Barry Lynn is the former executive editor of Global Business magazine and a former reporter for the Associated Press and Agence France-Presse.
When Congress summoned Enron's top executives this February and made them
sit, hands folded, in front of the TV cameras, we at home were treated to a
familiar display of Washington theater. Because most of these men had invoked
their Fifth Amendment right not to incriminate themselves, no one expected much
new information to be revealed. But our congressmen certainly were not going to
let pass a chance to broadcast to the world their indignation at the gross
mismanagement of a company that had once been so powerful, and so generous. Even
at the highest pitch of their fury, however, few of the politicians ever
actually said that what the executives had done was illegal. Although the
erstwhile pipeline company had certainly become more skilled at pumping debt
into subterranean partnerships than at earning money by pumping petroleum, it
was not clear that any of Enron's bosses had in fact overstepped the bounds
Congress had set for the conduct of their business. But then this was not the
first time our elected representatives had publicly chastised one of their
children for smashing the car, knowing full well that they themselves had
liquored the kid up beforehand and slipped him the keys.
What most amazed me was not the elasticity with which Democrats and Republicans
alike twisted their faces into expressions of outrage. Rather, it was that a
risk to the nation so very analogous to Enron, yet potentially so much more
dangerous, was, and still is, being ignored by these same public servants. Then
again, it's easy to string up a single bad Andrew Fastow, or a disingenuous
Jeffrey Skilling or Kenneth Lay. But what's a government to do when a whole
generation of corporations prove prodigal?
Out of sight, out of mind, or so seems the philosophy these days at Texas
corporations and Georgia crematoriums. But this only works for a while.
Eventually a neighbor's dog yanks some nasty treat onto the road. Or a few
billion dollars in vanished debt leaches up through a Houston swamp. So we might
as well prepare ourselves now for similar revelations, one of these days, about
our "global" manufacturers. Much as Enron spent the 1990s shifting
debt off its books, America's manufacturers spent those same happy years
shifting many basic operations right off their factory floors. And by this I
don't mean simply offshore but right out of the company, along with the
responsibility to make sure their world-spanning assembly lines always run
right. Like Enron, our manufacturers did so largely to pump up the value of
their stocks. And, like Enron, they will probably get to watch one day as their
empty edifices collapse. Unlike Enron, however, this crash may bring down a lot
more with it than one or a few companies. The global assembly lines that
manufacturers such as Dell, Ford, Motorola, and Intel have so expertly
engineered these last few years-in which, say, a single semiconductor might be
cut from a wafer in Taiwan, assembled in the Philippines, tested in China, fit
into a subcomponent in Malaysia, plugged into a component in Brazil, and loaded
with a program designed in India-are just as audaciously complicated as any of
Enron's financial schemes. Yet because manufactured goods are so much less
fungible than money, these systems are vastly more vulnerable to the mysterious
mutterings of God or the deliberate hand of man and state. We now live in a
world where a single earthquake, or terrorist attack, or embargo, could in a
moment bring our economy to a halt and, if played right by some smart state,
might well threaten the very fundaments of our national wealth and power. And
for this we received what' A few thousand points on the Dow? A half-percent
uptick in annual productivity growth? A capital gain, as it were, on every 1040?
And I suppose we will be treated to another fine show from the Thespian Club on
the Potomac. This time, however it will play as tragedy.
Globalization is many things, and much has been written about it and said.
But throw all the tomes and studies and placards into a giant tryworks, and
you'll render two simple arguments:
(1) Globalization is good because it spreads what is good in America, such as a
liberal approach to business, and McDonald's.
(2) Globalization is bad because it spreads what is worst about America, such as
a liberal approach to business, and McDonald's.
But while so much energy was spent these last few years studying the extent to
which the Happy Meal affects a nation's quality of life, hardly anyone one
bothered to examine in depth the fundamental changes that were taking place in
the nature of the manufacturing corporation, and in the nature of manufacturing
itself, as thousands of companies scrambled to adapt themselves to a world
radically remade by the sudden economic opening of dozens of countries and the
simultaneous arrival of the information age.
