STRATEGY ONLINE: PRESENTATIONS


The World You Will Inherit
TEN FORCES THAT WILL SHAPE YOUR FUTURE


On February 19, 2004, Dr. Billy O. Wireman delivered the following address to the Foundations of Liberal Arts and Sciences Seminar at Sykes Learning Center at Queens University of Charlotte, NC. Billy O. Wireman was the President Emeritus of Queens University in Charlotte, as well as a member of Norelli and Company's Board of Directors.

I want to thank the faculty and students of the Liberal Arts Foundation Seminar for inviting me to share my views on globalization, a worldwide development that New York Times columnist Tom Friedman describes in The Lexus and the Olive Tree as the “one big thing happening in the world.” Friedman defines globalization as “the world-wide integration of economic and political cultures.” Market economics and the Internet drive globalization, which Friedman contends is irreversible. Both of these forces cannot be turned back, because, according to Friedman, “no one is in charge of them.” They are driven by energy and opportunity, grounded in the hopes of millions of individual, corporate and national aspirations for profit and potential that is welling up throughout the world. Friedman gives further precision to his thesis on globalization by identifying two key concepts critical to its success:

The Golden Straitjacket:

With 90 percent of the world’s population now living under some form of market economics, countries are scrambling for foreign investment. Investors, motivated principally by return on investment, have established certain ground rules as conditions for their investing. Friedman outlines these conditions:

You have to fit into the Golden Straitjacket. This means to make the private sector the primary engine of economic growth, maintaining a low rate of inflation and price stability, shrinking the size of the state bureaucracy, maintaining as close to a balanced budget as possible, if not surplus.

Further, countries are expected to have a viable banking system and bond market, deregulate the economy and be scrupulous in rooting out corruption. These requirements mean that external economic forces intrude into a country’s political independence, which is anathema to most political leaders, especially dictators and ruthless leaders who manipulate the democratic process to stay in power. Tensions growing out of this conflict often stifle globalization.

The Electronic Herd:

Now operating in 180 countries, the Electronic Herd is a group of anonymous stock, bond, currency and multinational investors, connected by screens and networks. Their work is done largely through the Internet and personal contacts. The herd determines the degree to which the rules of The Golden Straitjacket are being observed. If the fundamentals are sound, investment is possible. If they aren’t, the herd will cut you no slack. The only criterion is the high probability of return on investment. Business is business, and there is no compromise. One developing country official seeking investment after being turned down several times, reflected both the truth and his own frustration. “I was mad as a hornet at not being able to attract investment, but what do you do? There is no one to call.”

While few would disagree with Friedman, I want to try to put his thesis in historical, cultural and political perspective. My thesis is simple and to the point: All human activity — financial, political, educational, religious — takes place within a historical and cultural milieu that shapes the values people hold, which, in turn, dictates the decisions people make. To understand people’s values and decisions, you must first understand the culture that nurtured and prompted them.

Against, this backdrop let me place globalization in historical context and identify ten major forces that will shape your world in the early to mid 21st century. You students here range from 18 to 20 years of age. Given a normal life, you will live to 70 plus, which takes you well into the 2050’s. To prepare for this journey, it is important to remember that the Queens Liberal Arts Foundation sequence is calculated to help you make the seamless connections between what “has been,” what “is” and what “ought to be.” Stated more simply, we can’t know clearly where we are going unless we understand where we have been and where we are today. While the “has been” and “is” are of critical importance, only to the degree that we act aggressively with passion and conviction on what “ought to be” do we become creative, participating citizens who are not only carriers but also creators of a free society. We are always in a state of becoming. And remember, developing these kinds of citizens is what Queens University is all about.

In terms of understanding the sweep of modern times, let’s listen to former director of the Central Intelligence Agency James Woolsey. In an address to a student forum at UCLA in April 2003, Woolsey opined that, “The United States is engaged in World War IV.” “This fourth world war,” he continued, “will last considerably longer than either World War I or II did.” “But,” he concluded, “not as long as the full four-decades of the Cold War.” More specifically, the First World War lasted from 1917 to 1919. While Germany was defeated, the punitive settlement at Versailles planted the bitter German seeds that resulted, partially at least, in the rise of Adolph Hitler and World War II. Following the end of this war in 1945, we entered into what Woolsey calls World War III, which is commonly known as the Cold War. This bi-polar world consisted of the Soviet Bloc and the Western Bloc. Over a 45-year period the West – America and its Allies – spent $11 trillion to bring down the Soviet Union. With the fall of the Berlin Wall on November 9, 1989, the Cold War ended, and we began what many call “The Victory Celebration.”

