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The Establishment Rethinks Globalization
The church of global free trade, which rules American politics with infallible pretensions, may have finally met its Martin Luther. An unlikely dissenter has come forward with a revised understanding of globalization that argues for thorough reformation. This man knows the global trading system from the inside because he is a respected veteran of multinational business. His ideas contain an explosive message: that what established authorities teach Americans about global trade is simply wrong--disastrously wrong for the United States.
Martin Luther was a rebellious priest challenging the dictates of a corrupt church hierarchy. Ralph Gomory, on the other hand, is a gentle-spoken technologist, trained as a mathematician and largely apolitical. He does not set out to overthrow the establishment but to correct its deeper fallacies. For many years Gomory was a senior vice president at IBM. He helped manage IBM's expanding global presence as jobs and high-tech production were being dispersed around the world.
The experience still haunts him. He decided, in retirement, that he would dig deeper into the contradictions. Now president of the Alfred P. Sloan Foundation, he knew something was missing in the "pure trade theory" taught by economists. If free trade is a win-win proposition, Gomory asked himself, then why did America keep losing?
The explanations he has developed sound like pure heresy to devout free traders. But oddly enough, Gomory's analysis is a good fit with what many ordinary workers and uncredentialed critics (myself included) have been arguing for some years. An important difference is that Gomory's critique is thoroughly grounded in the orthodox terms and logic of conventional economics. That makes it much harder to dismiss. Given his career at IBM, nobody is going to call Ralph Gomory a "protectionist."
He did not nail his "theses" to the door of the Harvard economics department. Instead, he wrote a slender book--Global Trade and Conflicting National Interests--in collaboration with respected economist William Baumol, former president of the American Economic Association. Published seven years ago, the book languished in academic obscurity and until recently was ignored by Washington policy circles.
I asked Gomory if his former colleagues from the corporate world quarrel with his provocative message. "Most of them have never heard it," he said. "It's a pretty new message." He has discussed his reform ideas with some CEOs, "who said, Well, maybe we could do that. Others couldn't have disagreed more strongly."
Now Gomory is attempting to re-educate the politicians in Congress. He has gained greater visibility lately because he has been joined by a group of similarly concerned corporate executives called the Horizon Project. Its leader, Leo Hindery, former CEO of the largest US cable company and a player in Democratic politics, shares Gomory's foreboding about the destructive impact of globalization on American prosperity. Huge losses are ahead--10 million jobs or more--and Hindery fears time is running out on reform.
"We want to be a counter to the Hamilton Project," Hindery explains. "They have a sense of stasis that is more benign than I have. I don't think this is all going to work out." The Hamilton policy group was launched last year by former Treasury Secretary Robert Rubin to make sure the laissez-faire trade doctrine known as Rubinomics continues to dominate the Democratic Party. "We're never going to have the status of Bob Rubin," Hindery concedes. "But we're not chopped liver either. We have respectable business careers. You can't tell Ralph Gomory that he is 'smoke and mirrors,' because he wrote the book."
Gomory's critique has great political potential because it provides what the opponents of corporate-led globalization have generally lacked: a comprehensive intellectual platform for arguing that the US approach to globalization must be transformed to defend the national interest. Still, it will take politicians of courage to embrace his ideas and act on them. Gomory's political solutions are as heretical as his economic analysis.
At IBM back in the 1980s, Gomory watched in awe as Japan and other Asian nations captured high-tech industrial sectors in which US companies held commanding advantage. IBM invented the disk drive, then dropped out of the disk-drive business, unable to compete profitably. Gomory marveled at Singapore, a tiny city-state, as it lured American manufacturers with low-wage labor, capital subsidies and tax breaks. The US companies turned Singapore into a global center for semiconductor production.
"It was an unforgettable transformation," Gomory remembers. "And it was pretty frightening.
"The offer that many Asian countries will give to American companies is essentially this: 'Come over here and enhance our GDP. If you are here our people will be building disk drives, for example, instead of something less productive. In return, we'll help you with the investment, with taxes, maybe even with wages. We'll make sure you make a profit.' This works for both sides: the American company gets profits, the host country gets GDP. However, there is another effect beyond the benefits for those two parties--high-value-added jobs leave the U.S."
China and India, he observes, are now doing this on a large scale. Microsoft and Google opened rival research centers in Beijing. Intel announced a new, $2.5 billion semiconductor plant that will make it one of China's largest foreign investors. China's industrial transformation is no longer about making shirts and shoes, as some free-trade cheerleaders still seem to believe. It is about capturing the most advanced processes and products.
