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Debatable. I think we have to think about the nature of the threat posed by globalised capital before we jump to conclusions.
Number one is being thrown out of the international trade system through loss of access to the payment system (see Iran) and piracy(see Argentina).
We'll have yet to see if the EU offers any kind of protection against this. Iran is a test case.

Otherwise, all we are left with is this:
What Is Foreign Investment For? - J. W. Mason

The final argument is that, if you have committed yourself to permitting the free creation of cross-border payment commitments, you will be unable to honor those commitments without a sufficient willingness of foreign units to take net long positions in your country's assets. [6]

This one is correct. If, let's say, banks in Argentina have accumulated large foreign currency liabilities (on their own, or more likely, as counterparties to other units accumulating net foreign asset positions) then their ability to meet their survival constraint will at some point depend on the willingness of foreign units to continue holding their liabilities. And unlike in the case of a bank with only domestic-currency liabilities, the central bank cannot act as lender of resort. In other words, the central bank can always maintain the integrity of the payment system as long as its own liabilities serve as the ultimate means of settlement; but it loses this ability insofar as the balance sheets of the domestic financial system includes commitments to pay foreign moneys. [7]

This, probably, is the real practical content of stories about how important it is to maintain the goodwill of footloose capital. If you don't honor your promises to foreign investors, you won't be able to honor your promises to foreign investors. The weird circularity is part of the fact of the matter.

by generic on Mon Nov 19th, 2018 at 12:41:47 PM EST
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