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The specific ownership and the details are irrelevant, what matters is that a large chunk of their profits is extracted out of the country and doesn't get reinv

The specific ownership and the details are irrelevant, what matters is that a large chunk of their profits is extracted out of the country and doesn't get reinvested.

Blackstone4 6y ago
Is that really true? The international supermarkets may chose to invest by open new stores....secondly, they had to buy the local supermarkets in the first place...that went somewhere...maybe that was reinvested locally. It is not clear cut.
- labawi 6y ago
  > they had to buy the local supermarkets in the first place When foreign owners extract profits to recover their investment or pay whomever, wealth is in fact leaving the country - because they still own the capital (stores) yet get money back. It's not clear cut based on this. They could have invested beyond price, brought knowledge, improved efficiency ... It's also possible they are in effect extracting wealth colonialist style, which is something to beware of - at scale it can have severe consequences for local economies.
viro 6y ago
Thats not how the economy works. Walmart profits don't get "invested" in the States. They get invested into Walmart. The wages and taxes those wages fuel always gets applied locally. Nothing is being "extracted". Thats just nationalist bullshit used to fuel protectionism.
- oblio 6y ago
  If the very well paid jobs stay in the home country, how do you call that? If the interesting work all stays in the home country, how do you call that? We like to kid ourselves that multinational companies are truly multinational, companies of the world. What's the percentage of non-American top managers, for example, working for American based multinationals? It's probably in the low 1-digit percentages. There is a definite advantage to bejng an early investor. For these companies the risk is comparatively small and the rewards they reap are huge and on very long time horizons. It's not super clear cut that it's all nationalist BS.
- labawi 6y ago
  AFAIU, neither wages nor investments count as profits - those are paid to owners / shareholders. As far as returning the earnings to workers and local economy via taxes - yes there are expenses, you can't take 100% of income as profits, but there is a lot of leeway to direct the funds pretty much wherever the company chooses. Corporate headquarters in tax friendly countries are popular for a reason.
- modo_mario 6y ago
  So if wallmart buys a chain that wasn't competitive because they didn't decided to have wages so low their employees require foodstamps do you think that helps the local economy? When the company buys in Romania and lays of the local marketing, sales departments, etc to make things more efficient, uniform and streamlined that doesn't help the local economy. That makes things more efficient tho but as a Romanian you're left holding the bag. Now everything is foreign owned and the streamlining and competition has played out in such a fashion that there's potentially less competition and consequently less benefits off competition. (see all the modern industries that have turned into duopolies, monopsonies or the like that can easily keep new competition from coming in but also don't compete enough to drive consumer prices down.
TheButlerian 6y ago
Fucking dumb Eastern European gypsy.

The specific ownership and the details are irrelevant, what matters is that a large chunk of their profits is extracted out of the country and doesn't get reinvested.

Blackstone4 6y ago

Is that really true? The international supermarkets may chose to invest by open new stores....secondly, they had to buy the local supermarkets in the first place...that went somewhere...maybe that was reinvested locally. It is not clear cut.

labawi 6y ago
> they had to buy the local supermarkets in the first place When foreign owners extract profits to recover their investment or pay whomever, wealth is in fact leaving the country - because they still own the capital (stores) yet get money back. It's not clear cut based on this. They could have invested beyond price, brought knowledge, improved efficiency ... It's also possible they are in effect extracting wealth colonialist style, which is something to beware of - at scale it can have severe consequences for local economies.

viro 6y ago

Thats not how the economy works. Walmart profits don't get "invested" in the States. They get invested into Walmart. The wages and taxes those wages fuel always gets applied locally. Nothing is being "extracted". Thats just nationalist bullshit used to fuel protectionism.

oblio 6y ago
If the very well paid jobs stay in the home country, how do you call that? If the interesting work all stays in the home country, how do you call that? We like to kid ourselves that multinational companies are truly multinational, companies of the world. What's the percentage of non-American top managers, for example, working for American based multinationals? It's probably in the low 1-digit percentages. There is a definite advantage to bejng an early investor. For these companies the risk is comparatively small and the rewards they reap are huge and on very long time horizons. It's not super clear cut that it's all nationalist BS.
labawi 6y ago
AFAIU, neither wages nor investments count as profits - those are paid to owners / shareholders. As far as returning the earnings to workers and local economy via taxes - yes there are expenses, you can't take 100% of income as profits, but there is a lot of leeway to direct the funds pretty much wherever the company chooses. Corporate headquarters in tax friendly countries are popular for a reason.
modo_mario 6y ago
So if wallmart buys a chain that wasn't competitive because they didn't decided to have wages so low their employees require foodstamps do you think that helps the local economy? When the company buys in Romania and lays of the local marketing, sales departments, etc to make things more efficient, uniform and streamlined that doesn't help the local economy. That makes things more efficient tho but as a Romanian you're left holding the bag. Now everything is foreign owned and the streamlining and competition has played out in such a fashion that there's potentially less competition and consequently less benefits off competition. (see all the modern industries that have turned into duopolies, monopsonies or the like that can easily keep new competition from coming in but also don't compete enough to drive consumer prices down.

TheButlerian 6y ago

Fucking dumb Eastern European gypsy.