telecommunications will continue to increase their share of world trade and
will be the most dynamic and profitable export area. This will result in
increased communications between people and the intermixing of cultures and
manufacture in the world. Telecommunications are a symbol of the Fourth
Civilisation and the main technological channel for its development.
Clearly telecommunications will continue to contribute to the
re-structuring of social life and the stimulation of growth, the opening-up
of the world and the linkage of millions and billions of people. The main
integrational effect will be the linking of the new communications
technologies to televisions and computer technology. The American media
group "Time Warner" has already developed and begun to market the first
digital interactive television network in the world. Their "Full Service
Network" permits its subscribers to carry out banking operations from home,
to receive information about products, services and events, to buy and to
order and to see new films etc.. Consumers' choice is guaranteed. However,
at the same time, this allows the television companies to guarantee their
monopoly of the market. Whatever happens in the future, there is little
doubt that telecommunications will continue to expand their share of world
trade and be a key factor in economic development and structural and social
changes. Together with world finance which has developed as a result of
improved world communications, telecommunications will continue to be the
most attractive area of the world economy. The Internet has allowed tens of
millions of people over the entire world have become part of a single
network of communications and access to information. Computer networks will
lead to revolutionary changes in finances, trade and manufacturing.
Despite certain serious predictions concerning a fall in profits from
manufacture and sale of aeroplanes[56], I believe that all modern
forms of transport will continue to grow dynamically. People of different
races, ethnic groups and cultures are coming closer to one another, running
to embrace each other. They are beginning to realise how useful it is to
travel together and to meet and use the experience of others.
The conclusion which seems to suggest itself is that the branches of
the Fourth Civilisation (telecommunications, finances, services, computers,
information technology, transport, services etc..) have made life more
integrated and are a product of the new inter-dependency which is required
by humanity. The process will not stop here. On the basis of these key
branches of the New Civilisation, still more, newer, branches will be
formed. Television and telephones will spur the creation of new audio-visual
telephones. Paging systems and mobile telephones will become cheaper and
will allow parents to have more control over their children and to gain
information from their teachers. Doctors and policemen will be called to
where they are needed. This will change politics and management. It will
ease and change ways of voting. There is already software available for
conducting trade over the computer with full legal support.
In ancient times peoples were separated from one another by years of
travel. In the Middle Ages the distance shortened to months. In modern times
distances can be covered in days. In the New Civilisation the whole of
humanity is connected within hours, minutes and seconds. I recently had to
fly from Sofia to Honolulu by Lufthansa and United Airlines. I covered the
distance in 15--16 hours. Twenty time zones to the other side of the globe
in 16 hours! I am convinced that in the Fourth Civilisation people will be
able to circumnavigate the world in less time. Despite the opinions of
certain sceptics I am sure that transport will continue to improve and
develop with leaps and bounds. This applies to car manufacturing, aeroplane
construction, shipbuilding and certain other completely new forms of
transport. This will also provide new prospects for world economic growth.
New technologies will continue to stimulate this growth and the dynamic
processes will never stop despite the critics who believe that the computer
and audio-visual market are already satiated. The limits of high technology
growth and integrational products have not yet been reached.
It is not certain whether this growth will dominate the world economy
as a whole. It is most likely that the next 10--20 years will be years of
technological progress but also slow reconstruction. The lack of
manageability and even elementary order within the world economy means that
it is not clear which of the two will gain the upper hand.
Above all this requires the replacement of old industrial production
with new technology, a process which has been in progress for the past 15
years. This process, however, should not be perceived as the elementary
replacement of the "factory chimney with the computer", as some philosophers
believe. The old industrial sectors (metallurgy, chemicals, machine tool
engineering, energy production, transport) will be partially reconstructed,
partially relocated to the lesser developed countries for the sake of
cheaper labour and the lack of environmental pressure groups and opposition.
One only has to look to see what is happening with the automobile industry,
machine tool production, electronics and the electronics industry and
chemical production. Everything now involves new high technology and
computers. In modern automobile construction as much money is now spent on
new electronics as on improvements to engine design. The new generation of
aeroplanes, "Boeing" and "Airbus" are practically operated from the ground
taking off and landing using electronic equipment, while the pilots fulfil
mainly regulatory functions. The chemical industry is re-orienting itself to
new, environmentally clean technology and hitherto unknown products. The
construction industry is investing more and more in new highly resistant
materials. Just as in the 19th and 20th century the industrial revolution
lead to revolutions in agriculture without replacing it, the new technology
of the New Civilisation will revolutionise industrial technology and will
change their essence but will not destroy it. Development does not allow for
absolute rejection. Revolution itself always means the addition of the new
to the old and its transformation. It has been interpreted in other ways in
history, but that was just destruction.
The second very important area in the restructuring of the world
economy, in my opinion, is the huge process of the geographical
re-distribution of world production. Today, the citizens, trade unions and
politicians in Bavaria and California are concerned about the re-location of
manufacturing facilities to the countries of South East Asia and Latin
America. Millions of people are suffering as a result of the reduction in
military production, as is the case in California. This fact cannot be
ignored, but this is only the beginning. The modern geographical
distribution of world production was formed at a time of colonial power and
consolidated during the bi-polar world. Given the new world conditions of
the Fourth Civilisation, things will have to change out of all recognition.
As paradoxical as it may sound even the direction of investments will have
to change. Amongst the favourites are the countries of South East Asia. The
export of manufacturing potential from North America and Europe will expand.
This will consist mainly of those products which can be easily adapted to
the new technologies and the constant increase in the cost of labour in the
industrialised countries. Finally, the advent of the New Civilisation will
be accompanied by the closure of a number of manufacturing processes. This
process will be more intense than at any other time during the whole of the
20th century.
Whether we live in New York, Tokyo, Belgrade or Dakkar we are living in
a state of transition between two civilisations. This is a technological
transition, a transition in the nature of economic development. New
manufacturing sectors and products will come to the fore. The distinct
division between intellectual and physical labour and the manufacturing and
non-manufacturing sector will disappear. This is indisputable and supported
not only by P.Drucker but also by the chairman of the majority in the US
Congress N.Greenwich.
The state of change is indeed similar to that which existed at the end
of the 18th century and the beginning of the 19th. Let us hope that the
consequences for the people of the world will not be as dramatic as they
were then. During the processes of industrialisation millions of people were
thrown out onto the streets or transformed into factory slaves. The
developed societies were divided into classes causing huge social unrest.
Today the experience of the past and the bitter lessons of the 20th century
provide us with the hope that the great changes in technological and
economic growth will not inevitably lead to chaos and social strife.
3. WHO WILL DOMINATE THE WORLD ECONOMY
Recently, everyone has been trying to convince us that the three
economic centres -- the USA, Japan and Europe dominate the world and that
the technological and financial power of Japan will replace the economic
power of the East. I do not believe in these prospects...
D
uring the Third Civilisation the power of countries was determined by
their military and political power. This was based on economic strength but
was not always the most decisive element in the consolidation of power of
one country over another. The Ottoman Empire was not more advanced
materially when between the 13--16th centuries it conquered one third of
Europe as far north as Vienna. France under Napoleon the 1st was no stronger
economically than the rest of the countries in Europe but managed to conquer
with better military organisation and leadership.
The Fourth Civilisation precludes the military resolution of conflicts.
The achievement of nuclear parity and the nature of nuclear weapons makes it
absurd to wage nuclear war. This is also true conventional conflicts as
well. Let us take the example of the war in Bosnia. There have been over
200,000 deaths (perhaps many more), the complete destruction of industry and
infrastructure, valleys of blood and violence. The war ended with the
signing of the peace accord in Dayton, USA which brought the sides back to
their starting points. The reason for such absurdities is the potential
possibility of the mutual neutralisation of the nuclear powers and their
influence on the smaller warring countries.
