End Of Internationalism

The End of Internationalism

The End of Internationalism OR WORLD GOVERNANCE? J. Ørstrøm Møller Foreword by Jacques Santer

Library of Congress Cataloging-in-Publication Data Møller, J. Ørstrøm. The end of internationalism : or world governance? / J. Ørstrøm Møller ; foreword by Jacques Santer. p. cm. Includes bibliographical references and index. ISBN 0–275–96701–8 (alk. paper) 1. Internationalism. 2. Nationalism. I. Title. JC362.M55 2000 327.1'7—dc21 99–22109 British Library Cataloguing in Publication Data is available. Copyright
2000 by J. Ørstrøm Møller All rights reserved. No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher. Library of Congress Catalog Card Number: 99–22109 ISBN: 0–275–96701–8 First published in 2000 Praeger Publishers, 88 Post Road West, Westport, CT 06881 An imprint of Greenwood Publishing Group, Inc. www.praeger.com Printed in the United States of America

The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48–1984). 10 9 8 7 6 5 4 3 2 1

Contents Foreword by Jacques Santer Preface

vii xi

1.

Prelude

1

2.

Perspective: The Flywheels

9

3.

Perspective: The Actors

33

4.

Security Policy

63

5.

The Political Enterprise

101

6.

A World Model: Some Obsolete Concepts

143

7.

A World Model: A Sketch

153

8.

The Alternatives

189

Selected Bibliography Index

195 197

Foreword In this rich and thought-provoking book, Ambassador Møller confronts us with some of the most difficult questions that face international policymakers today. Can we stop or at least influence the trend toward internationalization? How can we bring the elite closer to the people in order to prevent nationalism from rising? Are international institutions the answer to internationalism? With the implementation of a single currency and the ratification of the Amsterdam Treaty, the European Union cannot ignore the questions now being raised concerning globalization and the international system. Whether Europe decides to act for itself or allows others to act for it, the collective response to these questions will have a major impact on the future of our societies. The integration of the world’s markets, as evidenced by the increasing volume and variety of cross-border movements of goods, services and capital and the rapid spread of technology, is attributable to the unprecedented development of means of transport and transmission of information. There are many positive aspects to this process, one example being better allocation of resources thanks to the creation of much larger markets, the availability of foreign capital, transfers of technology and greater international specialization. Globalization has resulted in lower costs, higher productivity and, for consumers, a greater choice of products and services. By encouraging a much faster rate of economic interpenetration than in the past, globalization has maintained economic growth and helped to raise standards of living throughout the world. Globalization has been encouraged by a deliberate drive to liberalize international trade. Being the result also of technological innovation and

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Foreword

individual decisions by the prime movers in the economic field, globalization can be regarded as an irreversible trend which the traditional organizational systems in our societies are having difficulty in coping with. In actual fact, the business world began to think in global terms before the public authorities, since the internal policies which have to accompany and prepare for globalization are now only slowly being put into place. In the developed countries, the process of globalization is creating wider divisions between social groups and fields of activity. Major adjustments are being asked of sections of the population that are not always properly prepared for these developments, giving rise to imbalances within our societies. Globalization is also exacerbating the inequalities between the developed countries and certain developing economies which, despite certain successes, remain well outside this new dynamic process. These imbalances, which reveal certain weaknesses in the countries concerned, are also attributable to shortcomings in the system of international regulation. Globalization has unquestionably sharpened the impact of external shocks, heightening the knock-on effect of external financial and commercial crises. The international system has failed to sufficiently strengthen the regulation and control mechanisms needed to accompany globalization and has become more vulnerable and subject to more frequent and more severe crises. The very fact of greater interdependence between the developed and the developing economies implies a danger of greater tension between countries. At a time when many European businesses are reaping the benefits of globalization, worries are growing about what is perceived as an uncontrolled phenomenon where the decisions taken by various countries or economic entities have effects over which no one seems to have any hold. This view is not without its implications for the workings of democracy and the legitimacy of the public authorities. The public are concerned to safeguard or rebuild their influence and power of democratic control. Many people are also concerned about defining rules to safeguard what the global market does not manage in the most effective way—social objectives, the environment, cultural diversity and ways of life. Ambassador Møller’s book addresses all those issues in detail. What is striking in his analysis is the way in which Europe often emerges as a forerunner in dealing with the consequences of internationalization. The European Union has built up a wealth of positive experience on the European continent over the past 40 years and more. It has undeniable know-how and can, both inside and outside its own borders, help to balance the financial and economic aspects of globalization by taking account of other needs—of a social, human and cultural nature. But for this it must have the means to act in a concerted and effective manner.

Foreword

ix

This it can do by continuing to build a strong and cohesive Europe that is sympathetic to the needs of other countries and by promoting the reform of the international system and the orderly development of the global market. In many respects, it is through Europe, through joint determination and combined political resolve, that the Europeans will be able to defend their model of society and exercise their democratic rights more fully and effectively. It is Europe, as a leading player on the international stage, which will be able to contribute more effectively than others to the stabilization of the international system. The introduction of the Euro, the further development of the single market, the coordination of economic and fiscal policies, the establishment of ambitious environmental policies and the assertion of a European model of society are moves which the public generally endorse. They are seen as necessary for the balance of the European venture but sometimes appear to be jeopardized by globalization. To preserve this balance, Europe must consolidate and develop integration. Recent events in Europe point out that this process can only develop smoothly in a context of greater transparency, openness and accountability, and it is one of the merits of this study to make this abundantly clear. Jacques Santer President of the European Commission, 1995–1999

Preface Some years ago, Praeger published my book The Future European Model, which described how I looked upon the future of Europe. The book was written in the beginning of the 1990s and reflected trends and evolutions in Europe at that time. Since then, the international community has grown further and faster. The European Union has now started its Economic and Monetary Union. It is envisaging an enlargement with many countries in Central and Eastern Europe. In Europe, as well as in many other places around the world, the drive for internationalism is very strong. It seems to be unstoppable. And yet, behind the scenes and triggered by the rising tide of many international economic forces, the populations seem to put a question mark on some aspects of this development, if not the whole process. This book is an attempt to analyze many of the factors putting this internationalism in danger. It is also an attempt to point to some elements which can be used to control internationalism, thus alleviating the fear we find about this evolution among populations all over the world. It is my view that the risk of a new and uglier form of nationalism supplanting internationalism is more real and more acute than most of us believe. Thus, a determined effort is called for to maintain the international system which for more than 50 years has rendered the world such outstanding service. The text reflects my personal view and is not necessarily congruous with the positions taken by the institutions with which I am or have been connected. I am grateful to my secretary, Mary Narayanan, for help and assistance in finishing the manuscript.

The End of Internationalism

1 Prelude One of the recurrent trends in the history of civilization is the incessant swing of the pendulum between nationalism and internationalism. For a very simple reason, this may not appear on the display screen for our generation. Since 1945, our civilization has relentlessly pursued the objective of increased internationalism. Rarely in history have so many people for so long a time agreed upon a common political and economic goal. Economy and trade have been liberalized, and free traders did not need to labor in a stony vineyard to argue their case. The audience came to hear the arguments for the decision already taken. They did not need to be convinced; they already were true believers. Political mechanisms were built up on an international scale to control economics, trade and capital movements, and in the latter part of the century the activities of the multinational companies. The remarkable thing was that these institutions reflected some kind of bottom-up. Admittedly, the very first step, proposed in 1949 by Jean Monnet, a French politician and economist, and executed by French Foreign Minister Robert Schuman, had a clear political objective—to amalgamate the economic structures of France and Germany to prevent another FrancoGerman war, which would have been the fourth one since the middle of the nineteenth century. But apart from that step, the rest of the political infrastructures raised from the ruins of the immediate postwar world had one goal: to catch up with developments in the real world. As trade and capital movements moved from the national level to the international level, the national legislative process became more and more void of substance. The economic phenomena which legislation was intended

2

The End of Internationalism

to control took place on an international scale and thus escaped national legislation. To maintain political control it became not only necessary, but imperative to move the legislative process onto the same level as the economic phenomena it should control—the international level. Without really perceiving it, country after country silently and sometimes grudgingly had to follow suit and abandon a portion (and in some cases a good deal) of their sovereignty. Security and military matters followed the same patterns. Until the end of the 1980s, the world lived on the knife-edge of military balance between the two superpowers, the United States and the USSR. To get that system to work, each superpower created around it a number of client states, which more or less willingly endorsed whatever decision ‘‘their’’ superpower came up with. Around 1990 that picture changed, leaving an even more international world. Peacekeeping (even peacemaking), crisis management and humanitarian tasks came to the forefront. This was clearly seen in the former Yugoslavia, where first the European Union (EU), then the United Nations (UN) and finally the North Atlantic Treaty Organization (NATO) went in to establish peace while at the same time feeding a part of the population suffering from brutalities let loose among different peoples, different ethic groups and different religious orientations. Information and entertainment, which until the 1950s were largely if not exclusively a national prerogative, cast away the national straitjacket and went international during the later decades with a roar. Without an electronic fence keeping TV and radio out, nation-states could no longer conceal the truth from their citizens. Technology became the great liberator of people hitherto living secluded from outside information. That brought down dictatorship after dictatorship: the Shah in Iran, the communist states in Central and Eastern Europe and indeed the ‘‘evil empire’’ itself, the USSR. The reason was not only that the people in these states could now receive outside information, but that the outside information revealed the great secret—that the ruling classes in their countries had been lying to the population for decades. The rulers lost their legitimacy, and having been caught red-handed, fell quickly from power. By the end of the century, the dominating trend was readiness to surrender formal sovereignty and substitute for it influence in an institutionalized international system. In fact, even if the word ‘‘sovereignty’’ could still command respect as an icon of conventional wisdom, it was dying slowly. It was not a very propitious way ahead to insist on national legislation, which looked fine on paper but was quite useless in the real world. Countries could still (and some also loved to) introduce legislation to curb the activities of multinational companies, leading these companies to take their business elsewhere; likewise, countries could introduce strict rules with regard to air pollution or safety measures for

Prelude

3

nuclear power stations, only to find out that adjacent countries could still pollute the air or be hosts to nuclear power stations enjoying more lax rules there. The emerging trend was then not to surrender sovereignty but to pool sovereignty and exercise decision making in common. By doing that countries maintained their dignity, avoiding being exposed as the emperor without clothes in Hans Christian Andersen’s fable. They achieved influence on rules and legislation governing the framework for economic and political life inside their own country rather than standing outside and being the victim of either rules set by others or of unfettered international market forces. However, as the end of the century approached, it was clear that even if all were in the same boat, some felt more uncomfortable in these heavy seas than others. This was especially the case in Europe. Those European nation-states who had been such as early as 1800 did not like what was going on. They had assembled (even collected) sovereignty for centuries, and it was painful medicine to transfer some of it. They stalled every time something smelling of transferring sovereignty came on the table. The new nation-states in Europe did not take the same approach. On the contrary, they liked it and pressed for more integration and more common decision making. In the 1990s, strategists around the world found it difficult to find new themes. They had excelled in the nuclear standoff between the United States and the USSR, but what was the new threat? Strategists rarely find happiness working in a peaceful environment without a threat to direct their attention to! The inability to change intellectual track away from military strategy explains why so few people have realized the obvious: the threat to today’s world is that internationalism is not so deeply rooted in our societies as we like to think. The intellectual elite masterminded the great revolution since 1945 from nationalism to internationalism, which deserves to rank among the great swings of Western civilization. The people came along not because they realized the significance of this adventure but because the division of labor brought about a higher standard of living. The economic integration of Western Europe took place in the midst of an almost unprecedented economic upswing and increasing welfare for the people and the workers year after year. The Asian miracle encompassing first Japan and later the Tiger countries (Korea, Hong Kong, Taiwan and Singapore) and in the last stages also China did the same. Thus everybody came on board because it was so obvious that everybody was better off. Or to be more precise, the old prescription for an increase in welfare proved valid: those who would benefit could pay those who would not to support the measure and still be better off. Parallel to this development, an institutionalization could be seen at

4

The End of Internationalism

the international level. Not only the basic economic factors such as trade and capital movement ascended from the national to the international level. The legislative framework to control the basic economic factors followed, albeit with a time lag. The Europeans moved from the EEC (European Economic Community) to the EC (European Community) to the EU (European Union). The evolution reflected an ever growing and stronger integration, calling for a parallel development in the accompanying institutional framework. The Southeast Asians made ASEAN (the Association of Southeast Asian Nations) in the hope of developing into AFTA (the Asean Free Trade Area). In North America the evolution shaped NAFTA. None of these institutions would have been born without a genuine and strong demand for international institutions to replace national institutions obviously incapable of delivering solutions to an international world. And this is where we find the problem today. Around the world people—not the political and intellectual elite—have started to pose the basic question of whether the international system does indeed deliver the goods. Are we better off participating in that system, or would it be preferable to turn around and begin a nationalistic policy? Another twist here is that the criticism towards the international system very often originates with ethnic or religious groups feeling left out; not, that is, with one or two great civilizations who oppose the predominantly Western international system, but with ethnic and/or religious groups inside a country fully participating in the international world. The challenge to the political leaders of today’s world is not a military one. It is quite simply an issue of whether they can hold together and strengthen the international system, or whether the world gradually but surely slides backwards into the nationalistic straitjacket. In the same way as the challenge is not of military character, it is not, as proposed by Samuel P. Huntington (in his Foreign Affairs article and book The Clash of Civilizations and the Remaking of World Order), a question of cultural confrontation on a grand scale. Huntington’s point about culture is, however, valid in the sense that a good deal of the hostility towards the international system does indeed come from cultures or civilizations outside the European, North American sphere. But these cultures exist, work and operate inside nation-states around the world, often as minority groups. This can be witnessed in Europe and Southeast Asia, exactly the two spots where the integration has gone farthest and where one would expect the backlash to arrive. In Europe antagonism towards integration and the drive for nationalism arise on the extreme left and the extreme right. This should not be thought of as dangerous as long as the political majority is steadfast in the drive towards integration. However, between the outright opposition and the strong supporters of integration have emerged a group of doubt-

Prelude

5

ers, whose indecision prevents integration from progressing fast enough to yield the results which would pull the carpet from under the feet of the anti-EU faction. Workers, farmers, fishermen and now also immigrants want to know what integration has done for them. The answer in some cases is that the underlying internationalism—not the integration brought about to control it—has taken away jobs. That this would have happened anyway is no good explanation to people without a living. The strong influx of immigrants into Western Europe, primarily from Muslim countries, has taken place almost at the same time. The scale of this immigration has been grossly distorted by the mass media and extremist circles in member states. The total rarely exceeds five percent of the population, and the share of welfare payments channelled to immigrants is admittedly not negligible but far from excessive. Any solid society should be able to deal with these problems, and this is what has happened in Western Europe—so far. But the time has come when a growing percentage of people in Western Europe ask themselves, and now also more openly their politicians, whether the international system is the right one. Can it deliver the goods, that is the jobs, the social and cultural security? The political and intellectual elite are still firm in their answer. However, with unemployment running at about 10 percent and with cuts in welfare payments, patience may not necessarily be unlimited. In Southeast Asia the currency and stock market crisis came as a shock. Neither the political nor the intellectual elite had ever imagined that such things could happen. Nor for that matter had the international financial community, the IMF and the World Bank. The challenge ahead for the political establishment is one they have never faced before. For the first time in their history they have to go out to the people and explain that internationalism does not necessarily exclusively produce economic progress, but may also lead to economic hardship. In some of the countries zero or even negative growth has appeared for the first time in 25 years. This is an entirely new situation calling for unprecedented measures. The challenge becomes more difficult and awkward because even if the crisis is due to overlending on a national basis, much of it is sponsored by Western banks being bailed out by the IMF, while the hardship is falling exclusively on the ordinary people in these countries, as is almost commanded by the IMF. Many people believe that behind the IMF looms the United States as representative of the international system. The ordinary people in Southeast Asia, who never before realized that internationalism could also mean more unemployment, feel betrayed. Not so much by their politicians or the political system as by the ‘‘others’’—in this context, the international system. They ask the same question as some of the Europeans: Is the international system the right one? Can it deliver the goods, or should we try another—nationalistic—

6

The End of Internationalism

system? In Southeast Asia this question is primarily being posed by the Muslim majorities in several countries where Chinese minorities control a considerable part of the economic life of the nation. In North America the same problem surfaces, although many people would say on a lesser scale. And yet the refusal by Congress of fast-track authority for the president in trade negotiations demonstrates that the United States may have reached the limit of its commitment to internationalism as well. The strong movement in Quebec towards secession from Canada may possibly succeed, and if so may trigger similar ideas in British Columbia. Some believe that if this happens the western part of the United States would not be insensitive towards overtures to establish stronger links even on a formal scale with British Columbia. At the present juncture the international system seems to possess the power and the stamina to prevail. But this is not a foregone conclusion. It has to be fought for in Western Europe, in Southeast Asia and in North America. The question about the viability of internationalism—an unwelcome and uncomfortable one—arises because three trends converge at the same time: • The uncertainty among a growing part of people inside the nation-states as to whether they will actually be better off under the umbrella of internationalism than within a national system. • The certainty that some important and in many cases spectacular manifestations of the nation-state are being transferred to the international level. It is difficult to understand why a coin in a European nation-state must now be called a Euro instead of, for example, a deutsche mark. • Criticism of the nation-state by ethnic and religious minorities, with the inevitable consequence that a part of the majority in the nation-state turns against them, producing some from of xenophobia.

The trouble is that the political leadership seems to be blissfully unaware of these trends. While it should be preoccupied with forging a still stronger system capable of delivering what people want, its grand strategy is still beholden to many of the paradigms dominating pre-1990 thinking, and so is incapable of refocusing the effort to maintain security from the military vector to the economic and cultural one. The international system can only be maintained if politicians—national ones as well as those operating on the international scene—can convince the sceptics that internationalism can and will produce a higher living standard not only for the elite (who are already part of the international system) but also for the large part of the population inside the nation-states, who still have the power to switch their allegiance from internationalism to some kind of nationalism, and who could thus bring the whole international edifice down with a crash. Politicians must also

Prelude

7

be able to establish some kind of world governance which gives people a sufficient degree of transparency and democratic control over the many decisions being taken at the international level. One of the basic lessons of history is that the world is at peace when great empires have been established and rule. Normally such empires adopt a benevolent attitude towards their populations and not least towards the minorities among the population. This was the case during most of the Roman empire even if the persecution of the Christians bears witness to the opposite. It was definitely the case for the Muslim empire governed by the Ottomans. And it was the case for the British empire in its 100-year heyday from 1815 to 1914. The dangers of major wars materializes when such empires are being built and the empire-builders meet opposition from local people or from other empire-builders. The great wars have always taken place in such circumstances: the French against the British from 1789 to 1815, the Germans against the British in 1914 to 1918 and again in 1939 to 1945. The menace of minor wars, confrontations and crises appears when empires are breaking up, letting loose people hitherto under the sway of the empire. Such peoples, having been minorities under an empire, tend sometimes to adopt an aggressive attitude in defense of their newborn freedom. That is, of course, understandable, but it does not diminish the dangers. Right now the world finds itself exactly in the most difficult and most dangerous situation: empires have broken up or are in the process of breaking up, while simultaneously other empires appear on the horizon. The communist empire, which was a cultural empire, has broken up. So has the Russian empire, which was a nationalistic empire. So minorities ‘‘kept quiet’’ by these two empires suddenly find themselves having to define their own cultural identities and political roles vis-a`-vis neighbors who have traditionally tended to be antagonists, enemies or at least competitors. There are also trends pointing towards schisms inside India, Indonesia and China—the three of them encompassing more than 50 percent of the world’s population. While the political and/or nationalistic empires are under pressure to break up, we see cultural and economic empires under construction. Media moguls build global networks of entertainment reaching into local cultures, and in so doing triggering a tremendous battle about values. Multinational or let us say supranational enterprises (because they do not have a link to any particular nation-state) control more and more economic activity around the globe, and are in many cases much more powerful than national governments. Strategists, political analysts and policymakers seem locked in the perception that their job is to look for antagonism, conflicts, confrontations. Carl von Clausewitz’s main idea that war is a continuation of politics but by other means apparently constitutes an intellectual prison. As soon

8

The End of Internationalism

as the cold war ended political actors began the exploratory intellectual journey to find another threat, another conflict. Their endeavours were rewarded in 1993 when Professor Huntington published his article about the ‘‘clash of civilizations’’ in Foreign Affairs. This gave rise to a stimulating and sometimes intense debate. However, very few if any made the observation that the challenge for mankind now is one not of antagonism but of whether we will be able to create some kind of world governance to prevent and solve conflicts, be they of economic, commercial, cultural or military character. The present juncture presents the first occasion since the large Roman and Chinese empires (which administered universal governance in their respective ‘‘worlds’’) to make what we would like to call the big swing in strategy: the swing away from focusing upon conflicts and confrontations, and instead concentrating upon building cooperation. The challenge now is to create one space for the evolution of human civilization and to banish the perception that each part of mankind has its own kindergarten which needs to be defended against the boys and girls from the other sandboxes.

