[Marxism] The Economist on Crisis of Globalization

RKOB aktiv at rkob.net
Sat Feb 25 06:20:01 MST 2017


Very interesting articles on the crisis of globalization from /The 
Economist /- one of the mouth pieces of capitalism. They also contain 
several graphs which I can send to those who are interested.

*In retreat*

*The multinational company is in trouble*

*/Global firms are surprisingly vulnerable to attack/*

Jan 28th 2017, 
http://www.economist.com/news/leaders/21715660-global-firms-are-surprisingly-vulnerable-attack-multinational-company-trouble

AMONG the many things that Donald Trump dislikes are big global firms. 
Faceless and rootless, they stand accused of unleashing “carnage” on 
ordinary Americans by shipping jobs and factories abroad. His answer is 
to domesticate these marauding multinationals. Lower taxes will draw 
their cash home, border charges will hobble their cross-border supply 
chains and the trade deals that help them do business will be rewritten. 
To avoid punitive treatment, “all you have to do is stay,” he told 
American bosses this week.

Mr Trump is unusual in his aggressively protectionist tone. But in many 
ways he is behind the times. Multinational companies, the agents behind 
global integration, were already in retreat well before the populist 
revolts of 2016. Their financial performance has slipped so that they 
are no longer outstripping local firms. Many seem to have exhausted 
their ability to cut costs and taxes and to out-think their local 
competitors. Mr Trump’s broadsides are aimed at companies that are 
surprisingly vulnerable and, in many cases, are already heading home. 
The impact on global commerce will be profound.

*The end of the arbitrage*

Multinational firms (those that do a large chunk of their business 
outside their home region) employ only one in 50 of the world’s workers. 
But they matter. A few thousand firms influence what billions of people 
watch, wear and eat. The likes of IBM, McDonald’s, Ford, H&M, Infosys, 
Lenovo and Honda have been the benchmark for managers. They co-ordinate 
the supply chains that account for over 50% of all trade. They account 
for a third of the value of the world’s stockmarkets and they own the 
lion’s share of its intellectual property—from lingerie designs to 
virtual-reality software and diabetes drugs.

They boomed in the early 1990s, as China and the former Soviet bloc 
opened and Europe integrated. Investors liked global firms’ economies of 
scale and efficiency. Rather than running themselves as national fiefs, 
firms unbundled their functions. A Chinese factory might use tools from 
Germany, have owners in the United States, pay taxes in Luxembourg and 
sell to Japan. Governments in the rich world dreamed of their national 
champions becoming world-beaters. Governments in the emerging world 
welcomed the jobs, exports and technology that global firms brought. It 
was a golden age.

Central to the rise of the global firm was its claim to be a superior 
moneymaking machine. That claim lies in tatters (see Briefing 
<http://www.economist.com/news/briefing/21715653-biggest-business-idea-past-three-decades-deep-trouble-retreat-global>). 
In the past five years the profits of multinationals have dropped by 
25%. Returns on capital have slipped to their lowest in two decades. A 
strong dollar and a low oil price explain part of the decline. 
Technology superstars and consumer firms with strong brands are still 
thriving. But the pain is too widespread and prolonged to be dismissed 
as a blip. About 40% of all multinationals make a return on equity of 
less than 10%, a yardstick for underperformance. In a majority of 
industries they are growing more slowly and are less profitable than 
local firms that stayed in their backyard. The share of global profits 
accounted for by multinationals has fallen from 35% a decade ago to 30% 
now. For many industrial, manufacturing, financial, natural-resources, 
media and telecoms companies, global reach has become a burden, not an 
advantage.

That is because a 30-year window of arbitrage is closing. Firms’ tax 
bills have been massaged down as low as they can go; in China factory 
workers’ wages are rising. Local firms have become more sophisticated. 
They can steal, copy or displace global firms’ innovations without 
building costly offices and factories abroad. From America’s shale 
industry to Brazilian banking, from Chinese e-commerce to Indian 
telecoms, the companies at the cutting edge are local, not global.

The changing political landscape is making things even harder for the 
giants. Mr Trump is the latest and most strident manifestation of a 
worldwide shift to grab more of the value that multinationals capture. 
China wants global firms to place not just their supply chains there, 
but also their brainiest activities such as research and development. 
Last year Europe and America battled over who gets the $13bn of tax that 
Apple and Pfizer pay annually. From Germany to Indonesia rules on 
takeovers, antitrust and data are tightening.