Following the fall of the Berlin Wall, overnight the Cold War became a festive “street dance.” The West had won. Communism was defeated. Francis Fukuyama captured the euphoria of the era in his book; The End of History, which argued that the only viable approach to building a just and productive society was Western, liberal, democratic capitalism. These developments ushered in what we now know as a uni-polar world with America standing astride the globe like no power since ancient Rome and Britain. America’s technological, cultural, economic and military strength stood virtually unchallenged.

But trouble was brewing. In 1993 terrorists bombed New York’s World Trade Center. A portent of things to come is found in a statement at his trial by Filipino Ramzi Yousef, one of the convicted terrorists.

You keep talking about collective punishment and killing innocent people…You were the first one who killed innocent people and you are the first one who introduced this type of terrorism to the history of mankind when you dropped an atomic bomb which killed over 100,000 people, most of them civilians, in Tokyo with fire bombings. You killed them by burning them to death. And you killed civilians in Vietnam with chemicals as with the so-called Orange agent. You killed civilians and innocent people, not soldiers, in every single war you went in to. You went to more wars than any other country in this century, and then you have the nerve to talk about killing innocent people. And now you have invented new ways to kill innocent people. You have the so-called economic embargo, which kills nobody other than children and elderly people, and which, other than Iraq, you have been placing the economic embargo on Cuba and other countries for over 35 years. The government in its summations and opening statement said that I am a terrorist.

Yourself concludes with a sober admission: “Yes, I am a terrorist and I am proud of it. And I support terrorism so long as it is against the United States government and against Israel, because you are more than terrorists; you are the ones who invented terrorism and are using it daily. You are butchers, liars and hypocrites.” Yousef went on to proclaim that he merely wanted to destroy The World Trade Center and have the twin towers fall on each other and kill 250,000 civilians. He went on to explain that in January 1995 he planned to blow up a dozen American airliners in Asia. The presiding judge at Yousef’s trial, Kevin Thomas Duffy, put Yousef in his place: “Ramzi Yousef, you claim to be an Islamic militant… but you cared little or nothing about Islam or the faith of Muslims…you sought to maim and kill innocent people…you adored not Allah, but the evil you yourself have become.” Middle East expert, Stephen Cohen, describes Yousef as typical of an untold number of other disenfranchised young Arabs: “They used to believe that they had to overthrow their own governments and get control of their own states before they could take on America. Now they just do it directly on their own as individuals.”

And to the key point that places globalization in historical perspective: “It” (globalization), Cohen continues, “not only makes it possible for them to attack the United States as individuals, it not only gives them to the motivation to do it, it also gives them the logic,” Cohen concludes. “The logic is that their own states don’t represent the real power structure any more. The relevant power structure is global. It is in the hands of American power and the Supermarkets, and they are the ones who tell all other governments what to do. Therefore, if you want to bring down the real power structure, you have to go after the superpower and the supermarkets and not bother with the government of Pakistan and Egypt.”

Yousef’s angry rhetoric combined with the bombings of the American ship, USS Cole, in Yemen’s harbor and the embassies in Africa are both a prelude and segue to the official start of World War IV, which is symbolized by the orange and black smoke billowing from the World Trade Center on September 11, 2001 as two American commercial airliners, with terrorist pilots, flew directly into the towers. Further evidence of the new war was the Pentagon bombing and an American airliner, which many think was headed for the White House, that crashed in a western Pennsylvania field due to heroic resistance from the airline passengers. Significantly, the terrorists, 15 of 19 were from Saudi Arabia, with a budget of a mere $300,000, exploited American freedom and used our planes and our flight training centers, to implement this dastardly act of terror, which sent shock tremors throughout the world. This event brings us to the first and strongest of the ten forces that will shape the world you will inherit:

Terrorism:

