Nancy C. Thomson

A quote from Thomas Paine, "Society is produced by our wants and government by our wickedness."

This quote has been validated by events occurring in the past thirty years.

The only question arises, which wicked government? We now have several of them.

In this era of globalization it is hard to tell where any boundaries exist between elected officials, international bodies and multinational corporations.

In the 1940's Ambassador to Italy, Claire Booth Luce, declared that globalism is globaloney. Unfortunately, her husband, Henry Luce, publisher, didn't carry her views in His Life Magazine. While there were warnings way back then it was hard for people to realize their self-determination was being eroded. After all those American companies like General Electric, Coca-Cola, and IBM were so patriotic. Many also trusted their government implicitly.

A lot has happened since then. The Marshall Plan, World Bank, IMF, and dozens of other global lending institutions financed by US taxpayers, built up foreign industries to compete with our own.

Jeffrey Garten, Dean of Yale School of Management and former Under Secretary for International Trade under Ron Brown, wrote a book titled The Big Ten. Who are these ten contenders of the twenty- first century who will rewrite the rules of power in the world?

According to Mr. Garten they are Mexico, Brazil, Argentina, China, India, Indonesia, South Korea, Poland, Turkey, and South Africa. Russia was not included because it lacks "the potential" of these other countries.

These "Big Emerging Markets" or BEM's as they are called, will also be sources of trouble. Their values, lack of environmental considerations and child labor laws pose challenges to American leadership in the global sense. I would ask Garten what is defined as American anymore since our corporations have become internationalists.

BEM's include half of the world's population. They need technical assistance, which our government departments will give them. Japan, as well as most other countries subsidize their businesses. The rationale is we must do the same or lose out to the competition. Therefore we have developed the private -government partnerships in which almost every government department except HUD is involved in promoting business abroad.

One of the questions arose as to how much technology we should supply to China. This problem has already been solved by this communist country. In order to secure a contract it is necessary for a foreign firm to share its latest technology with the Chinese. Because of the "potential of this populous market" all the nations are fighting each other to have access to Chinese markets at any cost. That is what this global economy is all about. Think only of today, don't fret about tomorrow.

The US government is concerned about guidelines so all parties gain from tax funds used in trade deals not just certain companies. It is evident however that only the large conglomerates can play this international game. Small business would never be able to compete.

A special Center has been established in the Commerce Department that help Americans win big contracts in competition with Europe and Japan. It is called an "Advocacy Center," similar to Wall Street. Included in this project are the Departments of State, Commerce, Treasury, the Export-Import Bank, other government agencies and the Ambassadors to foreign countries. The whole thing has been turned into an "economic war room."

Clinton's first administration made great strides in reorienting foreign policy to take into account the large emerging markets. Previous policy was conducted in terms of military and political summits. More linkage was established between commercial and the diplomatic areas. Of course Garten admits that the trade deals such as NAFTA have caused dislocation and social problems at home due to increased imports.

Global expansion is more fragile than the trade enthusiasts would admit. Some of the problems? There is the Asian donation crisis, dangerous corporate downsizing affecting thousands of workers, bailouts of Mexico and Asia so they can start borrowing again from international funds (a continuance of the practice which caused their bankruptcy in the first place.) The BEM's are very reliant on foreign borrowing, something not displeasing to the American international bankers.

American conglomerates are endeavoring to link themselves to regional organizations such as ASEAN (Association of Southwest Asian Nations) by investment and trade with India. This will provide a jump off platform for access to the larger Asian regional organization.

Some of the primary business globalists are General Electric, Boeing, Microsoft, Motorola, Coca-Cola, Proctor and Gamble, and they are targeting the BEM's.

The most powerful financial firms who are developing strategies for our global economy are Morgan Stanley, (JP Morgan) Citibank (made many loans in Asia) Goldman Sachs and Chase Manhattan (Rockefeller)

We have started a massive shift in global production creating a long period of downward pressure on American wages. US companies are always searching for lower labor costs in order to protect the foreign markets they already have.

For instance, Boeing machinists in Beijing make $50 per month, in Seattle, $5,000 per month. US hourly wage (1995) was $17.20, in Korea it is $7.40, Taiwan, $5.82, Brazil, $4.28, Poland, $2.00, Mexico, $1.51, and in China and India, 25 cents an hour.

