JAPAN-US ICONOMIC RELAT]ONS; A CAST STUDY IN ECONOM]C IMPTRIALISM? by Johan

Transcription

1 ,i JAPAN-US ICONOMIC RELAT]ONS; A CAST STUDY IN ECONOM]C IMPTRIALISM? by Johan Galtunq []ent-er of International Studies Princeton ljniversity Princetr:n, New Jersey OB5/1 4 December 7986

2 l-. Thinkinq About Economic Rel-ations There is much talk about Japan-US economic relations these days. The newspapers in both countries and in many other countries for thal matter are filled with data and reflections on this particular phenomenon. Justifiably so, as what we have been wit.nessing for some time is a major transler of the center of qravity of economic relations from a country in the First World, the United States of America to a country in what is here ca11ed the Fourth Wor1d, the Southeastern part of the world, and to its center, to Japan. But t.he focus of public attention is on one particular aspect on11, and a very quantitative one: the trade deficit t.he US is incurring in its trade relations with Japan. Truly o the deficit is staggering. 0f a tot.al estimated US deficit for 1986 of $150 billion more than $80 billion is in relation to Japan, up from $az billion for However, in ancl by itself that figure is no particular reason for worry, or for any basic chanqe in trade relations. There is no principle in world trade that bilateral relations should be balanced. Rather, world trade derives much of its flexibilitv and dynamism exactly from its multilateral nature. A country A may have a deficit relative to B but surplus relative to C and the two mayr in principle, cancel oul (:.f in addition B has a deficit relative to C their refations may bafance even on a trilateral basis). Against this position the argument may be that the United States at present is incapable of obt"aining any such balance, leaving

3 2 al0ne surplus, the total deficit being ofi the magnitude it_ is. The question isn however, why is the total deficit of that magni_ tude? what has been happening these last decades? And in order to explore that rather basic probrem a more qualit.ative approach rnay be needed, focussing on the major component of the much tooted US deficit: the deficit relative to Japan. The approach taken here is based on the theory developed in "A Structurat Theory of Imperialism', (ano subsequent articles) some yearu ^gol with the hypothesis that Japan has today, and has in fact for some time, developed a relationship of economic imperialism refative to the united states, with Japan in the center and the us in the periphery. That particurar theory was referred to as "structural" since it was not tied to any particu.lar actor as is done in the traditionar focus for analysis of imperialism: the western economic powers ' and more particurarry Great Britain, Germany and the United States, in that historieal sequence (and some others). The theory describes a structure as a configuration, an inter_ acling complex of factors that tend mutually to support each other, and in so doing paintsthe structure refatively strong as a configuration where the Center is exploiting the periphery. That particular relationship is protected by a number of devices, also buirt into the structure. The theory does not appoint any particur.ar countries to the structural positions as center or periphery, nor does the theory presupp0se a general intent, even master_p1an to create such structures. rn fact, the theory presupposes no con_

4 3 sciousness at all about what is going odr neither in the Center nor in the Periphery. Nor does it presuppose a complete absence of consciousness: the structure is so strong that it will unfofd itse1f, fulfil1ing the configuration wifh a certain automaticilv; without in_ tention; even in spite of conscious efforts to resist the workings of the structure. Unless, and this is where the theory of libera* tion from imperialism enters the picture, the level of consciousness is so strong, so backed up by organized efforts to combat the structure that these efforts toqether constitute a viabl-e counterstructure. I could put it in different terms: imperialism is a very advanced form of structural violence. 0ne way of fighting imperialism is through structural non-violence, or more correctly expressed: counter-structural non-vir:lence " Another way of fighting imperalism would be through direct- violence, as is very well known in the contemporary wor1d. Which niet-hod is more efficient-? I shall return to t.hat ouestion later.!vith the hypothesis on the table that Japan is imperializing the United States, or, to use a politica]1y --*if not linguistically-* catchy term is "Third-Worldi zinq" the United States, the first task is to speli out the hypothesis in more detai l. More precisely, there are three sets of hypotheses, to be dealt. with in the followinq three sections. First, the basic hypothesis of Japan-US economic exploitation. Second, the equally basic hypothesis of how this exploit.ation is effectively protected structurally. Third, the hypothesis of a possible spil 1-over from economic relations to cultural political and military relations. And then, if this is the diaqnostic pa.rt- of the paper: t-he twin probl-ems of prognosis and therapy, of what is likeiy t.o happen next arrd what carr be dttne about it.