Mr Trump’s arrival will only accelerate a gory process of restructuring. 
Many firms are simply too big: they will have to shrink their empires. 
Others are putting down deeper roots in the markets where they operate. 
General Electric and Siemens are “localising” supply chains, production, 
jobs and tax into regional or national units. Another strategy is to 
become “intangible”. Silicon Valley’s stars, from Uber to Google, are 
still expanding abroad. Fast-food firms and hotel chains are shifting 
from flipping burgers and making beds to selling branding rights. But 
such virtual multinationals are also vulnerable to populism because they 
create few direct jobs, pay little tax and are not protected by trade 
rules designed for physical goods.

*Taking back control*

The retreat of global firms will give politicians a feeling of greater 
control as companies promise to do their bidding. But not every country 
can get a bigger share of the same firms’ production, jobs and tax. And 
a rapid unwinding of the dominant form of business of the past 20 years 
could be chaotic. Many countries with trade deficits (including “global 
Britain”) rely on the flow of capital that multinationals bring. If 
firms’ profits drop further, the value of stockmarkets will probably fall.

What of consumers and voters? They touch screens, wear clothes and are 
kept healthy by the products of firms that they dislike as immoral, 
exploitative and aloof. The golden age of global firms has also been a 
golden age for consumer choice and efficiency. Its demise may make the 
world seem fairer. But the retreat of the multinational cannot bring 
back all the jobs that the likes of Mr Trump promise. And it will mean 
rising prices, diminishing competition and slowing innovation. In time, 
millions of small firms trading across borders could replace big firms 
as transmitters of ideas and capital. But their weight is tiny. People 
may yet look back on the era when global firms ruled the business world, 
and regret its passing.

*MultinationalsThe retreat of the global company*

The biggest business idea of the past three decades is in deep trouble

 From the print edition | Briefing, Jan 28th 2017, 
https://www.economist.com/news/briefing/21715653-biggest-business-idea-past-three-decades-deep-trouble-retreat-global

IT WAS as though the world had a new appetite. A Kentucky Fried Chicken 
(KFC) outlet opened near Tiananmen Square in 1987. In 1990 a McDonald’s 
sprang up in Pushkin Square, flipping burgers for 30,000 Muscovites on 
its first day. Later that year Ronald McDonald rolled into Shenzhen, 
China, too. Between 1990 and 2005 the two companies’ combined foreign 
sales soared by 400%.

McDonald’s and KFC embodied an idea that would become incredibly 
powerful: global firms, run by global managers and owned by global 
shareholders, should sell global products to global customers. For a 
long time their planet-straddling model was as hot, crisp and moreish as 
their fries.

Today both companies have gone soggy. Their shares have lagged behind 
America’s stockmarket over the past half-decade. Yum, which owns KFC, 
saw its foreign profits peak in 2012; they have fallen by 20% since. 
Those of McDonald’s are down by 29% since 2013 (see article 
<http://www.economist.com/news/business/21715704-it-may-soon-be-surpassed-starbucks-mcdonalds-going-healthier-fare-and-greater>). 
Last year Yum threw in the towel in China and spun off its business 
there. On January 8th McDonald’s sold a majority stake in its Chinese 
operation to a state-owned firm. There are specific reasons for some of 
this; but there is also a broader trend. The world is losing its taste 
for global businesses.

Their detractors and their champions both think of multinational 
firms—for the purposes of this article, firms that make over 30% of 
their sales outside their home region (unless otherwise specified)—as 
the apex predators of the global economy. They shape the ecosystems in 
which others seek their living. They direct the flows of goods, services 
and capital that brought globalisation to life. Though multinationals 
account for only 2% of the world’s jobs, they own or orchestrate the 
supply chains that account for over 50% of world trade; they make up 40% 
of the value of the West’s stockmarkets; and they own most of the 
world’s intellectual property.

Although the idea of being at the top of the food chain makes these 
companies sound ruthless and all-conquering, rickety and overextended 
are often more fitting adjectives. And like jackals circling an elderly 
pride, politicians want to grab more of the spoils that multinational 
firms have come to control, including 80m jobs on their payrolls and 
their profits of about $1trn. As multinational firms come to make ever 
more of their money from technology services they become yet more 
vulnerable to a backlash. The predators are increasingly coming to look 
like prey.

