American companies have a new trick for an old trend of saving money by going overseas – moving their headquarters to countries with lower taxes.  These recent corporate inversions in which U.S. based companies, such as Medtronic and Burger King, reincorporate abroad in order to avoid taxes is part of an ongoing process in which corporations go global to offshore work and shuffle money through “tax havens” to boost profits. Commentators such as Allen Sloan condemn these tactics as unpatriotic and bad corporate citizenship. This highlights the tension between national interests and the pressures of globalization. We know that firms are not tied to particular national borders—a fundamental aspect of capitalism that classic theorists like Max Weber and Karl Marx observed in the 19th and early 20th century— but why are these publicly unpopular actions so prevalent today?

While nation-states have lost some power in the past 30 years, they created the very policies that contributed to economic globalization. U.S. policy since the 1970s has led to an increased financialization of the economy and the opening of global capital flows. Corporations aren’t just moving overseas due to greedy and unpatriotic CEOs, but the result of decades of change in policy and the global economy. 
Firms also have immediate financial interests in increasing shareholder value and avoiding taxes, even if that means harming national interests or engaging in immoral behaviors. Organizational dynamics, leadership and culture shape business strategies as well as the broader policy and economic context.