The multinationals' overseas deployment of capital and technology, Gomory explains, is the core of how some very poor developing nations are able to ratchet up their technological prowess, take over advanced industrial sectors and rapidly expand their share in global trade--all with the help of US companies and finance, as they roam the world in search of better returns.
The Gomory-Baumol book describes this as "a divergence of interests" between multinational firms and their home country. "This overseas investment decision may then prove to be very good for that multinational firm," they write. "But there remains the question: Is the decision good for its own country?" In many cases, yes. If the firm is locating low-skilled industrial production in a very poor country, Americans get cheaper goods, trade expands for both sides and the result is "mutual gain." But the trading partners enter a "zone of conflict" if the poor nation develops greater capabilities and assumes the production of more advanced goods. Then, the authors explain, "the newly developing partner becomes harmful to the more industrialized country." The firm's self-interested success "can constitute an actual loss of national income for the company's home country."
American multinationals, as principal actors in this transfer of wealth-generating productive capacity, are distinctively free to make the decisions for themselves without interference from government. They want profit and future consumer markets. Their home country wants to maintain a highly productive high-wage economy. Without recognizing it, the two are pulling in opposite directions--the "divergence of interests" most US politicians ignore, evidently believing church doctrine over visible reality.
The Gomory-Baumol book explains the dynamics with charts and equations for economists to study. For the rest of us, it is easier to follow Gomory's personal explanation of changing fortunes among trading nations. "What made America much wealthier than the Asian nations in the first place?" Gomory asks. "We invested alongside our workers. Our workers dug ditches with backhoes. The workers in underdeveloped countries dug ditches with shovels. We had great big plants with a few people in them, which is the same thing. We knew how, through technology and investment, to make our workers highly productive. It wasn't that they went to better schools, then or now, and I don't know how much schooling it takes to run a backhoe.
"The situation today is that the companies have discovered that using modern technology they can do all that overseas and pay less for labor and then import product and services back into the United States. So what we're doing now is competing shovel to shovel. The people in many countries are being equipped with as good a shovel or backhoe as our people have. Very often we are helping them make the transition. We're making it person-to-person competition, which it never was before and which we cannot win. Because their people will be paid a third, a quarter of what our people are paid. And it's unreasonable to think you can educate our people so well that they can produce four times as much in the United States."
As this shift of productive assets progresses, the downward pressure on US wages will thus continue and intensify. Free-trade believers insist US workers can defend themselves by getting better educated, but Gomory suggests these believers simply don't understand the economics. "Better education can only help," he explains. "The question is where do you put your technology and knowledge and investment? These other countries understand that. They have understood the following divergence: What countries want and what companies want are different."
The implication is this: If nothing changes in how globalization currently works, Americans will be increasingly exposed to downward pressure on incomes and living standards. "Yes," says Gomory. "There are many ways to look at it, all of which reach the same conclusion."
I ask Gomory what he would say to those who believe this is a just outcome: Americans become less rich, others in the world become less poor. That might be "a reasonable personal choice," he agrees. "But that isn't what the people in this country are being told. No one has said to us: 'You're probably a little too rich and these other folks are a little too poor. Why don't we even it out?' Instead, what we usually hear is: 'It's going to be good for everyone. In the long run we're going to get richer with globalization.'"
Gomory and Baumol are elaborating a fundamental point sure to make many economists (and political leaders) sputter and choke. Contrary to dogma, the losses from trade are not confined to the "localized pain" felt by displaced workers who lose jobs and wages. In time, the accumulating loss of a country's productive base can injure the broader national interest--that is, everyone's economic well-being.
"Our objective," Baumol told a policy conference last summer, "is to show how outsourcing can indeed reduce the share of benefits of trade, not only for those who lose their jobs and suffer a direct reduction in wages but can wind up making the average American worse off than he or she would have been."
The conventional win-win assurances, they explain, are facile generalizations that ignore the complexity of the trading system--the myriad differences in country-to-country relationships and the vast realm of government actions and policy interventions designed to shape the outcomes. "Many of our 'dismal science' colleagues speak unguardedly as though they believe free trade cannot fail, no matter what," Baumol said.
Some nations, in other words, do indeed become "losers." Gomory fears the United States is now one of them--starting to go downhill. When he and Baumol wrote their book, they figured US trade relations with China and India produced "mutual gain" for both ends. The United States got cheaper goods, China and India got jobs and a start at industrialization. But the rapid improvements in those two nations during the past decade, Gomory thinks, are putting the United States in the bind where their gain becomes our loss.
Essentially, the terms of trade have changed as more and more value-added production has shifted from the United States to its poorer trading partners. America, he explains, becomes increasingly dependent, buying from abroad more and more of what its citizens consume and producing relatively less at home. US incomes stagnate as the high-wage jobs disappear and US exports become a smaller share of the world total.
