Mudcat Café message #3973235 The Mudcat Café TM
Thread #165570   Message #3973235
Posted By: DMcG
24-Jan-19 - 07:50 AM
Thread Name: BS: Brexit #3: A futile gesture?
Subject: RE: BS: Brexit #3: A futile gesture?

The only reason multinationals behave as they do is because inadequate legislation allows it.


Perhaps, but that raises the question of what is inadequate and why is it inadequate. From a business point of view, a law is not so much a question of "do/don't do this or suffer the penalty" so much as "if we do it and incur the penalty, do we still make a profit?" As example of that was Sunday trading - a number of the big supermarkets openly flouted the law because they thought that the most profitable in the long run. (I am not taking about whether Sunday trading is or is not a good thing - just how companies will ignore the law if the cost-benefit suits them)

Part of the reason they could do this was that they could cross-subsidize penalties from profits on other days, and in the end the law was changed to allow them to trade very much as they wished.

My claim is that any national law will be inadequate - either the company will ignore the law(*) if it is profitable to do so, or they will decide it is not worth trading in a country whose laws make it non-profitable. The only way to overcome this is to the set laws at a higher level than a national law, and have mechanisms that allow the countries in such alliances to reach agreements with each other that can be enforced.

(*) Because even the boards of companies are people, there are still laws they will abide by with little questioning, of course. But the principle that laws are treated as cost-benefit analyses than instructions is, I believe, a consequence of the stuff Iains was saying.

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Big Al: I, for one, do not think I have everything worked out - it is all a work-in-progress from my point of view. I have said before, and repeat again here, I would love to be completely wrong about the consequences of Brexit.