I begin this chapter in this way since in the 1960's and 1970's when
nuclear parity was achieved a "new concept" of world economic domination was
born. There are still people in a number of countries who believe that the
USA or Japan can play the role of a world economic super power. In the 20th
century many countries have aspired to such a role but all of them lost in
the long run. I believe that today on the basis of the laws of human
development the imposition of economic domination by one country or a group
of countries over the rest can only be a temporary state. In the context of
globalisation the economic levels of the countries of the world have begun
to level out. This process can only be stopped by political coercion or the
isolation of countries from each other. In the civilisations which have
existed up until now, nations began their development in different climatic
conditions and with different resources. In the 19th and 20th centuries
these same nations began to realise how wide was the gap had grown between
them.
During the last 50 years a series of processes began to take place
within the heart of the bi-polar model which proved that economic domination
from an historical point of view is purely illusory. Let us take as an
example the most powerful institutions of the world economy, the
trans-national corporations. Immediately after the Second World War the
American corporations were the undisputed dominating forces of the world
economy and only a group of British companies managed to upset their
hegemony. In 1962 of the 500 largest companies in the world, 300 (with a
total product of 365 billion dollars) were in the USA and 200 (with a total
product of 174 billion USD) in other countries. Today this picture has
changed beyond recognition. In 1992, of the 50 largest industrial companies
in the world, only 14 were in the USA, 13 in Japan, 2 in the U.K., 7 in
Germany, 3 in Italy, 5 in France, 2 in South Korea etc.. This trend will
continue. We can expect a serious increase in trans-national companies from
Germany, Russia, South Korea, Brazil and also a number of smaller countries.
The process of levelling will take place slowly. This is the inevitable
result of the opening and expansion of the world market. In contrast to 40
or 50 years ago, today investments, manufacturing processes and goods are
being exported everywhere it is economically viable to do so. At the
beginning of the new technological revolution in the 1970's and 1980's
investments were directed at the most developed nations which had educated
and well-trained personnel. I believe that since the 1990's a significant
part of the world investments will be redirected mainly to some of the new
"dragons" of South East Asia, Australia, China, Latin America and, given
greater political stability, Eastern Europe.
Similar changes are taking place in the commodity and stock markets.
Only a few years ago the stock exchanges in New York and London were
dominant. Today the Tokyo stock exchange has changed all that and is now
quite convincingly the leading stock market in the world. There has been a
gradual, almost invisible process whereby the new financial markets have
developed. This will lead to the re-distribution of the economic power and
new hitherto unseen trends.
Until the end of the 1980's and in particular during the period of the
Cold War, the major criterion for political and economic power was still
closely associated with the military and armaments industry. If the positive
trends of world development continue economic power will depend more on
technology, information and resources and will guarantee the future of
promising industrial sectors. This will lead to the re-determination of the
power and wealth of the countries and nations of the world and their place
in the global division of labour. The new technologies will not permit
monopolisation. They will guarantee advantages for the countries which
possess them only until they are mastered by other countries. High
technology in the modern world is being spread via the trans-national
corporations and the activities of governments.
Japan, despite its world domination in the development and production
of new technology is also a major exporter of high-tech products and
know-how. In South East Asia and Latin America there are number of
production facilities with the most modern telecommunications technology.
Competition between the trans-national corporations is the main reason for
this. I believe that this is in principle impossible for technology and
information to be monopolised in the aims of the domination of certain
countries over others especially in the context of the modern scientific and
technological revolution. The New Civilisation will still maintain the trend
of the free movement of technology and information.
The direct result of this is the formation over the past 30--40 years
of a new global distribution of manufacturing and technological priorities.
Each of the developed countries to a certain extent have found their market
niches and has established itself in world export. For example at the
beginning of the 1970's the USA exported 77.5% of world aeroplane
production; 44.1% of organic chemicals; 55.9% of office equipment; 35.2% of
computer technology; 39.3% of industrial refrigeration; 35.8% of grain and
37.1% of steel export etc.. In 1985 Germany accounted for 23.2% of world
automobile export; 19.8% of plastics; 51.5% of rotary printing presses;
32.4% of synthetic organic dies; 34.1% of packaging equipment; 30.4% of
textile and leather processing machinery. In the same years, 1985, Japan
possessed 30.8% of world automobile export; 37.5% of lorries and trucks;
80.7% of televisions and tape recorders; 82% of motorcycles; 62.2% of
cameras and video-cameras; 55.7% of microphones and amplifiers; 37.9% of
peripheral electronic equipment and 31.7% of tankers etc.. It is interesting
that during the same period a number of smaller countries achieved
significant levels of long-term exports. For example Sweden accounted for
41.7% of the world export of paper and boxes; 17.2% of centrifuges; 15.5% of
sulphate cellulose. The Swiss accounted for 45.1% of textile looms; 34% of
wrist watches; 25.3% of synthetic dies and 20.6% of
herbicides.[57]
Another criterion is the state of the available natural resources in a
given country and whether they can exert influence on the power and strength
of countries and their role in the world economy. The freer the exchange of
goods, services and labour the more open countries become to each other. In
this case the power of countries will be determined by their total national
wealth based not only the existing manufacturing facilities but also on the
available natural resources. On the basis of this logic, in September 1995
the World Bank published an analysis of the ecologically sustainable
development and the natural resources of the countries of the world.
Accordance to their classification of the available national wealth per head
of population (table 9) Australia came out in first place followed by
Canada, Luxembourg, Switzerland and Japan.
The USA was quite far down the list in 12th place and Germany in 15th.
Other countries with enormous reserves of natural resources such as Russia,
Brazil, Argentina and others are outside the classification due to their low
levels of existing production facilities and human resources. The
methodology of the World Bank is flawless: resources are of benefit when
there is an adequate material base and human resources. On the other hand,
those countries who do not have such resources will have to pay for them and
to compensate for the inequity with more labour and technology.
Table 9
Classification of the 15 leading countries on the basis of national
wealth
per head of population.
State
Wealth per head of population
Sources of national wealth %
population
capital assets
natural resources
Australia
Canada
Luxemburg
Switzerland
Japan
Sweden
Iceland
Qatar
UAE
Denmark
Norway
USA
France
Kuwait
Germany
835
704
658
647
565
496
486
473
471
463
424
421
413
405
399
21
22
83
78
81
56
23
51
65
76
48
59
77
62
79
7
9
12
19
18
16
16
11
14
17
22
16
17
9
17
71
69
4
3
2
29
61
39
21
7
30
25
7
29
4
Source: World Bank, 1985
These figures show the constant increase in the number of countries
with an established position in the global division of labour. There are at
least 30 countries with a high level of economic potential and another 60 or
70 with the potential to join them in the next 30 or 40 years. Most
significantly, in the current situation no one country can impose a monopoly
on another. The USA, Europe and Japan are inter-dependent on each other.
Their mutual dependence is unilateral and is not only between the three
established economic centres. As a result of structural reforms in the world
economy, there is a whole group of countries aspiring to reach the levels of
the top three and as a result of narrow specialisation and resources they
will soon catch up with them.
Is it then true that economic power will move from the USA and Europe
to Japan? A number of academics seem to believe this. I believe that this is
possible but that it will be a short-term and limited trend. The reason is
that the global market is now strongly influenced by significant market
forces which are capable of balancing out the economic levels of the
country. Only with strong protectionism or as a result of political
cataclysm will one country or another be able to reach a situation of
monopoly or privilege. During the entire period of the 20th century only as
a result of political and military conflicts has one or a group of nations
been able to establish such a position of privilege which has transformed it
into a political force.
This time is over. No-one any longer recognises the legality of
protectionism or uses political arguments in the resolution of ordinary
economic issues. The choice is great and the competition offers better
alternatives. Manufacturers and merchants in the whole world are forcing
their governments to remove prohibitions and limitations. There is a number
of cases where the opposite is true, for example the European agricultural
policies and the limitations on import into Japan. However, no-one can be
convinced of the strategic benefit of such policies. The Fourth Civilisation
offers simultaneously the gradual approximation of economic levels and the
creation of similar, equitable conditions for economic activity and the
mutual conditionality of these two processes. The 20th century opened the
way for this process which is irreversible whatever difficulties the
transition might bring.
