The rules and concepts which govern "international taxation" among the major trading nations derive from work in the 1920s by the League of Nations. The principles first enunciated there are widely seen as having generated a remarkably durable and stable regime, lasting nearly a century to the present day. In the first half of this second decade of the twenty-first century, the major economic powers of the world undertook an initiative widely seen as aimed at, or having the potential to, substantially revise this existing but aging regime. The initiative was called the Base Erosion and Profit Shifting project, or, by its acronym, BEPS. Undoubtedly the most significant single facet of the historic regime are the rules governing "transfer pricing," which allocate the tax base generated by the profits of transnational enterprises (TNEs) among the national jurisdictions within which those enterprises operate. And despite the stability of the overall system, the "transfer pricing" rules have always proved neither durable nor satisfactory. The rules operate under the so-called "arm's length" principle-the idea that allocation of profits among countries should be accomplished by treating the TNEs as if the enterprises in different jurisdictions were separate enterprises engaged in transactions at prices that would be charged between independent enterprises. This paper advocates a middle view, which sees the "value creation" paradigm not as a departure from international norms but as a useful, if not profound, elaboration of it. In our view, the fundamental principle of the international system is that the right to tax income is allocated in the first instance to the state to which that income bears the greatest degree of "economic allegiance." The primary purpose of this paper is to explain this middle view, and to document the basis for seeing what we call the "value creation" paradigm as continuous with, rather than at odds with, the system which originated a near century ago and which prevails today.