Wednesday, April 18, 2012
How do you trust a country that does not respect property rights? Argentina is only the latest nation to seize control of a company, and Spain is huffing about it. But what can Spain do on behalf of the victimized company -- Repsol YPF? It is hardly in a position to go to war or even to mount an effective embargo. So, Argentina is likely to get away with its theft. However, what the country gains in the short run, it will lose in almost every other way. What companies or countries will trust its leadership? While Argentina panders to its citizens, the publics of other countries will turn their backs. And, Argentinians will lose. Why government leaders can be so foolhardy is hard to fathom. They do not understand relationships between nations and commerce, and in their naivete, they see only short-term advantage.