Keys of This Blood (54 page)

The second leg of the globalist tripod, representing global economic cooperation, has suffered many of the same difficulties as trade on account of the lack of hegemonic leadership. For international trade to be strong and viable, the all-important issue is not so much stable exchange rates per se as it is a stable anchor for exchange rates. And here again, hegemony is the indispensable anchor. One chief function of postwar American hegemony was its ability to provide that anchor, among all the others. But here again, the United States is by no means in a position to continue that role nowadays.

U.S. hegemony in financing has passed to others: notably to Japan, which is now the strongest financial power in our world—but not necessarily the most Internationalist or Transnationalist in spirit. And as we enter the nineties, United States military and political supremacy—the rule of the day for some thirty years after World War II—is over. America does still possess military clout, but not an exclusive military supremacy. It still has political assertiveness internationally, but without any moral surety that its political solutions are the best—or that they are even viable in today's world.

The classical and effective political assertiveness required for world hegemony—embodied formerly in the once flourishing British empire and later in the United States of the immediate postwar period—was pegged to its bedrock by two traits: an admitted and nourished patriotism, and a moral consensus springing from shared religious beliefs. The United States of the 1980s and '90s has lost its grip on both of those traits.
It no longer displays any nationwide acceptance of its old-time patriotism. And the only viable—but fragile—consensus is a legal one, based on legislation and case law.

The whole Internationalist-Transnationalist tripod system, therefore, appears to have developed a case of three wobbly legs. And yet, there is no denying that interdependence among nations has gone so far that the Internationalist and Transnationalist masters of our new global systems are more than justified in their concern for the consequences for all of us, should their programs collapse even before they are totally up and running.

The differences between the Internationalist and the Transnationalist approach to globalist interdependence are magnified in the ways they favor to solve the problems that face them at this most crucial juncture.

The Internationalist group appears willing to meet the world halfway. Internationalists do not see the nations of the world as a single community in quite the same fashion as the more doctrinaire among the Transnationalists do; they do not seem married to the idea that the nations of the world are already unevenly integrated members of a “global community.”

Rather, Internationalists are essentially men of politics. They do realize that their own national political parties can no longer solve the economic and financial difficulties besetting their particular political systems and national economies. They believe that the answer lies in treaties and agreements that will team nations with congenial nation partners.

Internationalists, therefore, have come to view the world as made up of possible groups of nations. “Islands” of nations is a perfect image, in fact. Islands of nations afloat in a vast archipelago. The task to be accomplished, as the Internationalists see it now, is to build bridges between those islands, drawing them together into several communities according to regional interests, geographical location and certain economic-political conditions that favor successful bloc policies between them.

As professional bureaucrats, Internationalists choose for the creation of such blocs—and eventually, if time allows, perhaps the fusing of all blocs—governmental means. For the fashioning and maintenance of administrative structures through bilateral agreements is what bureaucrats do most efficiently and naturally.

It is in that context that Lester Thurow called for “a system to manage business between … blocs.” It is in that context, too, that George Shultz touted the importance of regional initiatives; and that in 1989 he
pinpointed again, and categorically, “regional economic cooperation and prosperity” as the primary challenge of the post-Reagan era.

The Internationalist chorus is an impressive one indeed. Major voices are heard almost daily, all calling for the same solution to the fairly swift disappearance of the stabilizing hegemony of the United States, in order to avoid the possibly disastrous results of the current vacuum in global leadership.

“There is only one way to make up for this grave deficiency (in world hegemony),” said C. Fred Beregsten, director of the Institute for International Economics, “and that is by agreeing upon a pluralistic management.” Respected Japanese columnist Misahiko Ishizuka clearly sees the same need. Japan's function in such a pluralistic system of management, said Ishizuka, “will require a grand design involving not only economic but political and military matters.”

So far, however, that grand Internationalist design has made only spotty and halting progress. The most advanced form of Internationalist regionalism as a solution to the crisis in global leadership is represented by the European Economic Community (EEC) and by the Free Trade Agreement (FTA) between the United States and Canada.

As a single-market program, EEC is—by prior standards, at least—the most ambitious enterprise on the horizon. Much has been made of the EEC aim to remove the tariffs within the region by 1998. But the plan concerns wider measures. The goal is to eliminate border controls on the movement of people and goods; to free up capital movement and trade in services; and to grant the right of establishment. Ultimately, there is to be a truly single-market community comprising the whole of Western Europe's 350 million people. Some Internationalists raise their sights for the future even higher. Norwegian Prime Minister Gro Harlem Brundtland, for one, has speculated that “in the light of the extended contacts between East and West, we have a vision of a future market, not merely of 350 million people, but of 700 million people in Europe alone.”

Visions are all very well. But as impressive as the EEC program is, and for all the hope that Internationalists attach to it, Transnationalists will point out that virtually every other regional arrangement, except the FTA between Canada and the United States, remains bogged down in discussions, in exchanges of experience and in research and analysis. And to give the Transnationalists their due, the story does appear to be one of foot dragging and reluctance in region after region.

On one side of the Atlantic, there is the Caribbean Common Market (CARICOM), the Caribbean Basin Initiative (CBI) and the Central American Common Market (CACM). On the other side of the Atlantic,
there is the Assembly of Regions of Europe (ARE), while across the Pacific there is the Pacific Basin Forum (PBF), proposed by George Shultz, and the Asian-Pacific Organization (APO), proposed by Australian Prime Minister Robert Hawke. There is even the Soviet bloc's Council for Mutual Economic Assistance (COMECON). The United Nations has its regional commissions as well—its Economic Commission for Europe (ECE), for Africa (ECA), and for the Far East and Asia (ECFEA).