Despite the influence of Japanese commercial, manufacturing and
investment expansion and despite the fact that in the 1970's and 1980's
Japan was the most dynamic economic force in the world, I believe it will
not be remain single most powerful leader of the world economy. The economic
dynamics of South Eastern Asia will continue but this will give rise to a
reverse wave of investments to other regions and countries. It is true that
in the last 15 years the USA has lost a part of its share of the world
market and Japan has increased its market share by 15%. The American share
of the heavy machinery market has fallen from 25% to 5% in 30 years while
Japan has increased its share from 0% to 22%[58]. However, even
this cannot convince me that this process will continue to develop
unilaterally and that the Japanese economy will dominate while the American
economy will flounder as this was once predicted by the former director of
the European Bank, Jacques Atalie.
I am writing these lines early in the morning in perhaps one of the
least American and the most Japanese of the United States of the America. I
can see through my window the waking lights of the beautiful capital city
and perhaps one of the most beautiful places in the world. My first
impression is that the atmosphere is mainly Asian and in particular
Japanese. Only the liberal spirit of the USA could allow for the mass
concentration of Japanese, Chinese, Korean and Vietnamese influences in a
single, albeit island, state. It is here that I can understand the arguments
in favour of another type of thinking, that the majority of the older Asian
immigrants as well as the new arrivals consider themselves to be Americans
or at least citizens of the world and that Honolulu has become a bridge
between the USA and Japan and that it is such bridges which create a
balanced market.
Japan and the smaller Asian "dragons" cannot become the masters of the
world. However, they have indisputably destroyed the economic, technological
and financial monopoly of the Atlantic countries of the USA and Europe. They
have created conditions for a completely new distribution of world
manufacturing production and hitherto unknown geo-economic structures. In
the 19th century Britain and France and eventually Germany dominated the
world. During the first half of the 20th century the USA and the USSR caught
up and eventually became the world leaders in a bi-polar world. Between 1960
and 1990 Japan indisputably became a member of the family of the world
economic leaders and this list will continue to grow. There are at least
another 5 or 6 countries in the next 20--30 years which will win significant
economic positions and will find their niches in the world market, balanced
between the old leaders. At the end of the 20th century and clearly at the
beginning of the 21st century the stimulus will continue to come from Asia
-- not only from Japan but also from China where the growth rate at the
beginning of the 1980's deserves admiration, from Australia whose resources
and its "bridge" policies between the USA, Asia and Oceania have given it
tremendous advantages and from Indonesia and the Philippines which are also
making strong progress.
There are good grounds to expect that at the beginning of the 21st
century the more powerful Latin American economies will also begin to move
ahead beginning no doubt with Brazil. If they achieve political stability
and a balanced process of denationalisation then a number of Eastern
European economies will also begin to make progress. Russia with its
colossal, untapped resources will also begin to play a serious role.
I am leading to a statement of my opinion that further economic growth
will of necessity require the removal of economic monopolism. Despite the
ambitions of dictators, selfish politicians and militant ideologues the
globalisation of the world has not lead to the economic domination of one or
two countries or individual governments. At the end of the 20th century
there is also another clear growing trend which will be predominant in the
New Civilisation. I could call this "economic polycentrism" or in other
words, the trend towards the re-distribution of economic power and strength
between a larger number of countries with the gradual involvement of new
ones. It should not be considered that such a trend towards economic
polycentrism will summon in a "glorious future". There is not a single
country (or group of countries) which can independently control global
finance, natural resources or the markets. There is no one country which is
in a condition to force the others to follow it. Directly after the fall of
the Berlin Wall the theory of the "responsibility of the single super power"
become popular. Some people in the USA between 1991--1994 developed this
idea, combined it with the American dream and tried to establish a complete
doctrine on this basis. Fortunately, the majority of American politicians
and the majority of American intellectual elite have realised that this
concept is unreal and have rejected it. During my many meeting with American
politicians and diplomats in the State Department of the USA between
1995--1996 I became growingly aware of the rejection of this idea but also
of the impossibility of this task from the point of view of finances and
resources. The experience of the USSR and the USA during the last 50 years
has shown categorically that to take on the role of a world super power to
defened the sovereignty of the remaining states means to take on an
unsupportable financial burden. The collapse of the USSR and the growing gap
between the USA and Japan are to a large extent due to the burden of
military expenditure.
Polycentrism is at the root of world economic development and at the
root of democracy. It is a counter-trend to the experiences of imperialism
which has dominated world politics for the last 150 years.
4. IS THERE A NEED FOR GLOBAL ECONOMIC REGULATION?
If the global economic world is becoming more polycentric is there not
a danger of permanent chaos? Is global economic regulation a way to avoid
it...?
T
he new civilisation which humanity is entering is the antipathy to
imperialism. Instead of the super powers and the great powers of the Third
Civilisation the main trends of the Fourth Civilisation are polycentrism and
the possibility for an increased number of countries and people to
participate fully in the international division of labour. The mutual
dependency of the countries and state leaders make this process sustainable.
To this we should add one more element which was discussed in chapters five
and six, the transfer of a significant portion of the economic power of the
nation state to corporations, companies and individuals or, in other words,
organisations and the civil society. The combination of these two processes
has lead to great changes in global economic structures but has also posed a
number of new questions of principle about world development in general.
During the past four or five hundred years everything seemed to be clear:
all dependended on the state and their monarchs or leaders, later
governments and parliaments. Today things have altered significantly. The
multi-national corporations control the major processes of the global world
and more and more people including political leaders realise that this is
the case. The lack of correspondence between globalisation and the
nationally organised activities of governments could lead the world into
serious new crises as was discussed in chapter three.
If politicians are aware that they are losing their grip over power and
realise that they cannot guarantee their election promises to their
electors, what should they do? The most logical solution would be for the
large international companies to assume national responsibility for all
their activities and to be put under some sort of legal control. This should
also extend to the investments of large sums of money abroad. Such
experiments have been made and will continue to be made. The results are
usually disastrous since they lead to the "closure" of the national economy
depriving it of any possibility to rationalise its manufacturing industry.
If any particular government or parliament imposes limitations upon
companies which are acting within their jurisdiction, then they will simply
leave the country and will find other more accommodating partners and
patrons. Experiments to impose limits on the movement of capital or to
impose direct influence on the management of corporations in modern
conditions is doomed to failure. Such methods are within the arsenal of the
outgoing civilisation.
So there remains another possibility, the creation of an adequate
system of global economic regulation. The aim of this new system is to form
common economic conditions and regulations for the activities of all
economic subjects operating within the global market. I am convinced that
sooner or later such a system of global regulation will become a reality.
History cannot be halted. It is not possible to turn back the trans-national
corporations upon which so much of modern progress relies, nor is it
possible to delay the progress of globalisation which is stimulated by them.
Progress means the establishment of a new world economic order based on
the common global rules of the game. Years perhaps even decades will pass
before such an order is established but even today the need for it is
evident. This is the only guarantee against the threat of a return to
imperialism, the widening of the gap between the poor and the wealthy
nations. One must be aware of two possible misconceptions, firstly, that
there is a need for the creation of a united world government and secondly,
that the role could be fulfilled by the United Nations. Undoubtedly, the
generations which will live through the second half of the 21st century or
later will find some solution to the matter of a world government. Today,
however, this is still a Utopia and not only because it will be derided by
the vast majority of politicians but because nation states have not
exhausted their functions. For this and many other reasons the UN cannot
take on the responsibility of global governmental functions.
Globalisation which is being propelled by the multi-national
corporations and new technology presupposes the gradual development, above
all, of a new world economic order. The quicker this takes place, the sooner
humanity will enter a new, more mature stage of its development.