5 ? Is Japan exploitin Lhe Uni ted Stel_g3_!c0nomi cally? 0f course' it arr depends on the definition. The approach taken here is to look at the totarity ofl the economic exchange pattern, and for that purpose a discussion in terms of the trade relation in goods and services, in other words in terms of the finished products, is insufficient ' sticking in this section to a relatively economistic, albeit with that limitation al-so relatively r^holisticl approach the whole production function is taken into account, seeing products as something coming out of the productive use of nature, labor, eapital, research and administration. The problem is how the concrete economic relations between two parties, such as Japan and the united states shape these five input variables in the production function. what. happens as a consequence of the rel_a_ tionship? hlhat passes from the united states to Japan and flrom Japan to the United States, not necessarily in the sense of something cir(lssirqthe borders, but in the sense of "intra-action,, taking place inside the two parties? In short" to understand the nature of a relation both inter*action and intra-action effects have to be explored; what passes between t.hern, what. takes place insirje them. The general theory for First world-third world basic exchange relations can be used as an hypotheses in this connection, ancj t-he formula is presented on the next page, in Table r--with "Japan,, substituled for "First World" and the'united States" substituted for "Third world". The problem to be explored is how far the model holds with these two particular actors as role-incumbentsl no doubt. flor many a somewhat unconventional way of viewing t.he worl-d. This

6 TABLE 1. Jaoan-United States Economic Relations; From the LJnited States po Japan From Japan 6-The--ilT[teo states raw mater iai/ c0mmodities; simple, semi-advanced extractio use of Iand; use of soil tourism pollution with waste produrts (t.oxic); depletion of non-renewable "raw materials Labor body dr ai n.' cheap labor in sit-u excess ttadvise popula tion; rs, tt ttexper tstt Capital deposits, profits: r-rnlied capital investments; tied, "earmarked" capital Research brain drain, researchers; chead Tesearch in sit-u sale of technoloqy; packaged and dated {dminislr'.rt ror. devis 1ng stand ard p I(]{': implementing S0Psstandard operat.inq procedr.rres S0Pstjpet atrrrg e0r-ji.'es Products: goods,/services raw & semi-prr'lcessed qoods/se rvices pl-0r_-esseo nnnda,/ao nrr i noo 9UUUO/ OL L VJ i.q\- SUM THE RAl^/ Iow on challenge low on val"ue added THE REF I NtD high on challenqe hiqh on value added DIFFTRTNTJE IHE RAW ml-nljs THE RIFINEI) Asymme t ry

7 6 will first be done horizont.ally exploring the six rows, and then vertically exploring the two columnsr' ultimately comparing the two columns for asymmetry, and the total configuration for the standing of the general hypothesis.!vith regard to natule: IJS makes taw nature availabl'e to Japan as soil for agriculturaf products and as land for faclorles offices and residential quarters; not to mention as nature to be admired and enjoyed in the form of tou rism " And Japan gives to the United States essentiatly potfution from factories relocated from Japan to the US (usuaiiy discussed in economic terms and not also in ecoloqicat terms ), contributinq to the depletion of US raw material-s. including in the form of soi1. With regard to l-abor: US qlnoe nnl- ownnn{- rheap }abor to Japan but ^ FFarc considerable utilization of I arb'or in situ, the basic point beinq that this labor is low in ski 11. Japan is contributing skil led labor as advisers and experts and management in general, and is al-so enqaging in export of excess population. This is a rather classical aspect of economic imperialism practiced by the western powers before the Second World Wat. and also by Japan (in Manchuria) to get rid of excess labor, usually in the shape of able-bodied men first without, then possibly with t.heir families. What is new is t-he Japanese export of retired people, people on pensions living the golden phase of t.heir lives in warmer climates where the yen j can buy hiqher quality ol Iife-. The more sunny parts crf the United Statesr sudh as Hawaii, and the southern belt would be obvious

