April, 2002

I have just read Benjamin Barber's Jihad vs. McWorld, yet another attack on the globalization of business, proffering that the world is destined to deal with either ethnic strife or a homogenization of western styled culture. He presents it either / or and is simply wrong-headed. He decries the mentality of International Business (mostly American business), consistently holding forth its tendency to flatten the ongoing social progress supposedly espoused by democratic (and not so democratic) national governments.

Big Business overpowers local culture and Jihad insists on its preservation at any cost, thus he claims the two are incompatible and one must win, one must lose. Yet the two largest democracies, India and the United States, are served by parliament and congress paralyzed with corruption and greed---the very same attributes Barber so despises in business.

Business survives and grows by providing the highest possible quality at the lowest possible price. That's what business is all about, that and market domination. It circumvents, by fair means or foul, all interventions in that process, including governmental intervention whenever possible. It is internally ruthless in the control of costs, an externally ruthless competitor. Government, on the other hand, is self-serving, self-perpetuating, oblivious to cost and generally provides the lowest acceptable quality consistent with reelection. The great number of governments are not even elected, at least not freely elected.

These are hip-shot definitions---neither government nor business is as bad or good as their critics or enthusiasts would have us believe. But it's a sound argument that when business invests in developing countries, the result is jobs and a lift to standards of living. Loans to governments or regimes more often end up in Swiss banks or squandered among insiders, the residue spent financing the weaponry of repression.

Warts and all, which is preferable?

Case in point: If even one half of the investment made in arming Israel had been invested in the development of a viable Palestinian economy (i.e., engine manufacturing plants, Nike shoe factories), perhaps we would not now find ourselves in an impossible confrontation of anger, frustration and suicide bombings. One is less likely, anywhere in the world, to go to war with a good customer than an opposing ideology. It's true that low-wage offshore manufacturing is opportunistic. But low wages are, at least, wages and they rise in accordance with capital investment, from which business cannot merely walk away. Contrast that investment with the horrendous costs associated with the 'balanced arming' of belligerent nations, which put no bread on any table and no car in any garage. Jihad and business are not mutually exclusive, it's power politics, ignorance, neglect and the corruption of governments that sets them one against the other.

Examples are almost too numerous to count, but Saudi Arabia is a good candidate for discussion. We have for decades supported an entirely corrupt monarchy in Saudi Arabia, that garners all wealth to the Royal Family, despises its population, rules with an iron fist and allows no social progress within its Muslim society. The tradeoff to the West is oil and military bases. Hardly an accident under those circumstances that so many of the 9/11 terrorists were Saudi citizens. If the Saudi monarchy encouraged and promoted secular education among its citizens, they would not be educated primarily by militant Islamic Fundamentalist schools. But of course, the development of an educated middle class is anathema to an Arabian monarchy. The House of Saud could not stand, and stand it will until overthrown. There's little here upon which to blame international business.

Yet, if business is not a threat to the Monarchy, it certainly presents a problem to Fundamentalist Islam and its grip on the faithful. Given a choice between Islamic impoverishment and Coke, abstinence and Madonna, the mullahs are in deep trouble. Given nothing but radical belief, the masses dare not be allowed access to MTV, Michael Jordan and western movies. Thus, unable to compete for the hearts and minds of the faithful, Jihad takes on the Monarchy and the western influx of 'heathen morality' with nearly equal fervor. I say nearly, because the Saudi monarchy has bought off an Islamic day of reckoning by covert support of al Qaeda and bingo!, we're back to square one and the Saudi involvement in 9/11.

I suppose we could pull out Coca Cola and MTV, stop supplying military equipment to the King and just let the whole area revert to camel caravans, but it's hard to put back the genie of oil riches and the West needs that oil for as long as it holds out. Much of the world's oil is controlled by regimes and religions unfriendly to the West, so this is going to be a very long-playing record, but that's entirely another subject.

The heart of the matter is that governments and business are both greedy and corrupt, but business (unlike government) ultimately serves the tastes of its customers, no matter how low those tastes and how manipulated they may be by advertising. No business so far puts a gun at the head of its customers and yet many governments do just fine by that standard. Given the choice, I prefer Wal-Mart to the ayatollah and perhaps the Islamic world does as well, which is part of the problem. Our problem, their problem, the problem.

Those parts of the world where business thrives have done well, the quintessential haves. Those under the heel of autocracies, where the business climate has withered or never taken root at all, have consigned themselves to the 11th century and make up the have-nots. It's not a free choice for them. Westernization brings change and change threatens Islam and other self-serving power structures. Thus these countries opt for keeping western culture out and western weaponry in. It will change---change is in the air, but terrorism is in the air as well and we are certain to make many blunders along the way to accommodation. Democracy is a blundering business.

But the corporations will prevail and corporate investment requires a workable and accessible legal infrastructure or it stays home. Investment loves law nearly as well as profit. That lesson has been learned in Russia and is being learned in China. These pressures work slowly, but they work. A legal framework, even a flawed framework, is the first step toward civil society and it comes not from political pressure or world opinion, but from the need to do business or be passed by.

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