It all looked very different 25 years ago. With the Soviet Union 
collapsing and China opening up, a sense of destiny gripped Western 
firms; the “end of history” announced by Francis Fukuyama, a scholar, in 
which all countries would converge towards democracy and capitalism 
seemed both a historical turning-point and a huge opportunity. There 
were already many multinationals, some long established. Shell, 
Coca-Cola and Unilever had histories spanning the 20th century. But they 
had been run, for the most part, as loose federations of national 
businesses. The new multinationals sought to be truly global.

Companies became obsessed with internationalising their customers, 
production, capital and management. Academics draw distinctions between 
going global “vertically”—relocating production and the sourcing of raw 
materials—and “horizontally”—selling into new markets. But in practice 
many firms went global every which way at once, enthusiastically buying 
rivals, courting customers and opening factories wherever the 
opportunity arose. Though the trend started in the rich world, it soon 
caught on among large companies in developing economies, too. And it was 
huge: 85% of the global stock of multinational investment was created 
after 1990, after adjusting for inflation (see chart 1).

By 2006 Sam Palmisano, the boss of IBM, was arguing that the “globally 
integrated enterprise” run as a unitary organisation, rather than as a 
federation, would transcend all borders as it sought “the integration of 
production and value delivery worldwide”. From the Seattle 
demonstrations of 1999 onwards, anti-globalisation activists had been 
saying much the same, while drawing less solace from the prospect. The 
only business star to resist the orthodoxy was Warren Buffett; he sought 
out monopolies at home instead.

Such a spree could not last forever; an increasing body of evidence 
suggests that it has now ended. In 2016 multinationals’ cross-border 
investment probably fell by 10-15%. Impressive as the share of trade 
accounted for by cross-border supply chains is, it has stagnated since 
2007 (see chart 2). The proportion of sales that Western firms make 
outside their home region has shrunk. Multinationals’ profits are 
falling and the flow of new multinational investment has been declining 
relative to GDP. The global firm is in retreat.

*The other end of the end of history*

To understand why this is, consider the three parties that made the boom 
possible: investors; the “headquarters countries” in which global firms 
are domiciled; and the “host countries” that received multinational 
investment. For their different reasons each thought that multinational 
firms would provide superior financial or economic performance.

Investors saw a huge potential for economies of scale. As China, India 
and the Soviet Union opened up, and as Europe liberalised itself into a 
single market, firms could sell the same product to more people. And as 
the federation model was replaced by global integration, firms would be 
able to fine-tune the mix of inputs they got from around the world—a 
geographic arbitrage that would improve efficiency, as Martin Reeves of 
BCG, a consultancy, puts it. From the rich world they could get 
management, capital, brands and technology. From the emerging world they 
could get cheap workers and raw materials as well as lighter rules on 
pollution.

These advantages led investors to think global firms would grow faster 
and make higher profits. That was true for a while. It is not true 
today. The profits of the top 700-odd multinational firms based in the 
rich world have dropped by 25% over the past five years, according to 
FTSE, an index firm. The weakness of many currencies against the dollar 
is part of the story, but explains only a third of the fall. The profits 
of domestic firms rose by 2%.

A complementary measure comes from the foreign profits of all firms as 
recorded in balance-of-payments statistics. Though the data refer to 
firms of all sizes, big ones dominate the mix. For companies with 
headquarters in the OECD, a club of mostly rich countries, foreign 
profits are down by 17% over five years. American firms suffered less, 
with a 12% drop, partly because of their skew towards the fast-growing 
technology sector. For non-American firms the drop was 20%.

Profits should be compared with the capital sunk. The return on equity 
(ROE) of the top 700 multinationals has dropped from a peak of 18% a 
decade ago to 11%. The returns on the foreign operations of all firms 
have fallen, too, based on balance-of-payments statistics. For the three 
countries which have, historically, hosted the most and biggest 
multinationals, America, Britain and the Netherlands, ROE on foreign 
investment has shrunk to 4-8%. The trend is similar across the OECD (see 
chart 3).

Multinationals based in emerging economies, which account for about a 
seventh of global firms’ overall activity, have fared no better: their 
worldwide ROE is 8%. Several supposed champions—such as Lenovo, the 
Chinese company which bought IBM’s PC business and parts of 
Motorola—have been financial flops. China’s biggest completed 
cross-border acquisition was of Nexen, a Canadian oil firm, in 2012. 
Last year the buyer, CNOOC, a state-owned energy firm, wrote a chunk of 
it off.

