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05/04/2000

Trade, Part II

I finished up last week with a quote from Henry Kissinger:

"A sense of political unease is inevitable, especially in the
developing world - a feeling of being at the mercy of forces
neither the individual nor the government can influence any
longer."

And simply mentioning the word ''globalization'' can conjure up
thoughts of many disparate topics: free trade, human rights and
labor standards, poverty, and the environment are probably the
four main themes with sub-topics like debt cancellation, food
security and AIDS.

So the term globalization has many different meanings to
different people. Let''s throw out a few recent broad-based
thoughts from around the globe.

Joseph Stiglitz, former chief economist of the World Bank:

"What are developing countries to make of the rhetoric in favor
of capital liberalization when rich countries - with full
employment and strong safety nets - argue that they need to
impose protective measures to help those of their own citizens
adversely affected by globalization?"

Lawrence Summers, U.S. Treasury Secretary:

"It is morally important to lift people out of poverty. It is
incumbent on all of us to think carefully and rigorously about the
right strategies."

Naomi Klein, columnist:

"They (the protesters) are demanding that national governments
be free to exercise their authority without interference from the
W.T.O. and asking for stricter international rules governing labor
standards, environmental protection and scientific research."

Barbara Crossette, columnist:

"The I.M.F. gives local leaders cover to initiate reforms that are
needed if the economy is to be made rational...(quoting a worker
activist in the developing world): ''In the villages where I work
the rural perspective is not globalization. No. The rural
perspective is we have not received the services that are basic,
that we see our compatriots in urban areas receiving. Why?''"

Pope John Paul II:

(In blessing the world''s workers on May Day) he appealed for
rich nations to relieve poor ones of their crushing debts saying,
"Realities such as unemployment, exploitation of minors and low
wages persist and are even getting worse in some parts of the
world."

Kofi Annan, U.N. Secretary General:

"The issue is primarily one of governance - how the
international community of sovereign states and multilateral
organizations copes with global challenges, and how individual
nations manage their own affairs so as to play their part, pull
their weight and serve their peoples."

Wall Street Journal Editorial, 5/3:

"(There is a) growing campus ''anti-sweatshop'' movement whose
real agenda is set not by students, but by John Sweeney and the
AFL-CIO...Organized labor will not be party to any deal that
would have them putting a seal of approval on a foreign-made
shirt or soccer ball."

Henry Kissinger:

"(Since) globalization in essence involves global adoption of the
American model, it is important to remember that the flexible
labor markets of America, the deregulated financial institutions,
the relatively cheap capital and the bias toward lowering costs
took decades to evolve. This model cannot be replicated rapidly
in the developing world and not, in any event, fast enough to
prevent a growing political backlash against globalization."

"The key challenge is that very few people anywhere view
themselves primarily as components of a global economic
mechanism. They identify political accountability with the
nation-state and demand that governments cushion them against
excessive suffering or dislocation. Leaders - especially in
democracies - are overturned when they are perceived to have
failed in this task. Protectionism beckons, together with attacks
on America as the leading industrial power."

"If these conditions persist or grow worse, the world could
evolve into a two-tiered system in which globalized elites are
linked by shared values and technologies while the populations at
large, feeling excluded, seek refuge in nationalism and ethnicity
and in attempts to become free of what they perceive as
American hegemony. In such an atmosphere, attacks on
globalization can evolve into a radical chic, especially where the
governing elites are small, and the gap between rich and poor is
vast and growing."

In the spring of 1985, I briefly left the securities industry (until I
wised up) and took employment with a spice brokerage firm. I
was sent to India for a month to learn the business, most of this
time being spent in the spice capital of the world, Cochin.

India has states, just as we do, and Cochin is in the state of
Kerala. Kerala was communist at this time (I''m not sure if it still
is today) and all night long outside of my hotel room, a
loudspeaker blared communist slogans. Needless to say, I hardly
slept a wink but I also just lay there, thinking of how frustrating
the country was.

