Globalization drive is getting dangerous

January 26, 1998|By William Pfaff

PARIS -- A war between economic societies is going on. It is a war that may prove as important to modern history as the rise and fall of imperialism and colonialism. Important resemblances exist between today's struggle and the phenomenon of colonialism.

Western forces

The United States, ambivalently backed by Europe and Canada, is attempting to force the replacement of crucial economic and social institutions in the non-Western world with institutions drawn from its own experience and that of Western Europe.

This campaign is inspired by U.S. economic theory, promoted by U.S. economic and business publicists, and waged by U.S. industry, commerce and government. Its goal is deregulation and integration of the world economy, so as to impose the economic standards and practices, and in important respects the manner of life, of the capitalist West.

The campaign originated in the struggle against the Communist economic model. Until the 1980s many in the West believed that the Communist model, in its Russian and Chinese versions, could defeat the West.

Such was the concern of an influential 1975 Trilateral Commission study. However, a decade later, Soviet Communism collapsed as George F. Kennan and a few others had foreseen.

Many then argued that the East Asian economic model in Japan, South Korea, Singapore and Taiwan was superior to the Western model, and that the United States should try to adopt its practices.

In purely economic terms, the centrally directed East Asian model for national industrial mobilization was a much more serious challenge than the Leninist planned economy had been. But it too had, and has, an internal contradiction: its dependence upon export-led growth, ultimately irreconcilable with its protectionism.

In Japan, where the East Asian model originated, the nation's ability to adapt its economic system to changing circumstances in the 1990s was handicapped by the country's political blockage, a legacy of World War II and the Cold War. Japan's success in the future will undoubtedly depend more on political reform than economic adaptation.

The success of the similar South Korean system, based on high domestic savings and investment, with high productivity -- plus, initially, close control of bank lending -- was in the last few years undermined because the government yielded to Western demands for market and credit liberalization, opening its market to speculative Western investment. South Korea has already elected political reform.

Ruling classes

The East Asian model should not be confused with the essentially feudal economic system which exists in Indonesia and some other Southeast Asian countries, where resources and industry are controlled by family or clients of the ruler, or of the ruling political class, who in turn enrich Western investors prepared to pay the required tribute.

China today is probably closer to this feudal model than to East Asian capitalism. What such societies need is not the deregulation urged by Western financial institutions and governments, but the opposite: uncorrupt and disinterested regulation.

The East Asian model will be modified in the course of the present crisis, but it is reasonable to believe that it will survive with its fundamentals unchanged. It is a legitimate outgrowth of East Asian social institutions developed over the course of the region's history.

Elsewhere in Asia the lasting consequences of the crisis may be more destructive. But those who expect the crisis to result in a widespread adoption of something resembling the U.S. market economy are mistaken. They are making the naive mistake of those who believed that Western-style capitalism would spontaneously spring up in the debris of the command economy in Russia.

Western capitalism's intellectual and moral foundations have been Western Christianity and Enlightenment liberalism. The moral foundations of East and Southeast Asian civilizations have been religiously based hierarchical political structures and patriarchal social and family structures. These lie behind both the East Asian economic model and Asian economic feudalism. They now are under implicit attack from the West.

Western colonialism, in its day, was a moral challenge to Asian civilizations. More recently, in China (and Vietnam, North Korea and Cambodia), an imported Marxism attempted to destroy inherited moral structures. Now the attack once again comes from the West.

The West's drive toward globalization demands elimination of ''backward,'' ''inward-looking,'' ''protectionist'' structures in other societies, so as to incorporate the members of those societies into the Western-dominated global economy as FTC consumers and producers -- to the West's advantage, obviously. Otherwise the West would not be doing it.

This is dangerous, just as colonialism was dangerous. Colonialism undermined and sometimes destroyed the moral underpinnings of colonized peoples, producing violent reactions. In the end the empires withdrew, but they left a great deal of wreckage, and in some places a legacy of hate.

The new Western offensive means no damage. But it is a war of society and culture, and causes damage. The damage has political consequences. That does not today seem really understood.

William Pfaff is a syndicated columnist.

Pub Date: 1/26/98

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