Global Baloney

June 01, 1994|By WALTER TRUETT ANDERSON

In the post-Cold War era, economic competitiveness has become a near-obsession among political leaders. Right- and left-wingers, Asians and Westerners, ex-communists and quasi-fascists unite behind the notion that any government's duty is to improve its country's performance against competitors in the dog-eat-dog struggle of international trade. Everybody has different ideas about how to do this, but everybody agrees that it must be done.

Well, almost everybody.

Paul Krugman, professor of economics at MIT, says: ''It's baloney. In reality, there is almost nothing to our fixation with national competitiveness, or its central idea -- that every country is like a giant corporation slugging it out against rivals in global markets.''

Mr. Krugman -- in a new book entitled ''Peddling Prosperity'' -- contends that, although international trade has indeed become a more important part of economic growth in the U.S., it still isn't that important: In 1992, our exports accounted for 10.6 percent of the GDP, imports 11.1 percent -- each up from the 4 percent of 1960, but surprisingly not much increased since 1980. In other words, the U.S. has not become simply an international merchant, and our prosperity depends mainly on how effectively we produce for our own consumption.

Professor Krugman's dissent is getting a fair amount of attention. Excerpts from his book have appeared in influential publications such as Fortune and Foreign Affairs, and a heated argument about its merits is currently under way.

It is not exactly a partisan argument, because the doctrine of national competitiveness is now accepted by both Republicans and Democrats. It was enshrined in Vice President Quayle's Council on Competitiveness, and it is currently being carried forth in the Clinton administration by Labor Secretary Robert Reich and economic adviser Laura D'Andrea Tyson. It has, in fact, been publicly embraced by the president himself, who is on record as saying that every nation ''is like a big corporation competing in the global marketplace.''

Meanwhile, another salvo at the current wisdom is about to be fired by an organization called the Group of Lisbon -- an international network of scholars and political leaders from Europe, Japan and North America -- who are preparing to publish a report entitled ''The Limits to Competition''.

The Group of Lisbon Report -- obviously intended to evoke memories of the 1972 Club of Rome report ''The Limits to Growth'' that stirred up a worldwide dialogue about the environmental and resource constraints on economic progress -- questions the logic of comparing a country to a company.

It makes some of the same points as Mr. Krugman's book, but makes them at a global level. Its main argument is that competition is ''a powerful tool and an essential dimension of economic life'' -- but that it can't serve as the basic principle for governing the planet. It makes its case for rapid progress toward a ''post-competitive world'' in which governments cooperate at unprecedented levels in pursuit of common goals such as social justice, economic efficiency and environmental sustainability.

Professor Krugman's critique is mainly about economic policy. He is concerned about such matters as wasteful spending of government money on projects that are supposed to enhance competitiveness, and the ever-present possibility of protectionism and trade wars -- actions taken in the name of competitiveness that actually hamper healthy international competition.

His basic recommendation is that governments ought to do more to promote productivity, and pretty much let international competition take care of itself. ''A government wedded to the ideology of competitiveness,'' he says, ''is as unlikely to make good economic policy as a government committed to creationism is to make good science policy.''

It's hardly likely that the ideology of national economic competitiveness is going to wither away overnight as a result of these critiques. Perhaps we'll see some reduction in the overuse of competitiveness jargon, which is now as carelessly thrown about in political rhetoric as anti-communist jargon used to be: Mr. Krugman calls it ''a doctrine that offers the gain of apparent sophistication without the pain of hard thinking.'' The Group of Lisbon report calls it ''secular fundamentalism.''

At the very least, such challenges should inspire a few people to take a closer look at their prose. Hopefully they will do more than that -- help stimulate a long and serious search for better understanding of how a nation should operate in the new and changing global civilization, and how this global civilization is to govern itself.

Walter Truett Anderson, author of numerous books on politics and environmental issues, wrote this commentary for Pacific News Service.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.