You see I wasn''t on a first-class tour, rather I was stationed at a
spice plant and took a one-hour bus ride there every day, over
dusty roads, to the plant with my co-workers (to be honest, they
worked, I studied). I couldn''t believe how awful the drivers
were and it was no surprise when I learned that each day a few
people were killed walking along the road (most while strolling
with their cows).

But I eventually reached a certain level of peace of mind when I
thought, "Well, India has been independent only 38 years (in
1985) and America was no great shakes either at that stage in its
development." [And now, 15 years after my trip, I''m sure I''d be
amazed at some of the changes that have taken place in this
impoverished nation since then...hopefully, most of a positive
nature.]

I use this as an example because I think it sums up how our
leaders have to view the developing world. I get so frustrated at
the arrogance exhibited by many Americans and, as Kissinger
says, this attitude could prove costly.

Ironically, the "radical chic" he talks about is, today, more like a
mob of dirty freaks. Some of the May Day demonstrations were
despicable. The destruction and pure vandalism in London was
particularly appalling. One statue of Britain''s ultimate hero,
Winston Churchill, was defaced with a hammer and sickle (and
worse). Even Prime Minister Tony Blair was forced to respond:

"The people responsible for the damage are an absolute
disgrace...It is only because of the bravery and courage of our
war dead that these idiots can live in a free country at all."

In Berlin and other German cities, neo-Nazis marched against
"capitalism and imperialism." In France, nationalist parties held
demonstrations against immigration.

Yes, what we increasingly have is a global free-for-all. Different
issues for different folks, but with one common thread. America
is to blame.

Of course there are no easy solutions. Columnist Thomas
Friedman has written, "(You) can''t point to a single country that
has flourished, or upgraded its living or worker standards,
without free trade and integration. (Yet the protesters) offer the
Third World no coherent plan for how to develop...Their only
plan is that developing countries stop developing."

But if the protesters have accomplished anything, maybe it is the
fact that we are at least talking more than we previously had
about these ever important problems. Now what we need are
responsible leaders...worldwide. Fat chance of seeing that.

Brian Trumbore




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05/04/2000

Trade, Part II

I finished up last week with a quote from Henry Kissinger:

"A sense of political unease is inevitable, especially in the
developing world - a feeling of being at the mercy of forces
neither the individual nor the government can influence any
longer."

And simply mentioning the word ''globalization'' can conjure up
thoughts of many disparate topics: free trade, human rights and
labor standards, poverty, and the environment are probably the
four main themes with sub-topics like debt cancellation, food
security and AIDS.

So the term globalization has many different meanings to
different people. Let''s throw out a few recent broad-based
thoughts from around the globe.

Joseph Stiglitz, former chief economist of the World Bank:

"What are developing countries to make of the rhetoric in favor
of capital liberalization when rich countries - with full
employment and strong safety nets - argue that they need to
impose protective measures to help those of their own citizens
adversely affected by globalization?"

Lawrence Summers, U.S. Treasury Secretary:

"It is morally important to lift people out of poverty. It is
incumbent on all of us to think carefully and rigorously about the
right strategies."

Naomi Klein, columnist:

"They (the protesters) are demanding that national governments
be free to exercise their authority without interference from the
W.T.O. and asking for stricter international rules governing labor
standards, environmental protection and scientific research."

Barbara Crossette, columnist:

"The I.M.F. gives local leaders cover to initiate reforms that are
needed if the economy is to be made rational...(quoting a worker
activist in the developing world): ''In the villages where I work
the rural perspective is not globalization. No. The rural
perspective is we have not received the services that are basic,
that we see our compatriots in urban areas receiving. Why?''"

Pope John Paul II:

(In blessing the world''s workers on May Day) he appealed for
rich nations to relieve poor ones of their crushing debts saying,
"Realities such as unemployment, exploitation of minors and low
wages persist and are even getting worse in some parts of the
world."

Kofi Annan, U.N. Secretary General:

"The issue is primarily one of governance - how the
international community of sovereign states and multilateral
organizations copes with global challenges, and how individual
nations manage their own affairs so as to play their part, pull
their weight and serve their peoples."

