Western Europe: Swing of the Pendulum: Investing in the U.S.

WESTERN EUROPE

The most important development in international trade for a generation has been the flow of U.S. corporate capital to Europe. From $1.7 billion in 1950, it grew last year to $20 billion. The cash has not only fueled much of the postwar European boom but has created controversy among Europeans, particularly in France, who profess worry about an American economic "takeover."

Now the, flow, if not the furor, is beginning to subside—and the money has started to go the other way. Partly because of balance of payments considerations and partly because European laws and work practices are discouraging some U.S....