The key economic weapon of the elite that the Left must defeat at this juncture in history is capital flight -- but before we can deal with it, we have to recognize what it is and realize how crucial a problem it is. Capital flight, sometimes also called capital strike, is the refusal by a company to productively invest unless its demands for special privileges are met, either by relocating capital or by hoarding it. When a corporation “offshores” its factories, offices, and operations (or threatens to do so) unless a "favorable business climate" is created, that is capital flight. It need not involve moving jobs and operations overseas, because corporations play different cities and states against one another within countries too. Corporations demand lower tax breaks, subsidies, loans, grants, and reductions in workplace safety and environmental regulations -- whatever maximizes profit -- or they will pick up and move elsewhere. One high-profile type is when a city’s beloved sports team threatens to move unless it gets a shiny new stadium, probably with subsides for operating costs. But also manufacturing in the United States and, to a lesser degree in Europe, has suffered devastating losses since the 1980s as multinationals moved their operations to nations in Asia and elsewhere without unions, labor protections, or living wages, and has time has passed many whote-collar jobs have felt the effects of it too.
In the world of finance capital, investors commit capital flight when they move money out of countries they judge to have national economic policies or institutions unfavorable to profit acquisition. Capital flight is even institutionalized in international bodies such as the International Monetary Fund and World Bank, which are supposed to increase development and quality of life in poor nations, but which instead threaten the denial of loans and aid unless borrowing countries adopt radical privatization and austerity measures. Capital flight is the dynamic behind the current crisis in the European Union: investors, the European central banks, and the IMF are, as a lending condition, demanding austerity measures from Greece so harsh that they will keep it mired in stagnation for decades; and Big Finance is willing to let Greece collapse, and ultimately the Eurozone with it, if those demands aren’t met.
Capital flight/capital strike is significant because it is a form of extortion: society's capital funds are used against it to the advantage of the investor class. It is the relocation or withholding of society's investment assets, not for rational reasons, but as a threat. This threat is powerful because modern economies distribute incomes according to the institution of the "job," and jobs require investment of capital for the workers to use in the production process. The threat to move or withhold capital is thus a threat to remove jobs, incomes, and the means of living itself -- what other word but extortion accurately fits a system that makes demands by threatening impoverishment? The actual flight of capital from a community is catastrophic, as the devastation of Rust Belt cities and communities since 1980 shows.
Furthermore, the profit that companies make comes out of economic value added by the social cooperation of their workers, as I noted in a previous post. The surplus value that workers add over and above business costs is skimmed by the companies as profit -- and as if that were not unjust enough, it is then used to threaten those same workers and their communities with capital flight.
We should note that corporations do have social responsibilities, or are supposed to: they are legally chartered by states to perform necessary functions needed by the public. Corporations, like universities, hospitals, utilities, and other institutions are created to meet society’s needs. One of the public functions that corporations are supposed to do is provide employment and incomes for people (which, by sitting on huge sums of cash, they are currently not doing). Corporations actually work for us, or are at least supposed to, although of course they long ago corrupted the system and gamed it for their own advantage. More on that, and what to do about it, next time.