Wall Street Journal Editorial, 5/3:

"(There is a) growing campus ''anti-sweatshop'' movement whose
real agenda is set not by students, but by John Sweeney and the
AFL-CIO...Organized labor will not be party to any deal that
would have them putting a seal of approval on a foreign-made
shirt or soccer ball."

Henry Kissinger:

"(Since) globalization in essence involves global adoption of the
American model, it is important to remember that the flexible
labor markets of America, the deregulated financial institutions,
the relatively cheap capital and the bias toward lowering costs
took decades to evolve. This model cannot be replicated rapidly
in the developing world and not, in any event, fast enough to
prevent a growing political backlash against globalization."

"The key challenge is that very few people anywhere view
themselves primarily as components of a global economic
mechanism. They identify political accountability with the
nation-state and demand that governments cushion them against
excessive suffering or dislocation. Leaders - especially in
democracies - are overturned when they are perceived to have
failed in this task. Protectionism beckons, together with attacks
on America as the leading industrial power."

"If these conditions persist or grow worse, the world could
evolve into a two-tiered system in which globalized elites are
linked by shared values and technologies while the populations at
large, feeling excluded, seek refuge in nationalism and ethnicity
and in attempts to become free of what they perceive as
American hegemony. In such an atmosphere, attacks on
globalization can evolve into a radical chic, especially where the
governing elites are small, and the gap between rich and poor is
vast and growing."

In the spring of 1985, I briefly left the securities industry (until I
wised up) and took employment with a spice brokerage firm. I
was sent to India for a month to learn the business, most of this
time being spent in the spice capital of the world, Cochin.

India has states, just as we do, and Cochin is in the state of
Kerala. Kerala was communist at this time (I''m not sure if it still
is today) and all night long outside of my hotel room, a
loudspeaker blared communist slogans. Needless to say, I hardly
slept a wink but I also just lay there, thinking of how frustrating
the country was.

You see I wasn''t on a first-class tour, rather I was stationed at a
spice plant and took a one-hour bus ride there every day, over
dusty roads, to the plant with my co-workers (to be honest, they
worked, I studied). I couldn''t believe how awful the drivers
were and it was no surprise when I learned that each day a few
people were killed walking along the road (most while strolling
with their cows).

But I eventually reached a certain level of peace of mind when I
thought, "Well, India has been independent only 38 years (in
1985) and America was no great shakes either at that stage in its
development." [And now, 15 years after my trip, I''m sure I''d be
amazed at some of the changes that have taken place in this
impoverished nation since then...hopefully, most of a positive
nature.]

I use this as an example because I think it sums up how our
leaders have to view the developing world. I get so frustrated at
the arrogance exhibited by many Americans and, as Kissinger
says, this attitude could prove costly.

Ironically, the "radical chic" he talks about is, today, more like a
mob of dirty freaks. Some of the May Day demonstrations were
despicable. The destruction and pure vandalism in London was
particularly appalling. One statue of Britain''s ultimate hero,
Winston Churchill, was defaced with a hammer and sickle (and
worse). Even Prime Minister Tony Blair was forced to respond:

"The people responsible for the damage are an absolute
disgrace...It is only because of the bravery and courage of our
war dead that these idiots can live in a free country at all."

In Berlin and other German cities, neo-Nazis marched against
"capitalism and imperialism." In France, nationalist parties held
demonstrations against immigration.

Yes, what we increasingly have is a global free-for-all. Different
issues for different folks, but with one common thread. America
is to blame.

Of course there are no easy solutions. Columnist Thomas
Friedman has written, "(You) can''t point to a single country that
has flourished, or upgraded its living or worker standards,
without free trade and integration. (Yet the protesters) offer the
Third World no coherent plan for how to develop...Their only
plan is that developing countries stop developing."

But if the protesters have accomplished anything, maybe it is the
fact that we are at least talking more than we previously had
about these ever important problems. Now what we need are
responsible leaders...worldwide. Fat chance of seeing that.

Brian Trumbore