8 7 targets, but more famous in the piclure right now is the Japanese settlements for people on pension in such countries as Spain and Brazil. With regard to capital: from the United States there is a considerable net flow of capital into Japanf refated to lhs huge trade deficit. But there is also a counter-f1ow of cadital from Japan to the United States taking the form of investment in the public and private sector of the US economy? The basic difference between these two flows arising from the trade deficit would be that whereas the capital from the United States Lo Japan is payment at the disposaf of the Japanese side, the capital flow from Japan to the United States is also at the disposal of the Japanese side, tied as investments to their economic strategies in the US. Both sides invest, bul Japan has more to invest from the trade relation. With reqard to research: there is hardlv anv brain drain of individual US researchers from the United States to Japan, but considerable utilization of US research by the Japanese, Research is avai-lable in situ either as papers presented for conventions in the fields of science and technology, or as more or less secret documents handed over in various ways. The more particular form of, for inslance, Japanese pharmaceutical firms testing out new drugs on US bodies has not been reported. 0n the other hand, much technology passes now from Japan to the Unit.ed States6, sold ancl probably at high prices, pre-packaged in the form of fact.ories, possibl dated relative to what the Japanese would use al home.

9 B With regard Lo administrat.ion: the tjs is implementinq standard operating procedures coming out of Japan in the form of Japanese management techniques; these Lechniques are by definilion, devised in Japan. No doubt there was in earl,ier periods a counterfl-ow that was stronqer in the opposite direction of US techniques penetrating Japan. Today it Iooks as if t-he Japanese have the upper hand.' -7 lt' ith regard to produc.tsj qoods/serviceg; hry and large the United States is exporting to Japan soya beans, ot.her foodstuffs, waste paper, scrap iron' and then-as more refined products-+nilitary hardware, passenger aircraft, JBM and servi Japan is exporting ""u.8 to the tjnited States sophisticated electronics f or the home, t"he offine, the factory, machine too1s. cars and motorriycles--and services in t"he very imporlant form of loans/ inv estments. L et us now take nr:rte of the qeneraj, f indinq: the conf iqurat.ion of asymmet,ric exchange is there. Flows and.-:ounter*f lows, and of exactly the opposite nat.ure, For each point made one could make t"he counter-argument- that t-he United Stat"es is also investing in Japan, a,lso occrrpying land ( f or inst-ance in the very important f orm ofl IJS bases), and certainly engages in tourism. This is to be expected: the llnit-ed States was r:ntil recently very much the Cent.er cr:untry in the world. BUL ther:e is no assumption in the structural theory of' imperialism that- exploit"ation is a one-way street. Two countries may very well exploit each other. The question is in which direction the relationship is mnving. The point here is t-hat

10 the relat ionship is mr::ving, and not in the f avor of the ljs, from US ex- ploiting Let Japan via balanced exploitation to Japan expl oiting the us. us summarize the basic points made. What has been presented so far is a confiqu ra t-i.on of twelve tendencies in the same direction, some stronq, many of them lairly weak" However, the basic pnint is not so much the strenqth of the sinqle item as t"he mutual reinforcement in the total struclural arranqement " 0f rjourse it j-s true, as pointed oltt by the many who start becoming worried that. the tjnit.ed States is being "colonized" by Japan (a technically i-ncorrect term since "co -onj.alization" has political and military overtones that, as wiil be indicaterj later in this paper, can hardly be said to be present to any signif icant deq ree); Japan is makinq lar:ge amounts of capi tal available through investments and is creatinq jobs-- one eslimate by t-he year 2000 mentir:ns Blt0,000 jobs di rectly nreated throuqh IJS capita19. Japanese investment increaserj from $+,z bi]lion in.l980 to $fq"l billion in 1985, in other words f r:ur: times in a.period of f,ive years. In the same period British invest-ment went up f $-14.1 bil l ion to $41. B bill ion ( three "o* t imes ) and Dutch investment f rom $.19 " I bi l1ion to $:a. t bi l lion (almost twic").tn,n other words, the Japanese investment. is still only number th::ee, br:t is increasing more rapidly than the other two; is to a large ext-ent in prodrrctive assets such as factories, and--.one wnuld presume- -r.lccordinq to a master-plan where the notorinus MITT ent-ers al snme staqe or another (or, more 1ike1y, at ver:y many stages in the process ).

