THE SHIELD OF ACHILLES

by Bobbitt, Philip

  Prior to the famines, Asian business combines of hitherto unimagined size dwarfed all other enterprises in other countries. The largest twenty banks, the largest seventy-five corporations, the largest fifty trading companies were all Asian. This figure hid the fact, however, that intra-Asian competition was more cutthroat than ever before, with savage competitive tactics that, in an effort to gain market share in the consuming West, had led to falling living standards in Asia despite the fact that these had been the fastest-growing economies in the world. The intensely aggressive policies of these states—ruthless market penetration through price-cutting combined with heavily regulated imports of capital and goods—gave them trade surpluses and made them creditors but did not raise living standards. Child labor appeared more broadly in the world, moving into the developed states, which had not seen such practices since the early decades of the previous century. Moreover, greater investment was being diverted into military uses, as each of these states began to fear domination by one of the others when tensions rose out of fierce economic com-etition.

  Among world business leaders, there emerged a consensus that would have surprised many of the businessmen of the twentieth century: all three state models were rejected on essentially ethical rather than economic grounds. The entrepreneurial model, because it emphasized personal rights at the expense of personal responsibilities, led to a kind of libertarian anarchy. The managerial model induced in the peoples of the countries in which it reigned a torpor and dependence on the welfare state that produced a youth culture of drug abuse, birth rates so low as to be practically nonexistent, and ubiquitous vandalism. The mercantile model had proved too competitive, too national to apply even to a handful of states in the same region—much less to all the developed and developing states. This model turned out to work best when it took advantage of a stable international set of rules on which it could act as a free rider, but it had had the effect of dissipating the very system on which it was parasitic.

  In the year 2004, the chairman of the largest of the American investment banks gave an address to a group of international executives. It was widely reported and eventually took on an iconic status, though at first its impact was largely owing to the novelty of an American executive thoughtfully comparing the entrepreneurial and the mercantile market-state models. He said:

  For the past fifteen years I have been calling for the establishment of an ethical state with a concrete plan for change. The policies pursued by Japan and others have succeeded in achieving the objective of social prosperity; this sense of cohesion is something we seem to lack here in the multicultural United States. We have learned, however, to live and let live in our society, even if this has meant a little distance sometimes. Now we must adopt a principle of “kyosei”—of living together in harmony and interdependence with the other peoples of the world—and commit ourselves wholeheartedly to this purpose… We have learned that governments matter, not as a source of welfare benefits, but as the provider of key elements of infrastructure such as education and primary scientific research, and the enabler of societal changes necessary to take maximum advantage of new opportunities. Now we are learning that government also matters as the legitimate arbiter of those decisions we are unwilling to leave to the market, decisions which those new opportunities have set before us.22

  This criticism of the entrepreneurial model from one of its most successful advocates stirred many. That same year the first of the gene-tech scandals occurred: a series of gene manipulations by computer-assisted technology that went awry and produced horrifying birth defects. When serious weather-induced food shortages began to appear the following year, there was widespread suspicion that these too were the result of corporate experiments with computer-guided weather control systems that had misfired. Although this was never actually determined to be the case, the public's outrage and fear gave immense momentum to movements that sought to reinvigorate the political dimensions of the state. The speech was thought to have prophesied something of what had happened and its call for an “ethical state” was renewed.

  One unusual element of that speech was the call for a greater role for the corporation and for business leadership generally. “Today,” this corporate leader had said, “there is only one entity whose effort to create stability in the world matches its self-interest. That entity is a corporation acting globally. In the increasingly borderless world created by the microchip, politicians and bureaucrats will not be the ones to turn to for guidance. It is in the nature of politicians and bureaucrats to serve one country. But global corporations can only do business in a peaceful and stable world.”23

  This might have been the most controversial part of the speech; after all, the “gene-tech” scandals and weather-induced famines had called into question the accountability of global corporations. Some corporate leaders might truly act on the assumption that their business enterprises were responsible to their “customers, their employees, and society,” but most thought they were solely responsible to their shareholders. In fact, it wasn't clear that most managers would know what to do if such a broad social responsibility were given to them. They were not politicians or lawyers. Government leaders only knew one way—the way of the nation-state—to make corporations accountable: this was through law and close regulation. Corporations that could pollute the gene pool and precipitate mass migrations by manipulating the weather were hardly to be trusted. On the other hand, absent a culture of trust, there could never develop the long-term relationships of stability and responsibility that seemed so lacking in the states of this period.

  In many countries there were riots against the offices of multinational corporations; some firms hired private security forces that grew until they were private militias. Most states were too weak to prevent this development; others had already privatized police and even core military functions, so that the line between the security force protecting the corporate headquarters and that protecting the seat of government was blurred.