In addition to low wages, the Chinese work force is being trained in large part by US companies. Texas Instruments started Singapore's first modern chip making factory. The goal of Singapore (a city-state) is to become the first global center for silicon chips. Microsoft is the first tenant in Malaysia's multimedia corridor set up around the capital. Coca-Cola, in 1996 trained 1,800 Chinese students in finance, labor relations, and management skills. But American companies aren't the only participants in the "gone foreign" assistance programs.

American business schools, in cooperation with US firms, have set up programs with major Chinese universities. Some international US companies have become integrated with not only curriculum but also building facilities for educational institutions. In fact, many universities are dependent on business for part of their income. Ordinarily this would be a great idea except that the generosity of these conglomerates is totally related to their expansion at the expense of the American taxpayer. NAFTA allows Mexican and Canadian students the right to attend any US college of their choice. Was anyone aware this was a part of that agreement?

Then there is the problem of China diverting machinery provided by the US. When we weren't looking, China sent our material to a military installation instead of the civilian facility previously agreed upon. No big deal. The BEM's have no adequate laws or enforcement capabilities to govern "open societies" which is one reason they still keep much of their trade areas closed. Nor can we expect much help when our so- called trade agreements are violated.

We do try and spread our culture through the multinationals. Exporter Levi-Strauss is founding anti- discrimination groups in Brazil and has racial diversity explicit in their hiring goals. Proctor and Gamble is improving safety standards in India. Companies must become politically astute to build ties with emerging leaders in case there is a coup or untold vacancy in an important government position.

It is difficult for the large conglomerates to maintain their identity while hiring people from Mexico, Poland, Turkey and Korea. They must not lose control of strategy and standards. Thus it is global corporate culture, and standards which are represented, not ties to the US which gave them birth.

From this trade progression it is clear that the multinationals have become less and less accountable to public authorities. This is not creating a global village but a divided planet. Just a few 100 companies with global connections dominate four intersecting webs of international activity, which comprises the New World economy. These conglomerates are contributing to political and social disintegration.

Bonds of local communities are strained and like cells, nations are multiplied by dividing into trade zones. Many of the conglomerates are larger than most sovereign nations. Power has shifted from territorial governments to companies that roam the world. Secular institutions, they are a driving force and behind them are a few hundred giants who are headquartered in the US, Japan, Germany, France, Switzerland, the Netherlands, and the United Kingdom.

Global culture is spread by Hollywood and all the exponents, theme parks, movies, TV, games, and T-shirts. We now see and think according to Disney, Time Warner, and the global markets that change our food and eating habits.

Global banking is becoming more speculative. Small business and the needs of insignificant people are out of the loop. Twenty-four hour money transactions involving credit cards and devices for repackaging and selling money dominate our financial world. It could be called the "casino society."

The gap between global players and those excluded is widening.

While our leaders tote "democracy" around the world, as an adjunct with our "free Trade," it would be wise to heed the warnings of George Washington. His admonition that we should not export our system of governing because other countries start from different cultures. In South Africa (where we are insistent they practice democracy) there are 10 private security guards for every policeman. Their currency has declined, the educated are fleeing, and the international drug cartels have made South Africa a transshipment center. Unemployment is up to 33%.

Other countries have combinations of dictatorial democracies; oligarchy democracies or whatever seems to work best for them.

This other world government besides the UN is the international Corporations and their markets, which are becoming the powers and referees in many countries. Amnesty International brief corporations just as it has briefed governments. Interpol is involved with sharing certain information to the corporations. Some multinationals have their own mercenary military forces just like the British East India Company had. These armies are for the sole purpose of securing economic interests. (4)

Protection has become a necessity because 100 of the world's largest economies, 51 are not countries, but corporations. While accounting for 70% of world trade, 500 of the largest corporations are like feudal kingdoms, which have evolved into their own nation-states.

Canada's importance to Europe is declining while NAFTA has left them with high unemployment in Montreal and Toronto. In the US aerospace jobs are going overseas and the aircraft industry expects to lose $100 billion dollars and 250,000 jobs. During the last 5 years, large companies in the US have fired 10-20 % of their work force. More Americans have to hold down 2 jobs. The Bureau of Labor Statistics stated that 7 million Americans worked 15 million jobs.

The German statesman Otto von Bismarck said," World history, with its great transformation doesn't come upon us with the even speed of a railway train. No, it moves in spurts but then with irresistible force." This is a good example of the international trade situation. Should we stop the train, just jump off, or let the train ride to its destination with all of us on it? Isn't it time we redirect the conglomerate train engineers and turn the whole thing around?

March 3, 1998