| BUSINESSWEEK ONLINE : MARCH 29, 1999 ISSUE | ||||||||
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| BOOKS
The Trouble with Globalism TURBO CAPITALISM Winners and Losers in the Global Economy By Edward Luttwak HarperCollins 290pp $26 THE POST-CORPORATE WORLD Life After Capitalism By David C. Korten Berrett-Koehler 318pp $27.95 Ever read Private Eye, the old British satirical rag that was at its irreverent best in the early 1980s? Among its memorable routines were those spun around Prime Minister Margaret Thatcher, nicknamed TINA-- the acronym of her trademark exhortation, ''There Is No Alternative.'' This was prescient: Thatcher and Ronald Reagan were then presiding over the birth of what we now call globalism. And if one feature of the phenomenon stands out today above all others, it is the assumption that a globalized economy is indeed inevitable. ''Elite Americans do not merely approve of globalization,'' Edward Luttwak writes in his new book, Turbo Capitalism: Winners and Losers in the Global Economy. ''They treasure it as their only common ideology, almost a religion.'' Both Luttwak's book and that of David C. Korten, The Post-Corporate World: Life After Capitalism, are the work of heretics. Neither takes globalism in its current form as anything more than a passing phase. Luttwak's work is a rigorous critique of a system that he believes will either evolve or collapse from its excesses. But with that conclusion, the account comes to an abrupt halt--and there Korten begins. The Post-Corporate World is--well, it's not for everybody. It has an unfortunate New Age cast that is often trying. Drop what prejudices you may harbor toward such notions as ''planetary consciousness,'' though, and you find a thought-provoking argument to the effect that, as Korten says, ''our species is in the midst of a profound awakening to a new appreciation of what it means to be human.'' Don't worry: It only sounds like claptrap. Don't worry about Luttwak, either. He only writes like a leftist. The market system in its privatized, deregulated, globalist phase has become more destructive than creative. Turbo Capitalism is a sustained, sometimes savage attack on our failure even to see this--to say nothing of debating it in any serious fashion. But it's friendly fire. Luttwak is a longtime fellow at the Center for Strategic & International Studies, the Washington think tank. Anyone familiar with his work--notably The Endangered American Dream, published in 1993--knows his abiding admiration for the market's way of sweeping aside inefficiencies and releasing new economic energies. The problem, Luttwak says, is pace. After 20 years of relentless deregulation and market-opening, we've turbocharged the destruction-and-creation process essential to a competitive economy's advance. The speed of structural change now ''brutally exceeds the adaptive limits of individuals, families, and communities,'' Luttwak writes. And the process is not creating what we want. Instead, it's leading to minuscule aggregate wage gains (in the U.S.), high unemployment (in Europe), and rampant economic insecurity (pretty much everywhere). Only a few forlorn holdouts--Luttwak singles out France and Japan in particular--now resist the pattern. Those not fully turbocharged have only to look at American society to see globalism's mixed blessings. Turbocharging produces--along with Wall Street's ''financial acrobats'' and high-tech ''New Titans''--an upstairs-downstairs society with ''Victorian patterns of income distribution,'' Luttwak says. He also links turbo capitalism to a trend in America to stifle criticism of the role of markets. ''Free markets and unfree societies go hand in hand,'' the author asserts. The orthodox logic is just the opposite, of course. But Luttwak sees the ''sovereignty of the market'' as an accepted fact that has now become unchallengeable. The anger, insecurity, and frustration that global markets can generate have no outlet in ordinary political dissent. The result is an intolerance Luttwak calls the ''New Prohibitionism.'' The author finds this in everything from stricter statutes and longer prison sentences to smoking bans, an insistence on ''politically correct'' speech, and an obsessive concern with thinness. Luttwak barely disguises his disdain for some current responses to the society he describes. Corporations are not moral entities and shouldn't be, he says; the liberal notion that any group of corporate ''stakeholders'' should have the same say as stockholders is simply unworthy of serious consideration. What's left? Luttwak thinks capitalism's fate lies in the hands of that entity our age has unsparingly defamed: government, whose role is to mitigate the system's social disruptions. The alternative, as Luttwak sees it, is rising resentment among turbo capitalism's vast class of losers, followed by a wave of populism--probably of the right-wing variety Luttwak witnessed as a child in Italy. Of course, it's hardly original to suggest that capitalism's excesses must be subdued lest something even messier take its place. Franklin Roosevelt's New Deal was motivated by just this sort of thinking. In the ''controlled capitalism'' of the 1930s through the 1970s, Luttwak sees not just inefficiency but also ''the hidden advantages of stability'': secure incomes that encouraged savings and investment. These benefits, he says, often get overlooked, since ''the chain of consequences that runs from social stability to economic growth is...complex, and passes through certain psychological linkages that are alien territory for economists.'' To these arguments, Luttwak brings detachment, something that has become regrettably rare. Indeed, the best thing about his books, whether you agree with them or not, is the agile, independent intellect at work in them. It makes him, among other things, a superb social critic. The connection he makes between turbo capitalism and America's Calvinist ethos--the rich are rich because God has blessed them--is nonpareil. And in analyzing the American underclass, he finds that its ''famous pathologies''--crime and addiction chief among them--are not pathologies but rational choices. ''It is surely less painful to be chronically unemployed if one is not sober, drug-free, and filled with a desire to work at a satisfying job,'' he observes. Born in Transylvania and educated in Italy and England, Luttwak admires his adopted country. But he casts a cold eye upon it--one never clouded with either sentiment or ideological fervor. ''Turbo capitalism, too, shall pass,'' Luttwak writes. The trouble with this intriguing sentence is that it's the last one in the text. Luttwak believes that we are in an era of overproduction and deflation, and that we're destined eventually to reenter a ''scarcity-inflation'' phase. He also calls for ''a new political economy.'' But he never tells us what such a thing would look like. It's Turbo Capitalism's one serious lapse. David Korten, a management expert with a doctorate from Stanford University's Graduate School of Business, is anything but shy as to visions of the future. After 30 years as a development worker in Asia, Africa, and Latin America, Korten believes we humans have ridden the capitalist tiger rather longer than we should have. His last book, When Corporations Rule the World, published in 1995, surveyed globalism's costs in human and environmental terms. In The Post-Corporate World, he looks into alternatives that he sees taking shape in various parts of the world. Korten, in effect, seeks to tell the story beneath the mainstream tale of globalization's triumph. Korten delivers no new ideology. He's concerned with a renovated version of what we already have: Democracy and market economics are the twin pillars of his post-corporate, post-capitalist world. From these flow some familiar notions: strengthened civil societies, corporate stakeholding, sustainable growth, local business networks. But that's just the beginning. This book delves into biology, holistic health, the rights of the planet, and so on--all in the service of a theme fairly summarized as life vs. capitalism. This is beyond ''big think.'' In fact, The Post-Corporate World is positively cosmic--and thinly stretched as a result of its outsize ambition. Where Luttwak is hard-edged, Korten is never far from the touchy-feely precipice, and sometimes he falls deep into it. But Korten shares two central ideas with Luttwak: Neither believes our current course is inevitable, and both think economies and markets should serve societies, and not the other way around. Korten's book is valuable because it invites us to do something we rarely bother about: to reimagine ourselves. Eclectic thinkers will find much to ponder in it--people like, say, Edward Luttwak. BY PATRICK SMITH _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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