Comment by harmmonica
4 days ago
Your comment triggers so many thoughts, but the first one is I'm so friggin' naive, which is embarrassing. In my fantasy world corporations make investment decisions based on risk. They invest in a country like Venezuela and part of the due diligence is evaluating whether things may go sideways, like in any investment, and what plan b is if they do. And if plan b is getting the government to backstop you with money, guns and/or regulations then that would not be a viable strategy.
But, at every level in the US, that plan b is viable. And it's used over and over and over again, from small local businesses with local politicians to the US Federal Government and military for the likes of the oil industry.
At what point do you just accept the truth: that you (me!) are the dumb one because you hold onto this fantasy of how you think things ought to be as opposed to how they are?
Why is plan (b) bad? From my perspective it is certainly how things ought to be. If my property is nationalized in another country by force, I am fully in favor of my country swinging its dick around to get it back.
And what is to say that plan (b) isn't taken into account when doing the risk assessment in plan (a)?
In your world everybody will be at war with each other. The way to deal with the risk of foreign nationalization of your assets is to price it in or to forego the opportunity. Expecting your country to go to war for your private interests is ridiculous. You can go to court if you want and if you lose you'll have to take your lumps.
1898 is a while ago (the Banana wars).
No, people won't be at war with each other because the cost and the likelihood of war will play a role in the decision on whether to enter war or not.
In this case, the administration (correctly!) assessed that there was virtually no cost or risk (albeit, a very high profit.)
9 replies →
> Expecting your country to go to war for your private interests is ridiculous.
At the risk of coming across as flippant: Why? I don’t think the math has worked out on most peer conflicts during the past hundred years. The cost of the operation has likely already exceeded the value of whatever infrastructure was left in Venezuela to be reclaimed. But why should we expect courts and bailiffs to enforce the law domestically and not expect soldiers to enforce it internationally?
4 replies →
What if military intervention was an explicit part of the investment agreement in the first place? I’m not saying it was, but would it affect your judgement?
Imagine you start a business in another country where the law says your business assets will be seized if you don't file tax form 123(a) before August. That is to say, non-filers don't have any business property rights. And you don't file the form.
Do you:
(Plan A) Realize you fucked up
Or
(Plan B) Send in the military to kidnap the president and take over the country, retroactively claim the law wasn't the law, undo its effects (but only for you) and then change the law so that property rights work exactly the same way they work in your country.
Now you see why people are saying plan B is bad, and would cause everyone to be at war all the time.
> If my property is nationalized in another country by force, I am fully in favor of my country swinging its dick around to get it back.
In this case your property is actually not your property though. Assuming property == oil, then it belongs in Venezuela - you seized control of it but it’s not really yours.
> swinging its dick around
I'm sorry, I can't resist extending your metaphor:
The problem comes when "swinging your dick around" you accidentally get the other country pregnant. Then you have to co-parent the resulting child government, and they are always moody, rebellious, and ungrateful.
As soon as they're standing they run all over the house, painting the walls, breaking things, and costing you gobs of money. You can't ever go out, because the moment your attention wanders even a little they throw a party and invite their hooligan friends over; and wrapping up the party and throwing out their friends is another expensive debacle.
Not to mention the endless shady boyfriends/ girlfriends that parade through the place. They're "just experimenting" they claim: fascism, communism, and dictatorship are just phases they're going through as they explore who they really are.
Eventually they get resentful and want to live on their own. To accomplish this they kick you out of the house, and you end up leaving your car and many other possessions behind, and many times they trash the place as you leave.
If you're lucky, you both mature and you can develop an adult relationship in time. If you're not, they end up beating up their cousins and you have to break up the fights and pay for the broken furniture.
In short: don't swing your dick around, and if you must, be sure to use protection. I'm not sure what that equates to in this metaphor, but it's obvious the U.S. flunked sex-ed.
Of course it's taken into account. Feel like you didn't read what I wrote.
Question back to you: who decides when the government gets involved in getting your property back? You cool with it if they don't do anything to get your property back because of the size of your property; the cost to make it happen; you're not friends with the right person; etc.? Or better yet they don't get yours back but they get your competitor's/neighbor's back? Seems like the thing that happens in these situations is that someone maybe gets their property back and then the dick swings to piss on the people who didn't.
Like I said, fantasyland over here.
what do you think nationalise means? it wasn't taken without compensation.
My understanding is that courts ruled that some (though not all) of the 2007 expropriations were made without proper compensation.
1 reply →
Compensation is complicated.
As far as I recall, in Guatemala, United Fruit had undervalued the worth of their land to reduce their taxes. So when they were compensated for the nationalization of their land based on their own valuation, they said that they were under compensated. United Fruit complains helped trigger the US intervention.
And Venezuela was well aware of plan b when accepting the investment.