The persistent offshoring of domestic production is leading to a perverse consequence: The United States finds itself paying more for imports. The production that originally moved offshore to get low-wage labor and cheaper goods is now claiming a larger and larger share of national income, as the growing trade deficits literally subtract from US domestic growth. "All the stuff you were already importing from them becomes more expensive," Gomory explains. "That's why you can start going downhill--because you pay more for what you were previously getting." Put another way, one hour of US work no longer buys as many hours of Chinese work as it once did. China can suppress its domestic wages to keep selling more of its stuff, but that does not alter the fundamental imbalance in productive strength.
The US predicament is vividly reflected in the nation's swollen trade deficits, now running at nearly 7 percent of GDP every year. The country consumes more than it produces. It borrows heavily from trading partners, led by China, to pay for its "excess" consumption. This allows America to dodge--temporarily--a reckoning with its weakened condition, that is, falling living standards. But that will eventually occur, when Americans are compelled to reduce their consumption and pay off the overdue bills. Postponement will deepen the ultimate injury because, meanwhile, the trading partners will gain greater industrial capabilities, while US productive strength weakens further.
Americans can choose to blame China or disloyal multinationals, but the problem is grounded in US politics. The solution can be found only in Washington. China and other developing nations are pursuing national self-interest and doing what the system allows. In a way, so are the US multinationals. "I want to stress it's a system problem," Gomory says. "The directors are doing the job they're sworn to do. It's a system that says the companies have to have a sole focus on maximizing profit."
Gomory's proposed solution would change two big things (and many lesser ones). First, the US government must intervene unilaterally to cap the nation's swollen trade deficit and force it to shrink until balanced trade is achieved with our trading partners. The mechanics for doing this are allowed under WTO rules, though the emergency action has never been invoked by a wealthy nation, much less the global system's putative leader. Capping US trade deficits would have wrenching consequences at home and abroad but could force other nations to consider reforms in how the trading system now functions. That could include international rights for workers, which Gomory favors.
Second, government must impose national policy direction on the behavior of US multinationals, directly influencing their investment decisions. Gomory thinks this can be done most effectively through the tax code. A reformed corporate income tax would penalize those firms that keep moving high-wage jobs and value-added production offshore while rewarding those that are investing in redeveloping the home country's economy.
US companies are not only free of national supervision but actively encouraged to offshore production by government policy and tax breaks. Other advanced economies have sophisticated national industrial policies, plus political and cultural pressures, that guide and discipline their multinationals, forcing them to adhere more closely to the national interest.
Neither of Gomory's fundamental policy reforms--balancing trade or imposing discipline on US multinationals--can work without the other. Both have to be done more or less at once. If the government taxed US multinational behavior without also capping imports, the firms would just head out the door. "That won't work," Gomory explains, "because you will say to the companies, 'This is how we're going to measure you.' And the corporations will say, 'Oh, no, you're not. I'm going overseas. I'm going to make my product over there and I'll send it back into the United States.' But if you insist on balanced trade, then the amount that's shipped in has to equal the amount that's shipped out by companies. If no companies do that, then nothing can be shipped in either. If you balance trade, you are going to develop internal companies that work the way you want." Public investment in new technologies and industries, I would add, may not achieve much either, if there is no guarantee that the companies will locate their new production in the United States.
Essentially, Gomory proposes to alter the profit incentives of US multinationals. If the government adds rules of behavior and enforces them through the tax code, companies will be compelled to seek profit in a different way--by adhering to the national interest and terms set by the US government. Other nations do this in various ways. Only the United States imagines the national interest doesn't require it.
In recent months Gomory and Leo Hindery of the Horizon Project have been calling on Congress with these big ideas and getting respectful audiences. The two met with some thirty Democratic senators and Congressional staffers from both parties. Senator Byron Dorgan, with co-sponsors like Sherrod Brown, Russell Feingold and even Hillary Clinton, has introduced several bills to confront the trade deficits.
Gomory's concept for multinational taxation is a tougher sell amid Washington lobbyists because it goes right to the bottom line of major US corporations. On the other hand, this proposal has stronger intuitive appeal for citizens, who reasonably ask why multinationals are allowed to undercut the national interest when they enjoy all the benefits of being "American" companies.
Hindery's group is advocating Congressional action to arrange a "national summit" on trade, where all these questions can be thrashed out. The political system has never really had an honest, open debate on globalization in the past thirty years. The dogmatic church of free trade--"free trade good, no trade bad"--wouldn't allow it. As more politicians grasp the meaning of Gomory's analysis, they should start demanding equal time for the heretics.