When after the Second World War the Brenton Woods system was
established, governments bore the complete responsibility for the management
and movement of monetary flow. The medium and long term transfers of capital
were managed by national governments and the international finance and
currency organisations. In these conditions fixed exchange rates played an
important role as a stabilising factor and the International Monetary Fund
complemented the role of the central banks as a reserve fund. This system
functioned for three decades.
The main reason for the end of the Brenton Woods system was that as a
result of the turbulent development of world trade, the majority of
international liquid funds overflowed beyond the limits of the nation
states. This mass of funds increased by such a huge amount that the volume
of international currency speculation began to overtake the volume of trade
in goods. In such a situation the world stock exchanges became a
significantly more influential factor than fixed exchange rates. With the
transition to floating exchange rates the world entered an intermediate
state. The abilities of the national governments to "manage" their economies
independently became significantly hampered. This was a state of "paradise"
for the trans-national corporations and world financial players. The world
has lived with this system now for more than twenty years. I can now
categorically say that this system based on floating exchange rates,
enormous levels of currency speculation and the uncontrollable growth in
government borrowing can last no longer. We are sitting on top of a powder
keg as a result of the huge mass of money which is outside the control of
financial institutions. This system has created privileges for corporations
which possess large amounts of free money and those who exploit the
instability of the system to multiply their billions.
As an antidote to the present international practice of "liberalism" I
propose the logic of balanced development. This requires the creation of a
set of common rules for the movement of monetary flow, compulsory reserves
in the case of investments, stronger controls of "off-shore" zones and the
environmental responsibilities of investors etc.. Such measures will lead to
a reduction in interest rates which in turn will be of benefit to the weaker
nations and will lead to a re-direction of investments into the real sector
of the world economy. I do not know whether there will be enough willingness
or readiness on the part of governments and central banks of the largest
countries to carry out a common global macro-economic policy on the basis of
general agreements and long-term accords. The problems could be resolved by
the financial and governmental leaders of 7--10 countries and given the
current state of the world, the rest would follow.
The other possible solution would be to create a real World Bank which
would guarantee universal conditions for the exchange of currency and a
single global macro-economic policy. Such an idea, if it was supported by a
number of financial experts would have a revolutionary, radical character
and might be able to put a stop to instability. I am not convinced, however,
that at this stage the national governments and the central banks would
agree to such a step, although I, personally, am strongly in favour. The
majority of world financial strategists still hope that the Federal Reserve
System of the USA[59] and the central banks of Germany, Japan and
a number of other countries will be in a position to control the world
currency markets. During the past twenty years this has, more or less, been
the case. When the world financial markets begin to "hit below the belt" the
central banks of the major countries coordinate their activities to
intervene.
There is sufficient evidence to show that this practice is ineffective.
One only has to look back to the collapse of the US dollar against the yen
in 1995. This was a clear enough sign that the restoration of balance is
becoming more and more difficult and the powers of the central banks more
and more inadequate. This process is inseparable from the universal logic of
the collapse of the institutions of the Third Civilisation. First of all,
liberal international economic relations in the last couple of decades have
caused the increase in the strength of the "free" players on the world
financial markets and made their structures infinitely more complicated.
Secondly, the polycentralism of the world economy has brought many more
national currencies into the "turnover" of the world stock exchanges.
Despite the interest of many countries the dollar will no longer be able to
play the role of an international currency.
Consequently, there is little likelihood that the current system will
survive. It will be necessary to begin negotiations on the creation of a new
system of global economic regulation or to develop an entirely new World
Bank with similar regulatory functions. I believe that there will be more
and more support for the issuing of a currency which will be subject to
multi-lateral control and which could be based on the special issuing rights
of the International Monetary Fund or other forms of securities which could
be issued by a new World Bank.
The system of global economic regulation is an inevitable new feature
of the Fourth Civilisation. We shall gradually have to become used to the
idea of accepting universal standards of economic and human activities and
the formation of international courts which will resolve any conflicts which
may arise. These will be above all a series of environmental standards about
which the people of the world are particulary sensitive at the moment.
However, at the same time there will have to be new standards for the
payment of labour, social security and arbitration etc.. It is a shameful
fact that many of the trans-national corporations have moved their
production facilities to less developed nations to avoid pressure in other
countries. Recently a large number of workers in Ecuador appealed to an
American court to request compensation for being poisoned by pesticides
while working for an American company. It is not clear whether the American
court will be able to pass judgement on matters pertaining to foreigners
outside their jurisdiction. However, it is clear that the absence of
acceptable international standards and an adequate international court
system is a precondition for inequality amongst nations. What it cannot do
in the USA, an American registered company may do in Ecuador. There are
innumerable examples of such practice in our modern world of inequality.
One of the main aims of the system of global economic regulation will
be the increase of global savings with a view to the increase in the level
of investments on a world scale. The needs for investments in Asia, Eastern
Europe and Latin America are constantly on the increase. As a result of the
opening-up of the world and after the fall of the Berlin Wall the need for
investments will continue to rise until the end of the 20th century and the
beginning of the 21st. If the levels of savings reduce as they did in the
1980's, this will create extremely serious problems and will hold back world
development.
In general terms the system of global economic regulation is the
mechanism which will limit and will, eventually, put a stop to the processes
of the chaotic development of the world economy. This would provide a
stimulus to the development of many countries creating the opportunity for
the gradual balancing of the economic levels of the countries of the world
assisting in the formation of universal world criteria for economic growth.
Sooner or later this system will become reality. The problem is for people
to become aware of its necessity sooner rather than later.
5. VIVAT EUROPA AND THE DEATH OF THE INTROVERTS
One of the possible scenarios for the future is the division of the
world into regional blocs. Is there a risk that the integration of Europe
and the aspirations of the Europeans to create a common home will lead to
the new division of the world or will globalisation turn the regionally
integrated blocs into marginal powers...?
T
he establishment of the global institutions of the Fourth Civilisation
will take place from the bottom up through a gradual process of the transfer
of the rights of the national governments, legislative and judicial
institutions to international organisations. The best example in the history
of humanity is the unification of Europe: from customs unions, the free
movement of people, capital and knowledge, the creation of a European
parliament, government and court to the decisions to create a common
European monetary union (EMU) and the single currency (EURO). Over a period
of 30 years the builders of the European Union have not only established the
Common Market on the basis of tremendous dedication and created the
foundations for universal citizenship but also created a common feeling of
belonging for all the citizens of the member countries. In answer to the
opinion poll carried out by the "Eurobarometer" in July 1994 "Are you
frightened of or do you believe in the European Market?", 53% believed
strongly or relatively strongly, 35% were afraid or relatively afraid and
12% had no opinion. I mention these statistics here because I want to prove
the most unbelievable fact that only fifty years after the most destructive
war in Europe, former enemies have realised that the borders between them
are of little significance and that the road to progress is not through war
and disputes but via a single market.
There is no need to dwell on the details of European integration. There
are literally hundreds of books written on the subject which say practically
all there is to say. For the needs of my study, the European experience of
integration has a different meaning. If the advocates of integration in
Europe succeed (and they almost have) this will have an exceedingly positive
effect on global processes. The European Union has proved in practice that
the processes of integration are stronger than national prejudices. It is no
accident that the European continent which during the 20th century has
suffered more than any other region of the world has managed to overcome its
divisions and the selfishness of its national interests. Europe has learnt
from its suffering and torment. More than 60 million Europeans died in world
and civil wars in the 20th century alone.
The collapse of the Berlin Wall and the unification of the two halves
of the divided Europe was of particular significance for the pan-European
processes. It posed the question of whether the model of European
integration can be applied in other parts of the world. Would this example
be followed in North and Latin America or Asia? Are the European Union,
NAFTA and the far-Eastern processes of integration comparable? Would the
regional processes of integration push globalisation to one side?
One of the possible scenarios for the future is the division of the
world into regional trade blocs. The European market and currency union, the
North American Free Trade Agreement (a new version based on the old 1960
agreement), The Caribbean Common Market and a new far-Eastern zone for free
trade are trading blocs which could become a basis for conflict. There are a
number of writers, L.Thorou, for example who believe that the 21st century
will be the most dynamic and profitable export area. This will result in
increased communications between people and the intermixing of cultures and
manufacture in the world. Telecommunications are a symbol of the Fourth
Civilisation and the main technological channel for its development.
