CHAPTER 11
Global Investors MONEY
PLAYS THE LARGEST PART IN DETERMINING THE
COURSE OF HISTORY.
— K A R L M A R X , 1 8 48
preceding chapters there has been a recurring theme of global capital flow and the pursuit of it by both wealthy and poor economies alike. When a nation (or for that matter a single company) is doing well or is on the upswing, the providers of capital take on the form of great benefactors. However, when things go sour and debts are called due or investment is withdrawn, these benefactors turn into evil and avaricious agents intent on bending everyone to their will. The global investors have not changed—only how they are perceived.
IN MANY OF THE
PROPHETS OF PROFIT
National governments in Africa, southeast Asia, South America, and eastern Europe have in the past few decades both hailed foreign investment when it arrived full of promise, and cursed it when it left full of debt. When the IMF appears in the wake of escaping private investors to delineate the tough terms for new loans, these same governments cry oppression and loss of national sovereignty. Everyone, from the average citizen to the prime minister, has lost sight of what the global investors, both public and private, intended to do: make money. There is no intention to oppress or cause the loss of sovereignty and national dignity. Either there is potential for reasonable profit or there is not. Any other concern is extraneous. Much international capital flow exists outside of government control and in many ways can be seen as having the status of a parallel government. Such a government has armies of money, CFOs as generals, accountants as bureaucrats, and brokers as diplomats. Severely democratic, its elections are held not every few years, but every few seconds as transactions are made. These global investors come in many shapes and sizes, as do their investments. This chapter will look at what they do, how they do it, and the relative importance they have in international economics. Most importantly, it will look at the level of international capital flow, whether it is at its peak in the latter part of the 20th century, and how controlling it can either help or hurt an economy.
International Exchanges Every day, in New York, Tokyo, London, and Frankfurt, billions of dollars, yen, pounds, and euros of global funding are traded and invested. But these exchanges do not just serve American, Japanese, British, or German companies. In each of these investment arenas, numerous foreign firms have their stocks traded and their future fortunes decided. But it was not always so.
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