Home » Uncategorized » The Wealth of Nations

The Wealth of Nations

Anyone lucky enough to see the recent public television broadcast of the New York Philharmonic’s historic concert in Pyongyang can see why there has been so much contro versy lately about the rising influence of sovereign wealth funds. As maestro Lorin Maazel and the gang did their best to lift the spirits of the audience …

Anyone lucky enough to see the recent public television broadcast of the New York Philharmonic’s historic concert in Pyongyang can see why there has been so much contro versy lately about the rising influence of sovereign wealth funds. As maestro Lorin Maazel and the gang did their best to lift the spirits of the audience with some of the most glorious music ever recorded, a couple thousand stone-faced totalitarians sat glued to their chairs, never smiling, just barely breathing.

Arguably the least fun-loving people on earth, the North Koreans would be the last nation I would want to see investing directly in this country. But my concern is not limited to investments in industries vital to national security-avionics, software design, nuclear power. No, I’m more worried about industries vital to national happiness. Imagine if the uncompromisingly barmy Kim Jongil got his hands on a major American motion picture studio. Out would go Caddyshack and in would come Heroic Caddies Battle Structural Unemployment! Out would go Speed and in would come Slowness.

Motion pictures aren’t the only place where a Pyongyang-based sovereign wealth fund could wreak havoc. Imagine if the leisure-suit loving North Koreans targeted men’s haberdashery. Or if a North Korean fund seized control of the live entertainment industry. In North Korea, live entertainment mostly consists of 50,000 college students waving colorful flags or reconfiguring chrysanthemums to form the words:

“WE TRULY LOVE KIM JONGIL AND BELIEVE THAT HE WILL PUT AN END TO GLOBAL STRUCTURAL UNEMPLOYMENT SOONER RATHER THAN LATER, FOR HE IS ONE FINE FELLOW!”

It’s like a Notre Dame-Michigan game where the halftime show was co-produced by Busby Berkeley and Joseph Stalin.

The debate about sovereign wealth funds kicked into high gear when a Chinese company tried to take over 3Com, an American outfit that makes anti-hacker software that is sold to the military. But the decision to nix a deal like that is a lay-up. Far more difficult are decisions on foreign investments that do not have a national security component, but could have a deleterious effect on the American quality of life.

Examples:

  • Wouldn’t it be fun if we allowed a sovereign wealth fund bankrolled by the Italian government to manage the Internet? Just to
  • A Saudi sovereign wealth fund recently bought a stake in Citigroup. How would we feel if a Venezuelan wealth fund ultimately answering to Hugo Chavez got involved in the American banking business?
  • Ask the same question but substitute “Colombian” for Venezuelan.
  • Do we really want the Russians buying up prominent restaurant chains and designing the menu at the Olive Garden? Or, for that matter, Red Lobster?
  • Here’s a great idea: Let’s get the Swiss to run the cruise ship business. And the World Wrestling Federation. Better yet, let’s let the Germans run Disney World. Just make sure everything runs smoothly?

In saying all this, I hope that my remarks will not be construed as xenophobic. For just as I would dread a North Korean takeover of Radio City Music Hall or the National Basketball Association, I would be equally horrified by an American takeover of the lederhosen industry, or a looming Yankee shadow over professional cricket. Some countries are good at some things, and some aren’t. Anybody can make a good car. Well, almost anybody. But making good music, good food and good movies is another matter entirely. And don’t even get me started on the French taking over the American hospitality industry.

About Joe Queenan

Joe Queenan is a regular contributor on business issues, corporate culture, and financial follies to Barron's and The Wall Street Journal.