INTERNATIONAL BUSINESS LAW

Chapter One – Part One

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04/13/2023

Economic Interdependence Absolute/Comparative Advantage drives it.“the factors that yet hold the greatest promise for change are the growth of democracy, the resurgence of market-oriented economies, and the decline of socialism.” What do you think about this assertion? Read “Another God That Failed” by Patrick J. Buchanan at www.humanevents.com/article.php?id=35118.

What does democracy mean?What did Plato say about democracy?Read Web-Wise Lawyer column handout dated August 2009.

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Technology Transfer“U.S. firms have built factories around the globe and shared their technology, know-how, and management capabilities with their foreign partners.” Is this a smart idea?Samuel Slater (June 9, 1768 – April 21, 1835) was an early American industrialist popularly known as the "Father of the American Industrial Revolution" or the "Father of the American Factory System" because he brought British textile technology to America. A native of England, he was apprenticed to Jedediah Strutt in Belper as a manager in a cotton mill of the type pioneered by Richard Arkwright. In 1789 he violated a British emigration law that prohibited the spread of British manufacturing technology to other nations. When he left for New York, he had memorized the plans for the mill and had a deep understanding of Strutt's managerial practices. He offered to sell his knowledge to American industrialists . . . Wikipedia

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The Smoot-Hawley Tariff ActThe Smoot–Hawley Tariff Act of 1930 (P.L. 71-361, sometimes known under its official name, the Tariff Act of 1930)[1] was an act signed into law on June 17, 1930, that raised U.S. tariffs on over 20,000 imported goods to record levels. The ensuing retaliatory tariffs by U.S. trading partners reduced American exports and imports by more than half and according to some views may have contributed to the severity of the Great Depression.Vilified by free traders ever since the Depression.“No nation has ever risen to pre-eminence through free trade. Britain before 1848, America and Germany from 1865 to 1914, Japan from 1950 on, all practiced protectionism. “ Buchanan, The Isolationist Myth , http://buchanan.org/blog/the-isolationist-myth-165

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The U.S. Leads the Way

The Bretton-Woods (N.H.) Agreement of 1944’s original purpose was rebuilding nations devastated by World War II via currency stabilization programs loans. From these efforts came the World Bank and the International Monetary Fund (IMF).International monetary policy was based on a global gold standard, where gold was convertible to dollars at the ratio of $35 for one ounce of gold.However, it failed to take into effect the change in gold's actual value since 1934, when the $35 level had been set. The dollar had lost substantial purchasing power during and after World War II, and as European economies built back up, there was an ever-growing drain on U.S. gold reserves .See http://www.dailyreckoning.com.au/bretton-woods-agreement/2006/11/29/

President Nixon unilaterally ended the dollar/gold conversion in 1971, part of the so-called Nixon shock.

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MNCs (Multinational Companies)

What makes a company a multinational company?

Home and host countries. Ethical implications. Risks Visit UNCTAD's Web site at

www.unctad.org

Iceland's 3 largest banks (Kaupthing, Landsbanki and Glitnir) were privatized in 2002.They borrowed the equivalent of $250,000 for each man, woman, and child in Iceland.They went on a global spending spree.They were too big, their home base too small.U.S. bank problems caused a credit squeeze they could not survive. – Cont’d on next 2 slides

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“Easy access to 100 per cent mortgages has seen a change to the traditional pattern of young Icelanders living with their parents until their mid-twenties. The suburbs of Reykjavik have grown by a third in the past decade, most of it housing for first-time buyers. Whole new neighbourhoods have emerged. New streets house young couples, many with children, most with two cars in the drive and furnished with the best that Ikea can provide. All bought with 100 per cent loans, many in foreign currencies.”“Iceland is the only country in the world that indexes its loans in addition to charging interest.”

Voices of caution – there were many in Iceland – were drowned out by a media that became fixated on the nation’s emergence from drab pupa to gaudy butterfly.What international sympathy there was for Iceland’s plight evaporated with the dark realisation that the downfall of Iceland’s three main banks brought with it the potential loss of £8bn for half a million savers in northern Europe, the bulk of whom were British.The British government’s use of anti-terror legislation to freeze the assets of Landsbanki pushed Iceland’s banking system into the abyss.