Gomory's vision of reformation actually goes beyond the trading system and America's economic deterioration. He wants to re-create an understanding of the corporation's obligations to society, the social perspective that flourished for a time in the last century but is now nearly extinct. The old idea was that the corporation is a trust, not only for shareholders but for the benefit of the country, the employees and the people who use the product. "That attitude was the attitude I grew up on in IBM," Gomory explains. "That's the way we thought--good for the country, good for the people, good for the shareholders--and I hope we will get back to it.... We should measure corporations by their impact on all their constituencies.
"So in my utopian dream, we decide what we want from the corporations and that's how they make a profit--by doing those things. Failing that, I would settle for the general realization of this divergence and let people argue it out."
Some older CEOs and board members at least listen to him sympathetically. "They have grandchildren," he says. "They wonder too what's going to happen to our grandchildren. You can't get a vote around the corporate board table about, Is this good for the grandchildren? But you can talk to them and they'll worry about it and say, Well, maybe we need to do something."
William Greider has been a political journalist for more than thirty-five years.
© 2007 The Nation
23 Comments so far
Show AllI've long been of the opinion that globalization and the corporate interests trying to play the global game will mean the end of America and whatever dreams we had about the good life for our citizens. When the pursuit of profits mean more than allegiance to your country that country is in a whole lot of trouble.
There used to be a sense of "we're all in this together." Now it's an "every man for himself and let the devil take the hindmost," mentality. If this trend continues, and there's a whole lotta money trying to make sure that it does, America the Beautiful will be RIP. Good luck, Mr. Gomory, and go to Hell, Mr. Rubin. I used to think Rubin was one of the good guys. Obviously I was wrong.
Corporations are not nation builders as the multinationals have shown they go were its cheapest to build and so there are less jobs for the american citizens. The nation has to look after its own interests and not those of big business. Unfortunately the US has a long interest of looking after the interests of business and it doesn't seem to want to cut the apron strings. After all it was an American President who said "the business of America is business" and that has been the underlying dictum of the federal "guvmint" with few exceptions. The other problem is both parties feed from the same trough, big business who never give anything without wanting much more from the "ruling party" to confuse matters there are the TV evangelists/fundamentalists who can guarontee to get the camel through the needles eye along with its riders as wealth is a reward from God!?? Good luck to Gomery as a shouter of truth. I won't hold my breathe.
"US companies are not only free of national supervision but actively encouraged to offshore production by government policy and tax breaks."
Doesn't it make you feel good that our government representatives are more concerned with shipping jobs out of the U.S. than creating them? And to make matters worse, the trillions of dollars in massive tax breaks going to the super-wealthy, while the U.S. is engaged in a never-ending war, are not creating more jobs in this country according to this investigator: "The total wealth of this global ruling class grew 35 per cent year to year topping $3.5 trillion, while income levels for the lower 55 per cent of the world's 6-billion-strong population declined or stagnated. Put another way, one hundred millionth of the world's population (1/100,000,000) owns more than over 3 billion people. Over half of the current billionaires (523) came from just 3 countries: the US (415), Germany (55) and Russia (53). (The 35 per cent increase in wealth mostly came from speculation on equity markets, real estate and commodity trading, rather than from technical innovations, investments in job-creating industries or social services)." -James Petras
"Other advanced economies have sophisticated national industrial policies, plus political and cultural pressures, that guide and discipline their multinationals, forcing them to adhere more closely to the national interest."
Well now, isn't this a form of "protectionism"? Who is running the U.S. government?....Wall Street, whose only concern is profits?
"Now Gomory is attempting to re-educate the politicians in Congress."
This in my opinion is a diplomatic way of saying: It's time to stop defrauding Americans with your bogus trade policies and tax breaks to the super-wealthy.
Nice work Mr. Greider. Thank you!
If Bush, Cheney, Rove and Pat Robertson get their way, by the Time Mr. Gomory might have succeeded in reforming corporate attitudes, we will all be nuclear toast.
Oh, this article did my heart good! Finally, the voice of wisdom unmasking the fairy tales of Bob Rubin, Flat-Earth Tom and the other cheerleaders of globalization's "glories."
Dafoe, when you wrote "Good luck to Gomery as a shouter of truth. I won't hold my breath..." it gave me an idea. I'm going to e-mail Lou Dobbs, the one media person who uses his bully pulpit to alert Americans to the impending destruction of our economy through these insane trade and investment policies. I'll suggest that he have Gomory on as a guest. Hopefully, other Common Dreams readers will want to do so too.
The religious fundamentalism called "Globalization" has NEVER been about 'arguments', logic, or benefits for anyone but the global Ruling Class.
