How two businessmen wrote the rules of globalization
https://www.newstatesman.com/international/2021/04/how-two-businessmen-wrote-rules-globalisation
“Sensing the fear that decolonisation had now put into the hearts of other countries’ investors, in 1957 Abs presented what he christened a “Magna Carta for capitalism”.
The Magna Carta envisioned a world in which investors everywhere would be protected by US-style property rights, enforceable in an international tribunal. This meant not just protection from expropriation, but also “indirect expropriation” – regulations or taxes deemed to be excessively burdensome”.
Related:
How Hedge Funds Held Argentina for Ransom
http://www.nytimes.com/2016/04/01/opinion/how-hedge-funds-held-argentina-for-ransom.html
Guzman and Stiglitz note:
“It’s common to hear the phrase “moral hazard” when looking at countries that face crushing debt, like Greece or Argentina. Moral hazard refers to the idea that allowing countries (or companies or people) to renegotiate and lower their debts only reinforces the profligate behavior that put them in debt in the first place. Better that the debtor faces disapproval and harsh consequences. But the Argentina deal reversed the moral hazard by rewarding investors for making small bets and reaping huge rewards.”
https://www.newstatesman.com/international/2021/04/how-two-businessmen-wrote-rules-globalisation
“Sensing the fear that decolonisation had now put into the hearts of other countries’ investors, in 1957 Abs presented what he christened a “Magna Carta for capitalism”.
The Magna Carta envisioned a world in which investors everywhere would be protected by US-style property rights, enforceable in an international tribunal. This meant not just protection from expropriation, but also “indirect expropriation” – regulations or taxes deemed to be excessively burdensome”.
How Hedge Funds Held Argentina for Ransom
http://www.nytimes.com/2016/04/01/opinion/how-hedge-funds-held-argentina-for-ransom.html
Guzman and Stiglitz note:
“It’s common to hear the phrase “moral hazard” when looking at countries that face crushing debt, like Greece or Argentina. Moral hazard refers to the idea that allowing countries (or companies or people) to renegotiate and lower their debts only reinforces the profligate behavior that put them in debt in the first place. Better that the debtor faces disapproval and harsh consequences. But the Argentina deal reversed the moral hazard by rewarding investors for making small bets and reaping huge rewards.”