A Fragile Consensus - Industry Trend or Event

Business leaders and politicians who believe in globalization must continue to push it and make it a real part of their agendas.

THE ANNUAL MEETING OF THE WORLD ECONOMIC Forum in Davos, Switzerland, could be thought of as ground zero for the globalization movement. The politicians and business leaders who gather here every winter are almost uniformly in favor of greater worldwide economic integration as the only road to increased prosperity.

Last year, there was little to shake this consensus. Sure, there were some protesters, fresh from their infamous shutdown of the World Trade Organization meeting in Seattle. But the economy was booming, the Nasdaq was near its all-time peak, and even people who should have known better were starting to believe that technology might be ushering in an era of unprecedented prosperity. Even President Clinton was on hand to convince any incipient doubters that globalization was the only way to go.

This year the mood was far more sober. The market is in the tank, the economic outlook is cloudy, and the efforts to prevent demonstrations turned Davos into an armed camp. (Protesters, barred by police from reaching the mountain village and furious over what many regarded as suppression of free speech, wreaked havoc in Zurich instead).

Of equal concern to many delegates here was the absence not only of President Bush, but also of any senior-level U.S. officials. It's understandable that the president and his top aides would not want to travel abroad just days after the inauguration, but that doesn't diminish the fact that politicians and business leaders outside the U.S. are very nervous about the new administration's commitment to the international agenda.

It's not that Bush or any of his key economic advisers oppose free trade or dissent from the consensus in any significant way. It's that he doesn't have much experience on the world stage and hasn't expressed all that much interest in it. And there is enough of an isolationist tradition in some branches of the Republican Party that pessimists fear the United States could turn its back on the world if times get tough.

That would be more than ironic, since for many people globalization is a synonym for Americanization. The effort to break down trade barriers and promote free markets wherever possible -- even when it comes at the expense of local environmental or labor laws -- is basically an extension of American-style laissez-faire government at the expense not of communism or socialism, but of various forms of state-regulated capitalism. The U.S. has won the ideological battle, but if it eases up now it may yet lose the larger war, which is about broadening and deepening prosperity.

The U.S. has historically gone through cycles of intense involvement in world affairs, followed by a pullback. Since the current cycle of involvement dates to World War II, and has if anything intensified in the past few years with interventions in places such as Kosovo, one might be tempted to think that the cycles are disappearing. But they probably aren't going away any more than the economic cycle is.

For most U.S. businesses, globalization has become, well, as American as apple pie. But it won't keep moving on its own. Business leaders and politicians who believe in globalization must continue to push it and make it a real part of their agendas. Otherwise they are likely to find a cozy consensus crumbling in the face of opposition from the many people who have yet to see its benefits.

COPYRIGHT 2001 Standard Media International
COPYRIGHT 2001 Gale Group