1. Nothing makes profits like slave labor, prison labor, child labor, & sweatshop labor. How well can you compete with any of these?
2. A literate middle class with leisure time is the arch-enemy of every ruling class that has ever existed. Ruling classes destroy middle classes as THE primary threat to their existence. That is what they have done to you, destroyed your lives like a ravening animal tearing a carcass to shreds.
3. By 1964 the Ruling Class in the US was nearly moribund because of the Roosevelt Legacy of taxation (90% on earned income over $6mn/yr [adj for inflation]; 53% on unearned income; 50+% on mega-estates), support for the Wagner Act, Glass-Seagal, corporate regulation, and maintenance of a social safety net. These policies produced the greatest distribution of wealth ever seen in the history of our species, 35% unionization in the private sector, and the largest blue collar middle class in the industrial world. ---ALL DEAD NOW---ALL ROADKILL---The Roosevelt Legacy, the unions, and the American Middle Class. We, THE Enemy, are now manacled as surely as any Gitmo detainee in chains that we produced with our labor.
This ain't about 'globalization' and never was. It is about the global enslavement of all humans by tiny groups of families and clans ruling through violence and oppression. Corporations are the mandibles of this spider, shredding human flesh into bite-sized morsels to be turned into wealth power and privilege over us.
Reasoned arguments have NOTHING to do with this situation. The arguments are candy floss on a shit cake of murder, war, conquest, and subversion of our Democracy by MONSTERS.
How long will you tolerate your enslavement?
Bill Clinton was bought and paid for by globalized multi-nationals. How many lives did he destroy? Now he makes $25M and walks around without a worry in the world. Shouldn't he have many, many more security personnel around him at all times?
A number of years ago I read about Edward Deming and his ideas about work place democratization. Some of this article reminds me of what Deming was talking about. American corporations have ignored the American people for some time even while wrapping them selves in the flag. The right of people to organize and collectively bargain are absolutely essential to this situation and the sooner the US government stops undermining unions and unionization the sooner we can help export that necessary detail. As for Deming and his work perhaps it needs to re-surface as well. Success of the work place is in all our hands and therefor into all our hands the fruits of that success needs flow, and the business of business is to provide employment, these are essential ideas.
Yo! jjason. Do not confuse a symptom for the disease. Massa has always hired the 'Best' Overseers.
Yo! fringe54. 25 years ago I used to quote JM Juran & WE Deming to deaf ears. "The workers work in the System. Management works on the System." I have since learned that their error in dealing with American 'business' ran to their core premise. They believed that the primary purpose of business was to be effective, making the product, taking it to market and making a fair profit. Wrong. Wrong. 3x wrong.
Corporations are first, last, and always 'Plantations'. Their role is both social and economic and the boys never lost their taste for human slavery. That is why employees are always the first enemy. Us. That is why Corporations have Super-Citizenship and we give up all of our civil rights when we step off the curb and into a place of business as an employee. It is also why occasional executives may be sacrificed for Corporate Crimes but the Corporation is untouched.
Don't even think about the straitjacket you wear every single day in order to keep a roof over your head. Mushrooms. In the dark and covered with horseshit. "You have no legal standing in this Court". Against that reality, we have the Corporate Prime Directive: Absolute Advantage.
Nothing gives Absolute Advantage better than human slavery. Ask Tommy Jefferson. He traded a life without status or position for a dowry of 200 human beings in forced labor that gave him a life of Aristocratic wealth, power, and privilege over us – so he could write The Declaration and go on to become President of the US. In between paragraphs he raped a 14 yo black girl, because he found her desirable and he could do anything to her that he wished. Absolute Advantage. You may never have heard it expressed in quite this way. I submit it for your consideration. You are living not as a free citizen of this artificial nation state. You and me and more than a few billion other humans both here and around the globe are living in servitude. Don't get over it. Don't move on. Look it square in the face and snarl back. You are looking into the face of a beast that wants you and your children and their children in chains. Do what you gotta do to make things right.
Peace.
If you are opposed to globalization, but not to capitalism, please read the attached link, you may want to reconsider your position. This is the best explanation of our current economic predicament I have seen.
Many years ago, as an undergraduate majoring in Economics and Political Science, I was taught that capitalism was the ultimate economic system. For many decades, it seemed so; however, I now have doubts. I have long thought that most of our problems in the United States were the result of apathy and corruption in politics; however, I how think there's more to it than that. The American sacred cow, "capitalism", appears to be the problem. There is no question that human nature; in particular greed, can be implicated as well. However, my purpose in writing isn't to grind a moral axe.
