Perry Metzger wrote:
From: Bart Croughs You haven't answered this question yet. I don't claim that the U.S. is worse off when US capital moves abroad. I only ask: how can you proof that the US isn't worse off when US capital moves abroad?<
Simple. Keeping capital from flowing wherever it likes leads to a non-pareto optimal state. Care to dispute that? Perry - - - - - - - - - For those who don't know what the Pareto optimum is: it's an allocation of resources such that no one can be made better off without someone else being made worse off. So what you say is that you can't keep capital from flowing wherever it likes without someone being made worse off. Of course I do not dispute this; obviously, the US investors will be worse off when you forbid them to invest where they want to invest. But this is not a proof that the rest of the US citizens will not be worse off when American investors decide to invest abroad. And that is the proof I'm asking for. Bart Croughs