A pretty interesting article on why large corporations make a conscious choice while withholding investment and how they have used it as political leverage, with particular emphasis on the US...
A pretty interesting article on why large corporations make a conscious choice while withholding investment and how they have used it as political leverage, with particular emphasis on the US during the great recession and Obama administration.
A manufacturer refuses to invest in the United States until the government cuts taxes and loosens “environmental regulations and hiring rules.” The CEO of a top technology firm flatly states that the $181 billion stored in an overseas tax haven won’t come “back until there’s a fair rate.” Despite several trillion dollars in reserves, banks and corporations collectively refuse to make loans or hire new employees.
Capitalists routinely exert leverage over governments by withholding the resources — jobs, credit, goods, and services — upon which society depends. The “capital strike” might take the form of layoffs, offshoring jobs and money, denying loans, or just a credible threat to do those things, along with a promise to relent once government delivers the desired policy changes.
Government officials know this power well, and invest great energy and public resources in staving off fits by malcontent capitalists. The profoundly rotten campaign finance system is just one manifestation of business’s domination over government policy. The real power resides in the corporate world’s monopoly over the flow of capital.
During Obama’s first year in office, the United States experienced the most damaging episode of disinvestment since World War II: nonfinancial businesses were sitting on $2 trillion in capital, while banks kept another $1 trillion. Companies were holding cash at rates not seen in half a century. A Bloomberg report found that “companies that are spending . . . have largely chosen to increase dividends and buy back stock” rather than hire more workers, increase wages, or invest.
This was not simply an automatic market response to low demand. Obama himself recognized that businesses were making a discretionary choice. His February 2011 speech at the Chamber of Commerce, according to the Wall Street Journal, offered “tax breaks and other government support for exports and innovation” in return for domestic investment.
While I think this is definitely something that happens and will happen, IMO there's a lot of plausible deniability or context sensitivity in claiming corporations are willingly not investing to force the government to cater to them just collectively deciding investment is not worth it. While this doesn't matter much for leftists since either case is corporations being hostile to workers, it does matter to defining a capital strike.
I dunno, Amazon playing the "will we, won't we" in order to solicit the most possible government grants for their new HQ seemed a lot like that, and they're not the first to do so. See also:...
IMO there's a lot of plausible deniability or context sensitivity in claiming corporations are willingly not investing to force the government to cater to them
I dunno, Amazon playing the "will we, won't we" in order to solicit the most possible government grants for their new HQ seemed a lot like that, and they're not the first to do so.
See also: Telecoms pressuring communities to sign exclusivity clauses to deploy broadband services.
The author is putting their own spin on things but I don't think it's a helpful way to think about how investment works. Capital isn't "on strike," it's just invested in one place or another. Yes,...
The author is putting their own spin on things but I don't think it's a helpful way to think about how investment works. Capital isn't "on strike," it's just invested in one place or another.
Yes, politicians do make promises to create jobs, when by and large, it's businesses that create the jobs. This encourages politicians to propose pro-business regulations of various sorts.
But, I doubt anyone in the US government feels at all pressured by offshore funds staying offshore, and a business that's waiting for an act of Congress to favor of them is likely to be waiting a long time. The US doesn't need more investment by foreigners, it has plenty already. Foreign investment is the flip side of running a trade deficit, which the US has had for years.
Some investors can be patient, though, until there is a change to tax law that favors them.
On the other hand, it seems pretty easy to put pressure on city and state governments and it happens all the time. (For example a sports team deciding to change cities.)
A pretty interesting article on why large corporations make a conscious choice while withholding investment and how they have used it as political leverage, with particular emphasis on the US during the great recession and Obama administration.
See also the wiki page and this other Jacobin article from 2011: The right's favorite strike.
While I think this is definitely something that happens and will happen, IMO there's a lot of plausible deniability or context sensitivity in claiming corporations are willingly not investing to force the government to cater to them just collectively deciding investment is not worth it. While this doesn't matter much for leftists since either case is corporations being hostile to workers, it does matter to defining a capital strike.
I dunno, Amazon playing the "will we, won't we" in order to solicit the most possible government grants for their new HQ seemed a lot like that, and they're not the first to do so.
See also: Telecoms pressuring communities to sign exclusivity clauses to deploy broadband services.
The author is putting their own spin on things but I don't think it's a helpful way to think about how investment works. Capital isn't "on strike," it's just invested in one place or another.
Yes, politicians do make promises to create jobs, when by and large, it's businesses that create the jobs. This encourages politicians to propose pro-business regulations of various sorts.
But, I doubt anyone in the US government feels at all pressured by offshore funds staying offshore, and a business that's waiting for an act of Congress to favor of them is likely to be waiting a long time. The US doesn't need more investment by foreigners, it has plenty already. Foreign investment is the flip side of running a trade deficit, which the US has had for years.
Some investors can be patient, though, until there is a change to tax law that favors them.
On the other hand, it seems pretty easy to put pressure on city and state governments and it happens all the time. (For example a sports team deciding to change cities.)