Until recently, I had never seen a good explanation of the growth imperative of capitalism. The unspoken assumption is that infinite growth on a finite planet is achievable with good old American ingenuity, hard work and modern technology, basically, Manifest Destiny. I think it is safe to say that most people still believe it today. When things are going well; and for a long time they did just that, why question the assumption? If you did, no one would listen anyway – life was good.
Now times have changed and things aren't so rosy. There is something clearly amiss. The attached article traces the roots of our current problems. It does a nice job of uncovering the trail that has led us to the mess we're in today. If you can, withhold your skepticism long enough to finish the article, I think when you're done reading you will find that the position holds up quite well. This is NOT the socialist or communist nonsense you have probably seen in the past. This is a serious critique of our economic system and it needs our attention.
The attached article is a bit long; however, it is well worth the time. If you agree, please forward it to a friend.
http://legalminds.lp.findlaw.com/list/cyberjournal/msg00542.html
Or: what's good for GM is not nessesarily good for the US.
Maybe one day someone who counts will notice the same thing about Israel.
Gregory the Great... I read the article you recommended. Thanks! It's very clear and intelligent.
Unfortunately, the alleged wisdom in Mr Gomory's analysis and solution leaves out one tiny detail: the rest of the world. A true solution within the globalization framework must start from the premise that is encapsulated in the United Nations as the only true representative of all nations in the world, and its Universal Declaration of Human Rights.
Article 25 stipulates, as a basic right for every Earth dweller, "the right to a standard of living adequate for the health and well-being of himself and of his family, *including* food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control." (emphasis mine)
Protecting national interests, at best, prolongs the predicament of a world in such imbalance that millions and millions of its citizens live deprived, degraded lives and, at worst, increases competition, confrontation and ultimately conflict.
National interests are indeed being left unprotected, but rather because nations have allowed mega-moneylenders to take control of the temple of economics and, by extension, politics – all in the name of free trade. Allowing a small number of people and organizations to amass ever more wealth at the expense of the vast majority of fellow human beings is the real threat to the interest of any nation, as it threatens the very fabric of human relations across the global community. Because political and economic stability are in the interest of every nation, creating conditions to ensure such stability should lie at the heart of any policy to protect national interests. The foremost need now is not to rethink or renegotiate trade policies with competing economic blocks, but to create universal justice – enabling every individual to live a life in dignity and with true prospects for his future and that of his children.
This requires that we share, around the globe, the bounty of food and resources that the nations of the world have in excess and may put at the disposal of the United Nations. Only sharing will ensure economic and social justice, as outlined in the Declaration of Human Rights. And only justice will be a viable substitute for competition and conflict, if world peace and stability is our goal.
Gregory The Great. I've just finished reading what you recommended and I agree with the writer's point of view. In various postings, I've touched on this very same issue of Capitalism. Actually, I see it as Capitalism without a conscience.
One question I asked was: How much is enough? How much many does any one person need? Under capitalism, it's all about maximizing profits. There is no concern for the people, environment, or country.
In another posting I mentioned something John Stuart Mill wrote about communism. His conclusion was that there was evidence of it working in small communities that were well educated. Without saying whether communism was good or bad, he simply said that it appeared that the world was just not ready for communism. We were still too immature as a people for communism to work.
I also wrote about how the idea of capitalism was growth – unlimited growth. Well, that's impossible given that we live on a finite planet. There has to be a point where there just couldn't be more growth.
I also wrote about taxation so as to not have the middle class bear the vast majority of the tax burden. One person referred to the Laffer Curve but that is another idea that the media, who speak for the wealthy, would like us to believe.
And finally, today I wrote about whatever happened to forward thinking, proactive CEOs? If I were running a business and if I knew that not to far in the future, the resources needed for my business would no longer be available, I would begin to put some money into researching other means of keeping the company alive by finding alternatives to what my company was currently using. I used as an example the Air Force. If there were no forward thinking people in the Air Force, we would still be flying bi-planes. I mentioned the Apollo Alliance as well. They have a simple, great idea of joining environmentalists with blue collar workers to develop new sources of energy. This would create many jobs and they would be jobs here in the USA. It would also be great for our nation's security as well as the environment.
As to all the other points in the article you suggested, I agree. Due to corporate greed, we now have given the know-how for advanced, sophisticated products to be made by other countries, basically giving them the same technological knowledge we gained through our own had work and money.
In the process, these multi national corporations have decimated the middle class in the US. It has also led to unnecessary wars and interventions.
The IMF is more like the mafia, breaking the knees of any country that's had the misfortune of going through bad times. Fortunately, South America is breaking its ties with the IMF because they know what the IMF is all about, and that's certainly not helping people.
