover by the state, and all employees within the country can keep their jobs. A company or bank doesn't want workers unions inside, or even a works council? The threat of a hostile takeover and other consequences
will change the owners' minds. A bank wants to fusion with another bank to maximize profit? Without the explicit permission of the government of the country the original HQ of this bank is seated, no chance. A company wants to sell a part of it to a foreign investor? Nope. It would be nationalized instead. And not only that part: the entire company. Some bank wants to mess with the exchange rates or stock courses, or tries to offer or buy "options" and "derivates": all employees involved would go to jail for fraud, period. and so on and so on.
The governments should reclaim their powers, and show the capital its place.
And if you go down this path of fairytale economics you end up completely isolated from the world economic system, like North Korea only more so.
Something a lot of people don't appreciate, I think, is that goods produced in factories have value only in the context of the capitalist system, which is as global and fast moving as the internet.
By this I mean that the the working in the factory produces goods not because she wants them, or because her friends or community want them, but in order to earn wages to buy things that she and her family do, in fact, want or need. So her labour has value only to the extent that the goods are valued by the market -- if they're not, then the business has no money to pay her wages.
You can't simply remove production from the capitalist system by changing its ownership or by regulating it. Capitalism is, for better or worse, the whole economic environment in which we all live.
Now, let's extend this a bit further. As you will be aware, many governments run large budget deficits (I'm talking about government spending, not the balance of trade) in order to fund services provided by the government -- health care, education, infrastructure and so on.
How do they do this? By borrowing money, either short or long term.
How likely do you think investors are going to be to lend money to a government that starts expropriating property in the way you outline? These are investors outside the government's jurisdiction, remember.
So it ain't going to work, Eight. It's fairy stories, that's all. Stop wasting your time on it.
One point of detail I can't miss, since it's a particular bugbear of mine:
Some bank wants to mess with the exchange rates or stock courses, or tries to offer or buy "options" and "derivates": all employees involved would go to jail for fraud, period. and so on and so on.
Do you have any idea what currency options are? Let me explain.
If I'm an importer or exporter, one of my biggest worries is what is going to happen with exchange rates. That is, whenever a German company does a deal to buy or sell goods or materials outside the Euro-zone on a long term contract, the two sides have to agree on which currency to use. This automatically exposes one or both sides to the risk of currency fluctuations -- you know what the exchange rate for the € vs $ or ¥ or £ is now, but neither side knows what it's going to be like a month or six months or a year.
What do you do about this risk? If the exchange rate moves against you, it could vastly increase your costs or depress your earnings.
Answer -- you can take out insurance against adverse currency movements, which is what the futures and options market is all about. If I sign a contract to supply something for however many US$, payable in 3 months' time, then I know that those dollars are worth whatever it is in £s at today's exchange rates. If I don't want to gamble on what the rate is in 3 months' time, I can either buy an option to sell those $s in 3 months at an agreed rate, so if the $ falls against the £, I can exercise my option to sell the dollars at the fixed rate, but if it rises, then I just forget about the option and sell them at the higher exchange rate. Alternatively, I can buy or sell futures, which are a fixed contract to sell the dollars for the agreed number of pounds.
That's all currency futures and options are -- insurance. Trading them is very specialised and technical, since the traders stand to make or lose huge amounts of money, and back in the 1980s and 1990s a lot of people got their fingers burned by dabbling in a business they didn't understand, but there's nothing sinister about them at all. They're absolutely fundamental to international trade and travel.
