Thomas Friedman made a very good point in his op-ed column on CAFTA in the Times today (6/24/05).
The hazard of protectionism in a rapidly growing global economy is shutting yourself out, proverbialy cutting off your nose to spite your face. With China on the make, particularly, it is almost certain that trade barriers between the US and Central America would undermine joint ventures between US designers and Central American producers. Competiton with China is going to be nip and tuck and we shouldn’t let protectionist urges do that.
First, though, let’s take a moment and celebrate the problem. It’s been a hundred years or so that the developed economies, the US and old Europe mainly, have been doling out a few fish and unsuccessfully trying to teach the rest of the world how to catch their own. It was a largely disappointing enterprise, save for easing our guilt for being rich and not knowing how to share it.
Just last week we signed onto canceling the debt of a number of African countries, for example, giving up on decades of old pump priming that didn’t work. So, maybe it’s not quite uniform, but globalization is indeed now finally here. If it’s a surprise, well then it’s a great surprise, wonderful evidence that long patient effort in support of just causes can really pay off. Think about it, wouldn’t the world be a disgusting place if it didn’t?
Of course, now that we can declare significant success, we also have to figure out what to do about it. Globalization does indeed bring with it serious competition, leaving us undercut on a lot of our best hands. One otherwise hidden painful loss is all our formerly internal legal and cultural agreements on how businesses should behave, now effectively thrown in disarray.
Business culture itself spreads the good, and bad, practices of those that spread most rapidly. Other deals are off. We have to do over our deals on the basic problem that business leaders have a feduciary responsibility to undercut their employees and their environments.
Do we let it be just a free-for-all with the lowest standards of the inexperienced societies sure to win in the short run? Do we take carefully designed steps of self-defense? Do we take responsibility for teaching those following our lead how to do something better than just get away with the most money?
They say business does better when it doesn’t wreck its people or its place. Are we willing to wait for another hundred years while the rest of the world finds that out?
Look, we’ve got computers, we can do it. It’ll take some effort developing standards and self-correcting mechanisms, but there’s no reason the world should trade favorably with businesses which, for example, don’t respect their environments or include in their costs either credible retirement plans or set asides that allow workers to save for themselves.
Too sudden a change, or too heavy or loose a hand, would definately invite abuse, but that’s no reason not to find some reasonable place to start and to persue globally raising and equalizing business standards, aiming even well above where our own are now.
The businesss providing the best stewardship would finally get a direct reward for it, a huge plus. There’s also the other motivation… If we don’t we’re likely to loose our shirts. We got the car started, now the job becomes one of steering.
I think that’s pretty good!