Writer looks to Machiavelli for trade solution

May 30, 1993|By Ronald E. Yates | Ronald E. Yates,Chicago Tribune

TURNING THE TABLES:

A MACHIAVELLIAN STRATEGY

FOR DEALING WITH JAPAN.

Daniel Burstein.

Simon & Schuster.

272 pages. $23. Niccolo Machiavelli, the 16th-century Florentine statesman whose blunt treatise on the use (and abuse) of power and strategy inspired generations of autocrats and tyrants in all walks of life, would no doubt find the economic rivalry between Japan and the United States fascinating.

It combines, after all, all the elements of the struggle to attain and maintain power that he outlined in "The Prince," the classic political discourse he penned out of a deep frustration with the condition of Italy.

At the time, Machiavelli's disunited Italy was helpless before the combined might of Spanish and French invaders. The nation was divided by political and economic factionalism. There was a lack of national purpose and patriotism.

Italy needed a strong new leader, Machiavelli insisted -- one who understood the harsh realities of the world; who knew how to harness its evils and perfidy for his own ends. It needed a Prince who strove to make himself both loved and feared by giving the appearance of being virtuous, while doing the evil things required to maintain power.

If Machiavelli were alive today and were asked to examine the trade agreements between the United States and Japan and were then asked to pick a winner, he would no doubt declare Japan the champ, says Daniel Burstein in "Turning the Tables: A Machiavellian Strategy for Dealing With Japan."

Because, despite the "high-minded rhetoric" about the Japan-U.S. relationship with its "hoary cliches about the principles of free trade and the importance of friendship between nations," the fact is the relationship between Tokyo and Washington is about economic power and economic self-interest and how to exploit that power to national advantage.

The Japanese side, Mr. Burstein writes, has always understood this. The American side has not.

"For more than three decades Japan has followed a conscious strategy of maximizing its economic growth and international competitiveness," he writes.

Meanwhile, the United States, once the wealthiest and most competitive economy in the world, placed its priorities elsewhere and allowed itself to be bludgeoned into economic subservience via short-term policies like the devaluation of its once mighty currency, moves that help trade numbers in the short term but in the long run wind up emaciating our economy.

Japan, like Machiavelli's Prince, has discovered that all means are justified that serve the end of attaining and retaining power.

However, as Mr. Burstein points out, when Machiavelli wrote his treatise, "there were no automobiles, semiconductors, dollar-yen exchange rates or any of the other issues that have come to characterize the late-20th Century economic conflict between Japan and the United States."

In today's post-Cold War world, it is economic power, not militarymight, that will dictate the winners and losers in the next century. The nation that best understands that and is able to leverage powerful forces such as knowledge and technology will prevail.

The beginning of the Clinton era, Mr. Burstein writes, is a time of great opportunity for the United States to regain economic power lost to Japan in the 1980s.

Here is where Machiavelli might smile in delicious approval. Instead of bullying Japan with brute political force, President Clinton, according to the author, should employ all the ruse, cunning and artifice he can to fundamentally "reinvent" the U.S. trade, investment and technology policies in ways that will make Japan "part of our solution instead of part of our problem."

A unique window of opportunity has opened for this kind of policy, Mr. Burstein argues. With Japan's stock and real estate markets still recovering from their most serious meltdowns in recent history and with Japan deep in recession (though already beginning to recover), the United States should focus on "getting strategic" instead of "getting tough."

How? By encouraging more Japanese investment in America, rather than discouraging it. More Japanese investment means more research and development functions in the United States, more high value-added manufacturing jobs and more new technology.

The theory being, that by pulling more Japanese investment into the United States, the nation will be able to better harness Japan's economic and technological power.

In short, it is time to turn the tables in dealing with Japan.

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