11 l0 Accordinq to some estimates fnreiqners now own $1 trillion of the totaf US stock (land, real estate in t.he mnst qeneral sense) cal.culaled at $tz trillion in and $tf trillion in 1986 (tne decrease in value r:f the ljnited States beinq due to such factors as deplet"ion of soil and depreciation of infrastructure--roads, sewers i railroads etc. ) I I They own stocks anrj banks and real estate and US companies, and the amount is increasinq by more than $1OO bitlion per year. They employ t-hree million Americans, and in general one may of course say that "the friendly invaders are creatinq new jr:bs ancl wealth"\2 The argument is also that this is neederj in a country like the US where the net debt is now (ear"1y 19Il7) $ZO0 billion, the worldrs highest, possib- Iy increasing by an estimated $100 billion a year so as to reach $f0o billion in provided foreiqners are still willing to lencl money to the United Statesll And they ffioyr because the Unit-ed States is a big country capable of launching a budget January 1987 to the tune of $t triiiion. An increase in taxes of $:O bil1ion, or a decrease in spending of $:O billion wor:ld only amount to 5l( ol one trill"ion and yet be highly meaningf u1 in terms of the debt situation. And this is exactly where quantitative reasoning brings us; in per{:entage terms the sitr-ration does not look that critical for f-he Unit-ed States. My pnint, however, in the pirlur"e just" painted is that in qualitative terms lhe situat.ion is rather seridus. The l"js has the upper hand in the world division of.labor Ielative to many Third

12 11 World countries. But Japan has the Lrpper hand relative tn the ljso reducing the US to a country deli verinq raw natrrre, cheap lpbor " untied capital., cheap researrjh, inplementing operating procedures desiqnecl elsewhere anrj ultimately rjeliverinq rat,her sinrp,le, raw and semi-processed r;oods/servi ces. US receives in return a huge amount of highly sophist"inated go ods/ services, jr:bs and investment " This looks to some like a qreat dea1, getting so much for so 1itt1e. But that is, "visible part of the iceberg" reasoning. The US forgoes the spin-off effects from exerting ilself. And the basic value added will ultimately, t"hrouqh a network of transnat-ional business orqa nizatinns of' tremendous compl exity, end up in f-erritorial_ Japan more than in the Unit.ed Stat*=.14 Japan then dumps (if that expression may be parrjoned) excess population of ret"ired, presumably also tired, peopj.e who will only cont r j.br:te to the l.js economy as nonsumers but not as producers', technology thal probably wil -l never be state-nf-the-art by JapanesB standards, and manaqement practices that- resemble Japanese slandards' br.rt posing the qlrestion of whet-her Amerirans put into Japanese job definitions in the long r:un will function arjequately, after t-he f irst enthusiasm of havinq employrnent al al I wears r:lf. Besides, I may also arqrre lhat if t.his Donstruction should function Japan would j.n f act ha ve obtained what is -in the verv nature of economi r: imperialism: a reproduction of itself by nlnninq, t.he genetir: ttansfer menhanism being prenisely 0ne nf the mr:st effective socializinq aqents in Lhe world: work. experience is preceded by socialization 0f cdrjrse, when the work in the f ami.l"y and t-hen

