17 November 2007

Upping the stakes

Whether we should be worried about foreign governments having stakes in British industries, directly or through intermediary funds or companies, is an interesting question. Although clearly the Anarcho-Capitalist position is not to have state ownership of any companies (or indeed to have states), essentially if foreign states buy British companies then their tax payers are subsidising British industries, freeing up capital to be used elsewhere in the British economy. Thankfully the British state is relatively relaxed in this regard which benefits us all, unlike the French government in the case of Enel:

Enel's interest prompted outrage in France and the French government intervened to encourage a merger of GDF with Suez to create a national champion impenetrable to foreign bidders.

Which is rather hypocritical given that the French government supported √Člectricit√© de France owns 100% of EDF Energy - a merger of London Energy, SWEB Energy and Seeboard Energy. Although the British government seems to have some reservations about security with regard to energy provision:

[When] Gazprom showed interest in acquiring Centrica, ministers considered ways to block any bid, and may even have warned off the Russian state monopoly.

I would argue that this is ridiculous, as energy distribution is geographically tied. If another state tried some kind of blackmail using the energy companies they had acquired it would be a simple matter to commandeer said companies and it would be doubtful that British employees would be complicit in the foreign blackmail of their own country. In this scenario it would seem to me that Britain would be paid for the company, then British interests could regain it for free and, if wanted, sell it again!

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