2 Perspective: The Flywheels INTRODUCTION For centuries the flywheel of civilizations has been an interchange between technology, culture and organization. This interchange determined and will continue to determine which cultures emerge and survive and which do not. New technology is rarely new when it makes the jump from invention to innovation. Typically it has been known by scientists and researchers for years and sometimes decades. What is new is the ability to use it to produce goods and services. The Chinese knew about gunpowder well before any Western power. The Romans knew about steam power. But neither the Chinese nor the Romans had the ingenuity to perceive how these scientific ‘‘amusements’’ could be used. When the breakthrough from knowing about technology to knowing how to use it takes place and where it takes place are decided by culture and organization. Even the most spectacular invention falls into oblivion if it arises in a society modelled to a culture for which the use of inventions is anathema. The ‘‘fossilized’’ society, so to speak, kills any attempt to introduce new technology. The stiffer and more stationary a society we operate in, the likelier it is that inventions will be put aside as an unwelcome disturbance. What is required is a malleable society which can absorb new technology. Take, for example, Britain in the second half of the eighteenth century and beginning of the nineteenth century. Britain had its revolution during the Cromwell years and at the turn of the century 150 years later it was ripe for change. Despite its recent revolution France, in contrast, was still an inflexible society rejecting changes. Thus the Na-

10

The End of Internationalism

poleonic war can be described as a war between a society ready to change and a society not ready to do so, or between an industrializing country and an agricultural society. Organization provides another necessity, namely transparency. On the macro level society is transformed by the introduction of new technology. On the micro level technology is used by individuals or groups of individuals accepting risks. To do so they must know what they can gain and what they can lose. In other words new technology can only be introduced in a society governed by rules applicable to everybody and known and understood by everybody. Rules must be available in the form of legislation or decree (in this phase it does not much matter whether rules are introduced by parliament or by a king or dictator). This has been the case for societies in Western Europe and North America for almost 200 years, and in some cases even longer through the traditions of Roman law. On the other hand there are societies governed by personal relationships, where the order of society is dependent on the person in power and where the rights and obligations of individuals depend on their relationship with that person. In such societies individuals do not know whether they will be allowed to collect the reward if or when the risk materializes into profit. This system prevailed in most of the rest of the world (though not all of it) during the industrialization of Europe and North America. Indeed it prevails in large parts of the world today. Generally speaking one of the prerequisites for sustained economic growth is a reorientation away from personal relationships towards government through rules. Today we see the transformation of what is called the industrial society into what many call the information society but what should really be labelled the nonmaterial society. The new technology has, of course, many implications, but for this analysis the decisive point is that it severes the link to a geographical place, which characterized the industrial society. In the old and well-known industrial society production, capital, workforce and information were all linked to the same geographical place. The demand and the supply arose side-by-side. The producers and the consumers knew each other. They needed each other. And they often trusted each other for the very good reason that they had no evidence from outside to counterbalance the position taken by the other side. In the nonmaterial and international world all this has been turned upside down. The demand is often generated by international forces which the local community does not fully understand. The suppliers or producers, on the other hand, have been forced to enter the international marketplace and thus to produce under conditions which are not well understood or accepted by the local workforce. The local workforce does not understand what their own connection to the international marketplace (catching up with consumer trends born somewhere else and brought to

Perspective: The Flywheels

11

their attention by the audiovisual media) means for the competitiveness of producers in their own local community, who have to vie for consumers in regions all over the world. The producers do not need the local workforce. They can move their production if and when conditions are more favorable in another geographical location. The consumers who constitute the workforce need the producers to provide jobs, unless they can attract other enterprises—and they may think they can. Or the workforce can choose to find jobs elsewhere. The mutual need and trust have been severed by internationalization. This points to the growing dichotomy between the elite and the population. The political, intellectual and business elite today is international. A large part of the elite finds it much more natural and much easier to communicate with colleagues in another country—the elite in that country—than with their neighbors in the local community. The elite travel and communicate internationally. They gather their information and entertainment from many sources, most of them international. They are not confined to the national framework. They communicate in foreign languages. Their job spectrum is international. Many of them work in international enterprises and move from one country to another. They gradually shift their allegiance to the enterprise instead of the nationstate and/or the local community. They are becoming what Jacques Attali once called nomads, dependent on their personal computer but not on much else—least of all other human beings! Karl Marx’s rallying cry, ‘‘workers in all countries unite’’ has been turned upside down; in the international world it is the elite that has united. This may not be entirely new. The same could probably be seen in other periods of history. What is decisive now is the strength of this elite internationalism, its scope and the plain fact that now, unlike in other historical periods, it is promoted by the introduction of new technology. In some parts of the medieval period, the Renaissance and the second half of the nineteenth century there were growing international elites, but the vehicles for internationalism were still the written word, the horse and the steamship. Now new technology actually puts the international world at your desk, wherever that desk happens to be. That is why internationalism can now be a lifestyle, while formerly it could only be a pastime for a few. Common experiences and common interests uniting the elite and the populace with regard to economic conditions and political influence was what kept the old local community and thus the nation-state together. This is no longer the case. The elite pursues its own interest not comparable to and not at all congruous with the interest of the large part of the population. European integration offers a test case for this dichotomy. The intellectual elite of many countries is busy entering into joint research with institutes in other European countries or countries in other

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The End of Internationalism

parts of the world. Many countries are simply too small to provide the amount of talent needed for promoting research. Even if the researchers and the institutes wanted to do so they could not find corporate partnerships inside the national straitjacket. The business elite looks to enterprises abroad to grow and increase market shares. If they confined themselves to the national market they would be dead before tomorrow because they could not finance the research and development needed to rank among the leaders. They would thus be relegated to mass producers of industrial goods competing on price and cost—an unenviable position in the European context. The political elite likes to make decisions not in national parliaments but on the European level in Brussels or Strasbourg. They meet their equals sharing the same problems and having the same ideas how to get on. They quite simply feel that the local and national problems are more or less irrelevant. That runs counter to the feelings of the people having to cope with daily life and ordinary problems, and who now see politicians being less visible and more distant. Many people think that this is due to the EU, that if one could roll back development and return to the good old days everything would be all right again. The villains in this scenario are the bureaucrats in Brussels. People do not realize that the EU and the decision making in Brussels are the response to internationalization—a poor and inadequate response, in fact, but for all its flaws an attempt to shape the forces affecting them. And here we come to the most sensitive of all issues. In an ordinary Western democracy we have channels of communications between people and the politicians. Messages are forwarded to and fro. People feel they are being listened to. There is transparency in the sense that people know who is responsible for decisions and can reward or penalize them at the next election. So with all its incompleteness and faults the system functions as designed. Moreover, in this system most people have at one time or another been in touch with politicians and/or the authorities. They have been at the local town house. They may have spoken to their representatives in the local assembly, the regional assembly or the national parliament. They have a feeling that the system is in place. Confronted with criticism of the system many people have a sound and natural scepticism, because they can measure that criticism against their own experiences. This is not the case with the international decisionmaking process. Here very few if any people have had any personal contact, and if they have it is most likely a letter from an international institution, sometimes neither written nor read in the original language. They are far more inclined to believe in the inadequacies of such a system, because they do not have any counterweight in form of firsthand experiences. Thus they are gradually pushed into a confrontational attitude in which ‘‘we’’ are the goodies and ‘‘they’’ are the baddies.

Perspective: The Flywheels

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We can see how almost all countries around the world grapple with this problem. The politicians try to convince the populace that the international framework is responsive to their concerns, but these assurances are, to put it mildly, not always convincing. Simply because the systems are not designed to be responsive. They are designed to get a number of countries to cooperate efficiently. This is most clearly the case for the European Union but we spot it in regard to the World Trade Organization (WTO), NAFTA and ASEAN as well. Broadly speaking, we have three kinds of nation-states searching for a way ahead, each offering more or less encouraging results. First, we have the old and well established nation-state, primarily in Europe, where the United Kingdom, Denmark and France offer themselves as examples. They are very reluctant when confronted with the question of transferring sovereignty, sharing decision making and building a political process on the international level. They stall, so to speak. They have no other answer and they know that they cannot stand outside. So their policy is to let others decide, and if the decisions lead to a successful scheme, to join later. These nations are bound by their own false picture of the nation-state’s room to maneuver in today’s world. They can be called ‘‘sportifs’’ or spectators. They applaud or boo the players. France has done better than the UK or Denmark because France suffered tremendously during two world wars and felt that integrating with Germany was the only policy open regardless of its unattractiveness for the gallic spirit. Britain and Denmark are still trying to prove that the Danish king Canute the Great who ruled Britain about one thousand years ago was wrong when he demonstrated that he could not prevent the tide from rising. Second, we have the group of countries emerging as nation-states during the industrial period; they may have existed as sovereign nations before that but are artificial nation-states in the sense that they consist of more than one people with more than one religion and/or language. These nations do not back away from transfer of sovereignty because they know from their own bitter experience that to exist one must show tolerance vis-a`-vis the opinions of others. Whether these people live inside their own nation-state or in adjacent nation-states does not matter much. They are strong integrationists. Examples in the European context are Germany and Italy. They can be labelled ‘‘the players’’ because they are the ones who move the ball and score the goals. To use another vocabulary we may call them trendsetters. Third, we have the group of nation states born in this century. For these countries it is difficult to trace a common pattern. Most of them, however, are reluctant to transfer sovereignty because they got it recently, which makes it painful to sacrifice it for common decision making. Some of them have also been ruled by an imperial power (such as the Soviet empire) and fear that integration may constitute something

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The End of Internationalism

like what they were exposed to under that empire. Sometimes they surprise us by being strong integrationists. They can be called ‘‘the substitutes’’ in the sense that they may get a chance on the team and then surprise by their performance. If we move from the European scene to other parts of the world it is interesting to note that the rules of the game put together by Britain and the United States in the aftermath of World War II have been broadly accepted by almost all countries for almost all the postwar period. The reason might be that many of them have had their hands full with the national political decision-making process. However, in recent years some of these countries have raised their voices to demand an adjustment, even a revision, of the international system to take their growing economic weight and increased political power into account. Those doing best on the international stage are nation-states ready to accept changes, with open economies and a fabric of society where cultural differences are not regarded as a barrier to development—in short, countries used to coping with differences, who have been forced to find a common denominator. We can also put it more bluntly: the more genuine—not officially or constitutionally imposed—equality among races and religions, the likelier it is that a country will find itself comfortable in the international system. More generally, we can say that those nations with a culture open to and accustomed to contact with the outside world (militarily, economically, politically or culturally) are doing reasonably well. Such countries are found in Europe and North America but also in Asia, where we are most likely to find them in the Chinese-inspired cultures. Countries finding it difficult to integrate in the international system are those with an inward-looking culture often secluded from outside interference during long periods of their national life. Examples in this group are to be found in Europe, on the Indian subcontinent and in the Middle East; Japan is not free from sharing some degree of this attitude. The societies best suited to participate in the international economic and political system are those • Welcoming new technology not only in the industrial and economic facets of society but also in civic society, and understanding the fundamental changes inherent in new technology. The easy thing is to inject new technology in industry but not in other parts of society. This will work to produce higher productivity—for a while. Then the rest of society will take their revenge. The population will reject integration in the international system. The service sector (public as well as private) to support industry will lag behind and pull productivity down again. • Having a malleable culture facilitating adjustment and adaptations, and drawing its citizens into the process of decision making. With a nonmalleable culture

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it is possible to guide the mentality of the population, and in the short run this will work. People feel proud to have caught up, so to speak. Such an approach neglects, however, that malleability must come as a by-product of creativity, and is not likely to appear as a result of what people have been told from above. • Promoting rule-oriented societies instead of ones based on personal influence, thus opening the door for transparency and equality under the law. It is easy to bully people to conform with legislation, so that laws are respected because of heavy penalties and fear. In the long run it is detrimental to society. What is required is discipline, which in a rule-based society means that people understand that they have to abide by the rules for their own good and that of society. They know the spirit of the law and act accordingly—of their own will and without being told to.

TECHNOLOGY AND CULTURE Technology provides tools to perform certain tasks. The history of mankind can be written around the introduction of new technology, which poses new challenges and changes the power balance. Any society not ready to integrate new technology dies or rather withers away. English society was sufficiently flexible—malleable—more than 200 years ago to welcome new technology, most of which had actually been known for quite a while. American society was sufficiently flexible—malleable— in the middle of this century to adjust to information technology. This is why the United States was the century’s superpower. American industrial performance was outstanding but did not set any new trends. The invention of the computer, the chip and genetic engineering did, however. New technology emerged in the United States because that was where the largest market existed. This sounds like the kind of eternal truth that makes listeners yawn during lectures but in fact it is not. For several centuries the largest market was China, and it can be debated whether England or France was the larger one at the end of the eighteenth century. Historical evidence thus does not point to the inevitable emergence of new technology in the largest market—though this is often what happens, of course. The important thing, as we now know, is that the US economy favored channelling back profits to research and development. The large US market soon became the model for the European single market, promoting inventions, innovations and the marketing of new technology. New technology was not barred from entering the daily pattern of the life for the ordinary American because the society was sufficiently receptive and flexible. On top of that we have to mention one thing which has not been paramount in the conventional analysis. And that is that the war created an influx of researchers and scientists to the United States. These immi-

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The End of Internationalism

grants not only carried with them enormous intellectual acumen but also gratitude towards their new nation. Finally, again a little bit outside the conventional economic theory, the United States was during the 1950s and 1960s participating in an arms race with the Soviet Union, opening the floodgates for many projects which would never have been touched with a barge pole from a commercial point of view. Having proven its workability inside the military framework and having been paid for partly by military funding, such technology could be integrated into civilian projects. There was an enormous spin-off from military projects to civilian applications. Thus new technology emerging in the United States in these decades rested to a considerable degree on government subsidies, although the sums were called military appropriations in the federal budget. This is an important lesson because it shows that new technology does not necessarily dance to the free-market tune. On the contrary, there is strong evidence to suggest that new technology emerges when the state in one way or another facilitates its production and marketing. The US culture was propitious for the application of audiovisual new technology. During the period preceding World War II the United States had established itself as the most important producer of movies in the world. When the television and later computers made their way into daily life it was nothing but a continuation of this trend. European competitors—in particular France, which had a flourishing movie industry before the war—were cut off from entering the game because of the war. Americans made it their trademark to move around the country and take up whatever jobs were offered. American universities competed to attract the best brains, and the fact that these brains had to move to get together with other brains was no impediment, as it very often was in Europe. This made it possible to assemble teams of researchers in American universities and enterprises. Here the contrast with Europe is striking. After 1945 most research and development took place in institutes, in a team rather than an individual context. Americans were not afraid to try something new. In fact, most of the history of the United States was centered on trying something new. The United States did not have a great past to live up to after the war, which was fortunate insofar as such a past might have worked as an obstacle to innovation. The organization of American society was propitious because, as the conventional wisdom has it, trade unions were weak and did not command a sizeable part of the workforce except in the automobile sector, where backwardlooking unions almost succeeding (in a devastating combination with bad management) to kill the American automobile industry in the 1970s and 1980s. As a country with a less powerful federal government it was easier to

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introduce new technology and new cultures in the American society. Until President Franklin Delano Roosevelt took office the federal government was very weak. From the Roosevelt years to about 1990 this trend was reversed, reaching its high point during the Nixon administration. In view of the contest between the federal government and the states many issues were blurred, resulting in little or no regulation. At the same time the legal system was efficient and transparent, so during these decades American society was rule based. Later in the twentieth century the law system went out of control and can now be said to be an emerging barrier to the further evolution of American society, in the sense that too many lawyers are chasing too many cases hoping to start too many lawsuits with too many and too high indemnifications. At the end of the twentieth century American society constitutes the only example so far in which an otherwise perfect law system has inherent powers to destroy society by increasing the risks of innovation. Trying to look ahead at technological and cultural trends, we see the following breakthroughs as the most important ones for shaping a new ‘‘age’’ like the industrial and the nonmaterial ages. First, the use of voice recognition to control computer systems, in combination with further miniaturization. Second, further breakthroughs in genetic engineering, along with medical science aimed at regenerating our nervous systems and/or improving its performance. The reason to focus upon these two issues instead of numerous others is that the first one opens up the use of information to more than 90 percent of the world population, who were formerly excluded from the information revolution because they did not know how to handle a computer. In this group are elderly people in the industrial countries and people in countries with a low literacy rate. With further miniaturization individuals will be able to travel freely without bothering about how and where, because all useful information will be readily available. The reason we focus on the nervous system is that this is an area where medical science has not really made any breakthroughs for decades, while at the same time we start to realize the increasing importance and potentialities of the nervous system. The culture resulting from such new technologies is likely to emphasize two things. The first is a search for ‘‘the real thing’’—for instance, a trip to the Three Gorges in China or the Grand Canyon in the United States, or seeing a real tiger in the wild. Around the world ‘‘the real thing’’ will attract an increasing number of people who have seen it on the screen, blown up or downsized, in slow motion or repeated again and again from different angles. After having been overwhelmed by these technological adventures, people will want to see ‘‘the real thing’’ regardless of whether such an experience is actually more adventurous than what the technology can offer. The second cultural development is a search for more adventure, more entertainment, more excitement and

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The End of Internationalism

even danger. People will become disenchanted with the screen and will go either for ‘‘the real thing’’ or for something with an element of danger. Behind this prognosis lies another one: namely, that people will get bored because work time will diminish. This seems one of the most certain hypotheses in forecasting the future. Real work in the workplace, what we use of our time to earn the money to pay for our daily necessities, will diminish. It also rests upon the hypothesis that people tend to ask for what is scarce and what they only know from books or tales or movies. This seems well documented by experience from the industrial age and the nonmaterial age. Scarcity produces demand. Trendsetters tell their stories and their tales in the media and these set the pattern for the new culture. COMPETITION AND/OR EGALITARIANISM? The welfare model developed in Britain in the 1940s rested on two assumptions. The first was that societies were materialistic, which meant that welfare was uniquely an economic phenomenon. A person was happy or at least not unhappy if he/she had enough to eat, a place to live, care when ill or disabled, and sufficient money to pay for daily life during retirement. This premise was devised and implemented in the heyday of the industrial society, when everything and everybody could be measured. The second assumption was that society would continue to be rich enough to pay for those benefitting from welfare schemes, even as the rules were perfected to include a growing number of people. Another factor was not understood and clearly not taken into account, and that is that people’s economic behavior is not unaffected by the welfare model and the size of the benefits accruing from various schemes. Thus most people actually compare what they can earn as salaries for working and what they might receive from welfare schemes for not working. As we enter the new millennium it is quite clear that the welfare models built up in Europe during the preceding decades were so generous that they cannot any longer be financed, at least in the way they used to be. This in itself has produced a stream of reports and analyses from think tanks and other sources recommending more or less a scaled-down version of the status quo. At this juncture of history we find ourselves confronted with, broadly speaking, three different welfare models: the Northern European, the Anglo-Saxon, and the Asian. The competition between these models will decide quite a lot of human history well into the next century—so which one has the greatest chance to become the welfare model of the future? The Northern European model goes back to the original welfare model put forward by the Beveridge Report (introducing general welfare payments to citizens in need) in 1944. It aims at more egalitarianism even

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at the cost of industry’s competitiveness. It is primarily to be seen in the northern or to be more precise northwestern part of Europe: Germany, Scandinavia, the Benelux countries and France. In this model we have a split with regard to the method of financing. In some of these countries the payment takes place via the tax man, meaning that more than 50 percent of gross national product goes to the exchequer. Only small percentages come in via the insurance system. This model prevails in Scandinavia. In Germany, on the other hand, the insurance system is a much greater source of revenue; the German system also incorporates a higher degree of active participation from segments of social and cultural life, including the church. The disadvantage of this model is that the difference between what people can earn by working, as opposed to drawing on the welfare system, can often be small or even negligible. Cases can be seen where it actually pays not to work. In the short run that diminishes people’s incentive to work, thus increasing both the wage level and the tax burden. In the long run we may ponder the consequences for a society in which some people can live for long periods—some will say their whole lives— drawing upon the welfare system. The advantage of the system is that when practiced correctly, it introduces a high degree of social mobility into society. When financial backing is required to study at the high school or university level there is a tendency towards getting the best brains into the university, and not only the best brains of that part of the population having the financial means to pay for study. Society mobilizes its maximum intellectual capital, and that is no mean achievement in a world and an epoch with a premium on human resources. The Anglo-Saxon model is found, not surprisingly, in Britain and the United States but also (with various differences) in Australia and Canada. The main characteristic of this model is that the benchmark for how much you get and for how long is much lower than in the Northern European model. People can get some support, but only for short periods, and the system is not designed to support people outside the labor market—it is designed to push them back into the labor market, and the sooner the better. In this case we can speak of a safety net in two respects. The idea is that with luck one will not need to use it at all, and if it is used it shortly becomes very uncomfortable. The disadvantage of this model is that it does not work to decrease disparities among different population groups, but in fact is helping to increase disparities. Thus it is not a vehicle for greater social stability but is itself destabilizing as it highlights the difference between those who work and those who do not. It is, moreover, a strong barrier to social mobility in the sense that it does not help those who cannot pay to get a higher education. It tends to produce a society in which people are, and remain, rich and well educated or poor and poorly educated. The advantage of the system is that