Yes, we have to change ways of doing things in a globalized world. We really have no choice. The wealthy few still have some choices they can make, but I have a feeling the masses will soon rise up. The few powerful people and corporations are running out of rope, whether they want to believe it or not.
A few random thoughts:
1) Greider refers to the "home counties" of multi-nationals. They have no "home country" and no loyalty to a country.
2) While NAFTA's effect on the average American has been negative overall, it's been disastrous for the average Mexican.
3) For years Pat Buchanan has been peddling a similar message, suggesting that based on what America produces, it resembles a third world country. The message has fallen on deaf ears.
It's probably time to cap the size of ALL corporations worldwide to limit the economic havoc that any one corporation can wreak. And it's long past time to remove ALL direct and indirect subsidies that international transport enjoys.
To luckylefty, jjason, Gregory The Great, hybridoma2001 and to all with eyes to see: now is the time that not only people at large refuse to live by old rules, but the ruling few do not know how to keep the old order.
Mr. Gomory defies the very essence of Capitalism, its orginizing principle. "It's a system that says the companies have to have a sole focus on maximizing profit", says he, a pure mathematician, who did not loose his brain power.
That was my AHA moment. What a timely observation? What a new. Mr. Gomory offer us a revolution with small 'r' at the time when big 'R' si waiting in the winds.
Gregory The Great,
I think it was Louis Henry Morgan the anthropologist who studied the Haudenoshaunee people of upstate New York and whose work was read by Marx and Engels who thought tribal communism could be applied to reform large and growing profit enterprises. It never worked because when the people can no longer see and manage their own local activities, corruption and dictatorship are inevitable, as per Stalin, Mao, etc.
Yet, Ben Franklin and a few other American colonists applied the Huadenoshaunee practice of three branches of government to counterbalance greedy tendencies with our famous "checks and balances". So America proceeded down the capitalist road to greater prosperity and more democracy because it avoided Marx's "dictatorship of the prolotariat" which killed any chance the Soviet Union or Communist China might succeed and survive a socialist states.
Thus today, humanity has an ever-growing population promoted by an ever-growing capitalist empire on its back because nobody wants to let go of all that money and power, even though it's killing the planet and us with it. What to do?
Educate people to reduce the human population through family planning clinics in every nation and give all women the right to decide if and when to birth children. Then devolve to continental networks of eco-villages that surround themselves with miles of healthy wilderness, using whatever technology is helpful; or as Dorothy Day said: "Live simply that others may simply live." Meanwhile, recycle 100% of all industrial and human waste.
Perhaps the human race, as we now see it, is not capable of making such a dramatic change in its way of life. If so, then the global capitalist economy will perpetrate ecocide and extinction upon all life on Earth, maybe even sooner if madmen Bush, Cheney, Rove and Pat Robertson get their way and push the World into their precious "Armageddon".
We humans can no longer push the consequences of our lust for ever more power and wealth forward to a future time and a future generation. This is today and tomorrow and every day thereafter.
I'm no supporter of globalization but is there anybody left that doesn't recognize that the American standard of living has to be lowered? It wouldn't be so bad if it weren't for the fact that the lowering is shared so unequally.
So the people at the top lied to us about globalization so that they can lower our living standards without lowering their own. There are two separate problems: a level of consumption in the developed countries that is unsustainable and certainly can't be extended worldwide and rising inequality within the developed countries that works against efforts for a voluntary lowering of consumption.
The business of private equity buyouts of huge corporations for billions of dollars tells us that the corporate world is awash with money.The top wealth owners have so much of the filthy luchre, yet are intent on further accumulation of same to the point of obscenity (and insanity).Perhaps we need more attention to the study of the humanities to teach the young the true values in life.The present generation has been educated to perform like trained seals, who get their little rewards after every performance and kow-tow to their superiors in the hope of maintaining their mindless existence.Anymore than enough money for one life-time, is not only pointless, but a dangerous exploitation of the planets resources.It is reasonable to do a days work to earn a living, and in this complex world we all depend on each other in one way or another, but the strip mining mentality of the moneyed morons is not the way to go.
Paul M, JJason, gaartson, hybridoma2001, WmC, Vitaly Purto, Communitarian, Tommy_slothrop
I believe all of you are right on the mark. There doesn't seem to be much disagreement about the nature of the problem. The question is what can be done about it?
Tommy_slothrop makes an interesting point, most of us in the US live a high off the hog and I am no exception. Certainly individual changes will help a good bit, but we will need a lot more than that to make a real dent in our footprint. However, if we don't get nations like China and India to refrain from following in our foot steps, our conservation efforts will be wiped out many times over by their growth. It seems that we need sovereign nations to be something slightly less than sovereign when it comes to the welfare of the whole. So far the UN hasn't fared too well.
