Thursday, February 23, 2006

The "Foreign" Ownership Anachronism

The concept is obsolete

Now might be a good time to discuss international capitalism. There is a debate going on - the horror the horror - that a company owned by the United Arab Emirates (U.A.E.) would like to purchase a company which owns the rights to manage 6 major shipping ports in the USA. People are concerned about port security; where is the interest to now ensure safety?, the response is that well it'll be the same employees (eg "Americans" in the labor union) working the ports.

First off, if we (the government of the USA) werent intervening militarily or through aid overseas angering the people of those countries and/or those countries' enemies we would not have the threat of the terrorist attacks. So, that being said, what next.

My take is that the whole notion of a company being owned by one 'country' or another is outdated. We have indeed an integrated worldwide financial system. The rapid changes of the late 20th century - instantaneous currency and stock clearings, internet pushing transaction costs and asymetric information towards zero, a reduction in the real costs of airflights by 90%, international trade becoming a larger and larger percentage of the goods consumed in our daily lives, 'foreign companies' opening plants here, we outsourcing services and opening plants abroad, and most importantly the very real and increasing cross-listing of company stocks on exchanges worldwide - just makes the notion of a base-country false.

Additionally, as is quite obvious, the debt of our government is often owned by those self-same countries that the politicians cry foul when they try to buy the means of production instead of just financial assets. It should be apparent that this is hypocrisy.

Lastly, the commingling of assets brings incentives for peace. Who would want to blow-up something they owned (except in some kind of Zen parable about shedding your material possessions, but this is done in a non-violent way). The more we trade and cross-own the more our interests are co-aligned. Let us not create an "us versus them" situation when one should not exist. Imperialism does not have to be the highest stage of capitalism, peaceful and prosperous co-existence can be.