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The End of Internationalism

it diminishes social expenditure, paving the way for low tax rates and low production costs. With some justification it can be said that this system increases competitiveness by keeping wages down. The question is, however, whether this advantage is countered by lower productivity. In any case, lower production costs seem to be attractive for manufacturing nations operating or thinking that they operate in the industrial society while everybody else has moved into the nonmaterial age. The Asian model is primarily based upon the family acting as a support group in case a person needs financial assistance because of unemployment, old age or disability. The system is supported by the state and/or enterprises but the sums paid out are meager compared to the needs. Seen from a financial perspective this model is quite insufficient, but seen from a sociological angle it may give some cultural and/or psychological assurances not found in either the Northern European or the Anglo-Saxon model. The disadvantage of the model is that it does not live up to the expectations of a welfare model. There is no real financial safety net for people. This is, however, not in contradiction to historical experience but falls into line with what Europe and North America saw in their early stages of industrialization. The advantage of the system is that it gives great flexibility in the sense that people finding themselves in need tend to go back to the countryside to rejoin their families and live in a subsistence economy. This may, as mentioned above, increase personal satisfaction but does not address the financial needs of the victims of harsh economic times. It seems quite clear, however, that this model is gradually being phased out in favor of one of the two other models. Until now almost all analyses have focused on the financial side of the welfare system. This is surely the case because the welfare system is the child of the industrial age. Yet the evaluation of the systems and how they work does not necessarily have to be confined to the financial aspects—indeed these are likely to be of diminishing importance. The aspects that seem to be of much greater importance are human resources, sociological aspects and the stress factor. Before we embark upon an analysis let us first take a look at the financial side. Much of the debate has been stirred by an almost unanimous chorus of politicians and economists saying that the old and well-known welfare model can no longer be financed. That is not correct. What is correct is that it cannot any longer be financed in the way it used to be. The conventional financing is based on the hypothesis that almost all people in society work and are potential beneficiaries of the welfare system. Thus it makes sense and is indeed just to finance the system via the state because contributions are distributed in an equitable way; this is also the case for benefits. As soon as (and this started to happen a decade or two ago) some people want to be out of the labor

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market and others want to take care of their own welfare, the basic assumption of equality disappears, drawing with it into oblivion the conventional way of financing the welfare system. This is why all industrialized societies have seen a movement towards payment by those who actually use the system. This could be done directly, by setting a price for example on a hospital bed, or indirectly, by shifting the financing to enterprises and asking them to assume a greater part of the burden. If this way ahead is chosen the welfare system as we have known it may persevere, but at a cost. Only a part and not all of the population would be included in the system. Excluded would be those falling outside the labor market. It is open for debate whether this means greater or lesser disparity, but it is difficult to argue against the implication that it means the isolation of a part of the population who used to be beneficiaries under the old welfare system. In fact the pressure on the financing of the welfare system, combined with the adjustment from an industrial society to a nonmaterial society, have produced a dichotomy in most mature industrial countries. One part of the population constitutes what could be labelled the competitive society. They participate in the race for higher living standards, for higher social status. They work longer and harder as time goes on. They very often feel ashamed if they cannot deliver what is expected of them—by others, but more often by themselves. They compete not only with others in the same group or with comparable persons in other societies/nations, but most of all with themselves. They can if they so wish pay for their own welfare if or when needed. Needing medical treatment is not a financial problem, but it is a psychological problem insofar as it could be an omen that they will need to withdraw from the competitive part of society—thus removing a fundamental pillar of their identity. Another part of the population live a far more relaxed life. They constitute what we call the welfare society. They work inside the stipulated working hours and do not care if they finish their work. They do not compare their productivity with anybody else’s and least of all with their own potential performance. They work because they have to and not because they feel a commitment to what they are doing. They need the welfare system in case they get ill and when they reach retirement age. They despise the competitive group in society but sometimes realize or suspect the blatant truth—namely, that they are dependent on this group to finance the welfare system. If or when the first group stops financing the welfare system, it breaks down. If or when the second group manages to assume political power society starts to fall apart. The question of human resources is probably one of the most important ones haunting almost all countries around the world. As we move from the industrial age (with an industrial technic, power based and power

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The End of Internationalism

generating, easily administered by individuals but often requiring force and backed up by energy-producing vehicles) to the nonmaterial society, human resources are becoming increasingly central to our thinking. This theme is penetrating basic education and higher education as well. How do we mobilize as much brainpower of society’s as possible? The answer is ‘‘by raising the educational standard.’’ Those who bother to dig a little bit deeper stumble on the word creativity. This is one of the words which from now until the year 2005 will be pronounced a million times in all kinds of lectures and read just as many times in books, magazines and journals. Everyone agrees. We must do something about creativity. Behind all this lie two very simple educational choices underlining the difference between the industrial world and the nonmaterial world. • Do you learn to produce answers to a pre-defined problem? Or do you learn to ask questions to obtain a range of possibilities? • Do you learn to dig deeper in a well-defined area, emerging as a well-armed specialist? Or do you learn to combine items from different and sometimes contradictory fields, emerging as a generalist?

In the old industrial age people learned to answer questions and solve problems defined for them beforehand. The famous one is how to dig a ditch. It harassed millions of young people from grade one to grade twelve. It ran as follows: ‘‘If two men can dig a ditch in four hours, how long will it take four men?’’ The sophisticated version ran, ‘‘How fast could it be done by one man if he worked x times faster or y times slower?’’ This was magnificent. Every one of the pupils could immediately associate this piece of arithmetic with the industrial society because on their way home from school they could see somebody digging somewhere! In the nonmaterial society we do not dig very much. We have to formulate questions to obtain a whole range of possibilities from which we choose either one solution or to pose new questions. The computer finds all the answers for us. In the old industrial age people became very specialized. You mastered a tiny little engineering detail and doing this you became indispensable. There was no need to be able to generalize because society did not require it. All the tiny engineering details were put together, forming one of the wonders of the industrial age, such as the automobile, the suspension bridge or the railway engine. In the nonmaterial society it is again the other way round. The computer or the robot can handle the tiny engineering details much better. What we need is somebody able to put all these pieces together so that they can be used in new ways. The more specialized people become, the more likely it is that if a scientist makes a discovery, its potential uses will go unrecognized. Society needs people able to look at things from different angles: to combine and re-

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combine each time in a different way, according to what we need now and not what we needed yesterday. The role of the welfare system should be to ensure that as many people as possible get the entry ticket to see how well they can fare in this new world. It is difficult if not impossible to say beforehand whether a certain individual will be able to play a role in this world of creativity. Often the education system selects those who perform well according to old criteria. That is understandable. But we cannot afford waste and we need to try again and again to put talents together. Therefore, in the future the welfare system needs to find room for people who according to old standards would be judged unfit to work. It needs to provide chances even if doing so is costly. The sociological aspects of the welfare system have to do with social mobility. The more petrified a society is the more likely it is that only a part and sometimes a small part of its human resources can be mobilized. This will definitely be a problem because the expenditure level for the welfare system puts a brake on social mobility. The larger the share individuals or their families have to pay on their own the less likely it is that talent from the poor layers of society can be included in the pool of human resources, and the likelier it is that recruitment will come from the families and groups already furnishing the intellectual elite. The welfare system will thus have to break down barriers and open the doors to the education system for all people from all layers of society. Looking at how, for example, the United States mobilizes its human resources today, it is by no means evident that this has been accomplished. On the contrary it is abundantly clear that exactly in the United States we see a strong tendency to monopolization of access by the intellectual elite; that is, those who supply the talent and the human resources are those already at the pinnacle. This will have disastrous consequences in the long run. The Anglo-Saxon model also incorporates a potential self-destruct mechanism: the glorification of a large disparity between those in charge of an enterprise and those employed by the enterprise. It is striking that business leaders in the United States can earn $10 million or even $20 million per year, while the salary at the floor of the enterprise may be extremely low. Obviously people accept large disparities. They know very well what is necessary to make the machine run, so to speak. But they dispute disparities of the size we meet in the United States. It gets even worse when at the same time the executives at the upper end of the scale fire people at the lower end in the name of efficiency and competitiveness. This may be right, but it does not feel right when disparities of that size persist. The Anglo-Saxon model symbolizes for many people the capitalist model without the useful and indeed necessary brakes constituted for-

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The End of Internationalism

merly by the existence of the challenge from the socialist model. Without this alternative it has turned into an anti-welfare booster alienating people instead of attracting them. For the question of internationalism it is even worse. To a certain extent the Anglo-Saxon model has come to represent the international economy, indeed the global economy. That is because many, indeed almost all, multinational enterprises are American or English. Inside their own countries they are seen to transfer jobs from that country to other countries around the globe. Outside their own countries and on the international scale they are often looked upon as quite ruthless monsters moving jobs around the globe regardless of social or sociological considerations. The stress factor means that social and sociological problems for society and for the individual shift from the economic sphere to the question of psychological well-being. This is probably the largest shift needed in the welfare concept. It is no longer a question of having money to pay for food and shelter, but of a kind of mental zimmerframe (support scaffold) making it possible for mentally weak individuals to live in a society which unfortunately happens to be a competitive one. The implication for the welfare society is that less attention should be paid to the size of the various subsidies and grants, and more to services provided by staff and personnel. How do we integrate a social loser into society? How do we make sure that a former alcoholic can find work again? How do we encourage an insecure and uncertain individual to mix with other people apparently stronger than he or she? All these questions of paramount importance for the future have never really been dealt with by the welfare system in industrial societies, and no ready-made answers are at hand. The crux of the problem is that at the same time that we have to accept a stronger and more competitive society we have to build into that system some mechanisms limiting the number of social losers, and we have to do it without overtaxing the rich who will relocate to avoid too heavy a burden. The stress factor highlights one of the fundamental trade-offs inherited from industrial society. Those who are ‘‘rich’’ are ready to pay for those who are ‘‘poor,’’ provided that the poor behave in a way that lets the rich define the broad outlines of the society. What the poor cannot do without upsetting the balance is to impose upon the rich both the duty to pay and a kind of society the rich do not accept. If denied the right to set the terms, the rich will move either into their own defended areas (as seen in the United States) or abroad (as seen in some European nations).

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COMMUNICATION VERSUS SECLUSION The industrial age, the age of the nation state, the age of power technique (generating power to run the manufacturing process) all come together. They constitute a kind of unity. In this unity we also find national seclusion. All nation-states were quite happy to live and communicate inside a national fence outlining the borders of knowledge, beyond which they did not dare or did not bother to walk. They secluded themselves from influences in the outside world. Every ‘‘decent’’ nation-state had its own monopoly of some kind, and this was most spectacular with regard to the dissemination of information and knowledge. We had national universities, national institutes and national broadcasting—the list is endless. This seclusion resulted in limited access to talent, in several ways. The knowledge available was limited to national knowledge, so that talents did not have the opportunity to expand or broaden by getting to know what others in other nation-states had thought or discovered. There was a lot of duplication, and limited exploitation of available talent. Talent can rarely develop if it is not in competition or at least in dialogue with others sharing the same occupation. In the scientific world there was some transborder activity, but on a limited scale. In the business sector contact was very limited except in the traditional empires of the industrial world, such as oil-producing firms, where access to raw material was confined to certain geographical areas. Seclusion was a reason, though not the only one, for the rise of fascism, nazism and communism in Europe in the interwar period. These ideologies, which to a certain extent were born and developed to be international, turned out to be extreme forms of nationalism, resting upon the assumption that the broad mass of people were ready to accept any claim, regardless of its validity, because they could not compare it with other sources of information or knowledge. This has not much to do with censorship. It is a question of seclusion—whether or not a society gets information from various sources, some of them outside its own sphere. Seclusion produces the sentiment that ‘‘we’’ are better than other people. It limits the economic development of a nation because of barriers to trade, capital flow and research and development. Everything goes hand in hand, dichotomizing society into ‘‘us,’’ the good ones, and ‘‘them,’’ the bad ones. The main reason for the strong internationalism after World War II was the evolution, indeed the revolution, of information technology. This opened hitherto secluded national societies to information and knowledge from outside. Standards of living, tastes, patterns of demand all became measurable, not necessarily in a strict sense, but compared to

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what happened in other places around the world. People could tune into a radio, buy newspapers, watch TV and, in the latter part of the period, use the Internet to peep into strange places which they might not have heard of before. The scientific and technological communities really jumped into this international world, exchanging students, teachers and researchers on a grand scale. It is doubtful whether the Western Europeans would have accepted the establishment of American multinational companies in the 1950s and 1960s if it had not been for the knowledge, combined with research and development know-how, they brought along. That was the payoff. These companies could exploit the embryonic European common market in a fashion that was barely possible for European enterprises, which were either too weak or not in possession of appropriate managerial skills. Europeans could see that the stock of European knowledge increased in the slipstream of the American enterprises. The death warrant for seclusion in the trade area was followed by a death warrant for seclusion with regard to research and development. In a political context access to information put the squeeze on governments. Now the population did not exclusively get information from domestic sources but could also use international media of various kinds. This sounded the death knell for the communist systems in Central and Eastern Europe. When the moment came that the population could compare not necessarily their living standard but the information provided by the ruling system, and discovered that for decades the ruling class had been lying, the system collapsed. Not only did people react violently to this discovery but they also made it clear that they did not want to go back to the old secluded system. And this is where one of the major battles will be fought in the future. We can safely start with the assumption that maintaining international communication will promote internationalism, while the prospect of national seclusion constitutes a potential grave danger to internationalism. The potential risk does not come from national government; it arises from the combination of a preference for entertainment (let us not forget the movement towards the entertainment and adventure society) and the monopolistic trend in supplying information. Right now one of the biggest battles the world will ever see is raging in the sky above our heads. The stakes are enormous. As usual James Bond arrived at the theme first in the 007 series: the right to control and channel information. Whoever has these rights will be able to govern the evolution of our minds for a considerable time to come. We can see five to ten contenders competing to possess satellites and the equipment down on earth to receive messages and send them on to consumers. They have no intention whatsoever of sharing the rights with anybody else, be it national governments, international organizations or other multi-

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national enterprises. What we probably will see emerge here is another, but just as important, form of seclusion: seclusion from the real world. As entertainment carries the day there will be a lot of advertisement to finance the channels; fantasy and imagination will gradually take over and substitute for the real thing. This will pose a threat to internationalism because the ‘‘real thing’’ appeals to our conscience, reminding us of calamities in other places around the world. Even if many people talk about CNN diplomacy in an unkind way, we should not forget that CNN works as the international channel bringing into our parlor or living room the state of affairs in other parts of the world. Of course it also has a tendency to go for drama; it also cuts reports down to something like 30 seconds. But at the end of the day it works as a reminder that there is a world—a real world with poverty, with civil wars, with natural disasters—needing our attention, our help and our money. The monopolistic monsters developing will hardly do that. They will be much more inclined to concentrate upon the World Series, the Super Bowl or the America’s Cup. Or they will pursue the track already developing fast in the United States— showing real things, yes, but only pertaining to disasters or crime, with which people can associate themselves and feel the thrill that ‘‘it could be me.’’ It could not be ‘‘me’’ in Bosnia-Herzegovina, Kosovo or Rwanda or Somalia, these places are cut from the programs sponsored by the monopolistic monsters. The conclusion is, thus, that the tendency towards monopolistic control will also be a tendency towards nationalism, and will thus combine two hideous factors: seclusion from reality and seclusion from the outside world. It would be a strange kind of nemesis if the greatest revolution since Gutenberg’s invention of printing, a truly international one, was allowed to slide into ugly nationalism. INTERNATIONALISM VERSUS NATIONALISM The choice between internationalism and nationalism is one of how we think and behave in our daily life. Do we look inward and feel content with the nation and the nationality to which we belong, or do we look outwards, being drawn towards other nations and nationalities and indeed other ways of thinking? From time to time the intellectual and business elites have ‘‘gone international’’ in the sense that they have moved freely across borders. This was the case in the Renaissance, and it can also be seen in parts of the nineteenth century. In the latter instance, parts of the workforce also had that opportunity—at least in Europe, where it was not uncommon to travel from country to country to work. However, this did not apply to the workforce as a whole, which felt itself confined to the nation or

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indeed the local community to which it belonged. The new thing is that the freedom of localization, the revolution in transportation action and the evolution of the audiovisual media have all made it possible and in fact normal for a rising part of the population in the industrialized nations, as well as the elite from developing nations, to move freely from one country to another. One implication of this is the schism between the elite who have this opportunity and those in the nation-states who do not. This was discussed in Chapter 1. Another implication is that the elite itself runs the risk of having no roots. It is fine to move from place to place, it is fine to speak several languages, it is fine to get information from truly international sources and it is fine to have been educated at different universities in various countries. But what kind of human being will that produce for our world, and what kind of social conscience does it create? The danger is that people in this international intellectual elite will only know each other, only see each other’s houses and families, and thus gradually but surely lose sight of the many others who do not have the privilege of participating in this international world. There will always, so to speak, be somebody taking care of the elite. There will be a social welfare system in the sense that the elite will not get the feeling of being left out, provided that they themselves search for such a safety net. Thus they will lose interest in how individual nations are governed. Why should they care when everything is all right for them? What does it matter whether the social welfare system is good or bad in this or that nation state? The people living in the nation-states and not having or desiring the possibility of moving will gradually but surely feel the pinch, in the sense that they will be on their own. The nation-state will not be able to provide a full-fledged welfare system. The enterprises do not really care because they devote most of their efforts to the elite. The political systems set up to look after the interest of non-elites becomes more and more powerless. If they try to squeeze more money out of the business sector, enterprises move. If they raise taxes the citizens themselves start to use electronic commerce, pulling the rug from under their feet. The tone of these political systems will thus become more and more shrill, playing the national tone—which is not national at all when we examine it, but, stripped of all its dressing, Egoistical with a capital E. The people react in an egoistical way because they feel that the elite, by exploiting the opportunities of internationalism, is itself egoistical. They will pay back the coin given to them. The choice between internationalism and nationalism thus boils down to some permanent questions. How much economic disparity can a society tolerate before it breaks down? How much power can political systems surrender before they lose credibility among those whose interests

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they should safeguard? The dangerous thing ahead of us right now is that internationalism, despite all of its benefits to all societies and nations, has become the visible vehicle for bringing these issues to the forefront. PRODUCTION VERSUS CONSUMPTION Most if not all economic theory taught at universities around the globe is focused upon the need of the consumer. The consumer is king, so to speak. Indeed, the consumer and the market cannot be mistaken. As long as we model the economy according to their wishes and their preferences, all is well or will be well. This requires, however, that we read the market correctly, and that is the main problem for economic policy. A question rarely raised and even more rarely discussed is whether this consumer-based theory is right or wrong. It has become conventional wisdom to the extent that, while it is not heresy to dispute, it never enters people’s minds to do so. But looking at the economic policy pursued around the globe by nations and international organizations we cannot escape the conclusion that this policy rarely delivers the results. One of the reasons is that the theoretical framework is a pure AngloSaxon capitalist model in the mold put forward by extreme economic liberals. Many governments outside the Anglo-Saxon sphere of intellectual dominance have actually pursued divergent economic policies, but it seems that every time they have needed help from the International Monetary Fund they have been pushed back to a market/consumercontrolled economic policy. The strange thing is that the United States and Britain, who today stand for this policy, do not practice it in the sectors where they do not already have a competitive edge, and did not practice it in the days when they started to build their industrial economies. The main problem is that for many countries the market/consumer policy is seen as an American/British enterprise to ensure large profits for multinational enterprises, allowing funds to be plowed back into research and development, and thus also reserving for America and Britain the industries of the future: high technology. Total welfare and production on a global basis may or may not be higher with this policy than with other policies. But that does not matter in the present context. What matters for many nations is that it constitutes an unbreakable dyke against their endeavors to move upwards. They feel that if allowed to pursue for a certain period a policy of favoring national producers, they could more or less emulate American and British exploits of the past and create a production potential which could generate the capital necessary for them to develop their economy and their industries. Forced to abandon all instruments for doing so, their markets are left open for the

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already established enterprises wanting to sell their products in those countries but not wanting to produce there. This model might work if people were convinced that in the long run it would produce perfect competition with constant lowering of prices and higher quality—that is, if the theory that competition would prevail and so in the end favor the consumer were correct. But that is not happening. Instead, competition means that enterprise after enterprise is driven out of business, and after an initial phase where prices are lowered we are back in a situation with a few producers exercising an oligopoly, if not some form of monopoly. The examples are numerous. The deregulation of air traffic has not led to major price decreases for air travel. In some cases it may be possible to buy cheaper tickets, but ask the norm for the ordinary business person travelling from New York to Los Angeles or Paris to Frankfurt, and higher prices will be the answer. In the automobile industry producer after producer is being squeezed out of the market. The trend is the same everywhere. It looks as if the drive towards deregulation to obtain more competition and thereby lower prices is leading the world to quite the opposite. Capital is being accumulated. Production is not spread among countries and enterprises but monopolized and controlled by very few people. This danger is especially strong in sectors where capital is needed to invest. The outlook for many countries is thus that not only are they forced to abandon their own production in the name of liberalizing their economic policy, but in the end they never get the reward in the form of higher welfare through lower prices. Instead they are onlookers in a transfer of purchasing power from themselves to other countries. They then turn for a closer look at, for example, the Japanese model in the post–World War II period. It may not be very popular presently after its almost total bankruptcy in 1997–1998, but it contains a lesson for many countries in the sense that the Japanese managed to build a strong industrial base which exists today. And they did it by contradicting not in words but in deeds the Anglo-Saxon policy of putting the market and the consumer first. The propagandist for the Anglo-Saxon model will say that this was precisely the reason the Japanese model failed. But such a reply does not hold water. The Japanese model failed because the financial system did not develop according to the needs of the industrial base. That was already clear around 1990, but Japanese policymakers did not do anything about it. Developing countries also start to look at the Chinese policy, not the Chinese model. China has a lot of inefficient enterprises inherited from the old communist period, which have to be disposed of in one way or another. But what is attractive in the Chinese policy is exactly the same as what worked in the Japanese policy decades earlier—the preference or consideration given to the producer instead of the blunt and blind

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acceptance of market forces and the consumer as king. The Japanese policy was administered in a very subtle way. Japan said Yes to the constant United States demands but did not implement them. China does not feel that it needs to follow that course. It maneuvers instead in the open, counting on its size to obtain what it wants. It remains to be seen whether this policy will be successful. The fact is, however, that the battle during quite a long period about China’s participation in the World Trade Organization was a question of how fast and to what degree China should replace its producer-oriented policy with a market/consumer policy. The Japanese never bothered to accommodate the wishes of its trading partners, because the fact that they lived on an island, with a language spoken almost exclusively by people living on it, permitted them to do what pleased them—and so they did. The policy dilemma for the world is that for most people the market/ consumer policy is synonymous with the international economic policy. That is the policy pursued with rigor by the United States and by the EU when it suits them, as it does in most cases. For many countries this policy is not appealing. A number of countries in let us call it the medium range of economic development want the right to pursue a policy tilting in favor of the producer. They fear they will miss out on future economic and industrial development if forced to adhere to the consumer/market model.

