If capital can always flee from one bubble to another bubble in another country, there will always be bubbles.
Is it sustainable to always have bubbles somewhere that can give refuge to fleeing capital? …….. Probably yes, in spite of the problems left behind.
Many years ago, I was in the Zocalo, central park of Mexico City, during their national fiesta. There were music bands, games and skits being performed. I watched one skit where a farmer was talking to a policeman. The farmer was listing all the things that people produce, “Producimos comida, maiz…” (We the people produce food, corn, fiber for clothing.) We the people produce buildings and roads. Then the farmer turned to the policeman and asked him what he produced. “Qué produce Usted?”
The policeman looked confused and then started to tap his chin in deep thought pacing back and forth saying, “Produzco… produzco…” (I produce… I produce…) And then he stopped with a face of pride, raised his hand and said, “Produzco SEGURIDAD”. (I produce security.)
All of the people were silent for about 10 seconds as the actors held their poses. Those 10 seconds seemed like too long. It’s as if the people really wanted to believe that was true, and maybe it was… in an ideal world, the police would produce security. But after 10 seconds, the people came back to their reality, and remembered the corruption of the police. And everybody started to insult the policeman.
But for those 10 seconds, you could see the natural desire of the people to have security, which they truly wanted and would respect the police for.
Now I ask those who flee with capital from country to country investing in bubbles, what do they produce? and I don’t want to hear just the good things they produce, I want them to acknowledge the damage they do too.