Violent action by terrorists has been around since time began. Examples in modern times abound in Northern Ireland, Spain, Italy and Germany to name a few. And who can forget Timothy McVeigh and the Oklahoma City bombing? But the depth and extent of Osama bin Laden’s Islamic Jihad – Holy War — are unprecedented. The son of a wealthy Saudi developer and financier, bin Laden, is driven by a hatred of America and his determination to rid Saudi holy soil of the infidels occupying the American bases in Saudi Arabia. Not able to overthrow his own government, bin Laden has developed a worldwide terrorist network, al Qaeda (the base) that preys on the frustration and bitterness of young Arabs, both successful and those disenfranchised, who “hate America more than they love life.” After being driven out of Afghanistan, bin Laden regrouped and now directs his international campaign of hate from mountain caves in Pakistan. While we can put a “smart bomb” down a smokestack in Baghdad, we are having trouble finding Osama bin Laden in the labyrinth of Pakistani caves. The Iraqi Freedom invasion is instructive to what we can expect. In no time we conquered Iraq, brought Saddam Hussein down, and occupied the country, but winning the peace and bringing order and stability to Iraq is proving to be very difficult. We get back to the cultural milieu issue. Trying to introduce democracy to warring religious factions who have been under iron rule throughout their history is a daunting task, which takes us to our second issue.

Iraq:

President Bush’s noble attempt to democratize Iraq and have the concept throughout the Arab world is an undertaking of courage and daunting immensity. His
comparison to Germany and Japan after World War II, however, is slightly flawed. Both of those societies were relatively homogenous and had had some experience with freedom and industrialization. Iraq has had little of either. If Iraq moves slowly but successfully – no matter how tediously to democracy, the decision by President Bush will be ranked as one of the most visionary moves of our time. If it goes sour, bitterness in the Arab world toward America will fester even more. Either way, your generation will deal with either the benefits or negative consequences of the outcome. As Americans, deeply steeped in freedom and democracy, we can hope and pray that our efforts in Iraq will lead to freedom and democracy for the Iraqi people. Combined with Afghanistan’s 25 million, Iraq’s 25 million make 50 million people who have been freed from bondage by President Bush’s post 9/11 decisions. Consequently, the Afghans and Iraqis have a historic opportunity to embrace democracy and prosperity. Additionally, President Bush’s Road Map proposal to bring Arabs and Israelis to accept each other and establish two separate peaceful states adds tension to the Iraqi question. How these struggles come out matters greatly to your future.

The American Economy:

In the last four years, America has been confronted with one challenge after another. We entered into a recession in mid-2000, and then in rapid fire we had 9/11/01, the war in Afghanistan, the invasion of Iraq and President Bush’s tax cuts, which will take roughly $3 trillion out of the tax base over the next decade. The consequence of these developments: America has moved from a $5 trillion projected surplus to a $4 trillion deficit over the next ten years. The federal budget shows a $500 billion deficit this year, the largest in history. The president’s plan is to reduce the deficit by one-half in five years. Critics question whether this can be done. The President’s defenders point out that the deficit is a manageable four percent of America’s Gross National Product, and economic trends suggest job growth and a rapidly recovering economy. Add the fact that in a dozen years or so, 70 million baby boomers will retire, which will place additional strains on America’s Social Security and Medicare systems that are already being depleted. Add to this troublesome mix, the debate over the outsourcing of American jobs and the loss of manufacturing jobs and we find ourselves on the threshold of a divisive debate over trade policies and protectionism. There must be a way out of this, and we can only hope that our political leaders turn to and get serious about our economic future.

Strains in the Atlantic Alliance:

America was settled mostly by Europeans. Some 50 million European immigrants came to America seeking new opportunities and a better life for themselves and their families. The relationship between America and Europe, consequently, grew in strength over the years. We fought together in wars and, with a common ancestry, developed close bonds. For 50 years following our successful cooperation in winning World War II, we expanded democracy, freedom and prosperity, especially in the West, to unprecedented heights. But with the 1991 implosion of the Soviet Union, we lost a major threat that bound us together against a common enemy. Economic and trade conflicts became more relevant and the Iraqi War opened a serious breach, especially between Germany, France and America. Knowledgeable observers of European-American relations now contend that we no longer enjoy, “a common culture or a compatible vision of the future.” Significantly, Europe, due to low birth rates and resistance to immigration, will lose 100 million citizens in the next 50 years. America will gain 50 million due to replacement birth rates and openness to immigration. These trends have serious implications for international politics and economics. The rise of Asia as a major power will be a significant new factor in world affairs. Add the increasing immigration of Latinos – now the largest minority group in America – and Asians to America, and we discover a major transformation in American demographics. We must welcome our new citizens from Latin America and Asia and other parts of the world, and offer them every opportunity to participate fully in building America in the 21st century. Additionally, we must continue to expand opportunities for African Americans, who have been a part of America from the beginning. All of this will require new levels of understanding and sensitivity to make every one in America feel at home and a part of the future. It is from your generation that these imperatives must come.