Clearly telecommunications will continue to contribute to the
re-structuring of social life and the stimulation of growth, the opening-up
of the world and the linkage of millions and billions of people. The main
integrational effect will be the linking of the new communications
technologies to televisions and computer technology. The American media
group "Time Warner" has already developed and begun to market the first
digital interactive television network in the world. Their "Full Service
Network" permits its subscribers to carry out banking operations from home,
to receive information about products, services and events, to buy and to
order and to see new films etc.. Consumers' choice is guaranteed. However,
at the same time, this allows the television companies to guarantee their
monopoly of the market. Whatever happens in the future, there is little
doubt that telecommunications will continue to expand their share of world
trade and be a key factor in economic development and structural and social
changes. Together with world finance which has developed as a result of
improved world communications, telecommunications will continue to be the
most attractive area of the world economy. The Internet has allowed tens of
millions of people over the entire world have become part of a single
network of communications and access to information. Computer networks will
lead to revolutionary changes in finances, trade and manufacturing.
Despite certain serious predictions concerning a fall in profits from
manufacture and sale of aeroplanes[56], I believe that all modern
forms of transport will continue to grow dynamically. People of different
races, ethnic groups and cultures are coming closer to one another, running
to embrace each other. They are beginning to realise how useful it is to
travel together and to meet and use the experience of others.
The conclusion which seems to suggest itself is that the branches of
the Fourth Civilisation (telecommunications, finances, services, computers,
information technology, transport, services etc..) have made life more
integrated and are a product of the new inter-dependency which is required
by humanity. The process will not stop here. On the basis of these key
branches of the New Civilisation, still more, newer, branches will be
formed. Television and telephones will spur the creation of new audio-visual
telephones. Paging systems and mobile telephones will become cheaper and
will allow parents to have more control over their children and to gain
information from their teachers. Doctors and policemen will be called to
where they are needed. This will change politics and management. It will
ease and change ways of voting. There is already software available for
conducting trade over the computer with full legal support.
In ancient times peoples were separated from one another by years of
travel. In the Middle Ages the distance shortened to months. In modern times
distances can be covered in days. In the New Civilisation the whole of
humanity is connected within hours, minutes and seconds. I recently had to
fly from Sofia to Honolulu by Lufthansa and United Airlines. I covered the
distance in 15--16 hours. Twenty time zones to the other side of the globe
in 16 hours! I am convinced that in the Fourth Civilisation people will be
able to circumnavigate the world in less time. Despite the opinions of
certain sceptics I am sure that transport will continue to improve and
develop with leaps and bounds. This applies to car manufacturing, aeroplane
construction, shipbuilding and certain other completely new forms of
transport. This will also provide new prospects for world economic growth.
New technologies will continue to stimulate this growth and the dynamic
processes will never stop despite the critics who believe that the computer
and audio-visual market are already satiated. The limits of high technology
growth and integrational products have not yet been reached.
It is not certain whether this growth will dominate the world economy
as a whole. It is most likely that the next 10--20 years will be years of
technological progress but also slow reconstruction. The lack of
manageability and even elementary order within the world economy means that
it is not clear which of the two will gain the upper hand.
Above all this requires the replacement of old industrial production
with new technology, a process which has been in progress for the past 15
years. This process, however, should not be perceived as the elementary
replacement of the "factory chimney with the computer", as some philosophers
believe. The old industrial sectors (metallurgy, chemicals, machine tool
engineering, energy production, transport) will be partially reconstructed,
partially relocated to the lesser developed countries for the sake of
cheaper labour and the lack of environmental pressure groups and opposition.
One only has to look to see what is happening with the automobile industry,
machine tool production, electronics and the electronics industry and
chemical production. Everything now involves new high technology and
computers. In modern automobile construction as much money is now spent on
new electronics as on improvements to engine design. The new generation of
aeroplanes, "Boeing" and "Airbus" are practically operated from the ground
taking off and landing using electronic equipment, while the pilots fulfil
mainly regulatory functions. The chemical industry is re-orienting itself to
new, environmentally clean technology and hitherto unknown products. The
construction industry is investing more and more in new highly resistant
materials. Just as in the 19th and 20th century the industrial revolution
lead to revolutions in agriculture without replacing it, the new technology
of the New Civilisation will revolutionise industrial technology and will
change their essence but will not destroy it. Development does not allow for
absolute rejection. Revolution itself always means the addition of the new
to the old and its transformation. It has been interpreted in other ways in
history, but that was just destruction.
The second very important area in the restructuring of the world
economy, in my opinion, is the huge process of the geographical
re-distribution of world production. Today, the citizens, trade unions and
politicians in Bavaria and California are concerned about the re-location of
manufacturing facilities to the countries of South East Asia and Latin
America. Millions of people are suffering as a result of the reduction in
military production, as is the case in California. This fact cannot be
ignored, but this is only the beginning. The modern geographical
distribution of world production was formed at a time of colonial power and
consolidated during the bi-polar world. Given the new world conditions of
the Fourth Civilisation, things will have to change out of all recognition.
As paradoxical as it may sound even the direction of investments will have
to change. Amongst the favourites are the countries of South East Asia. The
export of manufacturing potential from North America and Europe will expand.
This will consist mainly of those products which can be easily adapted to
the new technologies and the constant increase in the cost of labour in the
industrialised countries. Finally, the advent of the New Civilisation will
be accompanied by the closure of a number of manufacturing processes. This
process will be more intense than at any other time during the whole of the
20th century.
Whether we live in New York, Tokyo, Belgrade or Dakkar we are living in
a state of transition between two civilisations. This is a technological
transition, a transition in the nature of economic development. New
manufacturing sectors and products will come to the fore. The distinct
division between intellectual and physical labour and the manufacturing and
non-manufacturing sector will disappear. This is indisputable and supported
not only by P.Drucker but also by the chairman of the majority in the US
Congress N.Greenwich.
The state of change is indeed similar to that which existed at the end
of the 18th century and the beginning of the 19th. Let us hope that the
consequences for the people of the world will not be as dramatic as they
were then. During the processes of industrialisation millions of people were
thrown out onto the streets or transformed into factory slaves. The
developed societies were divided into classes causing huge social unrest.
Today the experience of the past and the bitter lessons of the 20th century
provide us with the hope that the great changes in technological and
economic growth will not inevitably lead to chaos and social strife.
3. WHO WILL DOMINATE THE WORLD ECONOMY
Recently, everyone has been trying to convince us that the three
economic centres -- the USA, Japan and Europe dominate the world and that
the technological and financial power of Japan will replace the economic
power of the East. I do not believe in these prospects...
D
uring the Third Civilisation the power of countries was determined by
their military and political power. This was based on economic strength but
was not always the most decisive element in the consolidation of power of
one country over another. The Ottoman Empire was not more advanced
materially when between the 13--16th centuries it conquered one third of
Europe as far north as Vienna. France under Napoleon the 1st was no stronger
economically than the rest of the countries in Europe but managed to conquer
with better military organisation and leadership.
The Fourth Civilisation precludes the military resolution of conflicts.
The achievement of nuclear parity and the nature of nuclear weapons makes it
absurd to wage nuclear war. This is also true conventional conflicts as
well. Let us take the example of the war in Bosnia. There have been over
200,000 deaths (perhaps many more), the complete destruction of industry and
infrastructure, valleys of blood and violence. The war ended with the
signing of the peace accord in Dayton, USA which brought the sides back to
their starting points. The reason for such absurdities is the potential
possibility of the mutual neutralisation of the nuclear powers and their
influence on the smaller warring countries.
