chapter  5
20 Pages

Mergers, Acquisitions, Alliances

Now, more real capital is likely to mean more employment; mergers and acquisitions, by contrast, often lead to widespread layoffs. (They may be part of a restructuring that will improve the economy's performance in the long run, but this is not necessarily the case.) Acquisitions abroad make one ask: Do they not reduce the funds for creating jobs at home? (The question is legitimate, even if the answer may tum out to be in the negative.) Mergers may yield economies of scale, but they also often amount to the creation of monopolies; even joint ventures sometimes open the door to future concentration of ownership or control. (Moreover, some monopolies and oligopolies straddle quite a few frontiers, and corporate interests need not coincide with those underlying the policies of national governments or supranational authorities.) To cite a case in point, advantages in terms of efficiency in the production of wealth may be accompanied by increased inequalities in its distribution.