Nuclear Proliferation:

There is no more serious threat to the survival of the human species than the specter of widespread nuclear proliferation in the hands of irresponsible tyrants and weak leaders. The efforts of America and it allies to convince North Korea and Iran to dismantle their nuclear weapons programs must succeed. Can you imagine a Hitler with nuclear capability in the dying days of his hoped for Empire? Iran’s hostility toward America is fed by our former friendship with the Shah of Iran and the late Iranian Ayatollah Kohemini’s description of America as “The Big Satan” and Israel as “The Little Satan.” Interestingly, while a working democracy, the Iranian Islamic leaders have established a “Guardian Council,” which has veto power over legislative decisions. Young Iranians are hungry for more freedom and 200 elected Iranians legislators have threatened to resign if they are not given more freedom in Iranian affairs. In North Korea, a failed state that can’t feed its people, dictator Kim Jong Il has admitted to a nuclear weapons program. We are working with China, Russia, Japan and South Korea to make North Korea nuclear free. These as well as the efforts with Iran must succeed. Recent news out of Pakistan that its top nuclear scientist, Mr. Abdul Khan, had sold nuclear know-how to North Korea, Iran and Libya is not comforting. Fortunately, he was caught, admitted his crimes, and while he was pardoned by the president of Pakistan, we nonetheless, have removed, temporarily at least, a nuclear proliferation threat. Imagine a world where 50 or 60 nations have nuclear capability – frightening indeed.

Russia’s Evolution to Democratic Capitalism:

Time was, only a short decade ago, when Russia was “The Evil Empire.” But, overnight on December 25, 1991, Russia moved from empire to nation state and from communism and a command political system to democratic capitalism. Never in history has an empire been so quickly dismantled and at once embraced political and economic freedom. It is important that Russia succeed. It still has 25,000 nuclear weapons, and if it becomes a bully, it could destabilize the former Soviet Satellites, which would be a destructive force in seeking world stability. News from there is mixed. After Mikhail Gorbachev, who freed Russians from political and economic serfdom, fell from power, extreme imbiber Boris Yeltsin became president. His handpicked successor is Vladimir Putin, a former KBG agent. While economic and political freedom appears to be eepening, stories about trying to control and punish the press, widespread corruption and power centering in Moscow are disturbing. Here again, we encounter that old nemesis, culture. For 1000 years since Vladimir converted all of Russia to Eastern Orthodoxy, Russia has been struggling with the options of looking west for its future and being pulled to the East. There is a strong feeling in Russia that the old Slavic village and agricultural life contained a certain spiritual quality that is superior to the materialism of the West. Having missed the intellectual ferment of the Renaissance and the moral earnestness of the Reformation, Russia is desperately trying to find its place in world affairs. Russians are a proud, well-educated people and having them as a partner in expanding freedom and economic prosperity is critical to Europe and the world.

The Rise of China:

In the 15th century China was a major world power. At one time it produced 32 percent of the world’s GNP. But due to decisions by several Emperors (one called all Chinese home with the assertion that there was too much work to do at home to be out roaming the world in search of power and treasures) and what the Chinese consider exploitation by Japan and the West, principally Britain, China lost its international power. A large population has been a major obstacle to progress. In 1790, when China had 300 million people, America had three million. Key players in recent years have been Chiang Kai-shek and Mao Zedong. During the last days of World War II, Mao wanted to fight Japan and cooperate with Chiang. Chiang would have none of it and with the backing of America, continued to fight Mao’s peasant army. Mao won and Chiang fled to Taiwan in 1949. Mao ruled with a revolutionary zeal until his death in 1976 at which time Deng Xiaoping took over after the brief tenure of a Mao favorite. Deng in 1978 launched China on a course of progress by telling farmers, “grow what you want to grow, sell it to whomever you want, for whatever price you can get.” This market concept increased farmer’s income fivefold in the next decade. Beginning with Deng’s major departure from Communist doctrine, China has had a 20-year plus average annual growth of nine percent. Except for a major bump on June 4, 1989 when China suppressed a student rally in Tiananmen Square and a senseless conflict with the Falun Gong religious group, China has made steady progress toward becoming a responsible member of the world community. In 1997 China peacefully reassumed control of Hong Kong after 150 years of British rule of the city, and Macao was returned by the Portuguese in 1999. The Middle Kingdom now belongs to The World Trade Organization, and Beijing will host the 2008 Olympic Games. China’s aggressive help with trying to rid North Korea of nuclear capability is another indication of responsibility. Having rediscovered a sense of greatness and having slowly shed its mentality as being a victim, China is destined to be a major world power in the 21st century and could easily have the world’s largest or second largest economy in two decades. The Chinese are industrious, smart, hard working and want once again to be rich and powerful. Given its present course, there is a strong chance that this will happen. Taiwan and Hong Kong remain pesky issues, but here again, China is showing some restraint.