About half of the deterioration in multinationals’ ROE over the past 
5-10 years is explained by the slump in commodity prices, and thus the 
profits of oil firms, mining firms and the like. Another 10% of the 
deterioration is due to banks. Firms that provide the specialist 
services behind globalisation have also been hammered. Profits have 
dropped by over 50% from their peak at Maersk, a Danish shipping line, 
Mitsui, a Japanese trading house, and Li & Fung, a supply-chain agent 
for retailers.

The pain extends beyond these core industries, however. Half of all big 
multinationals have seen their ROE fall in the past three years; 40% 
fail to make an ROE of over 10%, widely seen as a benchmark of whether a 
firm is creating any value worth speaking of. Even at powerhouses such 
as Unilever, General Electric (GE), PepsiCo and Procter & Gamble, 
foreign profits are down by a quarter or more from their peak. The only 
bright spot is the technology giants. Their foreign profits comprise 46% 
of the total foreign earnings of the top 50 American multinationals, up 
from 17% a decade ago. Apple made $46bn abroad last year, more than any 
other firm and five times more than GE, often seen as America’s bellwether.

These figures mean multinationals are no longer achieving superior 
performance. /The Economist/ has examined the record of the 500 largest 
firms worldwide. In eight out of ten sectors, multinational firms have 
expanded their aggregate sales more slowly than their domestic peers. In 
six out of the ten sectors they have lower ROEs (see chart 4). For 
American firms, returns are now 30% higher in their home market, where 
cosy oligopoly has become more enticing than the hurly-burly of an 
unruly world.

Individual bosses will often blame one-off factors: currency moves, the 
collapse of Venezuela, a depression in Europe, a crackdown on graft in 
China, and so on. But the deeper explanation is that both the advantages 
of scale and those of arbitrage have worn away. Global firms have big 
overheads; complex supply chains tie up inventory; sprawling 
organisations are hard to run. Some arbitrage opportunities have been 
exhausted; wages have risen in China; and most firms have massaged their 
tax bills as low as they can go. The free flow of information means that 
competitors can catch up with leads in technology and know-how more 
easily than they used to.

As a result firms with a domestic focus are winning market share. In 
Brazil two local banks, Itaú and Bradesco, have trounced global lenders. 
In India Vodafone, a Western mobile-phone operator and Bharti Airtel, an 
Indian multinational active in 20 countries, are losing customers to 
Reliance, a domestic firm. In America shale firms stole a march on the 
global oil majors. In China local dumpling brands are eating into KFC’s 
sales. A blend of measures for listed firms shows that multinationals’ 
share of global profits, 35% a decade ago, is now only 30%.

So much for the investors. What about the second constituency for 
multinationals, the “headquarters countries”? In the 1990s and 2000s 
they wanted their national champions to go global in order to become 
bigger and brainier. A study by McKinsey, a consultancy, based on 2007 
data, outlined the sort of benefits they were after. Multinationals 
operating in America, which accounted for 19% of private-sector jobs, 
were responsible for 25% of private wages, 25% of profits, 48% of 
exports and 74% of research and development. Go them.

*Citizens of nowhere*

The mood changed after the financial crisis. Multinational firms started 
to be seen as agents of inequality. They created jobs abroad, but not at 
home. Between 2009 and 2013, only 5%, or 400,000, of the net jobs 
created in America were created by multinational firms domiciled there 
(although preliminary figures suggest that job creation picked up 
sharply in 2014). The profits from their hoards of intellectual property 
were pocketed by a wealthy shareholder elite. Political willingness to 
help multinationals duly lapsed.

As a result, the tapestry of rules designed to help businesses globally 
is fraying. Global accounting, antitrust, money-laundering and 
bank-capital rules have splintered into American and European camps. 
Takeovers of Western firms now often come with strings attached by 
governments to safeguard local jobs and plants. Two American-led trade 
deals, known as TPP and TTIP, that gave protection to intellectual 
property, have flopped. The global tribunals that multinationals use to 
bypass national courts have come under attack.

The deep roots of globalisation mean that trying to favour domestic 
companies by erecting tariffs no longer works as once it did. Over half 
of all exports, measured by value, cross a border at least twice before 
reaching the end-customer, so such tariffs hurt all alike. This does not 
mean that the inept or ignorant will not try them. But it does encourage 
the use of other avenues to try and right perceived wrongs, such as the 
tax system and good old political muscle.

