Capital Commerce: Globalization disaster?
The passage last week of the Central American Free Trade Agreement was another disappointment to the antiglobalization crowd. But Barry Lynn may have come up with a fresh argument against globalization, focused not on offshoring or trade imbalances but economic security.
Lynn, a fellow at the New America Foundation think tank, thinks it's time government asserted some regulatory control over huge, borderless corporations that operate all over the world. In End of the Line: The Rise and Coming Fall of the Global Corporation (Doubleday, $26, out August 16), Lynn says the current global economic system is too vulnerable to the vagaries of nature and political strife. He points out that a 1999 earthquake in Taiwan and the resulting disruption in computer chip supplies caused factories to close in California and Texas.
"A disaster that only a decade earlier would have been mainly local in nature almost cascaded into a grave global crisis," he writes. "What about another SARS-like flu outbreak in Asia or nuclear war between Pakistan and India? How would that affect modern just-in-time supply chains or tech companies depending on overseas call centers?"
Lynn's response would be to impose regulatory limits on how dependent any company can be on input from a single country and force companies to spread their suppliers among more than one nation. He also wants to force companies to make their supply chains more transparent to outsiders. Of course, such rules would punish India and China, by raising the costs of doing business overseas, thus favoring domestic workers.
A feasible economic agenda? Even Lynn admits that it is "vastly easier to sketch out such a program than to enact–and we will be opposed by global behemoths able to spend vast sums of money."