ILX Econogeeks -- What Say Ye about SOVEREIGN WEALTH FUNDS?!?

The biggest trouble with economic colonization is that whatever capital your economy generates is shipped out of the country, leaving your country poorer than it should be and with fewer resources to buy itself out of economic servitude. Another byproduct of this dynamic is that the colonized country eventually loses the power to regulate its own commerce, or to protect its citizens and natural resources.

Ownership is control. Control is power. No joke.

The truly stupid part about how the USA has cut off its own economic balls is that we did it to buy a solid-gold military machine, most of which we can't use (h-bombs, B1 bombers) and the rest we can't seem to use effectively to project power (of our last four wars, Vietnam, Gulf War, Afghanistan and Iraq, three have been debacles).

one out of four aint bad

he make with the funny (tears hair, beats breast, collapses in a heap)

im less concerned about states like singapore and norway who have some big swf's cos those seem more along the line of small nation-states making prudent financial moves, but superstates participating in this does frighten me on some base level.

namely, the potential for one country to buy up foreign competitors and put them out of business to aid native industry

not just put them out of business. they can also keep them in business and leverage their economic and political clout. like, if the oil lobby ended up with a significant russian or chinese presence, it's hard to believe it wouldn't affect u.s. foreign policy toward russia or china. (which was why the big flap over the attempted unocal purchase the other year.) there's obviously nativism involved in the knee-jerk reaction against these things, and also obviously multinational already have a sizable impact on foreign policy, so maybe the concern is overblown. but the idea of a bunch of american industry being owned by vlad putin or the saudi royals or whatever doesn't give me a cozy feeling.

multinational corporations, i meant to say.

it's not exactly the same thing (on a lot of levels) but this is the kind of problem that ukraine lives with every fucking day.

natural resources aren't that hard to protect, at the end of the day. you beg some foreign company to come in an invest, they invest, then you nationalize, either blatantly or using some pretext. russia has been doing it for the last several years.

The biggest trouble with economic colonization is that whatever capital your economy generates is shipped out of the country, leaving your country poorer than it should be and with fewer resources to buy itself out of economic servitude. Another byproduct of this dynamic is that the colonized country eventually loses the power to regulate its own commerce, or to protect its citizens and natural resources.

this is pretty disingenuous. "poorer than it should be"? capital is what drives long-term growth, so without the initial capital, you don't have any profits to complain about going offshore. it would be great if all countries had a healthy savings rate, but when you don't have many resources, it is very hard to save them, so it makes sense to borrow from other people that do. i don't like your last sentence either since it refers to inefficient policies that only "protect" citizens at the expense of either a) other citizens; b) citizens of other countries; or (more likely) c) both.

webber, you can call what I said "disingenuous" if you like, but exactly what does it profit a country to develop its resources using outside capital, if the profits of that development and the resources themselves are shipped out of country?

All you have accomplished is allowing your resources to be mined and depleted, and all your profit consists of some low-paid workers earning prevailing wages, which, if your country has no industry, are shite. All the skilled jobs will be filled by outsiders.

What you call "inefficent policies" are inefficient only if you decide that some idealized entity called the "global economy" is the framework within which "efficiency" is defined.

Why the fuck ought a citizen of Tonga or Peru give a shit if their national policy "impoverishes" Us citizens, or Europeans, or the citizens of any other nation, if they preserve the national resources of Tonga or Peru for the ultimate benefit of Tongans of Peruvians? As for such policies "impoverishing" Tongans or Peruvians, if the nature of that "impoverishment" is the rejection of a few low wage jobs, then you can go fuck yourself for trying to define this as a worthwhile national objective, you stupid git.

pardon my french

profits go outside the country because profits are the return on capital, and the capital is not owned by the country (BECAUSE THE COUNTRY DOESN'T HAVE ANY! WHICH IS WHY IT IS ASKING FOR SOME FROM OTHER COUNTRIES!). obviously if the profits are kept in the country, the situation is a lot better, but this does not mean that growth only helps the owners of capital and no one else. someone needs to work at the factory that was built using money from other countries, and someone else needs to provide the additional food or tvs or whatever that the worker can now afford from working in the factory, and everyone is better off if the capital results in productivity increases and lowered costs for commodities.

i take your point that the skilled jobs aren't likely to be filled by people in these countries, but how do we resolve this? should the west outsource all its legal work and information technology to tonga and peru? or is it the case that the reason the skilled work comes from other countries because there aren't enough people capable of doing it in their own countries? and the only way these countries are going to get their economies to the size where they can spend enough on education to turn people into lawyers or engineers is by selling what they have, which at the moment, is cheap labour or natural resources.

in my initial post, i shouldn't have implied that i am against all regulation, but a lot of it - especially when it comes to subsidies or trade barriers - are just tools to protect certain industries at the expense of everyone else. take corn subsidies. good for american farmers, because now they don't have to compete as hard as international farmers, or maybe they get to keep their jobs. but bad for:
-farmers in other countries
-in the long run, farmers in america too, because at some stage the subsidies are going to go away, and then america will find itself with a bloated and inefficient industry that can't help to compete against farmers in other countries (who are better at producing corn than americans)
-anyone who buys food, which is of course everyone on the planet.

but hey a minority of farmers are better off right? thank god the government is "protecting its citizens".