A typical multinational has over 500 legal entities, some based in tax 
havens. Using American figures, it pays a tax rate of about 10% on its 
foreign profits. The European Union (EU) is trying to raise that figure. 
It has cracked down on Luxembourg, which offered generous deals to 
multinationals that parked profits there; it also hit Apple with a $15bn 
penalty for breaching state-aid rules by booking profits in Ireland, 
with which it had a bespoke tax deal. America, for its part, has barred 
big firms from using legal “inversions” to shift their tax base abroad, 
most notably in the case of Pfizer, a pharmaceutical company that is 
America’s third-largest foreign earner.

Republicans in Congress are debating changes to the tax code which would 
see exporters and firms bringing profits home pay less than before, 
while firms shifting production abroad would face levies. Meanwhile, 
some firms have apparently been browbeaten into outsourcing decisions 
about where to base factories by Donald Trump, the new American 
president. On January 3rd Ford, a carmaker, agreed to cancel a new plant 
in Mexico and invest more at home. Mr Trump also wants Apple to shift 
more of its supply chain home.

If these trends continue global firms’ tax and wage bills will rise, 
squeezing profits further. If American multinationals shifted a quarter 
of their foreign jobs home, at American wage rates, and paid the same 
tax rate abroad as they did at home, their profits would fall by another 
12%. This excludes the cost of building the new plants in America.

Of all those involved in the spread of global businesses, the “host 
countries” that receive investment by multinationals remain the most 
enthusiastic. The example of China, where by 2010 30% of industrial 
output and 50% of exports were produced by the subsidiaries or 
joint-ventures of multinational firms, is still attractive.

Argentina’s government wants to draw in foreign firms. Mexico has just 
sold stakes in its oilfields to foreign firms, including ExxonMobil and 
Total. India has a campaign called “make in India” to attract 
multinational supply chains. An index through which the OECD seeks to 
gauge the openness of host countries shows no overall deterioration 
since the financial crisis.

But there are gathering clouds. China has been turning the screws on 
foreign firms in a push for “indigenous innovation”. Bosses say that 
more products have to be sourced locally and intellectual property often 
ends up handed over to local partners. Strategic industries, including 
the internet, are out of bounds to foreign investment. Many fear that 
China’s approach will be mimicked around the developing world, forcing 
multinational firms to invest more locally and create more jobs—a mirror 
image of the pressures placed on them at home.

*The price of hospitality*

Host countries may also become less welcoming as activity shifts towards 
intangible services. For the top 50 American multinationals, 65% of 
foreign profits now come from industries reliant on intellectual 
property, such as technology, drug patents and finance. A decade ago it 
was 35%, and the share is still rising. (It is much lower in Europe and 
Japan, which do not have big technology firms.) There is no serious 
appetite among multinationals to recreate in Africa or India the 
manufacturing centres they spurred on in China, which removes a reason 
for those host countries to welcome them. The jobs and exports that can 
be attributed to multinationals are already a diminishing part of the 
story. In 2000 every billion dollars of the stock of worldwide foreign 
investment represented 7,000 jobs and $600m of annual exports. Today 
$1bn supports 3,000 jobs and $300m of exports.

Silicon Valley’s latest stars are already controversial abroad. In 2016 
Uber sold its Chinese operations to a local rival after a brutal battle. 
In December India’s two digital champions, Ola, a ride-hailing firm, and 
Flipkart, an e-commerce site, said the government should protect them 
against Uber and Amazon. They argued that their rivals would build 
monopolies, create few good jobs and ship the profits to America.

The last time the multinational company was in trouble was in the 
aftermath of the Depression. Between 1930 and 1970 their stock of 
investment abroad fell by about a third relative to global GDP; it did 
not recover until 1991. Some firms “hopped” across tariffs by building 
new factories within protectionist countries. Many restructured, ceding 
autonomy to their foreign subsidiaries to try to give them a local 
character. Others decided to break themselves up.

Today multinationals need to rethink their competitive advantage again. 
Some of the old arguments for going global are obsolete—in part because 
of the more general successes of globalisation. Most multinationals do 
not act as internal markets for trade. Only a third of their output is 
now bought by affiliates in the same group. External supply chains do 
the rest. Multinational firms no longer have a lock on the most 
promising ideas about management or innovation. Where they have 
enforceable patents over valuable brands they are still at an advantage, 
as they are in products, such as jet engines, where economies of scale 
are best created by spreading costs over the entire world. But those 
benefits are less than they were.