  The principal transforming event, however, was the famine. The collapse of an international effort by governments to save the worst-hit areas from mass starvation—evoking the disillusionment of citizens in relatively prosperous areas who began to fear for their own well-being—was replaced by an international consortium of business firms who levied a kind of tax on their customers—really a price surcharge on their products—to finance food aid. This consortium turned over its operations to government agencies when the crisis had passed. There is little question that millions of lives were saved. This enhanced the credibility of multinational corporations generally, even though suspicions persisted in some circles that the weather changes had been artificially induced. Nevertheless, investigations, including an antitrust prosecution for the price fixing by which the famine funds had been raised, proved fruitless and were widely unpopular.

  When the United States and the E. U. were able to negotiate a huge revaluation of the yen in order to improve their trade deficits, they found that the purchasing power of Japanese multinationals had skyrocketed and that the largest corporate taxpayers, as well as the largest equity holders, were now Asian companies. It was as if these companies had bought the real assets of European and American states through a kind of novel lease-purchase—lending to finance trade deficits and then, through the revaluation, converting those liens to ownership. This too, however, had the effect of strengthening the move to give a political role to the multinational corporation.

  By 2025 an informal code of conduct was developing between international business and market-state governments. Those governments that were able to enhance stability while maintaining an open intellectual environment became magnets for investment. Measures such as income supplements to enable families to care for their elderly relatives, property tax breaks to encourage longer periods of residence in a single community, and invigorated libel and consumer protection laws all tended to impede market growth; but they also contributed to the citizen's sense of well-b
eing, his sense of place in the environment, and his growing assumption of responsibility. These factors tended to increase trust, which lowered the burden of legal regulation—greater delegation and discretion replaced rule making and litigation—and thus enhanced market growth by lessening transaction costs. Here the computer was indispensable, because informal networks alerted consumers to the activities of responsible corporations as well as facilitating ad hoc “communities” centered on common problems. These developments tended to raise citizen confidence that the society was able to respond to social problems and that society's members were willing to take responsibility for addressing these problems.

  These structural adjustments did much to ameliorate the worst excesses of the market. Informal business codes enabled corporations to isolate and shun other businesses that failed to act in the long-term interests of the communities they served (including large wage differentials between managers and workers) and the instant information provided by computer linkups gave consumers an enforcement mechanism to supplement business pressure. But these adjustments did little to resolve issues of social justice and group identity. Many persons felt stifled in The Garden that emerged from this process of business-led harmony. While crime as a whole lessened in the developed market-states, partly for demographic reasons, the lethality and intensity of criminal acts increased. Millennial cults grew up even though the millennium had passed, and in 2030 the first of a series of computer plagues struck the infrastructure of the developed world. The world saw the first hostile use of a nuclear weapon since 1945 when an Indian religious cult devastated the financial center at Bombay by poisoning its water supply with radioactive isotopes stolen from a lab.

  At the same time, corporate-led international policy was more successful in the developing world where its innovative system of institutional “tithing” was coupled with the business codes' emphases on environmental protection as a basis for developmental aid. Corporations could direct capital investment to those states committed to sustainable development and deny capital and expertise to states determined to despoil their own environments in an effort at too-rapid growth. What was lacking, as evidenced by the soaring levels of crime in these countries, was the mechanism for political cohesion. The market-state had survived by bringing international business leadership to bear on interstate problems and the society of such states was stronger for this move. But the State still had difficulty regaining its position as legitimate social arbiter of those moral and political questions to which business was indifferent, and for which an international institution, like the multinational corporation, was too acultural, too ahistorical to replace the State.

  Nevertheless the new market-states of this era—roughly 2012–2030—had successfully used the business corporation to introduce decentralization and individuation into government, supplementing the role of citizens, who could only act in groups, with that of individual consumers, who acted individually and instantly. Historians looking back on the period between 2000 and 2050 will surely debate which of several factors was responsible for the sustained worldwide economic growth of this period: the technological breakthroughs of superconductivity and laser-fusion and gene modification; the spread of new and successful managerial techniques for both firms and countries; falling populations and a fall in the price of raw materials; a changing leadership that moved multinational corporations into a higher profile in providing transnational political direction; unexpected and heartrending events that exposed the lack of common ground among groups in the pitiless market-state. Much of the credit, however, must go to The Garden itself, which brought forth business leadership at a crucial time.