3 Perspective: The Actors INTRODUCTION During the industrial age the economic and political architecture which emerged became well understood and worked very well to produce answers to the challenges and opportunities of the industrial society. On the domestic scene in Britain the model was based upon the nationstate, which ‘‘protected’’ consumers and producers from too many outside influences. The system was not stationary but focused upon developments and inventions inside the nation-state, assuming a standoff attitude towards outside interference. There was a clear class distinction between the workers, artisans, farmers and the office workers on one side and the capitalists on the other. They all knew where to find their information, as each class had its preferred newspaper. From time to time society tolerated a clash between these classes about how to distribute wealth. These took the form of strikes, lockouts or production boycotts by farmers. It was all organized and very rarely developed into chaos or unorganized struggles. After a short time a solution was always found, and everybody abided by it regardless of whether it was negotiated or imposed by the state. The state introduced a welfare system sufficiently gracious to allow the market economy to function. Everything worked. The basic technology was energy-related. Societies needed power for manufacturing, and they got it from oil or coal converted into power in enormous power stations, which conveyed the symbol of the industrialized age—here everything good is big. The culture was based upon homogeneity. A working day was eight hours long for everybody. In the morning the children were deposited at the kindergarten, where

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they were picked up late in the afternoon. The elderly were deposited in special homes and left to lives of semi-boredom. On the international scene this model was copied. In the beginning, the nation-states negotiated among themselves. This was fine as long as Great Britain was just that—Great—and could impose its will upon the others behind the veil of negotiations. Yet it soon became impossible to pursue that simple model, as the United States and Germany rose to challenge British supremacy. What followed was a fairly cumbersome international machinery which was built up in the 1920s and 1930s, but did not work because the Great Depression never gave it a chance. After 1945 the United States, with the help of Great Britain, designed a system which has served the world extremely well until the end of the twentieth century. It was in fact the first organized attempt to introduce a legal framework on the international scene. The International Monetary Fund would take care of balance-of-payment problems. The World Bank would help underdeveloped nations to develop by transferring capital to them. The International Trade Organization (ITO) would ensure free trade based on the most-favored-nation clause (extending trade concessions to all members of the ITO). The system was nothing else than the machinery for income distribution on the national scale put into an international framework. Here we do not fight; we negotiate to find out how to increase wealth (the World Bank), how to distribute it (the International Monetary Fund) and how to generate trade as a machine for growth (the International Trade Organization). All these organizations were supplied with a voting machinery giving the Americans and the British a preponderant influence—fair enough at that time, but not fair half a century later. The main trick was to avoid clashes between nationstates, pulling the world back to a stage of protectionism as seen in the 1930s. Sometime between 1945 and the year 2000 this system reached its zenith. Everything was in order. The industrial society worked well on the domestic scene. A copy was established on the international level. Technology and culture corresponded to the economic and political architecture put in place. Then it started to unravel. The main reason for this was the introduction of new technologies: information technology followed by biotechnology. These were accompanied by a new culture, one in which leisure and work were no longer wholly separate issues but were connected by a common technology. Audiovisual media determined both what people were doing at work and to a very large extent what they were doing home in their living rooms. The whole distributional architecture started to fall apart. Nothing fit into the other parts of the mechanism anymore. Instead of consisting of four or five classes society became heterogeneous. People did not focus so much anymore on wages, but on performance and fulfillment. On the international level new nations contested

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the system, and in so doing implicitly challenged the power of the United States and Great Britain. In short, the new technology and culture emerging late in the twentieth century favor the dismantling of the old system and its replacement with new ones. It is this battle between old and new we witness today when reading about all the international negotiations. The main difference between the established system and the new system is that while the established system has few types of actors—nation-states and international organizations—the new system features many actors pursuing different objectives. We have: • the nation-states • the regions • the cross-border regions • the enterprises • the international organizations • the international pressure groups • the communicators.

THE NATION-STATES Before we dig deeper into the role of the nation-states it may be useful to enter the tedious world of definitions, making it clear what we mean by the terms the state, the nation, the nation-state, and the nationality. The state is the representative of authority towards citizens obeying its orders and towards the outside world prepared to enter into agreements specifying rights and obligations. In this context the state does not reflect any emotions or preferences by those involved. Inside the state people obey orders and follow discipline not because they want to do so but because they feel that they have no other choice. In the outside world the state is accepted because experience or judgment tells other actors that it is capable of defending its interest. Until the mid-nineteenth century almost all actors on the domestic and international scenes could be regarded as states—political entities—operating because they were ready and indeed prepared to defend their rights. Take a small country like Denmark, regarded by many as an entity with a very homogeneous population. Denmark was a very obscure nation until about 200 years ago; most of the population did not regard themselves as ‘‘Danes’’ but as adherents to some kind of authority—the king, or a local lord or the church. Denmark at that time was following the pattern of organization based upon personal relations instead of rules. People thought of personal attachments before thinking about the state. Colors were used to emphasize personal relations. As the soldiers could not read they had to

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know where they belonged. Colors were the rallying points. Indeed the British military parade ‘‘trooping the colors’’ goes back to that age: to make sure that every soldier recognized the colors when on the battlefield they were paraded in front of him. It was not until the Napoleonic wars that the watershed between the state and the nation was manifested in the composition of armies. Until then soldiers fought for whichever state was ready to pay the most. The Napoleonic wars introduced the army composed of citizens reflecting some kind of common heritage and the pursuit of a common interest. The conscription army emerged. Since then, the army and conscription have been important items in nationbuilding. Thus the nation was introduced in Europe. The nation is the framework for people striving to live together, not necessarily because they have to, but because they feel that there is a certain degree of commonality among them. They pursue, if not a defined common objective, some kind of common course understood by the large part of the population. This is what happened in Europe around the year 1800 during and in the aftermath of the Napoleonic wars. Even for such composite nations as the Habsburg empire there was an understanding between the different peoples that they were better off staying together than parting with the Emperor in Wien. One of the first wars to be fought in Europe by an army of conscripts against rebels seeking to secede from the crown took place in 1848–1850, when the German minority living in Holstein and part of Slesvig—at that time under the Danish crown—tried to join their German siblings south of the border. The Danish conscript army managed to defeat the insurgents, only to be defeated fourteen years later by the Prussians and Austrians. The nation evokes and rests to a large degree upon emotions. People belonging to the same nation are ready to make certain sacrifices in order to keep the nation together and in pursuit of common objectives. They feel that they belong to the same group and they feel at ease inside this group. The nation is both stronger and weaker than the state. It is stronger because people feel attached to the nation by emotions, and so are willing to do more for the nation than for the state, which rests upon an authority that is, ultimately, fear. It is weaker because emotions are more vulnerable and can more easily be transferred from one recipient to another—and most importantly, there is not always a warning to those in power when this is going to happen. The nation-state did not exist before the Napoleonic wars but is one of the major results of 25 years of upheaval in Europe triggered by the French Revolution of 1789. The genuine nation-state is composed of one people, with one religion, speaking one language. This is a very strong actor. People inside the nation state feel that they act together because of a common history, a common culture and common objectives. Emo-

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tions may be present, but as a supporting force to hold the nation-state together. Authority may be there, but as an instrument and not a backbone. About 200 years ago very few nation-states existed in Europe and today not many more have emerged. But many actors try to convey the impression that they are nation-states, and have put a great deal of money and effort into the futile attempt to create a nation-state. Great Britain and France look like nation-states but are not, despite strong central governments that for 200 years have rewarded those citizens ready to declare themselves British or French regardless of their origins. The heterogeneous nation states—the artificial ones—fought very hard for a long time to mold their citizenry into a common culture, but in almost all cases in vain. Language was the major instrument the rulers used to shape the nation-state. Again Britain and France are cases in a point. In Britain the central government in London, whether the king or Parliament, almost succeeded in stamping out the Irish, Scottish and Welsh languages, but as we can see near to the end of this century were not successful. In France exactly the same took place, but again the old and apparently dead languages have risen from the grave and staged a remarkable comeback in the west, southeast and south of the hexagon. The nationality is the label for the group of people feeling some kind of togetherness. Most often this feeling is based upon language and/or religion, but other cultural factors can play an equally important role. However, it is difficult to find parameters other than cultural ones. If the nationality is to be found inside a single nation-state it often constitutes the majority of the population. If, on the other hand, the nationality is found in different nation-states around the map, in most they will constitute a minority. The most delicate issues arise when nationalities are spread around the border between nation-states, thus appearing in as minorities one or several adjacent nation-states. Nationality serves admirably when used to rally people around an idea or a purpose. A nation-state can achieve this or that end by using nationality as an inspiration for its population. When President Kennedy launched the drive to land a man on the moon, he used nationality as the driving force to get money through Congress and to mobilize the intellectual energy and capacity of the United States. Sadly enough, nationality is often being used as a rallying point against others. In this case it becomes extremely dangerous. People are always willing to believe that depressing times or events are due to evil plans nurtured in other countries, and Who is likelier to scheme against us than the neighbor knowing us so well? This is why nationality has gotten the bad reputation it so richly deserves. One of the tasks of a statesman is to keep nationality down despite its obvious appeal to the masses. Sadly enough, history gives example after example of politicians being elected

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to office and choosing to remain just that—politicians—instead of trying to perform as statesmen. After this digression let us now turn to the nation-state. The nationstate and the industrial age are twins. They were born in the slipstream of industrial technology and the industrial culture. The nation-state constituted, so to speak, the political framework for industrialization. Without the nation-state it is doubtful whether industrialization would have been possible in Europe, North America and parts of the Far East. Before the Industrial Revolution the nation-state would have been a term totally unknown and without any content whatsoever for the ordinary European. In Europe there were kingdoms, city-states, empires and small states governed by a prince or defending the colors of a republic. But there was hardly anything called a nation-state. The United Kingdom drew together England, Scotland, Ireland and Wales. England had succeeded in conquering the three others during centuries of warfare, which compelled them—with greater or lesser enthusiasm—to respect the British colors. Judged by the Scottish rebellions of 1715 and 1746 there was real anguish in Scotland. Judged by the Irish rebellions and Irish support of the French during the Napoleonic wars the enthusiasm for common governance on that island was even less than in Scotland and Wales. France came closer to being a genuine nation-state composed of one people with a common language, common religion and common history. But nor was this case clear cut. The French state rested upon the Parisian center being strong enough to crush rebellions in remote regions such as Brittany, Vende´ e and the southern parts of the kingdom. The advantage of France compared to the United Kingdom was that from Louis XIV until the appearance of the German empire and the heyday of industrialization in Britain, French was the cultural language par excellence. The implication of this is that the French felt much more French for the very reason that so many others wanted to emulate them as cultural leaders of the pack. There is a certain analogy here to the second half of the twentieth century, when English emerged as the language of the electronic environment, inducting people into an English-speaking culture. As French was the cultural language in the age of the book, English is the cultural language in the audiovisual age. Spain did quite well as a nation-state if the yardstick is keeping together, but failed completely if the yardstick is throwing your weight about to influence events in your own country and abroad. As the pressure on the Spanish regions to supply money and soldiers to fight for the Spanish empire melted away, Spain took a longer-than-expected siesta. The sleeping Spain would have to wait until the twentieth century to discover a new world, which it joined after having rejected Franco’s dictatorship. It reaped immediate benefits politically and economically.

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Germany did not exist as a nation-state until 1871. Before that the nation of Germany was geographic, if it existed at all. Very few people confronted in 1850 with the awkward and penetrating question of the future of Europe would have guessed that the year 1871 would give birth to a united Germany, and even less would have predicted that this united Germany would become a European military and economic heavyweight. Italy emerged thanks to the decline of the Habsburg empire and the falling power of France. It did so under the colors of the House of Savoie, exploiting a rare window of opportunity. The price was a weak nationstate held together by language and religion but without much idea of a common history and common destiny. Most people looking at Italy would be ready to consent in the verdict that we have two nations. One is northern Italy, belonging to Central Europe and under the strong influence of the Habsburgs for centuries. The other is Southern Italy, belonging to the culture and economic life of the Mediterranean. In the east and southeast of Europe we have had three great empires. The weakest was definitely the Ottoman empire, which already felt imperial overstretch in the beginning of the nineteenth century, but was allowed to exist because the other powers in adjacent areas were too weak to exploit its decadence. The Habsburg empire is much despised by many historians—unreasonably so. In fact it is an example of a longlived and well-governed conglomerate offering various peoples peace and some degree of economic prosperity. Judged by today’s yardstick the Habsburg empire respected minorities, their languages and their religions. That was the prime reason that the empire could last for so long, and also the prime reason that it was a weak empire. The Russian empire to the east was an expansionary one and in the last two centuries it nourished aggression and achieved a good deal of success. On this score it provides a contrast to both the Habsburg and the Ottoman empires. Exactly because it ventured too far ahead, it could not digest the peoples who against their will were assimilated to the empire. After the fall of the czar in 1917 the empire fell apart, and the Bolsheviks used brutal force to pick up the pieces after a brief flirtation with liberal ideas. When the communist empire crashed in 1991 the regions deserted as fast as they could and left Russia a large nation-state surrounded by peoples whose ties to each other are for the most part insufficient to make them comfortable inside an empire governed by Russians. Industrialization turned the European picture of a few large and many small and medium-sized nations upside down. Around 1900 Europe sported a few remaining empires, but many nation-states held the sway over minorities acquiescing in their fate because industrialization gave them something in return: a higher and growing living standard. With industrial society, industrial technology and industrial culture on its way

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out, the basis and the need for the nation-state disappear. It is no coincidence that Europe has seen the European Union at this juncture of history. It has come because the time was ripe. As the industrial society withers away so does the nation-state, giving way to a new economic and political architecture in Europe. Many people are fighting very hard to convince themselves and a crowd of followers that we still live in the age of the nation-state. But look at what is going on. How much economic, monetary, industrial and technological legislation rests with the nation-state in today’s Europe compared with the Europe of the 1950s? Not very much. Who is negotiating with the United States and Japan in international trade policy institutions? The individual European nation-states or the European Commission? The answer is the European Commission. Who is sending soldiers to Bosnia-Herzegovina and other parts of the former Yugoslavia to secure peace? Yes, the soldiers are coming from national armies, but who took the decision? It was taken by the European Union, NATO and/ or the UN, not by the national chancelleries. Why do we speak of the single market, the common agricultural policy, the common trade policy and the economic and monetary union? And why do we need these new policies now? We need them now because the European nation-state can do very little by itself. How well does the European nation-state care for its citizens? Measured by the size and quality of welfare service, many Europeans feel that despite a growing share of gross national product being channelled to support those in need, the service level of the public sector is clearly less than it used to be. Conclusion: the nation-states, despite having access to greater financial means, are not capable of ensuring a sufficiently high quality of services for its citizens. This is difficult to contest for the very reason that the recourse to private companies to supply what used to be the privilege of the nation-state has spread like a prairie fire during the last decade in Europe. On the international level, look at all the large negotiating rounds in recent decades. How many of these were carried out between nation-states, and in how many cases can it be said that the nation-states decided the outcome by themselves, and not by using the appropriate international organizations? As an actor whose job it is to ensure its citizens a growing standard of living and to safeguard their interest on the international scene, the nation-state quite simply does not seem capable of delivering anymore. THE REGIONS Exactly because the nation-states were artificial creations, the regions inside these nation-states smell the arrival of new times and new opportunities. No nation-state in Europe has escaped this evolution and it

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now seems to be spreading to North America and Asia. The regions do often constitute what the nation-state rarely does: discrete entity with regard to culture, language, religion and history. Thus people living in a region do feel a common destiny much more than people living in a nation-state. This is not surprising when looking at history, because many of the European regions and some of the Asian regions did in fact constitute sovereign nations before they were engulfed by nation-states in the 200year-long drive of imperialism. European nation-states conquered territories abroad, but many commentators overlook the imperial drive on the domestic front, as the strongest peoples conquered the economically and culturally weaker peoples around them, thus making their nationstate bigger and presumably stronger. This is what happened with Great Britain, Germany and France in Europe. As for Asia, India was for various reasons shaped in the mold designed by the outgoing British empire, and China was probably kept together because of the strength of the Chinese culture. Japan has always been an island promoting homogeneity and centralization, though from time to time flirting with decentralization. Individual regions feel that the time has come to free themselves from the economic dominance, political control and cultural imperialism exercised by the nation-states and the majorities in those nation-states. The clearest examples in Europe have been the break ups of Yugoslavia (a totally artificial concept invented on the table at Versailles and implemented in nearby St. Germain in the aftermath of World War I) and the Soviet empire created by the Bolsheviks just after World War I and expanded via ruthless suppression by Stalin and his henchmen in the 1940s. In the United Kingdom we can clearly see the strong drive in Scotland towards some kind of independence from London. The Scots now have their own parliament with certain but not overwhelming powers to exercise ‘‘home rule.’’ The same forces are at work in Wales, albeit more weakly than in Scotland. The heart of the matter is that the Scots and the Welsh feel they have the right to decide their own destinies. For centuries independent sovereign nations, they were conquered by the English king and kept inside the British empire against their will. Some will say with some justification that the overseas British empire was founded by Scots expelled from their own homeland—not by the English but by sheep sent there to make the Scots’ ordinary way of living impossible. The hunger in Ireland in the mid-1840s, which the English did little to soften, was the main driving force behind the strong Irish emigration to the United States. How will the Scots react to having their own parliament? Will it be sufficient or will they regard it as only the beginning of the drive towards

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full independence? For many people the answer lies in economics. That is, if the Scots get the idea that they will be better off outside the United Kingdom than inside, they will go on and ask for more. Others take the view that culture will determine the outcome. If the Scots feel that they can be as Scottish as they wish while staying together with the English inside the United Kingdom, they will have little reason to leave. Maybe something else will determine the issue. That something else could be the contest between internationalism and nationalism. If nationalism gains the day around the world and starts a massive drive towards ‘‘being ourselves’’ and safeguarding ‘‘our own interests’’ regardless of the repercussions for other nations and peoples, then Scotland and the Scots may go the whole way. Why should they hold back if or when everybody else chooses the nationalistic, even egoistic course? If the English find it difficult to accommodate themselves within the European Union, why should it be easy for the Scots to accommodate themselves within the United Kingdom? The key to regionalism in Europe and probably also in other areas of the globe is thus a successful internationalism. If internationalism can be accomplished in a way which allows regions to loosen the link to the capital and appear on the international scene, still as a part of a nationstate but with certain rights, then the nation-states can probably be kept together in the future. A fine balance is called for here. As the nationstates are no longer capable of securing the interests of either their own majorities or the regional minorities, the minorities feel they have the rights to safeguard their interests themselves. Why should the Scots, for example, first go to London to ask for a solution of a problem if they know perfectly well that the answer to the problem lies in Brussels and London will have to find the answer there—perhaps discovering in the process a conflict of interest? It would seem much more natural for the Scots to go directly to Brussels and negotiate on their own behalf. The reason for the Scots to stay in the UK is that they may after all have some common interest with the English, and as these two peoples taken together constitute about 55 million British instead of 5 million Scots, they will be better off with some kind of link to England, though not necessarily the present union. Supposing that the common interests outweigh divergent interests, the need to negotiate internationally makes it attractive for many minorities to stay in the nation-state, despite the fact that with regard to many domestic issues they would part with the majority and seek their own style. If, on the other hand, the world goes back to nationalism, a region like Scotland will be pushed hard to pursue a protectionist and egoistic course like so many others. That will push the regions and the minorities away from a continued link with the former nation-state. The fight for economic prosperity would not allow any

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room for taking into consideration repercussions on neighbors of your own actions and policies. The conclusion is thus that given a continued internationalism, regionalism will grow in Europe and the regions will continue to loosen their links to the former nation-states, though not dramatically. We will see regionalism, but not the regions as independent nations. This is based upon the assumption that the European Union will pursue and strengthen the course adopted some years ago to allow the regions greater influence on the political process in the Union. This allows the regions to get more influence by using international mechanisms of power. A weakened internationalism will let the nationalism loose on the lawn, so to speak. In this case it is highly probable that many of the European regions would try to get independence from their nationstates, and it is likely that the nation-states would resist that attempt, if necessary with force. Europe has seen in the former Yugoslavia and in the former Soviet Union what that could lead to. Many Europeans will undoubtedly think that this is a wild guess, totally unfounded. But do not forget that the regions were included in the nation-states by force. We do not read much about this because our history books are written by the nation-states who won the battles and not by the regions. The process could be reversed, with the regions trying to take their destiny into their own hands. The picture seen in Great Britain with regard to Scotland and Wales can be spotted all over Europe. Germany is a federal state with a broad and well-defined distribution of competences between the federal level and the state (Bundesland) level. The German constitution favors a weak central power to avoid a repetition of the Nazi experience. What is more, the constitution also falls into line with the tradition of the German empire from 1871 to 1918, which was not a centralized system but kept the competence and perhaps more importantly the symbols of the former smaller kingdoms intact. There was a king of Sachsen until 1918, and a king of Baden-Wurttemberg, just to mention two examples. Several of the former German kingdoms kept their right to issue money until 1918, even if they did not use it. This indicates that except for the Nazi period a strong and centralized German state has never existed. From a cultural perspective, the difference between the parts of Germany today is very strong. Bayern is probably the most striking example. Leading politicians in Germany often emerge on the federal level, but almost as often they emerge as prime ministers of one of the Bundeslander. The famous Franz Josef Strauss, for many years a contender for the job of Bundeskanzler, ended his career as prime minister of Bayern. In today’s political game in Germany, a main figure often publicly in disaccord with the leader of the two union parties (CDU and CSU) is the

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present prime minister of Bayern, Edmund Stoiber. In fact the political party for many years calling the tune in Bonn is indeed two parties. The CDU represents the northern part of Germany, while the CSU represents the southern part, primarily Bayern. The Bundeslander pursue their own policies with regard to many of the ‘‘soft’’ political issues such as schools and social policy. This is where we meet the clash between internationalism and nationalism in Germany. As some of these issues belong to the competence of the Bundeslander the federal government in Bonn has no power to negotiate internationally on their behalf. When items such as legal issues are on the agenda of the Council of Ministers in the EU, the Bundeslander appoints a spokesman who speaks on behalf of them and not on behalf of Germany. They thus integrate themselves gradually in the construction of the European Union and enter the international game. One of the surprises during the negotiation of the Amsterdam treaty (the follow-up to the Maastricht treaty) was the German opposition to a more widespread use of majority voting in the European Union. For many years German diplomats and politicians had convincingly advocated abandoning the requirement of unanimity in favor of majority voting for several of the treaty’s articles. Then Germany swung around and was not ready to agree, except on a few minor issues. Was that a change in Germany’s European policy? No. It was the Bundeslander. As long as unanimity is required in the Council of Ministers in the European Union, the Bundeslander can control the German federal government. If they oppose a proposal they can enforce a German No vote and consequently the proposal will be dropped. If, on the other hand, only a majority vote is required, the Bundeslander are defenseless vis-a`-vis the federal government. The federal government might try to argue a position advocated by the Bundeslander, only to be outvoted in the end in the European Union. So this German swing came about as a result of a power struggle in Bonn between the federal government and the Bundeslander on the issue of how much competence and how much influence on international negotiations should be allocated to the Bundeslander. They won; the federal government lost. As is the case with Scotland, the German Bundeslander cannot any longer be confined to what used to be their traditional areas. They want and ask for a say in the international game. If the federal government in Berlin cannot find an answer, there is a genuine risk that the power structure securing a balance between the federal government and the Bundeslander will start to crack. In short, the evolution, just as in the Scottish case, is towards a stronger role for the Bundeslander in international diplomacy. Names such as Bayern, Sachsen, BadenWurttemberg, Sachsen-Anhalt and Pfalz used to be household words in

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Europe until these places were integrated into the German empire. Now they start to appear again. In 1993 one of the fascinating topics in world politics was the fate of the Maastricht treaty. Everything had looked like smooth sailing, until the Danes gave vent to their nationalism by voting No to the treaty with the slight majority of 50.7 percent of all votes cast. Then a long, drawnout battle was fought in the House of Commons over whether the conservative government under John Major could get the treaty ratified. He succeeded through extraordinary tenacity. On the continent another struggle involving the competence of regions vis-a`-vis the central government took place in Germany. One of the underlying issues in the German ratification process, explaining why Germany was the last country to ratify (after a second Danish referendum gave a go-ahead signal), was the distribution of competences—not between the capital of Germany (at the time, Bonn) and the capital of the European Union (Brussels) but between Bonn and the Bundeslander. The Bundeslander saw the European Union and European integration as a vehicle for softening up federal control and eventually introducing a much greater autonomy than laid down in the German constitution, which is certainly not among those in the world giving power ad libitum to the central government. Exactly the same struggle took place in France, a country for many decades regarded as the most centralized in Europe. The French tradition of centralization goes back to the medieval period with strong kings like Louis XI, and continued with Cardinal Richelieu, Louis XIV and Napoleon. The Third Republic succeeding the Second Empire had no wish whatsoever to abandon the power embodied in the government in Paris and transfer some of it to the provinces. So until well after World War II power in France rested firmly in the hands of a few people in Paris. General de Gaulle sensed that time was changing and put the issue of decentralization to the French people in a referendum in 1969. The French people voted No. However, it is more than doubtful that the issue of decentralization was decisive in the vote, because the general had also made it a referendum on his presidency, and after the events of May 1968 a good deal of the French people felt that the time had come for a new president. It was left to de Gaulle’s opponent Francois Mitterrand to start the process of decentralization in France. He had actually been against de Gaulle’s proposals but as often happens his outlook and policies changed as he moved from the opposition bench to office. In the 1980s Francois Mitterrand carried out the largest reform of French society seen for centuries. He opened the door for decentralization based on the notion of regions, granting the regions some autonomy and financial resources. As we see with Germany and Scotland, the European Union is re-

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garded as the vehicle for breaking the bonds linking the regions in the periphery of the artificial nation-state to the center—London, Berlin, Paris. People in the regions do not feel at ease with the power exercised in the national capital. After all, what they feel they have in common with the majority in the nation-state is the fact of having been conquered. For many of them, the policy of the artificial nation-state was and is cultural imperialism. So they prefer to link up with the European Union instead. The reason is simple enough: the European Union treats the Scots, the Bretons and the Bavarois in the same way as it treats the British, French and Germans. In the nation-state that is definitely not the case. So the European Union and European integration lift the minorities onto an equal footing with those who used to be their masters. Spain presents the same picture, with Catalonia and its capital Barcelona competing with Madrid for supremacy on the Iberian Peninsula. The Catalans have a much longer history as a sovereign people because they were liberated from the Moors well before the rest of Spain. It was also in Catalonia that industrialization first took place in Spain. Catalonia shares those characteristics with the Basque Country, and it is no wonder that these two regions launch challenge after challenge against the government in Madrid. It often comes as a surprise, though it should not, that in Catalonia the Catalan language is the predominant one. Of course one can manage with Spanish but newspapers and other mass media often operate in the Catalan language, the mother tongue of the majority of the population. Every citizen has the right to appear before the authorities and use the Catalan language. And again, the strongest support for the European Union is to be found here. Brussels and the Commission are seen as an alternative to the government in Madrid. In Italy we see Lombardy moving steadily away from the rest of Italy, especially the south. No wonder again. The northern part of the peninsula belonged for a very long period to the Habsburg empire, and as such was integrated into Central Europe. Imagine asking the Milanese in the year 1800 what they felt about their brothers and sisters in the Kingdom of the Two Naples. They would have had nothing in common with people from the south, and nothing to do with them. Italy was united thanks to a romantic dream which due to surprising and unforeseen development on the European scene suddenly became a possibility, as was spotted by a very able politician (Cavour). But it has never since then been possible to unite Italy in a sociological or economic sense. Until today Italy is still divided, with the dividing line somewhere between Rome and Naples. Belgium changed its stance some years ago when the government and Parliament finally took the lesson from the streets and admitted that Belgium is no nation-state but a composite of two nationalities, the Flemish and the Walloons. The first speak the Flemish language. The second

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use French. Between the regions was created the artificial heart of an artificial nation-state: Brussels. The European Union is often regarded, and even more often labelled, as a centralized and centralizing monster. Nothing could be more wrong. The centralizing vehicle in Europe for more than two centuries was the nation-state, imposing upon millions of Europeans another language and another religion than the ones they had been taught at home. By focusing upon economics (trade, industry, agriculture) the European Union allows these minorities around Europe to choose their own regional culture based on their traditional languages and religions, regardless of what the power centers in the nation-states want. Thus the European Union has taken the lid of the European kettle with regard to the minorities. Europe has, so to speak, performed a soft landing, avoiding conflict between the minorities and the central governments. So do not be mistaken. Even if the European Commission passes some laws which many people think should be left to the national governments, this has nothing to do with centralization. First of all, while many people living in the nation-states may agree that some laws should not be passed by the European Union, they might disagree that the decisions should be left to the national capitals and the political systems there. They would take the view that legislation should be left to the regions, and it does not matter much whether they direct their grievances in this regard towards the national capital or Brussels. Their resistance reflects pure opposition; they do not defend the rights of the national capital. Second, we could compare the part of Europe included in the European Union with the part of Europe outside it. It is very hard to come to the conclusion that in the rest of Europe the nation-state as we knew it in the 1950s has had a tranquil life. The former Yugoslavia has fallen apart because the center (the national capital, Belgrade) exercised cultural imperialism towards other nationalities. As they did not possess a vehicle such as the European Union to make possible cultural decentralization, something else happened: civil war. The former Soviet Union suffered exactly the same fate. Even regions and areas like the Baltic states and Ukraine, belonging to the old Imperial Russia, left as soon as they got the chance to do so. In Central and Eastern Europe there is a whole string of nation-states fighting for their future. What is their primary aim? To get into the European Union. What is their most difficult problem? To reconcile the majority and the minorities inside the nation-state. The regions will be very strong actors in the future of Europe. Fortunately, it looks as if the European Union can do exactly what is needed, and that is to open—at the same time—two doors for the minorities inside the artificial nation-states: the door to participation in the international economy, and the door to cultural identity, regardless of the

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culture adopted by the majority in the nation-state. Peace and prosperity in Europe for the next half-century depend on whether the European Union is successful in its endeavors to introduce and implement such a model in Central and Eastern Europe in the same way as it has done in Western Europe. THE CROSS-BORDER REGIONS The phenomenon of the cross-border region is not exclusively European but is mainly seen in a European context. Cross-border regions emerge when regions from several nation-states start to cooperate formally or informally in the pursuit of primarily economic objectives. Not surprisingly the cross-border regions are found in the periphery of nation-states and in geographical areas close to other nation-states. They are in fact peripheral regions reacting against cultural imperialism and economic neglect at the hands of centralized governments. In Europe we can see the emergence of several strong cross-border regions. The first is in the Baltic area encompassing parts of Germany, Poland, Lithuania, Latvia, Estonia, Russia, Finland and Sweden. This could be said to be a kind of revival of the old Hanseatic League. The main idea and the driving force is to use the sea as a link, exploiting the old saying that the ‘‘sea unites while land divides.’’ But it does little good to have the sea at one’s disposal unless there are goods to be transported. And this is where the breakthrough has come. The Baltic used to be a sleepy area, with one part at the outskirts of the European Union (and in security policy at the outskirts of NATO, which promoted insecurity) and the other part belonging to the petrifying Soviet economic systems, with very little trade. Now this cross-border region boasts one of the strongest economic growth rates in Europe for the second half of the 1990s. There is a lot of complementarity among the economic systems involved. The prospect for the agricultural sector is good. The same goes for consumer industry and some parts of the service sector. The ‘‘rich’’ countries belonging to the European Union can profit (which indeed they do) by transferring some of their manufacturing to the cheaper production areas in the former communist countries. Without this recourse the producer in Western Europe would be squeezed out of production completely. Choosing to transfer part of his production—the most laborintensive part—to countries on the other side of the Baltic, while it also transfers some employment and added value, is preferable to losing everything to producers in Asia or Latin America. For a country like Poland the gain is very much like the one Western Europe experienced in the 1950s when American enterprises transferred some of their production there: increased employment, access to technology and mana-

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gerial knowledge. This is a classic illustration of the win-win or positive-sum game behind all successful endeavors in international cooperation. Politically the Baltic cross-border region is even more important. Poland is the biggest country, and the decisive one when the costs and benefits of seceding from the Soviet empire are calculated. Poland must succeed for the rest of the pack to follow. A failure in Poland would mean a failure not only in the biggest country but in one strategically situated between Germany and Russia (although Belarus is in between). An unstable Poland signifies instability in Europe as a whole, while a stable and successful Poland radiates confidence in the new Europe. The three small Baltic states fought hard for their independence, and Estonia and Latvia still have large Russian minorities inside their borders—a political and cultural problem attracting attention in Moscow and in the European Union. Without growth the Baltic part of the population and to an even greater degree the Russian minorities would advocate the reentry of the three nation-states into Russia. Why run the risk and shoulder the burden of irritating the Bear if the reward in the form of a higher living standard is not forthcoming? If these three nation-states started to slide back into a new Greater Russia the Baltic area would be destabilized, because Germany and the European Union could not stand idly by. To facilitate the progress of the cross-border region among the nations around the Baltic Sea a Baltic Council has been created. It held its first meeting in 1992 in Copenhagen, and this has now developed into an annual event where political leaders from all countries around the Baltic meet and exchange opinions to map out some kind of working program for the next year. A second cross-border region encompasses both sides of the Rhine from the Netherlands in the north to the Swiss border in the south. This is the European industrial heartland. It is dominated by the German manufacturing industry—especially investment goods—and as such constitutes the engine of growth in Europe. It dominates large parts of France and Germany and engulfs most of the Netherlands (in particular the Randstadt) and Belgium, along with Luxembourg. The heart of the heart is comprised of the old contested regions of Alsace and Lorraine in France and the old state of Baden-Wurttemberg in Germany. In recent years, steps have been taken to formalize the cross-border regions and the cooperation flowing from them. The triangle of Wien-Budapest-Prague indicates a revival of some parts of the old Habsburg empire. The idea of this cross-border region may not be a popular one because the past for some of the people living in it is not a very rosy one. However, it is clear that with Hungary and the Czech Republic entering the European Union the cards have been dealt.

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Another participant could be Slovenia, which probably would be only too happy to take part in an enterprise forming a counterweight to Italy on its southern border. Another cross-border region includes both sides of the Alps in France and Italy. This region is less clear cut although its outline can be seen. Cities like Torino and Lyon would happily play a more important role than being overshadowed by Rome, Milan and Paris. Both sides of the eastern part of the Pyrene´es, with parts of France and parts of Spain, comprise the final cross-border region. For most of these cross-border regions the prospect of success is linked to two factors. The first is whether there is some kind of common culture which can bind the regions on both sides of the frontier together. Language is the obvious example. The second is whether there is some kind of common history which can be used to unite the region. In cases where both factors are present the prospect of success is very high (the Baltic area being the most obvious example). In cases where language could do the job, as, for example, in southern France and northern Italy, the prospect is also reasonably good. Where history alone plays the role there is a good chance for success, but suspicion could arise and destroy any development. For Europe the emergence of cross-border regions means a political and economic shift of strategic importance. Politically the cross-border regions cannot thrive outside an international framework. So the emergence of this notion inside Europe is in itself a strong supporting force to keep Europe on course towards further internationalism. A change in political decision making is required, as decisions of interest to the crossborder region may not necessarily be of interest to one or more of the nation-states involved. In this respect the weakening of the nation-state is a welcome contribution to the creation of cross-border regions. Economically cross-border regions signal a shift away from the nation-state as the framework for economic and industrial development, in favor of organization on the international level. Many enterprises would exploit this development to rearrange their activities in Europe and among European countries. That is why medium-sized cities have emerged as a dynamic force in Europe during the last decade or so. These cities are to be found in regions and/or cross-border regions, and industry moves towards them rather than the capital of the nation-state. Why control from Paris and Rome activities that actually take place in the crossborder region on both sides of the Alps? Why maintain headquarters in several Scandinavian countries when the economic growth is to be found around the Baltic Sea? The cross-border regions, however, are of more limited significance than the regions per se. The regions are instrumental in tearing down the nation-state. The cross-border regions give a helping hand.

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THE ENTERPRISES In the 1950s the US defense secretary, Charles Wilson, who used to be general manager of General Motors, made the statement that what was good for GM was good for the United States. This was clear enough. The US economy depended upon GM. When demand was strong, production rose, which in turn bolstered employment, tax receipts and so forth. Wilson’s statement revealed two things: • His concerns were economic and business-related. Charles Wilson did not care about politics. • His outlook was national but not international. GM was an American company, producing cars for the American consumer. What happened in the outside world was of little significance.

Compare this with the mantra for the presidential race in 1992: ‘‘It’s the economy, stupid.’’ We can supplement this by saying, ‘‘and the economy is international, stupid.’’ In today’s world the enterprises have become so large and so powerful that they control a large part of the world’s development regardless of whether they want to or not, or whether the nation-states like it or not. When Bill Gates travels to China, he meets the president of China. Many political leaders of small and medium-sized nation-states would not be granted that privilege. The reason is very simple. Microsoft and its products mean more to China than many nation-states do. And the dialogue between China and other nation-states takes place inside organized, multinational frameworks, so apart from meeting and shaking hands there is not much to be done that has not already been decided or put on the agenda by the appropriate international organizations. And here we come to a determining point for the international political scene of multilateral diplomacy. Dialogue and negotiations between nation states take place to a very large extent outside the bilateral framework and a multilateral framework. Trade relations between nationstates are handled by the WTO. Security questions for European and North American nation states are the purview of NATO and/or the Organisation for Security and Cooperation in Europe (OSCE) and/or the Western European Union (WEU)—just to name a few. Bilateral negotiations aim primarily to prepare for and understand positions taken by nation-states in these multilateral frameworks. Exceptions to this rule are the strategic issues among the really great nations of the world; the US-China relations are a case in point, though this is partly due to the fact that China is not a member of some important organizations such as the WTO. On the other hand the impact of large

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enterprises on the economies of nation-states needs to be handled bilaterally between the nation-states and the enterprises in question. In Southeast Asia it is important where Microsoft decides to put its regional headquarters, or where a Japanese, European or American car producer puts its next factory. For many nation-states the relations with oil companies are of vital importance. The enterprises know this, and they move accordingly to increase their weight in the international power game. Information technology and the revolution in transportation technology present them with a unique opportunity to spread their activities around the globe, regardless of nation-states and borders. It does not matter whether they are negotiating with the prime minister of X, the head of regional council Y inside nation-state Z, or the local community. Slowly but surely, they push the nation-state away from the chessboard. This happens because the nation-states themselves have been weakened by events in the last decades. Many of the conditions to be taken into consideration by the enterprises do not belong to the competence of the nation-state, but have been transferred to regions or local communities, reflecting the tendency to decentralization. The nation-state itself has transferred many of the macro-economic instruments, such as economic policy, monetary policy and customs duties, to international organizations. This is blatantly obvious in Europe with the European Union. The emergence of the WTO, replacing the old General Agreement on Tariffs and Trade (GATT), means that trade policy disappears from the panoply of instruments available to the nation-state. We can thus see the enterprises shift their attention from the nationstate to the international level and the regional/local level. On the international level the enterprises are strong actors, but they remain behind the scenes. It is still to a large degree the voice of the nation-state that speaks into the microphone when, for example, the WTO meets. But the script has been written by the dominant enterprises back home. No position is taken by Germany without input from Siemens, by Finland without Nokia, by Sweden with out L. M. Ericsson or by the United States without Microsoft on matters of vital importance to the existence of these companies. The nameplate in front of the relevant minister may say country X but the script belongs to company Y. On the regional/ local level the enterprises negotiate directly with the appropriate political leaders, without even bothering to bring in the national political leaders. What we see behind this veil is not the international or multinational enterprise but the supranational enterprise having gradually cut its relations with a particular nation-state and operating without a safety net on the international scene. The implication of this is that employees of these supranational enterprises start to think of themselves more and

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more as participants in the enterprise and less and less as citizens of a nation-state. So far the supranational enterprise has confined itself to use of economic and trade instruments to pursue its objectives. However, the development of supranational enterprises means that we will in the future see many instruments of a political nature, hitherto exclusively reserved for the nation-state, appearing in the arsenal of the supranational enterprise. We will look into this issue in Chapter 5. THE INTERNATIONAL ORGANIZATIONS The world is starting to organize itself. The motto is no longer Karl Marx’s ‘‘workers in all countries unite’’ but ‘‘countries around the world organize.’’ Apart from the United States, very few if any nation-states are able to safeguard their interests against outside international organizations, which have become the vehicle for controlling world politics and world economics. This development has gone furthest with regard to economic, monetary and trade questions, while still lagging behind with regard to political and especially security policy matters. The trend is also strongest in Europe, less pronounced in North America and the Far East, and not much in evidence in South Asia, the Middle East or Africa. It can be said that the world is organizing itself around Europe, North America and the Far East with regard to trade and monetary questions. With regard to security the United Nations has an important role to play. It is still uncertain whether the same triangle can assert itself. Almost all important issues in the economic, monetary and trade areas are being dealt with via an international organization. Every nation-state has to prepare itself for presenting its view, not to another country, but in international negotiations encompassing many countries and following specific rules. The main actors do this according to a two-tiered system. First, they participate in a regional grouping such as the EU, NAFTA or ASEAN, where an attempt is made to map out a common position. This is where most nation states have the opportunity to put their mark on the forthcoming global round, where it is often the regional frameworks which count. This is not to say that outside nation-states cannot be heard, but their voices and interests cannot be compared with those of the large regional groupings. The main results more often than not come as a compromise between these three groupings, and after that it is extremely difficult for individual nation-states to rock the boat. Increasingly individual nation-states are being squeezed in the sense that their role is limited to either accepting or threatening to block the compromises reached by the regional groupings (blocking them is in-

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deed theoretically possible, as most decisions in the international organizations are taken unanimously). Even large nation-states such as India, Brazil and Egypt are faced with this dilemma, for example, in the WTO. The fact that a good deal of the legislative process has been transferred from the national level to the international level means that nation-states as well as enterprises have to do at least three things: • Prepare an input for the pre-negotiations (preparatory work) in the international organization. • Participate in the compromise-seeking process going on inside the organization during the actual legislative deliberations. • Take into account that a decision taken on the national level actually can be deemed illegal by a supranational authority—that is, the international organization—if the decision violates or contradicts legislation passed by that organization.

Until recently both the nation-state and the enterprise could live peacefully in their own little playgrounds, where they defined the rules for their own infighting to the applause of their own public. All that can now be discarded. What has to be done now is to shape a framework— inside the nation-state, inside the enterprise and often between the nation-state and the enterprise—for participating in the international political/legal decision making. And that is difficult because it runs counter to what many people like and the way many people think. In the national decision-making process all initiatives come from inside the nation and/or enterprise belonging to the national framework. Initiatives deemed unwelcome may be shelved. In the international decisionmaking process all or at least the overwhelming majority of initiatives— unless coming from the United States or Microsoft—originates outside. So the question is, How can the nation-states and/or the enterprises penetrate the organization to kill proposals they do not like, to speed up initiatives they fancy and amend other proposals to their liking? In Europe the European Union, during its existence of more than 40 years, has given the European nation-states and the European enterprises some experience dealing with pressure groups, sending good people to the staff of the international organization, mobilizing support in advisory bodies, and so on. In the national decision-making process all key players know each other, often personally. They have been sitting together for many years dealing with similar problems. The rules may not be written down but they are well known by all. Not so in the international decision-making process. The arguments will often be very different and will take into account different political

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perspectives. Participating countries need to forge an integration adding up to a positive game for all. National experts, despite the expertise they have from enterprises or national organizations, may find themselves outflanked by considerations which they do not understand and which according to their arithmetic have nothing to do with the question on the agenda. So international decision making is broader and more complex than domestic politics. Tip O’Neill once said ‘‘all politics are local,’’ and he was quite right. But the problem with international politics is that local may mean ‘‘local’’ in another nation-state far away, and may involve considerations and needs which are difficult to understand for some of the others around the table. After the decision making and the transfer into international law, is all settled? No, far from it. The nation-state or enterprise moving ahead on the assumption that it is may get a nasty surprise. Somebody inside or outside the process may decide to take the whole matter to court. This can, of course, also be done on the domestic scene, but there people will normally have a fairly good idea of the probability of its happening. Not so on the international scene. A foreign government may decide to go to court for reasons which we do not understand. Or some of the international institutions—in Europe, the European Commission—may decide to take this step. This means that the risk factor has increased. The nation-state/enterprise needs to evaluate a much more complicated list of risks than in the well-known domestic arena. Finally, on the domestic scene something may be achieved by appealing behind the scenes to the government (or whoever is in charge) to take into account that, for example, an enterprise has acted in good faith even if a court has deemed its actions illegal. That is much more difficult in the international context. The right of appeal tends to fade away in the mist at least if we are talking about the possibility of appealing to common sense and finding a reasonable solution. If European enterprises are found guilty by the European Court of Justice of violating some articles concerning competition, who can they appeal to? Which body will be ready to listen? The European Commission? They are the most likely body to have taken the matter to court in the first instance. The European Parliament? They have no power in this regard. A national government? They have transferred competence to the European Union. So the international framework has a tendency to be more legalistic and more strict than the national one. Experience shows that the best way to influence the international decision-making process is by quality. But what does quality mean in this context? Quality signifies the ability to convince because no flaws are to be found in one’s argument. This is not as obvious as it sounds when we are dealing with an international process. Let us take, for ex-

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ample, an environmental question in which a nation-state, supported by strong national enterprise, seeks the approval of some kind of material used in the production process. On the national level this case would not be too difficult. The ministry and the enterprise would make contact and the ministry would integrate pressure groups in the process. Provided that the scientific evidence was found convincing and could not be contested, odds are strongly for approval of the material, with no fuss afterwards in the national public debate—because those who might be interested in making a fuss are partners in the decision. Without such evidence, the ministry probably would not give its approval. On the international level the case would be taken to the appropriate international organization, which would send it around to other nation-states, who would again send it around to their enterprises and laboratories. In all nation-states a separate process of scrutiny would be started. It does not take much experience in this kind of business to calculate the probability that one or several of all these enterprises or laboratories would come up with questions, or even contest the validity of the scientific evidence provided in the first instance. And then the ball starts rolling. Is this foul play in the sense that competing enterprises could try to block the product from getting approval? Could it give scope for amour propre at certain laboratories not included in the preliminary analysis? It is rather difficult to get a fast decision on the international level, unless quality prevails, in the sense that the homework has been done thoroughly, with all known and foreseeable arguments taken into account. It may even help to expedite the case if foreign laboratories are involved from the start. Normally, in such cases some laboratories are better known than others and some researchers command the respect of their colleagues. It may be wise to sound them out to hear where they stand. This is quality insofar as the nation-state or the enterprise anticipates what can be foreseen and takes it into consideration. An approach of this kind calls for longer planning than would be necessary for a domestic issue, and is certainly more costly. The heart of the matter is that unless such a strategy is applied, international organizations may derail even the largest nation-states and enterprises in their endeavors. THE INTERNATIONAL PRESSURE GROUPS On the national level most if not all nation-states have a wellfunctioning machinery, tested and proven over decades, in which pressure groups have their well-defined and well-understood role. The pressure groups have been among the first actors to spot the window of opportunity for increasing their influence by internationalism. They have gone international in advance of the nation-states-and sometimes also

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before the enterprises, their normal opposite number. Names such as Amnesty International and Greenpeace can instill fear in even the bravest business leader. One clearly remembers how such pressure groups imposed upon Shell a turnaround concerning the Brent Spar platform in the North Sea, regardless of the fact that it is now generally accepted that the Shell solution was the best one to minimize detrimental influence on the environment. Many people also remember that the British prime minister was defending the original Shell solution in the House of Commons more or less at the same time as the management of Shell must have been deliberating a change in their position only a short distance away. One also remembers how many international companies were forced to change their investment plans in Burma because of the anger among several Western nation-states concerning the policies pursued by the regime in that state. The fundamental point in this is the difference between the defensive posture adopted by the enterprises and the nationstates and the offensive posture adopted by the international pressure groups. It is in fact quite simple. The pressure groups calculate how many viewers there are for news services such as CNN and they then try to pitch their case to these services. A good case for a TV news service is one that will provoke public interest and where something hitherto hidden will be revealed. This attracts viewers, viewers attract advertisement, and advertisement means money and profits. The enterprises and/or the nation-states caught red-handed, so to speak, find themselves immediately on the defensive in two respects. First, they have to defend the substance of their policies (why they have allowed the platform to be sunk in the North Sea, why they have allowed investments to take place in Burma, why they have given an export license to this or that enterprise for this or that product to this or that nation-state). Second, they have to explain why they did not inform Parliament, the public, the stockholders or whoever may comprise the relevant body. The TV news services put a microphone in the nose of an innocent minister or chief executive officer who does not know about the case and, confronted with questions about it, looks rather silly. The first goal is scored: how can it be that in such an important case this important figure is completely ignorant? It smells of arrogance of incompetence, does it not? The second goal is scored when the chief executive officer commits the common mistake of trying to explain by omitting some of the more obscure sides of the matter. This is where it gets most interesting. News services often expect this tactic, so they reserve some of their ammunition and do not reveal how much they really know. If this works the accused appears not only silly but also to be hiding something. The third goal may be scored if there is some flesh on the barbecue skewers, and the nation-state or the enterprise has to acknowledge its guilt. The turning point in all this is

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not whether a wrong has been committed, because that is unavoidable, but whether the accused tries to hide it. Things normally go wrong in the cover-up phase. For the nation state or enterprise, the tactic to adopt in these cases is straightforward: follow an offensive strategy so as not to be caught redhanded. Every decision likely to attract the interest of international pressure groups has to be scrutinized by people knowing how these groups think and act. Those likely to attract attention will have to be discussed with the pressure groups before making a decision—and with all relevant factors laid on the table. This opens the door for the enterprise or nation-state to make a decision regardless of whether the international pressure groups agree. Consider a case in point: an enterprise wishing to invest in Burma could discuss the move with pressure groups interested in Burma. The enterprise could say that it intends to invest because it is profitable, of course, but also because it thinks that integration in the world economy speeds up the process towards democracy. It may even get some of the opposition inside Burma to make statements to that effect. After having discussed the issue with the pressure groups, the enterprise can go ahead if it so wishes. If the pressure groups take the matter to the public they start without the first and most provoking advantage, namely that a secret has been revealed. Instead the enterprise can reply that all relevant information is known to the pressure groups, whose arguments have been heard but found unconvincing. The main reason that the international pressure groups have been able to exploit internationalism is that they are much better equipped to use the news media than are the nation-states and enterprises. This takes us to the next actor on the scene. THE COMMUNICATORS You need to get your message across. It is as simple as that. If you are able to do that you can start thinking about what the message is, not the other way around. Unlike in the industrial age, any communicator is now able to catch the attention of the world. He or she needs only to be good enough. A mixture of appearance, spoken language and body language is required. It is actually quite remarkable that some people are able to ensnare an audience from different, often antagonistic cultures. Take a brief look back at those persons who have dominated the media picture in recent decades. Most of them switched from the media to other professions or vice versa. In brief: a person can hardly occupy an important post in today’s society without a command of the media. Ronald Reagan, one of the greatest communicators of them all, took the road from actor to governor of the state of California to president of the United States. Bill Clinton is a politician, but his greatest assets are

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in campaigning, where he actually transforms himself from politician to communicator. O. J. Simpson caught the entire United States in a breathtaking pursuit, not of the ball but in the courtrooms. Jacques Chirac of France, Tony Blair of Britain and Gerhard Schro¨ der of Germany have all come to power more through the role of media star than the substance of their political messages. Without their media savvy they would never have been able to catch the attention of the voters. Their policies would never have been listened to. They would not have managed to cross the line between being watched and being heard. Some people venture to speak of a mondoculture. It is one of those terrible words as easy to get a firm grip on as a piece of wet soap. Mondoculture has to my mind nothing to do with culture as a set of parameters guiding our daily behavior on the basis of a set of values. Instead mondoculture means the ability to communicate effectively with people all over the world. It reflects communication—getting across— and not the content of what we talk about and whether it is good or bad. In a way mondoculture highlights a disquieting trend: the move towards the superficial. We are not interested in substance and do not wish to take positions. Our society slowly but surely is becoming a society based upon entertainment, adventure, imagination, fantasy and dreams. This is where mondoculture plays its role. The evolution becomes clearer if we distinguish among three different kinds of cultures: leisure culture, work culture and family culture. Leisure culture has to do with what we and our family and our friends do in our spare time. For those who work to earn the money necessary for daily life, and who maintain a sharp distinction between work and leisure, spare time is increasing very fast. For others, who come to the ‘‘workplace’’ to spend a good deal of their life because they like it, the distinction becomes more and more blurred. For the first group of people, those drawing a sharp line between work and leisure, we see a strong leisure culture emerging worldwide. It can to a certain extent be called mondoculture because it provides entertainment that does not differ substantially between cultures, nation-states and areas around the globe. There is with regard to leisure culture undoubtedly a strong trend towards homogenization. Work culture is also being harmonized, but not according to the same pattern. Here people around the globe take into account local or national differences, and any enterprise trying to impose a common approach on employees will fail and pay a price for it. Work culture is linked to company culture, and as such to the cultural profile of the enterprise. The enterprises that are able to get their basic message across and at the same time adapt the elements in their cultures to local circumstances are the winners. It is a little bit like strategy and tactics in the military world. Strategy is the basic message of the firm. It is unchanged all over the

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world. For the enterprise it can be called mondoculture. Those who understand it and share it join the enterprise and stay there their whole lives. Tactics are about how to achieve the strategic objective, adapting national instruments to new circumstances and using new methods learned in new circumstances. Tactics are not only flexible, they can be changed completely overnight. Family culture is the solid, almost petrified, part of our culture. It is based upon what we recall from our ancestors, what history teaches us and the values embodied in language, religion and behavior. In this context there is very little scope for mondoculture. Western precepts rarely take over as guiding values in China, for example, and it is equally difficult to see Chinese values infiltrating the behavior of Europeans. With mixed marriages, it is almost always the case that one of the spouses adopts and accepts the family culture of the other. Work culture and family culture have very little to do with entertainment and adventure. They are for the most part rather boring, and deal with the many problems human beings face in their everyday lives. Leisure culture and entertainment hang together as two sides of the same coin. The elite approach some kind of mondoculture with regard to their communication and their entertainment (to the extent that they find time for entertainment). But even more strongly than the nonelite part of the population, the elite hangs on to the basic values in their family cultures. They need a counterweight to the influence of mondoculture catching them everywhere in the slipstream of communication. The general population has the same tendency. When they relax—not from work but from TV or whatever it is—they need the family culture as a counterweight to remind them of other sets of values than the smooth current of populism being served all the time on the screen. We can witness a struggle every day between the communicators representing the leisure culture based upon entertainment and adventure and the family culture trying to keep people attached to their original values. The real powers behind the communicators are those trying to control the technology used by the audiovisual media. The world has always had moguls, a few people with money, power, and the determination to use it. In the industrial days they were to be found in steel and coal. Now they are to be found in communication, that is, in the possession of the technology that commands the dissemination of news and entertainment. In modern society the combination of high investment costs and privatization means that the door is open for moguls in communication. Formerly much of the infrastructure was provided by the state and could be used freely, or nearly so, by the public. Roads and bridges were free of charge; electricity, railways and the water supply came with a price that was supposed to cover expenses but not much more. Privatization

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means that many of these services are now being run by private companies. There is nothing wrong in that in principle, but two caveats apply. One of them is that these companies can make money from the public’s use of such services. That means in economic terms a transfer of money from those who use the services to those who own them. This may have been a political objective behind privatization, though rarely is a stated one. The other caveat is that these companies control conditions for the use of services, and thus implicitly assume considerable power over the future development of society. For instance, society’s desire for a well-run and intensive railway system may conflict with the profit-driven decision to run a system aiming at peak hours and servicing only selected parts of society. With regard to information and communication the concentration of power in private hands is now blatantly clear. The big enterprises around the world (Alcatel, Microsoft and Motorola, just to mention a few) are investing enormous amounts in satellites and cable networks to transport and make available information and communication. Moguls like Rupert Murdoch are buying rights to disseminate entertainment and news to large geographical areas and to large masses of the world’s population. On the surface it may look like this reflects internationalization, but this is not necessarily so. While they all represent international capital, these moguls aim at making profit, so the messages they disseminate through the networks they control may be very nationalistic indeed. Actually, they may encourage the end of internationalism (though they are themselves operating in the international world) because they need to sell, and this requires news and entertainment appealing to the population. In this context a nationalistic message blaming other nations, other nationalities and people with different ethnicities and religions will unfortunately find a receptive audience.

4 Security Policy INTRODUCTION In the feudal age wars took place among feudal lords commanding their respective armies. The king of England fought the king of France, but England did not fight France, nor did the English fight the French. It was quite easy to shift allegiance from one feudal lord to another. In fact, most armies at that time were composed of mercenaries paid to fight, which of course they did not want to. This is why warfare became a complex set of maneuvers to avoid actual battles, instead of tactics designed to fight and win a battle. The Swedish king Gustavus Adolfus, in the Thirty Years War (1618–1648), is renowned for having fielded an army composed of Swedes intending to fight, which they did remarkably well. Then came the industrial age, the age of the nation-state and nationalism. Warfare changed. The battle of Valmy in northern France, in the interval between the French Revolution and the Napoleonic Era, is the first example of war between peoples. The French, constituting the French army, fought for France (even this they only did because a normal and conventional army no longer existed after the turmoil of the early 1790s). The conscription army is the child of the nation-state, and it is thus easy to see why it is being abandoned in state after state as the transition from the industrial age to the nonmaterial age takes places at the same time that the power of the nation-state diminishes. The Napoleonic Wars were decided by manpower. Those in possession of the most and largest battalions carried the day. The American Civil War constitutes a transition from that kind of warfare to its next stage. The

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Franco-German war (1870–1871) and to some extent also the PrussianAustrian war of 1866 pointed to the impact of railways and the production of ammunition as decisive factors. However, it is first with the Great War from 1914 to 1918 that we get what could be called a genuine industrial war, with the size of battalions no longer the factor determining which constellation of nation-states wins. Instead, the winner is the one that can produce most, and that means the one with the biggest gross national product. That is what the Great War was about: industrial production. World War II, from 1939 to 1945, was to a certain extent a continuation of the Great War, not only politically but also in the sense that it was largely decided by respective sizes of gross national products. However, in the later phases of the war technology made its impact. The atomic bomb is the obvious example, but others include jetfighters, new submarines and the evolution in planning and logistics. Military analysis points to technology as the key to deciding future wars. Whoever can control the electromagnetic spectrum, or to put it in another way, whoever can maintain communication and interfere with the enemy’s communication is the likely winner. The actual battle does not serve as much more than the tangible demonstration of that. The world got such a demonstration during the Gulf War in 1990 and 1991. In a way the world has reverted to feudal warfare, where the actual battle rarely takes place, the outcome being decided a priori. The withering away of the nation-state means in all likelihood that traditional wars with large armies based upon conscription belong to the past. In fact even the large powers in today’s world can hardly establish a battle line like the ones the world saw in 1944 and 1945 in Western and Eastern Europe, and it is very unlikely that even the NATO alliance could form a battle line in central Germany as it could certainly have done before 1990. The United States is reducing its number of soldiers, if not necessarily its military power. As traditional warfare is a question of being in possession of the terrain, that automatically reduces the size of wars which the United States can fight. Britain was the first major European power to abandon the conscription army and adopt the ‘‘professional’’ army, that is, an army limited in size but with great firepower and mobility: in short, an army built, designed and trained not for a major war but for interfering in conflicts of limited size outside the national territory. France followed in the mid-1990s. Germany and Russia are coming along. Similar plans are on the drawing board in China. What does this tell us? That the military, one of the cornerstones of the nation-state, has already adapted to a kind of warfare indicating the disappearance of the nation-state. The armies of the future will be designed neither to defend a nation-state nor to attack one. They will be

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designed to enforce peace and stability in adjacent territories. We can see this already in the former Yugoslavia, albeit with limited success. Armies are equipped with logistics and transport capable of moving soldiers and equipment from one place to another very fast. They have aircraft carriers and a large fleet of supply ships allowing the warships to be on station for a long time. Much effort is being devoted to giving them more ‘‘bang for the buck’’ in the initial phase, so they can impress a potential foe just after their landing. This restructuring of military forces leaves a problem squarely on the desk of policymakers: whether the soldiers and the populace are willing to sustain losses in this kind of warfare. So far the Americans seem to have come to the conclusion that the answer is No. American reluctance to commit troops was seen in Lebanon and Somalia, and it posed a constraint on US policy in the former Yugoslavia for a long time. As long as the soldiers are not defending the nation-state, it is doubtful that large casualties can be allowed. This again forms a link to the question of internationalism versus nationalism. In the world of nationalism, warfare is a part of the nationstate’s policy. It may not be popular, but the population can accept a great number of sacrifices, casualties and losses in pursuit of a nationalistic objective—be it extension of the nation-state’s territory or defense of the border against an aggressor. In the international world this resolve seems to disappear. The question becomes, What are we doing in a particular place, and why? As long as the mission is a success everyone is happy, but when it requires real firepower—with the probability that the enemy is firing back—the will diminishes very fast. It is difficult to answer the public’s fundamental questions as to what objectives are being fought for, and at whose insistence? That is one of the reasons that the military parameter in the power triad (the military, economic and cultural parameters) is losing importance. In the coming decades the world will probably see the following risks to security (defined in a broad sense): • genuine wars • conflict inside artificial nation-states triggered by ethnic, religious and cultural differences • value-generated intervention by the international community • terrorism, possibly in the form of state-sponsored terrorism • organized crime, sometimes masquerading as business • conflicts resulting from scarcities (water, land, energy) • conflicts resulting from abundance (information, news, entertainment) • social imbalances

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• immigration and refugees • infectious diseases.

It will immediately be observed that only the first and possibly the second of these fall under the rubric of ‘‘security’’ in the conventional interpretation of the word. However, here we are concerned with tracing new trends and tendencies threatening stability and security in an international context. As we see, there are fortunately no credible threats to our nation-states in the conventional sense, though other and maybe even more important threats are rising just over the horizon—many of them disregarded or neglected because they do not fall within the established categories of security threats. Not many strategists would be tempted to advance the thesis that the security of our nation-states and the international world is threatened by infectious disease. And not many universities would acknowledge such a theory under this heading either. The poor fellow who proposed it would be referred to the Veterinary Department. Yet such a threat is in my view more realistic and dangerous than the old and well-known concerns about military forces and the power balance. But to stay in conformity with the tune we all know best I have chosen to start with the military side of security policy. GENUINE WARS The Great War of 1914–1918 arose because Germany challenged Britain and to a certain extent the United States for the role as leader of the pack. So goes the conventional explanation. Another one is that the war was really about who should control what the British geographer MacKinder called the ‘‘world island,’’ and in this respect the war was a struggle between Germany and Russia. The Germans almost succeeded. Because they came so close to victory they tried again 20 years later in World War II. These two wars were classical wars: armed conflicts to decide who would be the leader, with a challenger and an incumbent. It followed rules more or less firmly established since the Peloponnesian War, described so brilliantly almost 2,500 years ago by Thucydides. It also falls into the mold of von Clausewitz’s work On War, the holy text of all interested in strategy and war. From around 1945 to around 1990 such a war was possible, maybe even likely, between the United States and the USSR. The reason that it did not come (besides statesmanship from American leaders in the late 1940s, and fright combined with caution on the part of their Soviet colleagues) was the fact that nuclear weapons made the survival of the ‘‘victor’’ very doubtful. So simple arithmetic, displaying in the credit

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column what could be gained from winning and on the debit side what would be lost, nearly always balanced out, regardless of whether you labelled yourself victor or vanquished. Chairman Mao Zedong in China could say that he did not care whether China lost hundreds of millions. There would always be somebody left, and as China was an agricultural country there would not be much industry and infrastructure to destroy. What existed could be rebuilt in a relatively short period. A study of history shows that had it not been for nuclear weapons, it is likely that the United States and the USSR would have clashed for world supremacy. In providing a lesson to the world the Japanese, exposed to two nuclear bombs dropped by the United States, were forced to make sacrifices, which probably saved the rest of the world from a similar or worse fate in the half-decade to follow. At the turn of the century 1999–2000 there is only one military superpower in the world, the United States. We can go one step further: there will in the first decade or two of the next century be no change in this situation. A state today making the decision to build a military arsenal capable of challenging the United States would not see it transformed from the drawing board into a workable and credible military force until sometime between the year 2010 and 2020. It takes a very long time to design and build weapon systems, and then train the personnel to use these new systems. The United States is the only state capable of projecting power around the globe on short or no notice, keeping the force supplied and maintaining it there as a fighting force. The United States is the only state capable of interdicting other states from fulfilling any military ambitions they may have. The United States is the only state in possession of a full-fledged nuclear arsenal. And the United States is the only state capable of controlling the electromagnetic spectrum. So a fullscale war launched by a challenger is not only unlikely, it is simply impossible for the next fifteen years or so. But that does not mean that the world will be free of wars. Wars will be fought where the United States does not bother to interfere. The strategic fault line in today’s world is shifting from the European theater, running north-south, to Europe–the Middle East–the Far East, running east-west. Furthermore, it is shifting away from a fault line separating different ideologies and different kind of societies, becoming a fault line based on ethnicity, religion and access to raw materials. It is a fault line having very little to do with the nation-state but encompassing many conflict parameters in the world to come. It runs from the former Yugoslavia in the southeastern part of Europe through the north of Turkey and the Caucasus, passes the northern part of Iraq and Iran, and skirts the Himalayas to stop in the western part of China. What happened around the old fault line in Europe during the cold war decided whether we would have war or peace in the world as such.

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In the future, what happens around the new fault line will necessarily have the same significance for the world. The new fault line separates religions which for centuries have competed for the souls of millions of human beings, primarily Christians, Muslims and Hindus. But it is not a border where we find everybody on the same side of the line belonging to the same religion. On the contrary we find adherents to several religions on both sides of the line. The fault line separates people with different ethnic roots, who for centuries have competed and sometime gone to war over the question of who should dominate. We see different ethnicities again on both sides of the line. On top of that we have rich raw materials (primarily oil) near the fault line on both sides. Some experts believe that the last great reserves of oil are to be found in Central Asia, which is just north of the line and has a scant population, while south of the line we have poor people with little or no raw materials at their disposal. There is no political and economic architecture in place to control development and to steer towards a peaceful solution in case of confrontations. On the contrary, most of the countries near the fault line are new ones with almost no experience in international politics and ready to use their newborn freedom from the Soviet and Russian empire to play the nationalistic card. It is difficult to get access to these areas even if, for example, the United States could be persuaded to intervene. There is a great land mass, making it necessary to move troops either by land (and thus to ask for the permission or participation of neighboring countries, which could make the conflict worse) or using air transport (which would be costly and in many cases dangerous). Historically the situation resembles those we have seen with the Russian czars, the sultans of the Ottoman empire, the rulers of the Indian subcontinent and the emperors of China vying for power and influence. There is simply no tradition of peace, stability and security along this fault line. For the time being, however, all seems quiet. There are several reasons for this. It is still difficult to get access to the oil reserves along the fault line, and in the late 1990s the world has an oil glut, not an oil shortage. If oil were produced there, it would be difficult to get it from the oil fields to the consumer, or even to a place from where it could enter the global market. China, however, is investing both politically and in terms of money capital to secure a considerable part of these reserves for its future economic development. Russia is weak and is having more than enough trouble securing its own economic and political survival. The will might be there to expand, but the means are certainly not. India, as it becomes a nuclear power, is paralyzed in the short term by its rivalry with Pakistan and its desire to emerge as the coming superpower on the Indian Ocean. But when India discovers that the great prize is not to be found in the waters to the south, and when the conflict with Pakistan

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has been resolved (whatever the outcome may be), India could well start to contemplate whether it is wise to leave the exploitation of the rich oil reserves of Central Asia to other powers. And if so we would have a traditional potential conflict on our hands, with a power in control and a challenger riding into the arena. China has seen this and has acted accordingly. China is likely to be the superpower of Central Asia in the coming decades. If a major war, even a nuclear one, breaks out in the decades to come, it is most likely to happen along the new fault line, triggered by one or several of the potential conflicts mentioned above. And unfortunately it is a strategic problem which the world has devoted almost no intellectual and political resources to prevent. It will not be a clash of cultures. On the contrary, if war comes one of the reasons will be that different cultures are not separated but mixed. Minorities are to be found within larger cultures, thus giving birth to one of the most difficult and threatening issues of modern strategy: the appeal of minorities (ethnic, religious, cultural) within a nation-state for support from adjacent nation-states where their ethnicity, religion and culture constitutes the majority. Looking at the map, there are other places where a major war could break out, though on a lesser scale than along the new fault line. The Indian Ocean and South Asia are candidates. For many years, India has regarded the Indian ocean as mare nostrum but has not had the military arsenal to give credibility to such a claim. India in the future, as a more clear-cut nuclear power, may feel tempted to strengthen its attitude. The other powers interested in the Indian Ocean are Pakistan, South Africa, Australia and Indonesia. None of them seems strong enough to make India give up its claims. The United States is clearly interested in preventing any impediments to fleet movements in the Indian Ocean, but as seen so often in history a gradual shift of power and influence can take place without being spotted by some of the actors. India has not forgotten the lesson from 1971, when the Nixon administration, to exercise pressure on India, sent in a carrier force during the war; this war led to the breaking away from the then Pakistan of Bangladesh. The ongoing conflict with Pakistan could at any moment lead to a war between these two powers. Pakistan is trying hard to achieve parity with India, while India, recognizing that parity with China is no longer within reach, is determined to prevent Pakistan from catching up. All the cards on the table point to an arms race. History tells us what that is likely to lead to. The Korean peninsula is another candidate. Very few, if any, in the Western world—indeed outside North Korea itself—know what is going on in the minds of the rulers of that country. Do they really want to conquer the whole peninsula, or do they only want to be left in peace?

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Might they contemplate an opening towards the West, even if that amounts to jeopardizing the political system put in place more than 50 years ago and vigorously defended since? The Middle East is still a powder keg, and could provide yet another war, though time seems to be working for and not against peace—or at least a cessation of hostilities—in the region. CONFLICTS INSIDE NATION-STATES The breaking up of nation-states, setting majorities and minorities loose against each other to seek revenge for decades and sometimes centuries of mutual misbehavior, is by far the most likely source of conflict the world and the international system will have to cope with in the foreseeable future. It is a security threat for which the world is gradually, reluctantly and very cautiously preparing itself, although the many warnings we have seen in the last decade should have led to a speedier and much more thorough move to address it. This kind of conflict shows how dangerous the nation-state has become to international security. By forcing minorities to stay and live inside a nation-state, the nation-state may be kept together in the short run, but at tremendous cost. The minorities build up pressure to revolt against the nation-state, and when time is ripe they let fly. This is what happened in the former Yugoslavia—an artificial creation by the victors of World War I, who put a number of nationalities together in what never could be a workable and sustainable entity. Joseph Tito managed to keep it together despite the odds, partly because he was ruling at a time when the nation-state reigned supreme as the only viable entity on the international level, and partly because he was sufficiently brutal to keep the opposition down regardless of the sacrifices required. Neither the West nor the East spoke out against this regime because it so conveniently occupied a middle position between the two opposing military blocs in the heart of Europe. When the possibility for revolt arose in the beginning of the 1990s the world saw what a policy of forced union leads to. The minorities jumped at each other’s throats. The Serbs tried to shape a Greater Serbia molded along the lines of ambitions going back more than 100 years and nurtured in the beginning of the century (it was actually one of the main catalysts for the outbreak of World War I in 1914). The Croats felt threatened by this policy and prepared themselves for their defense by occupying strategic land areas. The Slovenians had the luck to exploit their geographic position and homogeneity to back away and form their own nation-state. The Albanians in the Kosovo province suffered for a long time before finally saying ‘‘enough is enough.’’ In the middle of everything Bosnia-Herzegovina tried to survive as a nation-state composed of

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almost as many nationalities and with almost as many religions as the former Yugoslavia itself. It could not work. It did not. The villain in all this is not the international community, which tried afterwards to put something together or at least to separate the fighting factions. What could the international community do in the mid-1990s after centuries of misbehavior by empires and nationalities? Who could believe that with just the stroke of a pen massacres and wars would be wiped out of people’s memory? A string of commentators have earned a living by telling of the complete failure of the international system and in particular the European Union. They claim that only when the Americans four years after the fact became involved could the conflict be solved, and that this proves the ineffectiveness of the EU and leaves NATO as the only tiger on the prowl in Europe ready to bite. There are good reasons to disagree completely with this analysis. The European intervention in the former Yugoslavia from 1992 to 1996 was a limited success. It helped to avoid a major disaster in the form of hunger killing several million inhabitants no one else was ready to feed. To an extent it prevented the Serbs and the Croats from taking each other on. It bought time needed to prepare a political solution. And most important of all, by being there the EU constituted an almost insurmountable barrier to outside intervention by other nation-states contemplating throwing in their lot with one or another of the factions. The plain fact is that a strong military show of force would not have solved the problem. The reason the NATO intervention in BosniaHerzegovina proved successful was partly that the opposing military forces had exhausted each other sufficiently to abide with peace. Furthermore, the Europeans and especially the Americans were holding back in the first years of the conflict because they did not know whether public opinion was ready to sustain casualties beyond a handful of soldiers per year. Only after atrocities were shown on TV did it became clear that there was public support for military intervention by the Europeans and the Americans. This is a crucial factor in these operations. Professional soldiers may be disciplined enough to obey orders and conscripts may be under instruction to do so. But in the long run the soldiers’ and the public’s willingness to sustain losses puts a ceiling on what kind of military actions a democracy can undertake. If the Europeans had tried at the start of the conflict to establish order, with the result that several hundred or perhaps thousands of European soldiers had been killed or wounded, no one knows what European public opinion would have been. It is likely to have been the same as American public opinion concerning Lebanon and Somalia; this would have meant a complete European withdrawal from the former Yugoslavia, which in turn would probably have

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led to a full-scale war between the Serbs and the Croats, with the world, amazed and gaping, witnessing enormous slaughter without doing anything. The world is going to see many conflicts of this type, because the nation-states are breaking up. The dissolution of the Soviet empire has been a success in the sense that we have seen very little bloodshed. From a historical perspective this is indeed remarkable. The turning point came in 1993–1994, with the Russian attitude towards Chechnya in the north of the Caucasus. Had the Russian government decided to use arms to reestablish control over Chechnya, we would probably have been on our way to full-scale conflicts in many other areas of the former Soviet empire. It decided not to do so, and has reaped very little acknowledgment from the rest of the world for this policy. In more general terms history tells us that unrest and conflict appear when empires are breaking up or being established. What we see now is a strong trend towards breaking up empires based upon the nationstate. Yugoslavia—not a big empire, but an empire nonetheless, dominated by the Serbs—has gone that way, as has the USSR. There is strong pressure inside Myanmar (formerly Burma), which may lead to a similar fate for that nation-state. Several African nation-states have gone through wars in the 1960s and 1970s to keep together, and it cannot be ruled out that similar situations may arise again. Indonesia may go through a congruous process, forcing the central government to decide whether to implement a policy of strength, thereby saving the situation in the short term but increasing the risks of revolt. India and China are also potential cases, the former much more so than the latter. Looked at from the perspective of internationalism and nationalism the world relied during the cold war on the nation-states to keep order. There were two nation-states happily performing that task: the United States and the USSR. Every time somebody stirred, one of these two moved to reestablish order, while the other one looked on approvingly. From time to time, their interests clashed and then they had to invent and impose a common solution based upon mutual benefit. The world has not succeeded in finding a replacement for that order. Every time something goes wrong in a nation-state, the collection box goes around to find countries willing to provide money and soldiers to address the crisis. This works, but only to a certain extent. The United Nations is busy in various peace keeping operations around the globe. What needs to be done, however, is to create some kind of mechanism for dealing with the following problems: • Early warning and the preparedness to move in with money and if necessary forces (not military ones but possibly police forces) to prevent a crisis. • Crisis management if, despite early warning, a crisis erupts.

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• Possible humanitarian assistance to the population, which is almost always subjected to suffering in these situations. • Peacekeeping in situations where a clash between opposing forces seems otherwise inevitable. • Peacemaking if war or armed conflict breaks out.

There are two snags in all this. The first is that most if not all of these conflicts will appear inside a nation-state. And what does the international community do if the lawful government announces that the situation is well in hand, despite CNN and the BBC showing newsreels every day to the contrary? Would the international community intervene, or would it remain on the sidelines as spectators? The second snag is that the nation-states comprising the international community do not seem to be ready to risk the lives of their soldiers. For some European nation-states with glorious imperial pasts the threshold of acceptable risk may be higher than for most of the more timid smaller nations. Britain and France have for two centuries groomed soldiers for colonial warfare, and that is more or less the kind of warfare we are dealing with here. But even for these two countries the threshold may be lower than most observers expect. The conclusion is worrisome. If the international system does not seem capable of solving the kinds of conflicts/crises/confrontations most likely to appear in the coming decades, the world is in for trouble. It matters little that the military forces in many countries (the United States, France, Britain, Germany, Russia and also China) are being restructured to perform exactly these tasks when public opinion seems to move in the opposite direction, preferring not to sustain the casualties flowing from such interventions. ETHICALLY GENERATED INTERVENTION BY THE INTERNATIONAL COMMUNITY Since the end of World War II, conflicts, interventions and wars have been generated by differences in values. But in most cases the main actor has been a nation-state that leads the pack in attacking another, smaller nation-state, forcing it to change its values. The British did that with partial success in the 1960s and 1970s in what used to be Rhodesia and now is Zimbabwe. When the Unilateral Declaration of Independence (UDI) was announced, a boycott was instigated by the British and followed by the international community. The main reason was the insistence that majority rule should be established in Rhodesia/Zimbabwe, which the ruling class of whites refused. Later, the international community gradually but insistently put pres-

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sure on South Africa, forcing the apartheid regime to change track, which it did in the early 1990s. It is often debated what role was played by the international sanctions. Were they really instrumental in the change of policy implemented by the South African government? The answer must be Yes. Economically and politically the sanctions meant that the country was isolated, and though it could almost certainly have persevered for a good number of years, the price would have been high. Burma, now called Myanmar, has also been exposed to international sanctions, albeit not on the same scale as Rhodesia/Zimbabwe and South Africa. Again the reason was a question of values. In 1990 an election was held. It was won by the NLD party under the leadership of Aung San Suu Kyi. The military prevented the winning party from assuming the mantle of government. The trend seems to be fairly obvious but not very strong. Cautiously feeling its way ahead, a kind of international conscience is developing. When obvious cases appear this conscience can trigger international sanctions powerful enough to do the job, although this takes time. In less obvious cases or when there are divergent opinions, international sanctions may not be imposed but international pressure groups and/or individual governments may assume the role of spokesmen, or may initiate sanctions or related measures. It is only a question of time before the world will arrive at a stronger and more articulate opinion on such issues, meaning that the domestic affairs of nation-states will no longer be sacrosanct and out of reach by outside interventions. The threshold can be derived from the Burmese case. When a legally constituted and constitutionally correct party or political force is prevented by armed forces from assuming the role of government, the international community will speak out. Of course there will always be room for interpretations, but this is the starting point. Another threshold can be derived from the South African case. When discrimination based upon race, ethnicity or religion becomes official or semi-official policy the international community will feel there is a case for intervention. The measures applicable by the international community will rarely start with military intervention, but instead will concentrate on political pressure and economic sanctions of different types. Only if the case becomes very ugly and these measures fail will the international community be prodded into considering intervention by military means. However, as time goes on it is a good bet that the international community’s threshold for action, including military intervention, will decrease. There may not be a common approach to human rights among a majority of member states in the United Nation’s but undoubtedly this question will gradually be more and more visible on the agenda of international politics. In the not-too-distant future the world may see a