Watch one of the new commercials for UPS and it's hard not to feel inspired by
the images of all those jets full of cargo ricocheting round the world, round
the clock. Whether Chevrolet fuel pump, Baxter intravenous-infusion pump, or
Ralph Lauren faux-lizard pump, the average modem product contains parts that are
more well traveled than are most of us. After conception in a design
studio-perhaps in Detroit, perhaps in Milan-these components embark on the modem
equivalent of a Grand Tour. East Asia, South America, Eastern Europe, Southeast
Asia, Central America-all the premier destinations of the developing world may
be visited before the product makes its way at last to the final assembly line
somewhere, perhaps, in North America. But, even as the corporations celebrate
with their 30-second symphonies the rise of the globalized industrial network,
almost no one asks what would happen if just one of the still very sovereign
nations that underlie this web were to grab hold of a few of the strands and
start yanking. Almost no one studies how "our" corporations have quite
literally manufactured new forms of foreign dependence for the United States
that may soon leave us gazing fondly back to the days when our nation was joined
at the aorta only to such dear fellow citizens of the world as Saudi Arabia and
Venezuela.
Much as Enron was the most cocksure of the elite club of trading corporations,
so is Dell Computer the perfect archetype of the post-national manufacturer.
Dell assembles its OptiPlex business desktop at the Topfer Manufacturing Center
in Austin, Texas. The operation is relentless, the plant floor a tight maze of
conveyor belts and elevators amidst which men and women work, often hidden from
view, in nest-like workstations or "build cells." For eight or more
hours each day, the employees on the line face near terror. From the moment an
elevator delivers a tray loaded with a half-made computer until the moment the
elevator returns to take the tray back to the overhead conveyor line, a worker
has only one to three minutes to install his or her components. Drop goggles in
the elevator gearing and the light atop the workstation will flick from green to
red. Since Dell's success depends at least as much on the efficiency of its
processes as on the quality of its product, nothing is dreaded more than a red
light.
These days, Dell's anxiety is not limited merely to the smooth functioning of
its North American plants. The modem Dell assembly line actually stretches out
far past the trucks parked at the delivery dock and down Interstate 10 to the
monitor plants of Tijuana. And it stretches back through Dallas/Fort Worth
International Airport to the component manufacturers strung from Malaysia to
Korea and clustered especially thickly in Taiwan and China. From those suppliers
it stretches on back through another three or four "tiers" to the
subsuppliers and sub-subsuppliers. To ensure green lights at all points along
this line, Dell logisticians must watch hundreds of potential bottlenecks around
the world, as some 4,500 parts from hundreds of suppliers make their way to
Austin, Texas. On any day, a single missing shipment of components can slow or
stop the whole operation.
Five years ago, when Compaq Corporation bestrode the personal-computer industry,
manufacturers commonly kept 60 or even 120 days of inventory on hand, and most
moved this material from one company-owned plant to another. When Dell passed
Compaq last year to become the world's top PC maker, it had trimmed its
inventory to four days' worth, and most of that now flows to and from plants
owned not by Dell but by companies that supply Dell. In essence, the Dell
production model is to cut inventory and other forms of sunk capital as low as
possible, largely by relying on other companies to do the manufacturing. To keep
pace, Compaq for years has hacked ruthlessly and relentlessly at its own
inventory, while following Dell into dependence on components made by Taiwanese
and Chinese companies. Yet still Compaq loses ground to Dell, as do the
personal-computer divisions of Hewlett-Packard, IBM, and Sony. Which only
increases the pressure to cut further or, in the case of Compaq, to give up and
sell out to Hewlett-Packard.
Not that electronics firms are alone in playing this game. Even the biggest of
traditional "multinational" corporations now operate very differently
than when the first George Bush sat in the White House. The ability to sell in
many more markets, and to manufacture in many more countries, has created two
vital imperatives: Corporations must now race against their direct competitors
for global scale, which means they must grow so big that another company cannot
beat or buy them. And they must keep costs low by structuring their worldwide
operations as efficiently as possible. This is what Ford does if, say, it
centralizes production of a particular fuel injector at a plant in Brazil while
closing similar lines in Michigan and Germany.
Aided by recent radical advances in information management and communications,
and by the never-ending effort to rethink corporate structure, a growing number
of industries have "rationalized" along global lines. This is what
happens if, say, General Motors and DaimlerChrysler hire, perhaps unknowingly,
the same fuel-injector manufacturer that Ford relies on in Brazil to manufacture
their components as well. In many instances, especially in the electronics
industry, such a back-door consolidation has already taken place. Last year,
nearly 90 percent of the world's scanners and most of the world's computer
motherboards were manufactured in Taiwan, many in a single industrial park in
Hsinchu.
Some see beauty in this system. In a borderless world, each company and each
community can concentrate on what it does best, be it growing artichokes,
stamping out motorcycle gears, designing marketing strategies, or engineering
global assembly lines. Unfortunately, such concentration--the growing reliance
by entire industries on single sources of supply--violates one of the most basic
rules of manufacturing, which is always to have an alternative at the ready.
On September 21, 1999, an earthquake measuring 7.6 on the Richter scale
killed some 2,500 people in Taiwan. Within days, the stock prices of Dell,
Apple, and Hewlett-Packard plummeted as investors focused for a short moment on
just how much these companies depend on Taiwan-based factories. Although most of
the island's suppliers were back on line within a week, worldwide orders for
electronics in October fell 7 percent. Had the quake been a few tenths of a
point stronger, or centered a few miles closer to the vital Hsinchu industrial
park, great swaths of the world economy could have been paralyzed for months.
In March 2000, in the midst of Taiwan's presidential campaign, China threatened
war if Taiwanese voters chose the candidate Beijing opposed. Again the stock
prices of Dell and other Taiwan-dependent firms dropped, as investors
remembered, if only for a moment, the missiles China landed near the island
before the 1996 elections and the resulting de facto blockade.
Then came September 12, 2001. Much of the manufacturing activity in the United
States came to a halt after the Bush Administration closed U.S. borders and
grounded all flights in the wake of the attacks on the World Trade Center and
the Pentagon. Ford, DaimlerChrysler, and Toyota North America were among the
companies that shut plants when they found themselves cut off from supplies.
This is not Henry Ford's vision of manufacturing. Ford's immense industrial
experiment during the 1920s, at the River Rouge complex in Michigan, was
revolutionary in that he gathered in one place everything needed to manufacture
an automobile. Fed up with poor quality and spotty delivery by outside
suppliers, Ford wanted to oversee production of all the parts and components
that went into one of his cars: seats, mirrors, and tires as well as engines and
chassis. By 1927 ships were unloading iron ore at one end of the complex while
employees drove finished Model A's onto railroad cars at the other. Companies
such as General Electric, Westinghouse, and Xerox soon emulated the River Rouge
concept. Nothing was too small to make in-house. Hewlett-Packard was famous for
machining its own screws; Nortel for cooking its own silicon.
Today, we are witnessing the breaking up of empire, the dismantling of the River
Rouge concept, as hundreds of vertically integrated manufacturers cast their
constituent operations to the far comers of the world. Most start by off-loading
the manufacture of a cheap component or a light assembly operation. Many then go
further: In January 2001, mobile-phone maker Ericsson sold off all its
manufacturing and transport operations to a Singapore-based company named
Flextronics. Even high-end manufacturers such as Sony and IBM can't resist
sloughing off a factory or four.
How else, really, to compete with a company like Cisco Systems, which in he
1990s grew to be the world's largest manufacturer of communications equipment,
and for a time the most highly valued corporation in the world, by op :rating as
a "virtual company." This means that Cisco relies almost entirely on a
stable of other companies to do everything from design its chips to manufacture
its circuit boards to deliver its Cisco-brand products. The company's role, its
executives say, is to exert a sort of postindustrial "Command and
Control" over this vast network of outsourced production. Much the same can
be said of Dell. Despite the fact that a tiny American flag graces each of the
company's Web pages, Dell, in the words of one semiconductor executive, is
really little more than "a delivery channel for Taiwanese-made
products." Think Wal-Mart, but in place of store shelves jammed with
foreign-made toys and towels substitute laptops loaded with foreign-made
components: CD-ROM drives and video cards and memory chips.
Executives and consultants have for years debated the wisdom of this
disintegration, but there has been no coherent mainstream discussion about
whether this scattering leaves the global industrial system-and by extension the
entire global economy-more liable to catastrophic shutdowns like the one barely
avoided after the Taiwan quake. At River Rouge, Henry Ford could walk from one
end of his operation to the other. At Cisco and Dell, it is unlikely that any
employee has visited all the suppliers, and certainly no one has visited all the
subsuppliers. If the production of door handles fell behind schedule at River
Rouge, Ford could throw on more machines and people, and in the meantime survive
out of inventory. These days big manufacturers have almost no inventory on which
to rely while they fix any problem, and ever less ability to spot potential
bottlenecks in their worldwide supply chains. Until the Taiwan-based TSMC
stopped shipping semiconductors after the 1999 quake, for instance, Dell
executives knew almost nothing of their dependence on the chipmaker, because the
actual purchases were made not by Dell but by Dell's suppliers.
Our modem faith in globalization was founded, at least in part, on the
premise that it was the right thing to do. We were outmaneuvering the Europeans
and Japanese for new export markets. Better yet, American in vestments abroad
would spread skills and wealth among the beggared and benighted. This consensus
had formed even before the fall of the Berlin Wall in. 1989. The oil shocks and
debt crises of the 1970s and 1980s had choked off growth in much of Latin
America and Asia, and by the late 1980s reformist politicians in many countries
were ready to ally themselves with the transnationalists to the north. In
exchange for debt relief and direct investment in their countries, the local
reformers pledged to sell off state companies and hack away the thicket of
tariffs and regulations that protected local industry and labor. To voters in
these countries, the promise at times seemed nothing less than freedom-from
corrupt authoritarian governments, from treasury-looting populists, from
hyperinflation, from inefficient local business monopolies. Foreign companies,
so it was often believed (and so it sometimes proved), would bring better
services, lower prices, and more jobs.
Yet by the middle of the next decade evidence began to mount that these grand
reforms would never deliver all the promised economic benefits. Some prices
fell, but others rose. Foreign companies brought higher-quality products, but
they manufactured fewer in-country. Hyperinflation was indeed choked off, but so
too was growth. Not that we bothered to notice. Sure, Doonesbury made a few of
us question what shoes we wore on our feet, and, yes, we did make Kathie Lee
cry, but how many of us actually twisted around to check what was printed on the
labels of our underwear? Crises came-Mexico in '94, Asia in '97, Russia in '98,
Argentina again and again-but our cars grew brawnier, our computers grew
brainier, and all this new wealth burdened us with new existential challenges.
What would a soaring Nasdaq do to our core values? How badly would we spoil the
children?
By the late Clinton years, globalization had come to mean simply that someone
else would do the dirty work, someone far away. Our own industrial workers, once
we emancipated them from the lines? Why, they could wait tables and drive FedEx
vans. They could answer the phones in our new charitable foundations and lug
around buckets of goat milk on our hobby farms. Our national duty was no longer
to produce but to consume. The slightest twitch in Peoria set off klaxons a
world away, calling workers by the thousands to their stations. "America's
women need a half inch more on their heels! America's men need ten million more
inflatable Budweiser chairs!"
Yes, the market would provide. To this mantra, this Muzak of the '90s, we
listened and we believed. Right through the end of the Cold War, we never lost
the conviction that government was the proper means by which to share our wealth
and to protect ourselves. But our faith now began to shift. Speed and
efficiency, we came to believe, were the forces that would bring us comfort and
riches. And sure enough, these last ten years the goods kept coming, unloaded
into our malls at night from tractor trailers, delivered at high noon by UPS.
Everything the mind could conjure, in Faustian profusion. So why not cut another
of those harnesses that government once dared to set on the shoulders of
capital? Why not ignore the transnational alchemies eating away at the
institutions that for two centuries have provided us our only shelter? Compaq,
Chrysler, Xerox, Thailand, Argentina, Japan-there is no security even for giant
corporations and powerful states. Yet we still cling to the belief that some
sort of secret social compact will al ways hold for us. That our state, however
battered, however corroded, will continue to shield our bodies should our new
best friend, the global market, ever turn against us.
When Robert Schuman, the foreign minister and former prime minister of
France, first proposed the European Coal and Steel Community in 1950, he was a
sixty-four-year-old pious Christian Democrat. Born to a French-speaking family
from the Lorraine, Schuman had served in the German army in the First World War,
then found himself a French citizen after Germany ceded control of the region in
1919. By 1950, Schuman's goal was to prevent a third war in Western Europe by
making such a conflict economically impossible. He proposed placing control over
the coalfields and blast furnaces that stretched from the Ruhr to the Lorraine
under a multinational institution, so that neither Germany nor France could ever
build great numbers of weapons without the other being aware and, presumably
able to stop it. Despite the strong backing of the Truman Administration it took
the French government two years to gain approval for the plan. which grew to
include the coal and steel industries of Belgium, Italy, Luxembourg, and the
Netherlands. Even amidst the rubble and economic destitution left by the war,
opposition to the plan was strong and complex. Communists throughout Western
Europe marched in protest. Italian steel-makers, Belgian coal-mining companies,
and De Gaulle's French nationalists denounced the plan. The British waffled,
then opted to keep their own steel and coal industries independent. All the
while, these newly restored democracies engaged in open, thoughtful, albeit
sometimes bitter debate about what amounted to a sharing of sovereignty.
And here is America careening toward a similar economic integration with half
the world amidst a near absence of debate and without any of the compelling
reasons that drove Europeans together a half century ago. There is no recent
history of war. There are no occupying armies to ensure fair use of the
industrial capacity we "pool" with everybody. Many of our new partners
are not democracies, and their internal workings, long-term goals, and ability
to live peacefully in the world we imagine ourselves to be making remain obscure
at best. The Europeans deliberately contemplated marriage; we have leaped,
greased from head to toe, into a global orgy.
In the arguments over both NAFTA and the expansion of trade with China, Robert
Schuman played a part in spirit if not in name. Back in the early 1990s, when
Boris Yeltsin was clambering atop tanks, and Argentines were spending their
dollar-guaranteed pesos, and Japan Inc. still loomed over the far Pacific, one
of the main arguments in favor of expanding trade with China was that the flow
of American money and expertise into that country would make us more secure. Not
only would China come to depend on U.S. funds and technology but its citizens
would perhaps be inspired to clamor again for political reform. So, anyway, said
the first Bush Administration. So, too, said Bill Clinton.
Somehow, the inverse possibility-that economic interlinkage might make the
United States dependent on China-was never considered, nor have - we revisited
this subject in depth in the ten years since. Even as U.S. corporations invested
billions of dollars directly into China and Taiwan, and indirectly through
outsourced production agreements, none of our elected officials or civil
servants ever really examined in detail the risks of joining hands with one of
the least stable and least transparent states on earth, China, and with that
state's number-one potential target, Taiwan. A decade ago, no large U.S. company
was dependent on China or Taiwan as either a market or a place for production.
Today, hundreds are. When he took office early last year, George W. Bush
inherited from his predecessor and from his own father perhaps the greatest
failure in the history of American geopolitical thought.
