THE BORDERLESS WORLD; Power and Strategy in the Interlinked Economy <i> by Kenichi Ohmae (Harper Business: $21.95; 217 pp.) </i>
In 1985, hoping to coax America into removing his nation from its list of “unfair trading partners,” Japan’s prime minister made a speech urging each of his countrymen to buy at least $100 of American goods. No longer practicing their parsimony of the early ‘80s, many Japanese began doing just that, purchasing everything from Wilson tennis rackets to Del Monte catsup and Kleenex tissue. But as Kenichi Ohmae points out, there was one problem: These (and many other) “American products” had in fact been made in Taiwan, Portugal, Hong Kong and Japan.
Ohmae, a leading luminary in American and Japanese management circles these days, cites the above example to show how obsolete the notion of “national industries” has become. To win the game of hardball being played in today’s fast-changing, high-tech economy, he reports, companies are compelled to farm out projects to regions with cheap labor or prowess in a specialized area of manufacturing, regardless of whether those regions lie at home, elsewhere in the “Interlinked Economy” of the United States, Japan and Europe, or in the developing world. If there are to be economic wars in the ‘90s, Ohmae predicts, they will be fought not between the United States and Japan for trade surpluses but between regional alliances such as Orange County-Japan and North Carolina-Hong Kong for international R-and-D funding.
Well aware that both protectionism and Japanophobia have been on the rise in America, this Tokyo-based consultant is careful to put a Populist spin on his free-market arguments. Politics, he writes, has come to play an increasingly marginal role not only in the affairs of corporations, but in the lives of consumers (who will buy the cheapest, most reliable appliance regardless of its nationality) and of business people: “When Houston’s oil-based economy went into a steep decline a few years back,” Ohmae points out, “it was not just the foreigners who pulled out. Americans did too--and just as fast. Money is money. It’s the most purely rational thing there is.”
But money also can blind, Ohmae realizes: He questions a number of sacred cows, from “do more better” to salary inflation, which incredibly has allowed CEOs of big American companies such as Chrysler to make 1,000 times more than their factory workers (in Japan, a CEO’s total compensation is six to 10 times that of the lowest-paid worker).
Despite its occasional vision, though, “Borderless World” is a small book trying to promulgate big, radical ideas, and too much of its reasoning is of the casual, flippant sort that one might expect to hear in a country-club locker room. “Government does less and less for me every year,” Ohmae writes, not stopping to consider that the neat picture painted by the statistics--enough jobs were created in the ‘80s to compensate for jobs lost to foreign labor--does not necessarily match the picture in the streets, where half a million American auto workers lost their jobs in the ‘80s. Governments, which Ohmae dismisses as “little more than spoilers who disrupt markets with their interference and announcements,” might have been able to anticipate the industry shift and retrain or relocate workers.
What ultimately underlies Ohmae’s arguments, then, are not statistical verities, as he would like us to think, but a conviction that as standards of living rise, people renounce religious and political dogma, worshiping “the good life” instead. Therefore, he reasons, we need not diversify or protect industry at home to guard against embargoes or wars. But Ohmae, still a bit giddy from the free-market Bacchanalia of the ‘80s, doesn’t seem to see that in the wealthiest of countries, from America to Saudi Arabia, money often has failed to buy people away from their faith.