Another challenge is entrenched business interests here and elsewhere. The Republicans and Democrats sold their services to big business and the wealthy a long time ago. We're kidding ourselves if we believe that we the voters are their constituents. Their constituencies are those who contribute big dollars to their campaigns. As long as we keep voting for either party they own us. They are the only game in town and they know it. I fail to see how this is much of a democracy when there is no viable choice.
One last cheerful note, have any of you read Jeremy Rifkin's "The End of Work"? If he's right; and he makes a pretty good case, we need to completely rethink our economic structure since we don't need anything remotely close to full employment to produce all of the goods and services we need. How will we deal with the "excess" labor that is not needed?
It's unlikely that any of us can effect much change alone; however, if we coordinated our efforts maybe we could make some headway. Is anyone game for that; and if so, any ideas as to how or where to start?
If nothing else, I find it encouraging that I'm not alone with my concerns and that I have found intelligent life in cyberspace. It's been my pleasure to join all of you in this discussion.
It seems to me that big business is always going to have to be focused on the bottom line, which is what they've supposedly been doing. But the problem is that business doesn't really know how to evaluate the bottom line. For one thing, the focus is always short term - the quarterly report, the annual report - and only measured in some monetary unit. When does the accounting ever focus on the quality of human life, let alone seven generations ahead? When is profit ever measured in terms of human dignity, health, well being and freedom? When is the bottom line ever presented in terms of sustainability and environmental impact? When is growth and progress ever evaluated in terms of fuller realization of individual and collective human potentials? When is the richness of diversity considered, and when is peace and unity factored into the equations?
There are accountings for costs of doing business: supplies, materials, labor, benefits, facilities, equipment, transportation, advertising, insurance, legal fees. But the costs of caring for the workers and their families, their air and food and water supplies, their land, their opportunities to live fulfilling lives and grow and realize their full potentials are conveniently ignored. There are also costs associated with the production of all the unnecessary junk our current system creates, stuff that uses resources but that does not add value to our lives. There are unnecessary costs associated with exotic products that use an excessive amount of resources for the amusement of a tiny elite minority. And there is far too much produced only for the purpose of causing terror, destruction and death in the world. Just because it is possible to produce something does not mean it is a good idea to produce it - often the real costs are too great to be justified.
Without an accounting for ALL the costs of doing business, there is no way to measure true profitability and no way to ensure sustainability. Without all of us - individual, national and corporate citizens alike - working to care for one another (seven generations into the future) and for our earth, we don't stand a chance. We can't do this individually, we can only do it collectively.
The only collective we currently have is the United Nations. So far it has done a rather miserable job of taking care of us and our earth. The reason is that we have never given it the power to do so. Giving it power means giving it the money it needs to do what we ask of it. It also means we must give it the authority it needs, as well as the trust and cooperation necessary for it's success. We have never tried doing these essential things to help the UN function to the best of its ability. We've only given it token monetary support, minimal authority, little trust and lots of grief.
Only through some such cooperative arrangement can we ever hope to develop and sustain a system of production and trade that will be as fair as possible for all. President Bush essentially declared the UN irrelevant. What we actually need to do is declare the UN the most relevant organization we have and then do all we need to do to encourage and support its work in the world in all realms of human need and endeavor - agriculture, economy, finance, health, welfare, science, environment, natural resources, human resources, transportation, business, trade, peace, justice...
No single person, no organization, no business, no government can be expected to look after the best interests of everyone. Only an all embracing collective can begin to take on such a task. That means we must all take this task on together, through the agency of such a collective. And the primary basis for the purposes of any and all accounting must be the health, welfare and happiness of all beings measured long term.
I do not mind become poorer, relative to the rest of the world, as long as the economic elites of this country are made poorer relative to the rest of us. The greatest threat to our quality of life is the increasing economic polarization, where the few can more easily bully, manipulate, and control the rest of us like we were insignificant slaves.
Also, the greater the economic polarization, the less the elites feel connected to us, either financially or emotionally, and the less they will be concerned with our interests.
So the solution is bringing back the 90% tax rate on high incomes, while eliminating tax shelters, and then the economic elites will either work for the broad national interest or they will leave. And if they leave, we can say "good riddance" and nationalize their assets. They spend a great deal of money convincing the rest of us how much we need them, but we do not.
Hi everyone,
I am having trouble understanding Gomory's proposed solution for the U.S. I read the article and understood the problem but his solution I am having difficulties understanding it. Please if someone would help me explain his reform theory I would greatly apprieciated it. Thank you
bill