The United States and Mexico actually drew up the framework for an agreement in 1987 that listed several specific areas for bilateral consideration, much in the manner that led to the U.S.-Canadian FTA. But no concrete concessions were granted by either side. Similar proposals have been entertained, so far with the same meager results, between the United States and Japan, and for the members of the Association of South-East Asian Nations (ASEAN).

As nearly as Pope John Paul can see, therefore, clearly the weakest link in the Transnationalist solution for the urgent need to provide stability in the tripod globalist system is that there is no sign of the broad formation of blocs required for their plan to work.

Even the three “Asian tigers” show no sign of unitary regional action. Indeed, Korea's and Taiwan's markets are even more tightly closed than Japan's. Moreover, while all the signs are that the European Community (EC) will achieve a certain intracommunity easement of border duties and labor movement, no one—least of all the Europeans themselves—thinks that the EC is going to trade as one bloc with the rest of the world.

As a group, dyed-in-the-wool Transnationalists are neither surprised nor entirely dismayed at the failure of the Internationalist initiative. In fact, blood brothers though they are, Transnationalists assail the regional approach of the Internationalists on several accounts. Their most important objection, perhaps, is that they are certain the legal machinery required to link one region or bloc of nations with another will involve protectionist restrictions—in such things as trade quotas, as just one example—as inducements to get certain nations to sign on.

To make their point, in fact, Transnationalists have only to point to GATT itself, the very underpinning of the Internationalist model. Transnationalists applaud the phasing out of the Multi-Fiber Arrangement by GATT members, because it will end the practice of developed countries to set limits on the quantity of clothing and textiles the developing countries can sell them. That phaseout is right down the Transnationalists' alley, because their effort is to avoid any head-to-head confrontation by
which one economy attempts to protect its interests through legal restrictions that prevent others from full competition in the global market.

Happily for the Transnationalists, similar thorny issues concerning agricultural subsidies and protectionism are at least on the way to a solution. Unless such protectionist confrontations and arrangements can be phased out, say the Transnationalists, we will be faced with a regional system as mordant as any nationalist protectionism ever was.

Moreover, in the Transnationalist mind, solutions for problems and realizations of opportunities can no longer be achieved solely within a system of single nations, or even within a system of sectors or blocs of nations. No regional or bloc system, however interrelated it might be, will supply an adequate solution, because it is already too late to forge or control interdependence by means of blocs of trading partners. And it is too late because the nations are already interdependent.

If that argument sounds a little like the old saw about the chicken and the egg, Transnationalists make no apologies. Instead, they use that old saw again and again, to their increasing advantage. The complex issues presented by the interdependence that is already upon us, say the Transnationalists, require new dimensions of cooperation and collaboration at the global level. But collaboration not only of the old kind between governments and society: they see that effort as, at best, an evolutionary stage on the way to their own solution. What the world needs now, argue the Transnationalists, is a new sort of interdependence pegged to a regulated system of fresh and innovative interrelationships that cross all former boundaries, include all sectors and take in all disciplines.

In other words, effective and practical interdependence calls for a new systemic approach.

The Transnationalist mind draws back from the Internationalist solution of treaties and pacts, largely because that path implies a political consequence the Transnationalist mind is not ready to accept.

The Transnationalists, therefore, have in mind a different path to the same general goal, a different program for the nations. Quintessentially, they are managers—money men and company men. And their systemic approach is expressed in the creation of the global company.

The global company of the Transnationalists is sometimes confused with the multinational company, which has been around for quite a while. But the difference between those two creations is critical in this context. For, as Sir Edwin Sharp, chairman and CEO of the UK's Cable and Wireless Corporation, told an economic summit meeting in 1989, no
matter how wide the network of a multinational company may be, the company itself remains essentially “a one-way street back to the parent company.”

By contrast, the global company must have a genuinely international management: a management composed of several nationalities. And its decisions must have a worldwide character, so that plants and factories, for instance, will be located without regard for nationality.

The Transnationalist leaders themselves already transcend political and ideological boundaries. Television commentator Bill Moyers found out during a fifteen-day, globe-spanning trip in the company of David Rockefeller that “just about a dozen or fifteen individuals made day-by-day decisions that regulated the flow of capital and goods throughout the entire world.”

In truth, Transnationalists form a social class—aptly dubbed the managerial class—that came into being only after World War II. And within that social class are to be found the very select few who regularly participate in weighty decisions about the regulated flow of capital, of capital goods and of capital services among the nations.

Their backgrounds usually include training in major business schools and sometimes graduation from prestigious colleges. They locate in companies of substantial monetary capital and “status” capital. They have strong ties with other corporate financial leaders and enjoy membership in elite groups around the world. They wield direct and indirect but always potent political power, belong to select clubs, and hold down multiple directorships and board memberships.

Together, these corporate leaders constitute a managerial system; this is the latest form that Western capitalism has taken—in a kind of chicken-and-egg process again—in response to the multilateral trading system as it has so far developed over the past forty years.

As multinational trade has developed, the flow of production and finance has become increasingly internationalized. Logically, that internationalization has resulted, in turn, in still further globalization of the policies by which trade and investment are carried out. Just as logically, therefore, the interests of Transnationalists are increasingly global, because their investments and their very lives have become global, encompassing all manufactured goods and all services, including money management.