I begin this chapter in this way since in the 1960's and 1970's when
nuclear parity was achieved a "new concept" of world economic domination was
born. There are still people in a number of countries who believe that the
USA or Japan can play the role of a world economic super power. In the 20th
century many countries have aspired to such a role but all of them lost in
the long run. I believe that today on the basis of the laws of human
development the imposition of economic domination by one country or a group
of countries over the rest can only be a temporary state. In the context of
globalisation the economic levels of the countries of the world have begun
to level out. This process can only be stopped by political coercion or the
isolation of countries from each other. In the civilisations which have
existed up until now, nations began their development in different climatic
conditions and with different resources. In the 19th and 20th centuries
these same nations began to realise how wide was the gap had grown between
them.
During the last 50 years a series of processes began to take place
within the heart of the bi-polar model which proved that economic domination
from an historical point of view is purely illusory. Let us take as an
example the most powerful institutions of the world economy, the
trans-national corporations. Immediately after the Second World War the
American corporations were the undisputed dominating forces of the world
economy and only a group of British companies managed to upset their
hegemony. In 1962 of the 500 largest companies in the world, 300 (with a
total product of 365 billion dollars) were in the USA and 200 (with a total
product of 174 billion USD) in other countries. Today this picture has
changed beyond recognition. In 1992, of the 50 largest industrial companies
in the world, only 14 were in the USA, 13 in Japan, 2 in the U.K., 7 in
Germany, 3 in Italy, 5 in France, 2 in South Korea etc.. This trend will
continue. We can expect a serious increase in trans-national companies from
Germany, Russia, South Korea, Brazil and also a number of smaller countries.
The process of levelling will take place slowly. This is the inevitable
result of the opening and expansion of the world market. In contrast to 40
or 50 years ago, today investments, manufacturing processes and goods are
being exported everywhere it is economically viable to do so. At the
beginning of the new technological revolution in the 1970's and 1980's
investments were directed at the most developed nations which had educated
and well-trained personnel. I believe that since the 1990's a significant
part of the world investments will be redirected mainly to some of the new
"dragons" of South East Asia, Australia, China, Latin America and, given
greater political stability, Eastern Europe.
Similar changes are taking place in the commodity and stock markets.
Only a few years ago the stock exchanges in New York and London were
dominant. Today the Tokyo stock exchange has changed all that and is now
quite convincingly the leading stock market in the world. There has been a
gradual, almost invisible process whereby the new financial markets have
developed. This will lead to the re-distribution of the economic power and
new hitherto unseen trends.
Until the end of the 1980's and in particular during the period of the
Cold War, the major criterion for political and economic power was still
closely associated with the military and armaments industry. If the positive
trends of world development continue economic power will depend more on
technology, information and resources and will guarantee the future of
promising industrial sectors. This will lead to the re-determination of the
power and wealth of the countries and nations of the world and their place
in the global division of labour. The new technologies will not permit
monopolisation. They will guarantee advantages for the countries which
possess them only until they are mastered by other countries. High
technology in the modern world is being spread via the trans-national
corporations and the activities of governments.
Japan, despite its world domination in the development and production
of new technology is also a major exporter of high-tech products and
know-how. In South East Asia and Latin America there are number of
production facilities with the most modern telecommunications technology.
Competition between the trans-national corporations is the main reason for
this. I believe that this is in principle impossible for technology and
information to be monopolised in the aims of the domination of certain
countries over others especially in the context of the modern scientific and
technological revolution. The New Civilisation will still maintain the trend
of the free movement of technology and information.
The direct result of this is the formation over the past 30--40 years
of a new global distribution of manufacturing and technological priorities.
Each of the developed countries to a certain extent have found their market
niches and has established itself in world export. For example at the
beginning of the 1970's the USA exported 77.5% of world aeroplane
production; 44.1% of organic chemicals; 55.9% of office equipment; 35.2% of
computer technology; 39.3% of industrial refrigeration; 35.8% of grain and
37.1% of steel export etc.. In 1985 Germany accounted for 23.2% of world
automobile export; 19.8% of plastics; 51.5% of rotary printing presses;
32.4% of synthetic organic dies; 34.1% of packaging equipment; 30.4% of
textile and leather processing machinery. In the same years, 1985, Japan
possessed 30.8% of world automobile export; 37.5% of lorries and trucks;
80.7% of televisions and tape recorders; 82% of motorcycles; 62.2% of
cameras and video-cameras; 55.7% of microphones and amplifiers; 37.9% of
peripheral electronic equipment and 31.7% of tankers etc.. It is interesting
that during the same period a number of smaller countries achieved
significant levels of long-term exports. For example Sweden accounted for
41.7% of the world export of paper and boxes; 17.2% of centrifuges; 15.5% of
sulphate cellulose. The Swiss accounted for 45.1% of textile looms; 34% of
wrist watches; 25.3% of synthetic dies and 20.6% of
herbicides.[57]
Another criterion is the state of the available natural resources in a
given country and whether they can exert influence on the power and strength
of countries and their role in the world economy. The freer the exchange of
goods, services and labour the more open countries become to each other. In
this case the power of countries will be determined by their total national
wealth based not only the existing manufacturing facilities but also on the
available natural resources. On the basis of this logic, in September 1995
the World Bank published an analysis of the ecologically sustainable
development and the natural resources of the countries of the world.
Accordance to their classification of the available national wealth per head
of population (table 9) Australia came out in first place followed by
Canada, Luxembourg, Switzerland and Japan.
The USA was quite far down the list in 12th place and Germany in 15th.
Other countries with enormous reserves of natural resources such as Russia,
Brazil, Argentina and others are outside the classification due to their low
levels of existing production facilities and human resources. The
methodology of the World Bank is flawless: resources are of benefit when
there is an adequate material base and human resources. On the other hand,
those countries who do not have such resources will have to pay for them and
to compensate for the inequity with more labour and technology.
Table 9
Classification of the 15 leading countries on the basis of national
wealth
per head of population.
State
Wealth per head of population
Sources of national wealth %
population
capital assets
natural resources
Australia
Canada
Luxemburg
Switzerland
Japan
Sweden
Iceland
Qatar
UAE
Denmark
Norway
USA
France
Kuwait
Germany
835
704
658
647
565
496
486
473
471
463
424
421
413
405
399
21
22
83
78
81
56
23
51
65
76
48
59
77
62
79
7
9
12
19
18
16
16
11
14
17
22
16
17
9
17
71
69
4
3
2
29
61
39
21
7
30
25
7
29
4
Source: World Bank, 1985
These figures show the constant increase in the number of countries
with an established position in the global division of labour. There are at
least 30 countries with a high level of economic potential and another 60 or
70 with the potential to join them in the next 30 or 40 years. Most
significantly, in the current situation no one country can impose a monopoly
on another. The USA, Europe and Japan are inter-dependent on each other.
Their mutual dependence is unilateral and is not only between the three
established economic centres. As a result of structural reforms in the world
economy, there is a whole group of countries aspiring to reach the levels of
the top three and as a result of narrow specialisation and resources they
will soon catch up with them.
Is it then true that economic power will move from the USA and Europe
to Japan? A number of academics seem to believe this. I believe that this is
possible but that it will be a short-term and limited trend. The reason is
that the global market is now strongly influenced by significant market
forces which are capable of balancing out the economic levels of the
country. Only with strong protectionism or as a result of political
cataclysm will one country or another be able to reach a situation of
monopoly or privilege. During the entire period of the 20th century only as
a result of political and military conflicts has one or a group of nations
been able to establish such a position of privilege which has transformed it
into a political force.
This time is over. No-one any longer recognises the legality of
protectionism or uses political arguments in the resolution of ordinary
economic issues. The choice is great and the competition offers better
alternatives. Manufacturers and merchants in the whole world are forcing
their governments to remove prohibitions and limitations. There is a number
of cases where the opposite is true, for example the European agricultural
policies and the limitations on import into Japan. However, no-one can be
convinced of the strategic benefit of such policies. The Fourth Civilisation
offers simultaneously the gradual approximation of economic levels and the
creation of similar, equitable conditions for economic activity and the
mutual conditionality of these two processes. The 20th century opened the
way for this process which is irreversible whatever difficulties the
transition might bring.
