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Current Trade Deficit:    
Former Clinton Official Urges CEOs to Embrace Globalism, Reject Nationalism
William R. Hawkins
Monday, October 14, 2002
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William R. Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council.
The October 14 issue of Business Week featured an excerpt from a new book filled with old sophistries: The Politics of Fortune: A New Agenda for Business Leaders, by Jeffrey E. Garten (to be published by Harvard Business School Press). Garten is dean of the Yale School of Management and was Undersecretary of Commerce for International Trade in the first Clinton Administration. Appearing just before Congress took up a resolution to give President George W. Bush authority to use military force against the regime of Saddam Hussein in Iraq, the article was titled, "A Foreign Policy Harmful to Business?"

Garten's theme is that in the wake of the September 11 terrorist attacks, the Bush administration has fallen under the influence of "hard-line nationalists," who will slow the pace of economic globalization, which Garten sees as the hope for world harmony and international law. He argues, "Only one group has the experience, the knowledge, the perspective, and the clear self-interest to provide some countervailing influence to the dangerous ways that Washington is throwing around American military power - and that is the nation's top business leaders."

The American public does not, however, place much faith in the opinion of corporate leaders on matters of high policy.  Even before the current wave of financial scandals, there was reason to believe that the self-interest of those engaged in Big Business worked against any ability to think in terms of the national interest. Too many corporate leaders have announced in recent years that their firms are no longer identified with, or loyal to, any particular country.  Big business has gone from being multinational to being transnational, belonging only to "the world."

Over a century ago, Teddy Roosevelt noted this weakness in the business class when he wrote, "There are not a few men of means who have made the till their fatherland, and who are always ready to balance a temporary interruption of money-making, or a temporary financial and commercial disaster, against the self-sacrifice necessary in upholding the honor of the nation and the glory of the flag."

TR was disparaging the very type of corporate leader that Garten wants to enlist in globalization's cause.  Garten asserts, "CEOs ought to be talking about the real world, where sovereignty is waning."  Yet no government, and certainly not the government of the world's leading power, should accept the notion that its sovereignty is waning - nor should its citizens, whose long-term well-being depends on the success of the nation state in which they live and work.

The point of view favored by Garten has gotten a considerable hearing, more than it deserves.  Certainly some of the early criticism of President Bush's policies from within the Republican Party came from those associated with the business wing of the GOP, in particular House Majority Leader Dick Armey, a former economics professor who constantly expounds the ideology of business liberalism.

Business leaders played a major role in directing U.S. foreign policy in the 1990s. Garten himself discussed this in his 1997 book, The Big Ten.  The Clinton administration changed its approach to China under pressure from business. As Garten wrote, "I saw no issue which raised more concern and emotion in the business community than the tying of trade to human rights in China."  This concern went beyond the human rights issue to corporate opposition to any return to 'Cold War' policies aimed at containing an expansionist Beijing.  The transnationals want nothing to jeopardize their investments in China.  The U.S. Chamber of Commerce has even been sponsoring tours of major American cities by the Chinese ambassador, where local elites are treated to Beijing's views on major international topics to promote "understanding."

This commercial engagement policy was to be applied everywhere, from China to Cuba. There was a strong push, backed by well-financed corporate lobbying groups like USA*Engage, to lift economic sanctions even on Sudan and North Korea.  Iraq was to be brought onboard as well, with a push early in the Bush Administration by Secretary of State Colin Powell to lift many of the economic sanctions on Baghdad and provide more oil money to Saddam's regime for 'civilian' use.

But not a single "rogue" state has changed its ways as the result of this policy.  And there is reason to believe that change was never expected, nor, given Garten's stand, even desired.  All the global corporations want is the removal of geopolitical constraints from their pursuit of private profit.

By presenting globalism and nationalism as contending principles, Garten unwittingly makes the case for the superiority of the latter as the basis for U.S. policy.  He writes, "We can afford to import far more than we export only if we can continue to borrow a billion dollars a day from foreign sources. Up to a quarter of our economic growth depends on exports....Our high level of productivity reflects sophisticated just-in-time global logistical systems. Our defense capabilities are heavily tied to the importation of electronic components from Asia." Such a litany of vulnerabilities should prompt this question: How did the United States allow itself to be placed in such a dangerously dependent position?  The answer is that national policy was abandoned, and under the rubric of "free trade" turned over to private corporations whose leaders have quite literally sold out America.

Garten fears that "with nationalism winning the day," there will be a rise in protectionism "led by escalating tensions between the U.S. and Europe over export subsidies, steel, agriculture, genetically modified food, and privacy regulations." In addition, Garten believes, "An increasing number of governments, beginning with most of Latin America, will reject policy prescriptions designed in Washington and on Wall Street."  These are not predictions of the future, but descriptions of current events.  Strife is the nature of the real world.  Just as 9/11 was a wake up call for the United States on security issues, the Bush Administration needs to expand its awareness of the economic assaults on America from overseas.

The liberal dreams of the 1990s were never a reality, but unless economic and security policies are brought back into sync along nationalist lines, the next few years could be a nightmare.

William R. Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council.