13 IL redeated bv sncialization in the sehnols the resr.rlt is even more robust; two good reasons why Amerieans workino the Japanese way will remain j nferior to the real t.hinq, Historically the basir: tt-rrninq point" -i n the relationship be* tween the {Jnited States and Japan oan prr:bably be dateri to t.he period 7982 to 1985, I then use as indinator not the q':a1it-ative dif,ference between what- Japan exports to the tjniterj States and the tjnited St"ates exports to Japan--that difference in deqree of processinq has been in t.he f avor of Japan af reacl y f or some t-ime.15 But in the period 1982 to l9b5 the net f oreiqn asset.s of t-he Llnited States started pllrmmetinq from abor.rt- $150 billion in the black in 1982 for the LJnited States Lo $.t20 in the red t-hree years )6 later" Japan was always in t-he black, but went up in the same period from about $25 billion to $tl0 bi1lion, in ot.her words rnore in the black than t"he United States in the red" In 1985 Japan passed the United States as the major ereditor nation in the world. administu"t:q 2696 ol the world credit- as It opposed to the tjnited States 2596 (of cdrrse ther:e is something anomalous in the circumst-anne Lhat two countries alone ext-end mote than ha1fl of t"he t-otal world eredit--but- that is annther matter), The two percent,ages are similar brrt, they stand for verv dif:lerent circumstances: to be a r*'r'edi tor in t-he red is verv dif f e rent- f'rnm beinq a cred-itor in the b1ack. Morenver, most- of the Japanese credit is extended to First World count"rie$ whereas so rnuch of the US nrecjit is to countries in the Third Wr:rld. Japan is Iikely tn

14 'l 3 get her money back, the tjnited StaLes not- sinne sooner or Lat-er a number of, countries wiil pass the maqir: line between not real ly paying (relvinq on seemingly unenrting process of reschedulinq) to saying that they wi l1 not be repaying. This leads to the refllection: who in the worrd have the deepest trnderstanding of how the world econornic system is funnlioninq/b Rn.l in the United St.ates it might sooner or lat-er IearJ to another important reflection: maybe state planninq, when r--arried out by verv insightf'ul people is not t.hat inferior to totar reriance on the maqic of the marketplac-e? The former is long-t_erm and may t,enr:j t_o become riqid; the latf-er is short-terrn ancj may be unable to reflect adequately basic changes in t-he t-otal system, incfr:rlinq t.he parameters of that marketplar:e. The tempt.ation will be to make a f ast buck rat'her than tryinq to cotrect basic flaws in the structure of the economic relat'ions. Nowhere in the system can long term, basic pranninq for the national economy as a whole be implemented. Think tanks mav plan but not acl; companies may act but not plan for the nation as a whole. Let us onry add that the same appries to the worr.d economy: even brilliantly executed national plans do not necessarily add up Lo a healthy world econ0my. From these reflections on asymmetric exchange and "in_change', the spin-off effects--let us t.ecting the conf i guration of Lhen turn to the structural factor Dro_ exploitation.

15 I4 3. Is Japan. Penetratinq the Unit_ed States? In "A StrucLural Theory of Imperialism" a two-country, twoclasses model is qiven whe:re the four r:lasses are referred to as the center in the Center (cc), the center in the Per!phery (cp), the periphery in the Center (pc) and the periphery in the Periphery (pp ). As we are dealing with economic aspecls one might simply interprel it as management, employers or capitalists in the Center and in the Periphery respectively, and as functionaries, workers in the center and in the Periphery, Japan and the us. But I prefer these more qeneral terms for a more qeneral theory of imperialism coverinq not only edonomic aspects. Here are some simple conditions for penetration to function: ( 1) The qener:al leve1 of income in the Center shoulrj be higher than in the Periphery; (2) The distribution of innome should be more eqalitarian in the Center than in the Periphery; (3) A center in the Periphery should emerge in c-lose coopera* tion with the center in the Center. The reasoning behind these conditions runs as fol1ows. Most important is the third condition: this is the real- penetration, the reproduction of the []ent-er jn the Pe:riphery. What is expected her:e wou.id be a new class beinq formed in the united states of people at the service of Japanese penetration, They wou,ld obviously ennsist not only of manaqers of enterprises, but also of real estate

