Like even in the best of scenarios where the left isn't destroyed but can actually summon some form of revolutionary energy against capital, what is to prevent most capital investment from leaving the country as the winds begin to turn?
Is there good theory out there on how to prevent capital flight? Are there capital controls that don't simultaneously provoke capital flight?
Is there good theory out there on how to prevent capital flight?
I reject the premise that capital flight is a real problem.
The "real" economy is the productive things: workers and capital. The capitalists themselves can fuck off wherever.
In the context of, say, a wealthy country attempting to pay for welfare by increasing taxes resulting in the rich taking their money out of the country:
- Firstly, this is an admission that the country isn't producing much, as it gets strangled by legal fictions.
- Secondly, this can be fixed legally. See how Russian USD was frozen. Basically, people and orgs overseas can open accounts with your country's bank, but it's still within the purview of your country's enforcement apparatus
- lastly in a revolutionary context, the capitalists aren't fleeing with drill presses and tractors, they're fleeing with jewellery and soon to be worthless currency.
Points where it's valid to be concerned about:
- if they see the writing on the wall by a while, they can try to export productive capacity and hoarded stores
- If the productive capacity is part of an international supply chain; Saudi Arabia might not continue selling you oil post-revolution. A part of the value of capital to your country is access to inputs
counterpoint, white flight is the exact same phenomenon as capital flight.
This is a mostly US specific answer but the white labor aristocracy has essentially fled the cities for the suburbs and its a serious issue that has resulted in schools and public services being significantly underfunded in nonwhite areas.
Yes, it would be impossible for the rich to take a factory outside of the country if a revolution happened right now. But capital flight can be and most often is a gradual process, do you think the rich don’t prepare for such a scenario?
And what about brain drain, when highly educated and skilled people like doctors, engineers, and scientists flee from a revolution when the state legitimately needs their services? The USSR and USA jockeyed for German rocket scientists.
Small business tyrants may be one thing but when you have human capital fleeing a revolution that’s bad, that’s very bad. Either they have to be killed or re-educated. It doesn’t matter how brilliant someone is, if they are being paid to run the nuclear program of a nation like Israel they got to die. The Cuban exile community even existing at all is unironically a failure on the part of Castro.
When the revolution comes it has to be unexpected and fast enough to make escape from it impossible, and odds are it’s not going to be a global revolution so there will be many escape routes possible.
lastly in a revolutionary context, the capitalists aren’t fleeing with drill presses and tractors, they’re fleeing with jewellery and soon to be worthless currency.
This is the thing. Tell them they can't take the drill presses with them and don't let them go full Kulak on the drill presses. I just figure that if Saudi Arabia don't got me, South America and China got me.
Yeah, secure means of production and supplies, then revolt. You're interacting with that stuff every day, they're not.
So essentially the extent to which a country still participates in capitalism is the extent to which capital flight it will be a problem. If you maintain a system where you need permission from capitalists to do anything then surprisingly you won't be able to do anything in the absence of capitalists. Thus is the problem with social democracy.
You mean actively encourage free market and free trade conditions (or at least give the impression thereof) and foreign investment/outsourcing, while having a passive foreign policy with capitalist nations and a highly educated/skilled but low income workforce and lax labor laws?
It's the kind of thing that worked in 80s to 2010s China (and not without negative effect, like the infamously strong pollution of the mid 2000s) but is not going to work for a country like Cuba or Venezuela. That is of course, unless they'd be willing to lick America's boots and let US companies do whatever they want.
And even then, it's not like the material conditions for that are the same as in 1999 - the western bourgeois nowadays would rather invest in Indonesia or Bangladesh than Vietnam for the fear of building up another future political adversary.
Finally, that's a strategy that's completely unviable for higher income countries like if say Greece had a revolution tomorrow.
You can't move natural resources and labor so it doesn't matter.
At the end of the day, the USA is resource rich, and labor is required to extract the resources. If capital leaves, they lose the labor power needed to extract resources. Those resources are then an input into future production.
Yes and no, lots of manufacturing has been outsourced, but the imperial core still does have a good bit left its all either automated or high tech production.
As for financial capital, you gotta grab them big banks. As our sweet boi Lenin said the capitalists do us a favor by concentrating control in fewer and fewer banking institutions.
But how do you grab a bank, isn't a lot of :porky-happy:s money kept on Caribbean islands? And if it isn't can't it be moved there readily if a serious threat from the left begins to materialize?
Wouldn't the end game be that their money becomes worthless? That they are no longer capitalists? Their mansions become ours their funds and even the planes they flee on become collective.
Sure that's the end game. Until then we'll likely need to trade with other countries, and I'd like to seize the billions they've expropriated from my country and invested abroad so we can use that money for appropriate means. I honestly don't understand how we're supposed to not have capitalists if you let them keep all their money to continue to fuck with the world.
Yes but the banking institutions control the means of transferring funds around.
Which specific country are you talking about? The answer would be different for each
Not that different right? Surely most imperial core countries are similar, and most peripheral ones?
Anyhow I meant in the imperial core
No, not really. While deindustrialization since the 1980s has brought upon an impoverishment and rise of unemployment in industrial areas, but there are still many companies, workshops, even larger scale factories producing random stuff in light and heavy industry.
It's definitely a priority to prevent further dismantlement of industrial capacity, but should that happen anyway, it's still possible to have the company survive through state or cooperative management.
Argentina during the early 2000s and modern Venezuela both have had similar experiences in regards to that and can be learned from.
The US has a highly financialized, service-based, and imperialism-dependent economy. If shit like that were to go down, it would be so much worse than simple capital flight. There would be no production to speak of to keep the lights on, it's 100% import dependent.
Better hope that other countries step in to supply capital and imports, e.g. China.
Edit: I assumed you were thinking of the US, which might not be the case.
I'm inclined to agree with the strategy of several AES states of seeking to establish/maintain relations with the International Community™ while keeping an eye towards self-sufficiency and supporting an alternative bloc for when shit hits the fan. With enough time, and friends to trade with, you can build everything back up, but in the short term you're probably gonna have to weather the storm.
This really depends on your country's military position relative to capitalist economies. The money is really a proxy for state violence. You can always just invent your own monetary system - the question is whether you'll be bombed for doing that.
They're going to take their magic numbers away and not let us use them? We're going to have to operate an economy without financialization?
:NOOOOO:
