Limiting Capital Flight

 Curbing the ability of businesses and capital to relocate offshore

1. International agreements

1. In degrowth discussions, we talk about localizing production to reduce unnecessary

    shipping and to empower countries to provide for their own needs of finished

    products. This can be made possible by international agreements, including the

    release of patents and copyrights (intellectual property).

2. Trade agreements that let countries produce whatever they need to produce and not

    be limited by the dictates of international financial institutions could also help. For

    example, according to an article in the Globalist the U.S. Agency for International

    Development  (USAID) asserted that cotton was not a viable substitute for poppy

    cultivation in Afghanistan. Yet cotton production in Afghanistan has increased due

    to a national ban on opium production since the end of the Afghan war. 
   
   

2. Shifting to cooperative employee ownership for businesses
   Cooperative, employee-owned businesses are those where the business’s workers, rather

    than non-employee shareholders, collectively own the business. Business decisions are

    typically made through a democratic process, either through the election of

    representatives or through direct voting by employees on business issues. In contrast to

    capital-owned firms, worker-owned firms tend to resist layoffs or job relocation in

    response to market changes and shocks, and tend to absorb shocks within the business

    through other means of restructuring.

1. “The Cleveland Model”: Following the mass capital flight and industry relocation

    away from Cleveland, OH, the Evergreen Cooperatives were launched to capture

    procurement contracts from major institutions and ensure wealth and jobs

    continued flowing locally. Local employee ownership and ties to local

    institutions ensure jobs proliferate locally, and procurement contracts from

    major institutions remain tied to the local labor force, creating a steady flow of

    income to local workers through institutional contracts.
   
   

3. Bringing the means of production into public ownership

1. If a country nationalizes an industry, the relevant equipment and buildings become

    the joint property of that nation, making it illegal for investors to move the

    equipment. If that country can take over the employment of the workers of those

    factories at the same or better wages, then it also reduces the drain on skilled

    labor to other countries. Nationalization may occur with or without compensation

    to owners. Industries often subject to nationalization include telephones, electric

    power, fossil fuels, iron ore, railways, airlines, media, postal services, banks, and

    water. According to a study reported in the British newspaper Mirror, nationalization

    of public services would save Britain billions of pounds. Many countries have

    nationalized one or more of these industries at various times. Control of media

    can limit the information available to people and influence their thinking, so we

    would want to approach nationalization of media carefully and make sure it was

    under independent democratic control, free of both investors and government

    control.