Why did we so grievously fail to understand that running our ever more
delicate assembly lines across so many fault lines, political and tectonic,
might endanger our power and our well-being? I had occasion late last year to
put the question to Larry Wortzel, director of The Heritage Foundation's Asian
Studies Center. Wortzel was the assistant U.S. Army attaché in Beijing at the
time of the Tiananmen protests, then directed the Strategic Studies Institute of
the U.S. Army War College. He has very close ties to some of the most
anti-Beijing Bush appointees in the departments of State and Defense, ag well as
in the office of the Vice President. Wortzel maintained that involvement among
the American, Chinese, and Taiwanese economies would not endanger America's
security, because no large company would dare rely too much on sales in China.
And what of cross-border supply chains, single sourcing, the Taiwan earthquake?
Our economy, he insisted, in no way depends on manufacturing capacity located
abroad. When 1 mentioned that Andrew Grove, the chairman of Intel-the largest
manufacturer of semiconductors in the world-believes the integration of
manufacturing activities has made war between the United States and China
essentially impossible, Wortzel became red in the face. He lurched forward and
said, "If Grove is that dependent on that source then he has assured the
destruction of his own corporation."
Wortzel's reaction reveals the fundamental incompatibility of the two great
political-economic systems that now operate in parallel. One is a
global-manufacturing system created by companies such as Intel, which
increasingly act independently of national considerations. Beneath that lies an
older system, comprising governments whose ways of thinking date back to a time
when economies were still largely national, when imports and exports were of raw
materials and finished goods, and when the idea of a large, vital corporation
moving its center of gravity abroad was unthinkable.
We have, it seems, outsourced one time too many. Often I have asked
manufacturers to explain how they would keep their production lines running if
the supply of a key component were suddenly cut off. Almost always they start by
mentioning the robustness of their contingency plans: within days they could
easily restart production elsewhere. And if an 8.5 quake strikes Hsinchu? Well,
that might pose a challenge-a matter of weeks, not days. And if China ever
invades Taiwan? Here the reassurances cease. "There are no models for
that," the CEO of one electronics company told me. That, it would seem, is
a question for Washington.
But does Washington know how to compose an answer? Would it be allowed to if it
did? The CEOs who lobby the White House and Congress may hunt and fish and eat
Delmonico steak like the American industrialists of old, yet Washington somehow
ignores the fact that these men now represent corporations whose interests are
no longer purely "American," and whose global expansions are driven
more by panic than by political nuance. Our corporations have seemingly reduced
the average individual "nation" to little more than a nasty knot of
taxes, work rules, and other geographic idiosyncrasies to be unbound and
intertwined with those of the neighbors, but sit through a discussion of trade
policy at The Brookings Institution these days and you might be tempted to go
buy tickets to a Senators game. You would think that America still swapped Xerox
copiers for rusty tools and poorly dyed T-shirts, that there was still such a
thing as "competition among nations," and among "national
industries," for "export markets."
And as we prattle on here, what goes on twelve time zones away? China seems
content to allow the great river of commerce to flow over its ledges and slip
between its boulders. And why shouldn't it? As long as Beijing sits quietly and
smiles, its palms upturned, the market will reward its patience and good humor
with a steady increase in industrial capacity. Taiwan, Japan, Korea, Mexico, all
fret about losing core industrial activity to China, and now Beijing pats its
lap and winks at the global semiconductor industry. At the end of the day, who
"owns" the actual semiconductor plant matters far less than where the
plant is located, because whoever physically controls the production of
semiconductors can paralyze thousands of the world's assembly lines with the
flick of a switch. Beijing need not even declare a blockade of Taiwan, backed by
a threat to use its missiles, in order to cause economic havoc. If it succeeds
in luring enough key manufacturing capacity, Beijing will need only to threaten
a peaceful closure of its own border, a sit-down strike if you will, organized
by the most powerful labor syndicate in the world.