The lack of advantage is revealed in the amount of activity that yields 
little value. Roughly 50% of the stock of foreign direct investment 
makes an ROE of less than 10% (40% of the stock if you exclude 
natural-resources firms). Ford and General Motors make 80% or more of 
their profits in North America, suggesting their foreign returns are 
abysmal.

Many industries that tried to globalise seem to work best when national 
or regional. For some, the penny has dropped. Retailers such as 
Britain’s Tesco and France’s Casino have abandoned many of their foreign 
adventures. America’s telecoms giants, AT&T and Verizon, have put away 
their passports. Financial firms are focusing on their “core” markets. 
LafargeHolcim, a cement maker, plans to sell, or has sold, businesses in 
India, South Korea, Saudi Arabia and Vietnam. Even successful global 
firms have gone on diets. P&G’s foreign sales have dropped by almost a 
third since 2012 as it has closed or sold weak businesses.

It looks as if, in the future, the global business scene will have three 
elements. A smaller top tier of multinational firms will burrow deeper 
into the economies of their hosts, helping to assuage nationalistic 
concerns. General Electric is localising its production, supply chains 
and management. Emerson, a conglomerate that has over 100 factories 
outside America, sources about 80% of its production in the region where 
it is sold. Some foreign firms will invest more deeply in American-based 
production in order to avoid tariffs, if Mr Trump imposes them, much as 
Japanese car firms did in the 1980s. This is doable if you are large. 
Siemens, a German industrial giant, employs 50,000 in America and has 60 
factories there. But midsized industrial firms will struggle to muster 
the resources to invest more deeply in all their markets.

Politicians will increasingly insist that companies buying foreign firms 
promise to preserve their national character, including jobs, R&D 
activity and tax payments. SoftBank, a Japanese firm that bought ARM, a 
British chip company, in 2016, agreed to such commitments. So has 
Sinochem, a Chinese chemicals firm that is buying Syngenta, a Swiss 
rival. The boom in foreign takeovers by Chinese firms, meanwhile, may 
fizzle out or explode. Many such deals, reliant on subsidised loans from 
state banks, probably make little financial sense.

The second element will be a brittle layer of global digital and 
intellectual-property multinationals: technology firms, such as Google 
and Netflix; drugs companies; and companies that use franchising deals 
with local firms as a cheap way to maintain a global footprint and the 
market advantage that brings. The hotel industry, with its large 
branding firms such as Hilton and Intercontinental, is a prime example 
of the tactic. McDonald’s is shifting to a franchising model in Asia. 
These intangible multinationals will grow fast. But because they create 
few direct jobs, often involve oligopolies and do not benefit from the 
protection of global trade rules, which for the most part only look 
after physical goods, they will be vulnerable to nationalist backlashes.

*The seeds of something more*

The final element will be perhaps the most interesting: a rising cohort 
of small firms using e-commerce to buy and sell on a global scale. Up to 
10% of America’s 30m or so small firms already do this to some extent. 
PayPal, a digital payments firm, says its cross border transactions, 
which include activity from such multinationalettes, are running at 
$80bn a year, and growing fast. Jack Ma, the boss of Alibaba, a Chinese 
e-commerce firm, predicts that a wave of small Western firms exporting 
goods to Chinese consumers will go some way to reversing the past two 
decades of massive American firms importing goods from China.

The new, prudent age of the multinational will have costs. Countries 
that have grown used to global firms throwing cash around may find that 
competition abates and prices rise. Investors, who all told have a third 
or more of their equity portfolios tied up in multinational firms, could 
face some unpleasant turbulence. Economies that rely on income from 
foreign investments, or capital inflows from new ones, will suffer. The 
collapse in profits from British multinationals is the reason why 
Britain’s balance of payments looks bad. Of the 15 countries with 
current-account deficits of over 2.5% of GDP in 2015, 11 relied on fresh 
multinational investment to finance at least a third of the gap.

The result will be a more fragmented and parochial kind of capitalism, 
and quite possibly a less efficient one—but also, perhaps, one with 
wider public support. And the infatuation with global companies will 
come to be seen as a passing episode in business history, rather than 
its end.

-- 
Revolutionär-Kommunistische Organisation BEFREIUNG
www.rkob.net
aktiv at rkob.net
Tel.: 0650 406 83 14



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