Despite the influence of Japanese commercial, manufacturing and
investment expansion and despite the fact that in the 1970's and 1980's
Japan was the most dynamic economic force in the world, I believe it will
not be remain single most powerful leader of the world economy. The economic
dynamics of South Eastern Asia will continue but this will give rise to a
reverse wave of investments to other regions and countries. It is true that
in the last 15 years the USA has lost a part of its share of the world
market and Japan has increased its market share by 15%. The American share
of the heavy machinery market has fallen from 25% to 5% in 30 years while
Japan has increased its share from 0% to 22%[58]. However, even
this cannot convince me that this process will continue to develop
unilaterally and that the Japanese economy will dominate while the American
economy will flounder as this was once predicted by the former director of
the European Bank, Jacques Atalie.
I am writing these lines early in the morning in perhaps one of the
least American and the most Japanese of the United States of the America. I
can see through my window the waking lights of the beautiful capital city
and perhaps one of the most beautiful places in the world. My first
impression is that the atmosphere is mainly Asian and in particular
Japanese. Only the liberal spirit of the USA could allow for the mass
concentration of Japanese, Chinese, Korean and Vietnamese influences in a
single, albeit island, state. It is here that I can understand the arguments
in favour of another type of thinking, that the majority of the older Asian
immigrants as well as the new arrivals consider themselves to be Americans
or at least citizens of the world and that Honolulu has become a bridge
between the USA and Japan and that it is such bridges which create a
balanced market.
Japan and the smaller Asian "dragons" cannot become the masters of the
world. However, they have indisputably destroyed the economic, technological
and financial monopoly of the Atlantic countries of the USA and Europe. They
have created conditions for a completely new distribution of world
manufacturing production and hitherto unknown geo-economic structures. In
the 19th century Britain and France and eventually Germany dominated the
world. During the first half of the 20th century the USA and the USSR caught
up and eventually became the world leaders in a bi-polar world. Between 1960
and 1990 Japan indisputably became a member of the family of the world
economic leaders and this list will continue to grow. There are at least
another 5 or 6 countries in the next 20--30 years which will win significant
economic positions and will find their niches in the world market, balanced
between the old leaders. At the end of the 20th century and clearly at the
beginning of the 21st century the stimulus will continue to come from Asia
-- not only from Japan but also from China where the growth rate at the
beginning of the 1980's deserves admiration, from Australia whose resources
and its "bridge" policies between the USA, Asia and Oceania have given it
tremendous advantages and from Indonesia and the Philippines which are also
making strong progress.
There are good grounds to expect that at the beginning of the 21st
century the more powerful Latin American economies will also begin to move
ahead beginning no doubt with Brazil. If they achieve political stability
and a balanced process of denationalisation then a number of Eastern
European economies will also begin to make progress. Russia with its
colossal, untapped resources will also begin to play a serious role.
I am leading to a statement of my opinion that further economic growth
will of necessity require the removal of economic monopolism. Despite the
ambitions of dictators, selfish politicians and militant ideologues the
globalisation of the world has not lead to the economic domination of one or
two countries or individual governments. At the end of the 20th century
there is also another clear growing trend which will be predominant in the
New Civilisation. I could call this "economic polycentrism" or in other
words, the trend towards the re-distribution of economic power and strength
between a larger number of countries with the gradual involvement of new
ones. It should not be considered that such a trend towards economic
polycentrism will summon in a "glorious future". There is not a single
country (or group of countries) which can independently control global
finance, natural resources or the markets. There is no one country which is
in a condition to force the others to follow it. Directly after the fall of
the Berlin Wall the theory of the "responsibility of the single super power"
become popular. Some people in the USA between 1991--1994 developed this
idea, combined it with the American dream and tried to establish a complete
doctrine on this basis. Fortunately, the majority of American politicians
and the majority of American intellectual elite have realised that this
concept is unreal and have rejected it. During my many meeting with American
politicians and diplomats in the State Department of the USA between
1995--1996 I became growingly aware of the rejection of this idea but also
of the impossibility of this task from the point of view of finances and
resources. The experience of the USSR and the USA during the last 50 years
has shown categorically that to take on the role of a world super power to
defened the sovereignty of the remaining states means to take on an
unsupportable financial burden. The collapse of the USSR and the growing gap
between the USA and Japan are to a large extent due to the burden of
military expenditure.
Polycentrism is at the root of world economic development and at the
root of democracy. It is a counter-trend to the experiences of imperialism
which has dominated world politics for the last 150 years.
4. IS THERE A NEED FOR GLOBAL ECONOMIC REGULATION?
If the global economic world is becoming more polycentric is there not
a danger of permanent chaos? Is global economic regulation a way to avoid
it...?
T
he new civilisation which humanity is entering is the antipathy to
imperialism. Instead of the super powers and the great powers of the Third
Civilisation the main trends of the Fourth Civilisation are polycentrism and
the possibility for an increased number of countries and people to
participate fully in the international division of labour. The mutual
dependency of the countries and state leaders make this process sustainable.
To this we should add one more element which was discussed in chapters five
and six, the transfer of a significant portion of the economic power of the
nation state to corporations, companies and individuals or, in other words,
organisations and the civil society. The combination of these two processes
has lead to great changes in global economic structures but has also posed a
number of new questions of principle about world development in general.
During the past four or five hundred years everything seemed to be clear:
all dependended on the state and their monarchs or leaders, later
governments and parliaments. Today things have altered significantly. The
multi-national corporations control the major processes of the global world
and more and more people including political leaders realise that this is
the case. The lack of correspondence between globalisation and the
nationally organised activities of governments could lead the world into
serious new crises as was discussed in chapter three.
If politicians are aware that they are losing their grip over power and
realise that they cannot guarantee their election promises to their
electors, what should they do? The most logical solution would be for the
large international companies to assume national responsibility for all
their activities and to be put under some sort of legal control. This should
also extend to the investments of large sums of money abroad. Such
experiments have been made and will continue to be made. The results are
usually disastrous since they lead to the "closure" of the national economy
depriving it of any possibility to rationalise its manufacturing industry.
If any particular government or parliament imposes limitations upon
companies which are acting within their jurisdiction, then they will simply
leave the country and will find other more accommodating partners and
patrons. Experiments to impose limits on the movement of capital or to
impose direct influence on the management of corporations in modern
conditions is doomed to failure. Such methods are within the arsenal of the
outgoing civilisation.
So there remains another possibility, the creation of an adequate
system of global economic regulation. The aim of this new system is to form
common economic conditions and regulations for the activities of all
economic subjects operating within the global market. I am convinced that
sooner or later such a system of global regulation will become a reality.
History cannot be halted. It is not possible to turn back the trans-national
corporations upon which so much of modern progress relies, nor is it
possible to delay the progress of globalisation which is stimulated by them.
Progress means the establishment of a new world economic order based on
the common global rules of the game. Years perhaps even decades will pass
before such an order is established but even today the need for it is
evident. This is the only guarantee against the threat of a return to
imperialism, the widening of the gap between the poor and the wealthy
nations. One must be aware of two possible misconceptions, firstly, that
there is a need for the creation of a united world government and secondly,
that the role could be fulfilled by the United Nations. Undoubtedly, the
generations which will live through the second half of the 21st century or
later will find some solution to the matter of a world government. Today,
however, this is still a Utopia and not only because it will be derided by
the vast majority of politicians but because nation states have not
exhausted their functions. For this and many other reasons the UN cannot
take on the responsibility of global governmental functions.
Globalisation which is being propelled by the multi-national
corporations and new technology presupposes the gradual development, above
all, of a new world economic order. The quicker this takes place, the sooner
humanity will enter a new, more mature stage of its development.
When after the Second World War the Brenton Woods system was
established, governments bore the complete responsibility for the management
and movement of monetary flow. The medium and long term transfers of capital
were managed by national governments and the international finance and
currency organisations. In these conditions fixed exchange rates played an
important role as a stabilising factor and the International Monetary Fund
complemented the role of the central banks as a reserve fund. This system
functioned for three decades.