  CONCLUSION: THE THREE SCENARIO SUITES

  It is tempting to read these small narratives and conclude that there is an optimum course for the society of market-states to pursue. On the contrary, these scenarios reveal instead that any choice burdens our values, for these values are both contradictory and incommensurable.*

  In The Meadow pressures from population growth were mitigated by high average annual economic growth. Cities, however, became scarcely livable. Elites thrived but the majority of persons were not better off and their prospects for social and economic security were constantly threatened. High migration was beneficial for both the sending and the receiving states, but ethnic heterogeneity threatened the cohesion of some states and communal violence escalated accordingly. The advanced countries largely solved their resource problems but they stressed ecosystems causing increased CO2 pollution, deforestation, the loss of species, and widespread soil degradation through their dietary demands for animal protein. The Meadow was an hospitable place for technological innovation, the diffusion and implementation of information technology, biotechnology, and smart materials. But most countries fell further behind because they lacked the education levels, infrastructure, and governance systems to exploit these technologies. And new technologies could also be destabilizing, empowering terrorists and criminals and accelerating the proliferation of weapons of mass destruction. As the chief advocate and beneficiary of globalization, the United States assumed world leadership in The Meadow, but a U.S. economic downturn sent other states into a tailspin, ultimately eroding support for the United States. The Meadow managed low-intensity interventions with characteristic inventiveness, but the risk of regional conflict in Asia rose substantially.

  In The Park regional integration increased rapidly, bringing robust initial growth. This growth was eventually diminished, however, by the effects of regionalism and protectionism. Growth within the developed states of The Park was less volatile than in The Meadow, and therefore more sustainable; furthermore, the benefits were more widely distributed within the leading societies of The Park, enhancing the quality of life for more persons. Nevertheless, increased regionalism resulted in irrefragable positions about markets, investment flows, intellectual property rights, and natural resources. The United States was confined to a single regional grouping, the Americas, which was neither in its interest nor that of the world, with which it ought to have had broader economic intercourse. International collaboration was reduced regarding terrorism, crime, cross-border conflicts, humanitarian interventions, and the proliferation of weapons of mass destruction, yet some national and international—though not global—institutions that had atrophied in The Meadow thrived in The Park. Regional identities sharpened political resistance to the United States and to U.S.-led globalization in The Park; this was reflected in the uneven absorption of new techniques in biotechnology. So long as the United States continued to develop cutting-edge military technology, there was no prospect of great power conflict in The Park, but there were far higher levels of internal and crossborder conflicts in developing countries. Diversity (through federalism) thrived, but true multiculturalism shrank.

  In The Garden, the seductive melody of withdrawal, almost isolation, contributed to U.S. disengagement in the world. Traditional national identities asserted themselves. Mercantilist competition strengthened the state while weakening global and regional intergovernmental institutions. As the United States withdrew its presence in Europe and Asia, China drove toward regional dominance, Japan rearmed, and the risk of great power conflict for the first time since the end of the Long War increased when the United States sought to reassert itself in Asia. Nevertheless, Korea was able to achieve normalization and unification. The cultures of emerging market-states were able to protect themselves from historical annihilation. The need for community, felt but ignored in The Meadow, was addressed in The Garden. Most important, the ability to develop business leaders who would take up the moral and political challenges abandoned by states was nurtured in The Garden, though scarcely tolerated in The Park and out of place in the entrepreneurial Meadow.

  Think of The Meadow as “A,” The Park as “B,” and The Garden as “C.” If we rank these approaches with respect to the security decisions taken in each scenario, A is preferred to B, which is preferred to C. That is, peace with s
ome justice (the protection of nonaggressors, for example) is to be preferred to simple peace (bought at the price of sacrificing innocent peoples), which is still preferable to a cataclysm that would destroy the innocent and guilty alike. Or perhaps we get B/A/C—no conflict is preferred to frustrating low-intensity conflict, which is still preferable to a high risk of cataclysm. In any case, we can agree that C (The Garden) presents the worst option for satisfying the world's security needs. But if we do the same sort of exercise with respect to the issues raised by the “culture” scenarios, preferring genuine pluralism to mere cultural protectionism, and yet preferring the protection of minorities to their marginalization, we get B/C/A. Or at least we get C/B/A, for some will feel that the protection of sanctified ways of life trumps pluralism. In any case, we can agree that A—The Meadow—is an inhospitable place for the serenity, continuity, and community that protect cultures. And if we conduct this same exercise with respect to the scenarios devoted to economic issues, ranking sustainable growth ahead of recovery, which is still preferable to stagnation, we get C/A/B. Or, if growth alone is our objective, we get A/C/B: the insatiable but impressive engine of dynamic, innovative risk taking is preferred to the methods of mercantilist competition. In any case we must concede that regional protectionism—the world created in the Park—is a sure route to high unemployment, slow growth, and the costliness (and uneven diffusion) of new technology.