16 15 agents capable of solving prob.lems of, locat-ion and relncation, lawyers capable of negotiating contracts. finance specialist.s, linguistic interpreters and cult"ural interpreters of all kinds, human r:e-lations specialists, trade union specialists includinq trade union bust.ers, and so on. I am not col-rnting clriver.s, servants, cooks, gardeners since they are not in t_he center of the Periphery but in it.s periphery, However, some of them may qraoually become a Japanese 'trabor ari.stocracy", anrd like atl the people in the cateqories jr-rst mentioned not only gbt their rewards in the shape of discnunted travel to Japan, but- also sooner or Later acquire not only t-astes for thinqs Japanese but also Japanese tastes. I would expect the knowledqe of Japanese languaqe t-o increase quickly as penetration deepens, as usual in the name of internati onal eoopera t ion. The second condition countinq f'rom below is also important. what is hinted at is simply this: there is more of a distance to fall for those who cannot make it inlo the center in t-he Periphery country than in Lhe Ienter country]9 tne more inegalitarian the income distribution, the more there is to lose. And if we now extend the vision from quantity of inr:ome to quality of "incorne in terms of its secrjrity it i.s also readily seen how unemployment functions as a f artor faciritatinq penetration. rn the years 7965 t.o l9b6 there has been a steady qrowth in Japanese 20 unemployment, but only in the range between 196 and The uni ted states reached 1096 in , as did weste::n Eur:ope. But-

17 1/ -to then, in l9b5 the unemployment in the LJni t-ed States was down to 726 whereas in furope, on the avetag, unemployment had reached 1196 corresponding to 15 million jobs created in the United 5tates and I million jobs lost in Europe, 0n the surface this wr:uld mean that the tjniled States was more easy t"o penet.rate for risk-willing Japanese capit.al in l982 than 1985" After all, unemployment was denreasing a1t-hor-rgh still far above Japanese levels. But t"his is Lhe danqer oi too quantit.ative reasoninq; the qrrality of jobs also matters. Some.jobs were creatro2 Iin the f ields of informat ion/dal,a, via bio- technoloqv, but not t-hat many. Jobs were lost in mininq, texti 1e, steel and iron, car manufacturing---bncl quite many- Two million jobs were nreated in the form of snack bars and (hamburger et.c.) stands. But onry one qua.rter r:f the new jobs have rrnemployment insuranne, only 1916 of t,hem are unionized as opposed to 4O9i a short while ago (but" then Japanese unionizaf.ion is also decreasinq, from 4096 downwarcjslrzt*o thircls of the jobs make Iess t.han the "poverty ]ine" of $tl,e00 annual income, only B million r:f the job D have the minimum salary of $l.s5 and very many of the.jobs are for. women who on the averaqe make 6796 of t.he innome of men in the same jobs " Which does not" mean that people dn not. wor:k; f-he averaqe number of wnrking hor-rrs per week in l9b5 was 44.5 meanine a substantial overt-ime in order tn make ends meet, one wnuld presume. The job seeking process is hiqhly i'ompetitive with the former hold ers

18 I7 of menial jobs, the blacks, being thr'eatened by t"he f,hi nanr:s and--i would assume even for the near futr:re*-t-he holders of very many intellentual jobs, the Ameriean Jews. beinq threatened by highly qualiflied As;ians. Jn short, the picture is not. that d.if f erent- f rom whatone would f ind jn a Third Wot'Id cor:ntty in qeneral. The tremen- "job dous exness of demand over supply drives income down" and job quality down. As a consequenne the investor from t.he outside can qet what he wants: people wiilinq t.o perfnrm in jobs already definecl from the outside, and performinq well lest t-hey might sink f r:rther down in the hierarchy " 0f no!rlse, t-he situation is considerably mdre nlitical in "rea1" Third World countries. After ajl, in L9B5 there were only 3I million unemployed in lhe 0tCD countr:ies, althor:qh they were slrtrounded by poor housing, decl ining material standards in qeneral, deterioratinq healt-h care, urban pollution, dying forests, radi;:tion anrj what nol.23 This is still better than the sit"uat"ion of t-he 500 mil-l ion Lrnemployed in t-he Thir:d World, with a constant food crisis and starvation (40,000 children dyi.nq per day, amnuntinq to llt million per year corresponding to more t-han Ilt million per year; probably 5 million Africans dying in 198{+ alone)--with a debf, of $i t-riliion as one external symptom of the situation (cer:tainly not a cause I ). However, there are also important simi Iarities as alreadv pointed out' creatinq a new status fnr the tjs in t-he world communit-y. There havealways been pocket-s of structural ly induced underdevelopment in the U5, br"rt af t.er Independence t-he mechanisms have been endogenous to the US. Today some of t.hem are exogenous.

