Capital strike

Capital strikes may sometimes result when governments pursue policies that investors consider "unfriendly" or "inflexible", such as rent control or nationalization. Capital strikes are often aimed at undermining proposed left-wing or socialist policies. The term can refer to a capital strike by a single investor or a large group. Capital strikes are commonly invoked as the business-owner/shareholder equivalent of a labor strike, and are often tied to the concept of capital flight. Capital strike was originally a derogatory term, but has been used more neutrally in modern politics.

Examples

It is difficult to determine with any certainty when a decline in business investment is the result of a "capital strike" against certain policies or a response to other economic factors. Most often, the phrase "capital strike" is used to describe resistance to labor-friendly or left wing reforms which are perceived or intended to be against the interests of business owners and investors.

• U.S. President Franklin Roosevelt argued that the Recession of 1937 was caused by a capital strike organized to undermine the New Deal and his new taxes on high incomes.
• In December 1978, banks financing the debt of the city of Cleveland, Ohio engaged in a capital strike by refusing to roll over the city's municipal debt when the Mayor, Dennis Kucinich, refused to sell the publicly owned electric company, the Cleveland Municipal Light Plant. Cleveland would later enter default.
• French President François Mitterrand is said to have faced a capital strike when capital fled France following the 1982 nationalization of a large number of private firms and other labor market reforms.
• Chilean President Salvador Allende is said to have faced a capital strike when investment fell after his election as he was the leader of a left-wing coalition that proposed large-scale nationalizations and far-reaching economic reforms.
• U.S. President Barack Obama was sometimes said to have faced a capital strike during the Great Recession, including then Speaker of the House John Boehner saying that "job creators in America are on strike" in response to uncertainty over the Obama administration's economic policies.
• A February 2021 article in the magazine Jacobin argued that companies such as Amazon, Kroger, Lyft, and Uber were threatening to use capital strikes during the COVID-19 pandemic. As examples, they pointed out Uber and Lyft threatening to cease operations in California if California Assembly Bill 5 were enforced and Kroger announcing they would close two stores in Long Beach, California after the city council passed an ordinance requiring grocery stores to increase pay for their workers during the pandemic.