Who Rules The Global Village? Challenges For The Next U.S. President
4 April 2000
The Washington Times
With their nominations now assured, Vice President Al Gore and Gov.
George W. Bush begin a truly momentous campaign - at the dawn of a new
century, at a time when the nation and the world are being radically
transformed by rapid technological advances. Indeed, by shrinking time
and distance, technology is creating a true global village. As the
candidates develop their platforms, it is essential that they squarely
address the pluses and minuses of the force that over the next decade
will affect the voters more than any other - globalization.
At first glance this may seem to be a theoretical and even an academic
issue; complex, difficult to articulate and over the heads of the vast
majority of the electorate. Voters, so the pundits often insist, don't
care nearly as much about what is going on around the globe as they do
about how the store is being minded at home. The political strategists
will argue, campaigns are not so much about educating the public as
about defining your opponent and letting no charge go unanswered. But
this prattling of conventional wisdom betrays a persistent
underestimation among many gurus of the powerful global forces shaping
the everyday lives of millions of Americans.
The fact is that foreign affairs are no longer so foreign. When a
sell-off in the Tokyo stock market triggers a decline in the value of
pension funds on which most Americans are relying for their retirement,
events in Japan become of great interest. The massive public
demonstrations at last year's meeting of the World Trade Organization
in Seattle underscored in dramatic fashion the "local" concerns that
many Americans have about globalization.
The hard reality is that Messrs. Bush and Gore simply cannot ignore the
great potential benefits or the potential price of globalization. The
Economic Strategy Institute's Global Forum, being held this May in
Washington, will be the first major revisiting of these issues on U.S.
soil since Seattle. How the world business, economic and political
leaders gathered there propose to optimize the benefits while
minimizing the costs of the galloping integration of world economies is
the key to the continued prosperity and security of America and the
world; how Messrs. Bush and Gore address these questions is key to
their own electoral prospects.
On the one hand the candidates must understand and make the electorate
understand that globalization is America's most fundamental national
interest for two reasons. First, because it is one of the keys to the
"new economy," and second, because it is the most powerful force for
global democratization and peace. The incredible growth and prosperity
of the past decade were not only a matter of Americans working harder
and smarter. They also owed much to the flow of capital, goods, and
services from abroad that funded U.S. borrowing and kept the dollar up
and inflation down. Foreign markets enabled U.S. producers and
exporters to make and sell more and to reduce the costs of production
because of the greater volume of exports.
Even more important than the contribution to American prosperity is the
impact of globalization on the rest of the world. The greatest threat
to the United States and to world security today is not the strength of
other nations. Rather it is their weakness. Economic disaster in Russia
or China or Latin America is far more potentially dangerous to American
and world security and to human rights than any conceivable military
threat. Growth based on trade, international investment and technology
flows, and the rapid expansion of the Internet is the best insurance of
Modern economies cannot be run without connection to the Internet, and
both decentralization and connection to the information society are
powerful forces for expansion of human rights and democracy. For all
these reasons the candidates need to tell us how they propose to
provide for greater openness, transparency and rules based competition
in the global economy.
But the benefits of globalization do not come without a price. Rapid
technological change, capital shifting around the world at the speed of
light, and new international production and supply patterns are
sometimes unsettling forces. They undermine traditional relationships
and displace old, venerated structures and institutions thereby
creating uncertainty and even fear. While there are many winners, some
will also undeniably be threatened with painful losses. Domestically,
some workers may lose their jobs as a result of the global
restructuring of industry, and a growing digital divide that threatens
permanently to separate information "haves" and "have nots" is a
concern for millions of parents.
On the global scene, while America has prospered over the past decade,
other countries and regions have faced crises, stagnation, and painful
restructuring. That a majority of the world's most dynamic and
successful global companies are American sometimes makes globalization
look like Americanization to people in other parts of the world, who
fear domination by the U.S. colossus. Here too there is growing fear of
an international digital divide that will leave other countries
trailing far behind the United States in the global prosperity
sweepstakes of the future.
All of this is beginning to create a backlash which was evident in
Seattle and which if not dealt with properly could destroy the very
basis for the kind of development that would close the gap in the
future. It could also drive dangerous wedges between the United States
and its friends and allies in key regions of the world. Possibly the
greatest task of the new president will be to determine how to maximize
the value of globalization while paying the lowest possible price. We
need to know how Messrs. Bush and Gore are planning to do this - and
the sooner we know it the better.
Clyde Prestowitz is president of the Economic Strategy Institute.