The last three issues that will shape your world – the feminization of poverty, the AIDS epidemic and establishing realistic expectations for the United Nations – are not as sharply focused and pressing as the first seven factors. But nonetheless, they will be subtle but important influences in the kind of world you will inhabit.

The Feminization of Poverty:

Confined principally, but not exclusively, to the developing poor countries, the inferior role of women is a major obstacle to developing widespread prosperity and justice. The key is having young women attend school and develop a sense of self-worth by feeling that they have a future outside of producing and raising children. Motherhood is an honorable endeavor, but the data are irrefutable: the lower the level of education of women, the higher the birth rate. Raise the educational level, and birth rates decline. To deprive the human enterprise of 50 percent of its potential is wrong for moral and
practical reasons. Women are very able and it is unjust to deprive them of equal opportunity.

The AIDS Threat:

Sadly, we do not know how to deal with this deadly scourge. Countries are reluctant to report the facts as they feel it reflects unfavorably on them. But we do know that the plague is spreading much faster than reported. If left uncontrolled, we could face a major death toll in addition to the astronomical medial costs of taking care of the victims. And think of the agony of families watching loved ones die a slow death with no cure in sight. The magnitude of this threat is probably closer than we realize.

The United Nations:

Since the conflict over the UN’s involvement — more accurately non-involvement — over the Iraqi War, I hear too frequently that the UN is “worthless” and that we should withdraw from this ineffective organization. I hope we can discourage this negative thinking and develop a more realistic view of the UN. It is basically a debating society. It cannot wage war or make power decisions that engage countries against their will. Its 180 plus nations go from abject poverty to wealthy. On the face of it, UN members have little in common. But they do. The environment, children, health and drug trafficking issues, responding to hunger and famine crises, and providing a forum for discussion of sensitive matters are important UN functions. If we didn’t have the UN as a forum for discussing and dealing with these issues, the world would be impoverished. The UN’s present involvement in determining the best time and approach to Iraqi elections is illustrative of the constructive role it can play in resolving sticky international issues. Though the UN is headquartered in New York and America underwrites a disproportionately large part of the annual budget, we can’t expect smaller, poorer countries to always agree with us. In fact, most of them don’t, most of the time. But let’s be high-minded and agree that if we didn’t have the United Nations, we would have to invent an organization to take its place. Let’s be realistic about the United Nations and let it do what it does best.

The mutual interaction of these ten factors will shape the geo-political, moral dynamics of your world in the 21st century. On the face of it, collectively they represent a well-nigh impossible challenge. But we must not despair. America is a strong nation with resourceful people. We gained our independence, with the help of the French, against the odds. We built churches, schools, and strong businesses, came back together after a bloody Civil war, survived a major depression and helped win two World Wars. After these wars, we helped our former adversaries rebuild and prosper. We helped fell the challenge of communism. We weathered difficult situations like Vietnam and saved both Taiwan and South Korea from communist domination. We rescued Mexico from bankruptcy and at the same time have educated more citizens in higher education than any nation in history. We have wronged black people and have not always respected the rights of women, but we are doing something about these issues. In space we have been to the moon and now have Mars in sight.

To be sure, as we face the future, we see both difficulty and opportunity. As in Lincoln’s day, “Our problems are piled high,” and as he continued, “as the times are new, we must think anew.” Let’s be about the business of being a model in building a just, enlightened and humane society. My travels take me all over the world, and I can say unequivocally that we have the respect if not often the affection of most of the world. We do live in a time of great revolution, but the most revolutionary idea of all is human freedom. Your task is to build on America’s strengths by ensuring that people are attracted to us not for the glitter of our wealth or the power of our weapons, but for the splendor of our ideals and our commitment to justice.

I have great confidence in your generation and I wish you well. Godspeed on your journey.

 



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