The main reason for the end of the Brenton Woods system was that as a
result of the turbulent development of world trade, the majority of
international liquid funds overflowed beyond the limits of the nation
states. This mass of funds increased by such a huge amount that the volume
of international currency speculation began to overtake the volume of trade
in goods. In such a situation the world stock exchanges became a
significantly more influential factor than fixed exchange rates. With the
transition to floating exchange rates the world entered an intermediate
state. The abilities of the national governments to "manage" their economies
independently became significantly hampered. This was a state of "paradise"
for the trans-national corporations and world financial players. The world
has lived with this system now for more than twenty years. I can now
categorically say that this system based on floating exchange rates,
enormous levels of currency speculation and the uncontrollable growth in
government borrowing can last no longer. We are sitting on top of a powder
keg as a result of the huge mass of money which is outside the control of
financial institutions. This system has created privileges for corporations
which possess large amounts of free money and those who exploit the
instability of the system to multiply their billions.
As an antidote to the present international practice of "liberalism" I
propose the logic of balanced development. This requires the creation of a
set of common rules for the movement of monetary flow, compulsory reserves
in the case of investments, stronger controls of "off-shore" zones and the
environmental responsibilities of investors etc.. Such measures will lead to
a reduction in interest rates which in turn will be of benefit to the weaker
nations and will lead to a re-direction of investments into the real sector
of the world economy. I do not know whether there will be enough willingness
or readiness on the part of governments and central banks of the largest
countries to carry out a common global macro-economic policy on the basis of
general agreements and long-term accords. The problems could be resolved by
the financial and governmental leaders of 7--10 countries and given the
current state of the world, the rest would follow.
The other possible solution would be to create a real World Bank which
would guarantee universal conditions for the exchange of currency and a
single global macro-economic policy. Such an idea, if it was supported by a
number of financial experts would have a revolutionary, radical character
and might be able to put a stop to instability. I am not convinced, however,
that at this stage the national governments and the central banks would
agree to such a step, although I, personally, am strongly in favour. The
majority of world financial strategists still hope that the Federal Reserve
System of the USA[59] and the central banks of Germany, Japan and
a number of other countries will be in a position to control the world
currency markets. During the past twenty years this has, more or less, been
the case. When the world financial markets begin to "hit below the belt" the
central banks of the major countries coordinate their activities to
intervene.
There is sufficient evidence to show that this practice is ineffective.
One only has to look back to the collapse of the US dollar against the yen
in 1995. This was a clear enough sign that the restoration of balance is
becoming more and more difficult and the powers of the central banks more
and more inadequate. This process is inseparable from the universal logic of
the collapse of the institutions of the Third Civilisation. First of all,
liberal international economic relations in the last couple of decades have
caused the increase in the strength of the "free" players on the world
financial markets and made their structures infinitely more complicated.
Secondly, the polycentralism of the world economy has brought many more
national currencies into the "turnover" of the world stock exchanges.
Despite the interest of many countries the dollar will no longer be able to
play the role of an international currency.
Consequently, there is little likelihood that the current system will
survive. It will be necessary to begin negotiations on the creation of a new
system of global economic regulation or to develop an entirely new World
Bank with similar regulatory functions. I believe that there will be more
and more support for the issuing of a currency which will be subject to
multi-lateral control and which could be based on the special issuing rights
of the International Monetary Fund or other forms of securities which could
be issued by a new World Bank.
The system of global economic regulation is an inevitable new feature
of the Fourth Civilisation. We shall gradually have to become used to the
idea of accepting universal standards of economic and human activities and
the formation of international courts which will resolve any conflicts which
may arise. These will be above all a series of environmental standards about
which the people of the world are particulary sensitive at the moment.
However, at the same time there will have to be new standards for the
payment of labour, social security and arbitration etc.. It is a shameful
fact that many of the trans-national corporations have moved their
production facilities to less developed nations to avoid pressure in other
countries. Recently a large number of workers in Ecuador appealed to an
American court to request compensation for being poisoned by pesticides
while working for an American company. It is not clear whether the American
court will be able to pass judgement on matters pertaining to foreigners
outside their jurisdiction. However, it is clear that the absence of
acceptable international standards and an adequate international court
system is a precondition for inequality amongst nations. What it cannot do
in the USA, an American registered company may do in Ecuador. There are
innumerable examples of such practice in our modern world of inequality.
One of the main aims of the system of global economic regulation will
be the increase of global savings with a view to the increase in the level
of investments on a world scale. The needs for investments in Asia, Eastern
Europe and Latin America are constantly on the increase. As a result of the
opening-up of the world and after the fall of the Berlin Wall the need for
investments will continue to rise until the end of the 20th century and the
beginning of the 21st. If the levels of savings reduce as they did in the
1980's, this will create extremely serious problems and will hold back world
development.
In general terms the system of global economic regulation is the
mechanism which will limit and will, eventually, put a stop to the processes
of the chaotic development of the world economy. This would provide a
stimulus to the development of many countries creating the opportunity for
the gradual balancing of the economic levels of the countries of the world
assisting in the formation of universal world criteria for economic growth.
Sooner or later this system will become reality. The problem is for people
to become aware of its necessity sooner rather than later.
5. VIVAT EUROPA AND THE DEATH OF THE INTROVERTS
One of the possible scenarios for the future is the division of the
world into regional blocs. Is there a risk that the integration of Europe
and the aspirations of the Europeans to create a common home will lead to
the new division of the world or will globalisation turn the regionally
integrated blocs into marginal powers...?
T
he establishment of the global institutions of the Fourth Civilisation
will take place from the bottom up through a gradual process of the transfer
of the rights of the national governments, legislative and judicial
institutions to international organisations. The best example in the history
of humanity is the unification of Europe: from customs unions, the free
movement of people, capital and knowledge, the creation of a European
parliament, government and court to the decisions to create a common
European monetary union (EMU) and the single currency (EURO). Over a period
of 30 years the builders of the European Union have not only established the
Common Market on the basis of tremendous dedication and created the
foundations for universal citizenship but also created a common feeling of
belonging for all the citizens of the member countries. In answer to the
opinion poll carried out by the "Eurobarometer" in July 1994 "Are you
frightened of or do you believe in the European Market?", 53% believed
strongly or relatively strongly, 35% were afraid or relatively afraid and
12% had no opinion. I mention these statistics here because I want to prove
the most unbelievable fact that only fifty years after the most destructive
war in Europe, former enemies have realised that the borders between them
are of little significance and that the road to progress is not through war
and disputes but via a single market.
There is no need to dwell on the details of European integration. There
are literally hundreds of books written on the subject which say practically
all there is to say. For the needs of my study, the European experience of
integration has a different meaning. If the advocates of integration in
Europe succeed (and they almost have) this will have an exceedingly positive
effect on global processes. The European Union has proved in practice that
the processes of integration are stronger than national prejudices. It is no
accident that the European continent which during the 20th century has
suffered more than any other region of the world has managed to overcome its
divisions and the selfishness of its national interests. Europe has learnt
from its suffering and torment. More than 60 million Europeans died in world
and civil wars in the 20th century alone.
The collapse of the Berlin Wall and the unification of the two halves
of the divided Europe was of particular significance for the pan-European
processes. It posed the question of whether the model of European
integration can be applied in other parts of the world. Would this example
be followed in North and Latin America or Asia? Are the European Union,
NAFTA and the far-Eastern processes of integration comparable? Would the
regional processes of integration push globalisation to one side?
One of the possible scenarios for the future is the division of the
world into regional trade blocs. The European market and currency union, the
North American Free Trade Agreement (a new version based on the old 1960
agreement), The Caribbean Common Market and a new far-Eastern zone for free
trade are trading blocs which could become a basis for conflict. There are a
number of writers, L.Thorou, for example who believe that the 21st century