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Bestselling author and renowned economist Lester Thurow argues forcefully that globalization is not a done deal and we must seize the moment now if we are to create a new global economy in which all can prosper.
In this new book, Thurow examines the newly–forming global economy, with a special focus on the role of the US and the dangers to our own national well–being. He examines such questions as: What's at stake for us in the global economy? Why is it important that the system be equitable and that other countries prosper along with us? What should our goals as a nation be – long term and short term? What are the tough choices that need to be made in our relationship with other countries and world regulatory bodies? What role should we be playing globally? What are the political, economic, social choices / tradeoffs we will have to confront?
Thurow contends that the huge and growing US trade deficit poses grave dangers to the value of the dollar and is putting our own economy in jeopardy.
As the world economy leaps national boundaries, its hallmark seems to be a rising instability and a growing inequality between the first and third worlds. Financial crises in the third world come ever more frequently and seem to be ever more severe. The first world economies seem to be in ever more frantic boom and bust cycles. Globalization causes riots throughout the world and is one factor in the rise of terrorism against the West.
Thurow shows how some nations, including Ireland and China, have embraced the concept of globalization and placed themselves into a position to prosper with growing and productive national economies. He contrasts their positive actions with Japan, whose leaders have allowed the nation to drift into stagnation and have destroyed its prosperity.
He argues that this is the time to choose globalization or be left behind, the time to "build a global economy that eliminates the defects," and he provides plenty of ideas for corporations, governments, economists, and citizens to act upon.
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About the Author
Lester C. Thurow is the Lemelson Professor of Management and Economics at the Massachusetts Institute of Technology, where he has taught since 1968. From 1987 through 1993 he was dean of MIT's Sloan School of Management. His previous books include the New York Times bestsellers The Zero-Sum Society and The Future of Capitalism.
Read an Excerpt
Fortune Favors the Bold
What We Must Do to Build a New and Lasting Global Prosperity
A Global Economic Tower of Babel
Globalization is much like the biblical Tower of Babel. The construction of a global economy has begun. Some are for it! Some are against it. Neither group knows exactly what "it" is.
This economic Tower of Babel is being built without a set of construction plans. The neessary architectural drawings aren't even in the proess of being drafted. Governments aren't thinking about the appropriate designs, since the tower is being privately built. National governments would, in fact, rather not think about globalization because it diminishes their role and their powers to control economic events. The actual builders, private firms that are moving their economic activities around the world, don't think about the design and construction of the global economy since each is small relative to what is being built. For those who are true believers in the efficiency of private markets, there is no need to think about the institutions and rules of globalization. Whatever is necessary will simply evolve in the marketplace without private thought or government action. Markets will automatically set the necessary construction standards!
As in the biblical Tower of Babel those involved in constructing the global economy are speaking many different languages. Globalization means many different things to many different people. Arguments for and against it are often self-contradictory. Perhaps these different languages and the associated disputes will stop a global economy from being built -- just as they stopped the biblical tower design to go to heaven from being built. If so, is that a good thing or a bad thing? Have we prevented ourselves from getting to an economic heaven? Or have we prevented ourselves from over-reaching, trying to play God, and ending up in what will surely be an economic hell?
Anxieties are high. The violent antiglobalization demonstrations that have occurred at both public (WTO, IMF, World Bank, Seattle, Goteborg, Bologna)and private (Davos) global meetings in the last few years have delivered that message. Although the number of actual demonstrators is few, I suspect that if every newspaper in the world tomorrow were to have the headline "Globalization Ends," far more than half of humanity would feel relieved. In global public opinion surveys less than 20 percent of the population thinks the world is doing well.
What do the protestors dislike? What would they like to see happen? Beneath the noise and babble what is their real message? What are they trying to tell us about globalization? They predict disaster! But which of the predicted disasters are possible and which are impossible? For those that are possible, what are the real causes?
Real disasters are almost never caused by a single factor alone. Investigators start with a jumble of possible causes that have to be sorted out to find the sequence of individual causes that together produced a particular disaster. The same procedure has to be followed when trying to understand the predictions of disaster by those who are against globalization. The nature of the predicted disasters and their potential causes are all jumbled together. They have to be sorted out.
In the conflicting babble generated by the construction of our global economic tower, the problem is to distinguish noise from information -- truth from fiction. The investigator begins by trying to separate out what is true and false in the different arguments. Only when truth has been separated from fiction is it possible to add up the pluses and the minuses to determine whether we should accept or reject globalization.
But there is a third choice. The third choice is to build a global economy that eliminates some of the minuses that have been found. Even if the initial summation indicates the benefits far exceed the minuses, the minuses can be further reduced. The global economy will partially evolve in response to foreseen and unforeseen uncontrollable forces, but in the end it is a human, not geological, construction and an be built to different specifications. Globalization can be shaped.
But to do so it is necessary to understand the dynamics of globalization so the for es of globalization can be used to change the course of globalization. There are actions to be taken that an enhance the positive effects of globalization and minimize its negative effects. These possibilities are outlined and discussed near the end of the book, since an in-depth understanding of the full range of the forces of globalization is necessary to evaluate the various possibilities. What seem like disconnected problems are often connected problems.
In separating the facts from the fiction in all the babble about globalization, it is important to understand that the economic Tower of Babel looks different depending upon where you stand. The rich and successful at the top of the tower see something quite different than do the poor just starting to climb the stairs at the bottom. Those standing far away, outside of the global economy, see a tower with very different contours than what are seen by those working inside the tower. Not surprisingly, the economically,militarily, and politically large and powerful fear the construction of the tower much less than do those who are small and weak.
It is not that one of these perspectives is right and the others are wrong. Each focuses on different elements of the tower. All reflect some aspects of the truth. No one an have all these perspectives simultaneously because no one can see the entire tower or the entire truth. That is why those who are rich and successful, large and powerful, and inside the building of the tower have to listen to the views of those who are poor, unsuccessful, small, powerless, and outside of the global economy. The first group cannot see what the second group sees, but the first group can listen to what the second group has to say ...Fortune Favors the Bold
What We Must Do to Build a New and Lasting Global Prosperity. Copyright © by Lester Thurow. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.