On being presented with this thesis, the experts in Washington revert to a
stance learned a generation ago, in the era of thermonuclear gamesmanship. This,
they insist, would be the economic equivalent of Mutually Assured Destruction.
China could no more venture such a risk than could we. But there is doubt in
their voices. And is there not some reason to fear a Falklands-like scenario in
the event that China's own economy turns sour? Might it not one day prove
perfectly rational for Beijing to shut down, if only temporarily, the world's
assembly lines? Did Arab oil exporters not sacrifice immediate revenues for
long-term power and plunder in 1973? Did Jefferson not attempt to exact greater
respect from Great Britain and France by denying them American cotton, grain,
and tobacco through the Embargo Act of 1807? Did Eisenhower not cut off oil
supplies to coerce those same two countries out of Suez in 1956? Would a similar
act, from Beijing's point of view, be any less valid?
For years Sovietologists have debated whether Lenin once said, "A
capitalist would sell rope to his own hangman." Change "rope" to
"supply chain," and, whether Lenin made the statement or not, it is
still clearly true.
If terrorists ever want to strike at the heart of American manufacturing,
they need not sneak into Ohio to do so. More certain success, with more
concentrated results, awaits along the industrial boulevards of Taiwan. And what
of the Philippine colonel or Indonesian autocrat who one day wakes to find that
the electronics industry, in its rational wisdom, has placed 80 percent of the
world's chip-assembly, or even chip-testing, operations in his country? Must we
now abide and buy off cranks such as Malaysia's Mahathir the way we must abide
the Dos Santoses of the world and the families Saud? As our companies continue
to scatter industrial capacity to the far comers of the globe, then to trim
slack at home until they come to depend on that distant capacity, are we not
witnessing the creation of a new strategic commodity like oil, control of which
can be exploited to wrangle away our wealth and security? And once a country
expropriates industrial capacity in this way would it not be able to use its
influence to prevent the affected industry from ever building competing capacity
elsewhere again?
Then there is China. Thirteen years ago, Francis Fukuyama wrote an essay called
"The End of History?" Human political thought, he argued, had stumbled
at last through the gates of a Hegelian heaven. Political perfection would
forevermore be defined as Liberal Democracy supported by a capitalistic economic
system. Published during the summer of Tiananmen, when it seemed that all the
world's authoritarian regimes were withering away, the article (perhaps
unintentionally) set the tone for an American triumphalism that did not crest
until well after the Soviet Union collapsed in 1991. Yet atop the seas of
champagne that engulfed the world in those days there floated an ark with so
little in its hold, and so much blood on its deck, and such ridiculous
Khrushchev-era weaponry, that it seemed barely worth another glance. It is clear
now that the vessel did not sink, and that in its hull it carried an answer to,
if not a refutation of, Fukuyama's argument. The liberal democratic state, its
powers continuously eroded by the immense forces of the modem market, simply
leaves too much up for grabs. And grab is exactly what a more cohesive political
entity than our own may try to do.
The greatest danger of all may not be that Beijing one day dares try to coerce
the West but that the plan to undermine Beijing actually works, that the massive
movement of money, goods, and ideas will lure freedom-seeking citizens back to
Tiananmen. Revolutions, as we sometimes forget, can turn violent. How long, if
violence strikes China, will we have to wait for our shipments of semiconductors
and alternators and gaskets to arrive? Might we not find ourselves obliged one
day, by the selfsame economic interdependence that was supposed to undermine
Beijing, to prop up that regime in order to ensure the proper functioning of our
own economy?
After two decades of deregulation, of voting away our few slight powers in
exchange for BMWs and bass boats, we may soon discover, like Lear, that our
children do not remain grateful for our generosity forever. We soared out of the
1990s convinced that we could inhabit forever our Cisco-style role as the
commanders and controllers of an outsourced world. Now, barring a revolution in
how we view business, we may be lucky to eke out a few good years as the
corporate front end, the marketing department, for China. Unless, of course,
Beijing decides to vertically integrate that activity too.
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