19 TB In connecti on with penelration t.here are three other structural characteristics that c'an be used t-r: protect a pattern of exploitation; segmentation, fr.agmentation and rnarginalization. There are el ements of segrnentat.ion in the p ictur:e ; the Uni ted States is increasi-ngly becnminq a sinqle r:rop, o'lr only f ew crops, country relative to Japan. I woul,d expect what remains of sophistication in US expor:ts to Japan tn dinrinish in the years to come. Thus, as Lhe balance in t.he area of wr:r1d debt indinates. the o-lrj adage that Japan may have an edqe in manufactured qoods but not in services, is nertainly far from true, What is true is a shortcominq the Japanese still have in Lerms of mastering the Eng lish J anguaqe" T o the extent servir-'es are deoendent on that linguistic factor Lheir neiqhbnrs in East and Southeast Asia might constitute more of a threat to US srjpremacy in the servines, The implication of this can be clearly seen in t.he major marketplace in what today is referred to as the qlobal village (which certainly is not- "g1oba1"as experienced by most penple, but as experienced by cc and cp)r the tax free shop at the airports. Let us have a look" Ther:e are pra.tically speaking no US goods (except chocolate, toothpaste, chewing gum) available. Sophisticated electronics cornes from Japan and neighboring countries. There are excellent wj nes and eheese f rom France, silk shawls and -1 eather qoods f rom Ita1y, Scotch whiskey and tartan textil-es from Scotland (from England there is also very littie). From the US there Inay be bourbon whiskey, possibly samsonite lugqaqe but in that case more likely than not, marje abroad. But; the buyinq is done/ more of ten t-han not' in American aceented Fnglish, the pricosrtnorb often than not,

20 I9 are quoted in dollars, and the transact.ions flre in fact made in doi lars or wit-h l"is based credit- car.ds, What I am sug!lesting is that ail of'this is fraqile- The Japanese may catr:h up in Enqlish, and even if they do not their neiqhbors are already there. As to the quality of their services anybody might c:olnpare, as an exanr ple* any airline orrt of East or sor-rt.heast Asia with any us airline. As to prices quoted in dollars: with the erratin behavior nf the dol1ar t-hat currenny may be increasinqly unacneptable as an internat-ional clrrrenny, and a tendenr:y in these qiobal rnarket-pfaces to qttote in other plices has been not-ed rerentlv. What is left are the credi t nards. Who knctws, maybe the Japanese wil l come up with a credit card with a built in compr.rter that immediatelv shows the balance, -includinq that sr:f t Japane$e voice tel linq yotl that you are danqer:ously close to the end of your credit line? As to IBM: it is qenerally annepted, althor.rqh ther:e are ups 24 and downs in this hiqhly eomplex fielrl, that- the Japanese are ahead in fiflth qeneration comput-ers, artificial intelliqence " And this raises the specter of Japan one day even being able to penpt-rate IBM to the point of creatinq a "joint vent-ure", off,ering IBM some liquidit-v and some techntrloqy, in ret.urn f or "codper.ation", meaning penptration. 0f colrtse, to take over another company with rnore than 5-19( of the stock is rather primitive; the refinerj approar:h would do with 1096 or less than the napital, but perhaps 9096 or more of the new i.t""*?5 The success of Japanese laptop computers is an example. The West does the initial R&D and develops consumer Lastes Japan makes something smafler, with higher quality and lower price, and conquers more marke tt