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common policy about what kinds of human rights abuses could lead to intervention. TERRORISM AND STATE TERRORISM The world seems ready to live with terrorism as a threat to security and peace. The instruments which if applied properly could remove terrorism are so repulsive that most democracies shy away from using them. So terrorism in a limited degree is preferable to the kind of police state that would be necessary to remove it. This, however, is the result of thinking in the same way as the terrorists. That the only way to deal with the problem consists of using force. The more cumbersome and tedious, and sometimes less rewarding, approach to attacking terrorism consists of understanding that terrorism appears when the terrorists feel that they can do without society, that they lose nothing if denied access to its services—indeed that society has nothing to offer them, and they can do as well if not better outside it. It is in a way the rebellion of outcasts against a society that does not take them seriously and does not intend to do anything about their problems. Terrorism inside the nation-state is thus a problem of discrimination, whether or not the majority likes to hear it: a minority, often a tiny one, feels that the rest of society is discriminating against them. In some cases they have tried in vain to find support for their grievances. In other cases they go directly from dissatisfaction to terrorism. In this context the interesting phenomenon is that the source of perceived discrimination is often ethnic, religious or social. Often the terrorists feel that culturally they do not belong to the rest of society. The remedy is to provide an outlet for these grievances, so as to show the potential terrorists that society does take them seriously. This is best done in nation-states with a high degree of social balance. In such societies there already exists a sentiment that everybody should be accommodated. In societies where we find social imbalances the risk of terrorism is much higher, because the terrorists feel that society does not care about them, or indeed about a large part of the population. Even if it sounds provocative to many it could be said that inside the United States we find terrorism in the sense that gangs or armed groups have sealed off part of cities from the authorities and regard these areas as their ‘‘homeland.’’ Here they live and thrive. They venture outside to harass and sometimes to rob others, providing the money necessary to live. So paradoxically they get the money they need not from the public but by ‘‘taxing’’ the rest of society, even innocent people passing by, in a very brutal and indiscrimate way. The ways terrorists get their money may differ. Either society provides it in an orderly way, decreasing the

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threat of terrorism, or it does not, so that the terrorists themselves choose how to get the money. In the international context the same picture emerges. Groups of people belonging to some form of subculture may decide to break away from society. They work closely together across borders. As they do not feel under any obligation to respect international law—why should they, when they do not respect national law?—these groups can exploit internationalism better than almost any other organization. In fact they use the international division of labor better and more ruthlessly than many international enterprises, moving persons and money capital from place to place. This is where the nation-state constitutes one of the most effective and efficient barriers against activities which would run against the wishes of an overwhelming majority of the population. However, something very strange emerges. The population is reluctant to exercise collective decision making to combat terrorism, clinging instead to the old and outdated notion of sovereignty. Many politicians channel these sentiments into very vocal opposition to organized and institutionalized international action against terrorism. So the nation-states end up with a kind of open-door policy, inviting terrorists to choose between them and move across their borders. In a way, we see here a reversal of the international competition in economic and trade matters. In these areas nation-states compete to offer the best terms to attract foreign investments and international enterprises. With regard to terrorism the nation-states follow individual policies, leading to different rules and regulations. The terrorists compare these, choosing where to ‘‘invest’’—that is, where to lodge and hide their money. The nation-states’ staunch rejection of genuine supranational cooperation prevents an effective antiterrorist policy from being implemented. State terrorism is an even uglier form of terrorism and also definitely the most difficult one to stamp out, because the terrorists can find refuge in a nation-state, using its privileges to prevent other nation-states and/ or police forces from pursuing them. We have seen the withdrawal from the world order of so-called rogue states not ready, interested or willing to follow the rules and framework put together to prevent terrorism. Almost without exception these nation-states are poor ones who do not lose much by standing outside the international economy and do not wish to share responsibility in world politics. The same reasoning as was applied for terrorism inside a nation-state can be used here to explain why it happens: the international community has nothing to offer these nation-states, and has probably offered very little in the past to accommodate them. They stand to lose nothing by reverting to state terrorism, because they have gained nothing. But what can they gain from terrorism? Very little, in tangible terms. However, they may feel that they matter in some strange respect not easy to fathom

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for the more internationally oriented nation-states. Terrorism may in their own eyes justify their speaking out and acting against, for example, the world’s strongest power, the United States. It is illogical and irrational, but so is terrorism. The key to a solution for this problem is obviously to change the picture and make it worthwhile for these nation-states to rejoin the international community. That will in some cases require trade concessions and/or the flow of money, which may not be easy to offer if the past is strewn with examples of terrorism. However, it is difficult to see any other way. Such a policy could be reconciled with a policy of retaliation, combining reward for joining the international world with punishment for harboring terrorism in the nation-state. In case of retaliation it is of paramount importance to hit the right targets. Inside the nation-state harboring terrorism strikes could with some luck induce an awareness or even resentment of terrorism, but these potential gains would be completely lost if retaliation takes innocent lives. That would show to the large majority of the population in the nation-state that the international community does not care about them. Outside the nation-state, hitting the wrong targets would erode the support of those who would not mind striking at terrorists but would certainly mind killing innocent people. The balance here is crucial. As retaliation implies that the apparently stronger punishes the weaker, there is a lot of psychology to be taken into account. The main point is that terrorists by definition stand out as cruel people not caring for lives. The retaliator must be absolutely certain not to fall into the trap of being seen as just as cruel as the terrorists. The psychological game also works between the terrorists and the retaliator. If the terrorists get the impression that a nation-state is likely to retaliate, they will shape their tactics accordingly. There is no doubt that terrorists and state terrorists have observed that the United States and the European nation-states are afraid of losses during military operations. They may to a degree exclude military operations risking a substantial number of casualties. The American strike in August 1998 against Bin Laden, or Sudan or Afghanistan, or the Taleban confirmed as much. Cruise missiles were launched from ships off the coast. The message is clear: the United States will strike, provided weapons carrying no risk of casualties can be applied. The lesson the terrorists learn is to safeguard precious stores so that such weapons cannot be effective. This seems to be the policy of a number of states, including Libya and North Korea, who apparently have gone underground to hide something, whatever it is. The retaliator could get at it if he were ready to send in ground troops, but as that is not the case it is difficult to see how such safe havens can be attacked—unless of course the retaliator starts to use mercenaries. This seems preposterous until seen from a historical perspective. It was

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done in the medieval period and the French have done it since the Foreign Legion was established in the middle of the nineteenth century. If this happens, and it may, we would have a totally different situation to reckon with. It is alarming that in the age of internationalism some nation-states have left the international community and instead pursued a policy directed at the overthrow of the international order. It is even more alarming that the established order does not seem to be able to provide an answer to this crisis. The issue can be left hanging for the moment because the nation-states adhering to terrorism do not so far have the ability to use weapons of mass destruction. But eventually they will possess this ability. Internationalism is too weak to mount a defense against the weapons of mass destruction weapons which state terrorists may soon possess. One model is a theater missile defense, insofar as it is possible to shield a limited geographical area from missile attacks. On the other hand, it should be possible to prevent the launching of missiles from a limited and welldefined geographical area harboring terrorism. As it is now, nation-states with access to missiles or thought to have such missiles are in a position where they can threaten their neighbors. The international community has no answer in such cases. This is left to the United States, which is fine as long as the United States is ready and willing to deliver. But what happens the day in the not-too-distant future when a state terrorist threatens an adjacent state and informs the United States that it has a few missiles with a range allowing them to hit targets in the United States? How will the United States react when it is no longer safe from missile attacks launched by terrorists? We should not forget that until now state terrorists have not had missiles making this threat possible. The temptation for the nation-state being threatened to break ranks and find an accommodation with the potential aggressor would be strong if circumstances indicated that the bullying state terrorist would not be under a credible threat of retaliation. Many decent nation-states would conclude that it is unreasonable that they should run the risk and shoulder the potential burden of standing up to state terrorists. If one brick falls there would certainly be the risk of a domino effect pulling the international community apart and starting a race between the nationstates to take care of their own interests. It is also striking and alarming that most of the groups and the nationstates in the terrorist business are not aiming for money. Their objective is to disrupt the international order. They see the United States and to a certain extent Great Britain as the main enemy, because the Anglo-Saxon culture has shaped the modern world. Thus these people are interested not in money but in culture and values—they want to destroy existing values and replace them with values of their own choosing. We find here two main purposes. One of them is to attack internationalism, with the

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hope of reverting to the old order of secluded nation-states. The other is to exploit culture as a parameter to pull people away from their existing adherence and towards the values/culture proposed by the terrorists. The alternative to a combined and organized international response is that it is left primarily to the United States to respond. In some cases the United States will do so. In other cases it may choose not to. That poses a whole string of problems for the international community. If the United States chooses not to act there is nobody else in possession of the intelligence, transport and weapons capability to do so. The international community will stand naked before the terrorists, who know that if they play it right and do not provoke the Americans there will be no response. If there is an American response the United States chooses the time and method, without asking for permission or consultation. Why should it? The international community has to put up with the way the United States handles such crises, or side with the terrorists. This is not a very attractive dilemma if the United States applies retaliation which falls outside of what the majority finds appropriate. Many people would also have difficulties in endorsing retaliation when the accused does not even have the right or the opportunity to voice an opinion. It is a bit like Alice In Wonderland: sentence first, verdict afterwards! Such a procedure will not in the long run be helpful in rallying people behind actions against terrorism. Some people, even a majority, may admit that in special cases it is admissible to strike first and ask questions later; but not as a general rule. Operationally the United States may prefer not to respect some international rules. To catch and hit the terrorists the United States may violate the air space of another nation-state or may actually conduct a military action on another nation-state’s territory without its consent. That would mean that the international community would have to either admit that there are some who are more equal than others (i.e., above the international law) or assert that the law has to be respected, with the implication that those violate the law in pursuit of terrorists will end up facing the consequences. If terrorism and/or state terrorism continues to rise and the international community takes the stand that there is not much we can do about it, the prospects for the law-abiding evolution of internationalism are not good—they are in fact very bad. Those who are strong enough will reserve for themselves the right to strike against terrorists without respect for international law, which they see as failing. Between the strong (and strong-willed) nation-states and the terrorists will be left a large number of bewildered and well-meaning small and medium-sized nation-states who cannot be protected by the international community because they will not transfer the competence necessary to do so, and yet cannot defend themselves.

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ORGANIZED CRIME Nation-states have been harassed by crime, and often by crime that truly can be described as organized. Big syndicates in the gambling, drug and illegal immigration businesses have made enormous fortunes. They now sense the trend of internationalism, and its lack of machinery to control that kind of business. We now see the big syndicates operate across borders and in many nation-states. In the 1920s US president Calvin Coolidge came back home one Sunday morning from church and was asked by his wife about the theme of the sermon. He answered ‘‘sin.’’ His wife persisted, asking what the priest said about it. ‘‘He was against’’ was the curt answer. It is much the same with crime, and most of all organized crime. Everybody is against it, but very few do anything about it. The problem is that the criminals have realized the potential of the international economy and internationalism before many of the politicians in the nation-states. Some of the largest international, indeed supranational, companies today are to be found in organized crime. It becomes even more dangerous when organized crime gets together with terrorism or state terrorism. This is a deadly symbiosis because organized crime earns the money to project terrorist power, while the states secure a safe haven and formalities such as citizenships and official status for the criminals. Together this constitutes a threat on a grand scale towards the peace and stability of the international community. Again we come back to a main point in the endeavor to secure peace and stability in the international world. Nation-states are reluctant to transfer sufficient competence to the international institutions to allow them to carry out the tasks which internationalism has made it impossible for the nation-states themselves to do. With efficient cooperation with regard to tax laws and the measurement of capital movements, international institutions would be able to stage a worthy counterattack. But as long as there are attractive tax havens around the world and the banking secret is regarded as a fundamental human right, it will be very difficult if not impossible. A simple question should be asked of those nation-states refusing to transfer competence to international institutions: What is there to hide? What are your financial institutions doing that must be kept a secret? Transparency and accountability are key words also in this respect. CONFLICTS BECAUSE OF SCARCITIES (WATER, ENVIRONMENT, ENERGY) It is not difficult to calculate that the growing world population requires more raw materials. Nor is it difficult to see that the earth is

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approaching the stage where it cannot any longer deliver these materials. So chances are that the world will find itself facing conflicts over access to and exploitation of raw materials. Thomas Malthus already predicted this at the beginning of the nineteenth century, but was proved wrong at the time by the opening up of new land, which made it possible to produce more food and keep pace with the population increase. This has been used as documentation by many to ridicule predictions of scarcities. The same happened to the ill-fated report of the Club of Rome, which more than 20 years ago foresaw a steep increase in the prices of raw materials and even significant shortages. This prediction was off target because technological progress made it possible to turn one unit of raw material into many more units of finished product than could be done when the report was made. On top of that economic growth has since the end of the 1970s been directed towards the service sector, which is not intensive in the use of raw materials, and indeed hardly uses any raw materials at all. Indicators point to the fact that resources may still be at our disposal, but they are not of the quality required by modern society. Available water may be polluted, and/or may increase the risk of infectious disease. People are not disposed to put up with this in the modern world, and the mass media today are very effective in publicizing these situations. Also, resources may not be inside the borders of the nation-state using them, so that international negotiations between the producer, the consumer and the transit nation-states are required. The new factor is that use of water, energy, consequences for the environment starts to become not only a question of setting a price but whether it is available at all for the consumer, and if so on what conditions. The scarcity (right now or potentially) can be used by those controlling the supply as a bargaining chip to achieve something else. Water used to be plentiful. This is no longer the case. Changes in the weather may or may not be more violent than in the past, but definitely create drought areas around the globe. This is, however, not the main problem. The main problem is that water is in permanent shortage in a number of geographical areas, and the number of these areas around the globe is increasing. To some extent the problem can be alleviated by conservation, desalination or a combination of conservation and technological progress. We also see the transportation of fresh water from one area to another as a new business in the transportation market, supplementing or even replacing jobs performed by the big tankers formerly transporting oil. But several problems remain outstanding as potential threats. The first one is that in some areas it may be too costly, or simply impossible, to provide water. Shortages in the central part of China or remote areas in Australia do not lend themselves to an easy solution. What about the

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people living there? Of course the world may be able technically to deal with a few hundred thousand Australians, but what about a couple hundred million Chinese? And what about the social costs of having to relocate people already settled in an area they like? Even if we found a way to do that, what about the people living in or near the areas where the newcomers would settle? But the main problem, and it might be a security issue is that water shortages could produce what we may term ‘‘refugees caused by scarcities.’’ One of the main factors behind the decline and fall of the Roman empire was the migrations triggered by scarcities in the large prairie areas to the east. The empire tried to accommodate these people and/or keep them away. This policy, however sensible, did not succeed. It cannot be ruled out that our present civilization could face the same challenge, and the victim could be internationalism. To safeguard themselves and keep costs at the lowest level, many nation-states would try to revert to, in effect, fortress states, closing their doors to migrations from other nation-states. This would transfer the burden to others and lead to a content contest between nation-states to end up with the lowest number of refugees. It is hard to believe that internationalism could survive in such circumstances. Yet another problem could arise when water is exported by a nationstate not itself the main consumer. Several of the main consumers could compete among themselves to receive the lion’s share of the same country’s water supply. This could lead to conflict, even war. The most striking examples are the Jordan River Valley between Israel and Jordan, which brings water from further north, and the rivers bringing water to Iraq from Turkey, who wants to use them for irrigation of it’s own agricultural areas in the eastern part of the country. The problem is not confined to developing countries. It is found in California, where the northern part of the state is unhappy with having to supply water to the middle and southern part. This may not be the first time in history that access to water has threatened to ignite armed conflict, but it is the first time in recent history that such a prospect can clearly be identified as a major risk. The environment constitutes another problem of the same character, though probably not (except in a few cases) of the same urgency. One aspect of the problem emerges when a source of pollution happens to occupy the border between two or more neighboring countries. Cases in point are the nuclear power station on the Danube, which provides electricity to the Republic of Slovakia but creates anxiety in Austria; the nuclear power station Cattenom just south of the border between France (the host country and the beneficiary) and Luxembourg; and the nuclear power station Barseback on the coast of Ska˚ ne in southern Sweden,

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which delivers electricity to both Sweden and Denmark. Austria, Luxembourg and Denmark are upset about having nuclear power stations so near their borders, all having rejected building nuclear power stations themselves because of unease about the safety of such plants. There is also the possibility of an environmental disaster, which could start a migration from one area to another, perhaps in a nearby nation-state. This could obviously create tensions. In Southeast Asia in the autumn of 1997 a thick haze blanketed large parts of Malaysia and the whole of Singapore. It even reached the southern part of Thailand and the western part of the Philippines. At one stage there were reports that a couple of towns in northern Australia had been effected. The initial reaction of the nation-states in Southeast Asia was to keep quiet. Everybody knew that the haze originated in Indonesia and was spread by the wind to neighboring nation-states. People could leave Jakarta in splendid sunshine to land an hour-and-a-half later in nearby Singapore with a visibility of let us say one or two kilometers. At some points the haze was so bad in Kuala Lumpur that some of the big multinational companies contemplated evacuation and introduced rotation schemes for their personnel. In the Malaysian states of Sarawak and Sabah in northern Borneo evacuations were actually carried out by some foreign enterprises and organizations. But not a word of criticism was heard. According to the ASEAN bible it was not in conformity with the rules to criticize the domestic problems of other countries, and this is what it was regarded as, despite the fact that Malaysia and Singapore took the brunt of the Indonesian haze. Enterprises located in these countries suffered, with inevitable repercussions for decisions concerning future investment. Tourism suffered in Malaysia and Singapore, who were accustomed to reaping strong earnings year after year in that part of the service sector. Many people wondered how long the silence could go on. One of the reasons that it was not broken was that the international community was not really interested. We were not dealing with a hunger catastrophe in a poor African country, but with a health risk to a strange collection of rich people from many parts of the world, who had chosen to go to this region to work. It was simple enough: let them shoulder the consequences. When in the spring of 1998 it looked as if the haze would come back and terrorize large parts of Southeast Asia, the silence was broken. It happened at the time that the small nation-state Brunei, ruled by one of the richest men in the world, got a tremendous dose, far above the threshold of danger. It has to be said, to the credit of the international community, that the rich people in Brunei were left on their own, in the same way that the semi-rich people of Malaysia and Singapore had been six months before. Not a voice was heard from abroad when the people

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of Brunei suffered. But in the region a new attitude dawned. The good old prescription of saying nothing affecting domestic matters in your neighbor’s domain had become an outlived policy. This case is interesting because it so clearly illustrates the point that environmental problems can change the relations between neighbors— indeed, can force upon a group of countries a new set of policy prescriptions. It seems clear enough that the threshold for watching pollution in one country have repercussions in another is falling dramatically these days. It is not unrealistic to expect international negotiations in a couple of years—when this reality has sunk in and been digested by politicians—over a code of good conduct in such cases, including a panoply of sanctions to be applied when a nation-state does not comply. The Chernobyl disaster in Ukraine, at that time part of the USSR, was kept secret for some time. That is simply impossible today. One wonders how people would react in case of a major nuclear disaster in one of the plants so negligently placed near population centers with millions of people. In many countries evacuation plans have been worked out. But is it likely that people would follow them? What would happen if the authorities tried to allay fears while 90 percent of the population watched CNN expert interviews suggesting the time had come to get out? This is a very realistic scenario. In some parts of Europe and North America, and probably also in Asia, nuclear power plants are situated in places where a major disaster could set in motion a mass of evacuees—that is, environmental refugees. What would happen if, for example, the host country of the plant causing the disaster is not suffering itself, but refuses to receive and help refugees? Is it likely that the affected nation-state would tolerate this situation, or would it try to use some kind of force? We have not yet seen such cases, but many experts would agree that it is more than likely we will see one in the next decade. The world may be lucky, yes, but luck is a very capricious lady. While energy may not be scarce in the foreseeable future, it may not necessarily be available where it is needed. So the problem with energy may be one of exploiting it and getting it to where it is needed. The main problem is to be found in East Asia, and first of all in China. This country is going to have rapid economic growth in the coming decades, and much of it will materialize in the manufacturing sector, demanding increased energy. That is not now available in China, despite rich deposits of coal. China is looking for oil. And oil is at hand, but not inside China itself. Some of it can be found in the South China Sea near the Spratley Islands, an area claimed by at least five nation-states (including China) and one of the areas on the short list of potential conflict zones, precisely because of the oil. Thus China may enter a phase of confrontation with its neighbors, with bleak implications for security and

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stability in the Far East. If, on the other hand, China does not get the oil, its industrial development will be jeopardized. So China is also looking for some other sources and has cast its eye on Central Asia, where oil sources are rich but transport facilities, including pipelines, are poor. The strategic problem is that to channel the oil to China would require not only massive investment but also some kind of guarantee that the political situation in the host nations will then continue to favor export to China. We find the classic dilemma. China needs the adjacent states to be client states. They may accept that, but not openly. As long as the situation is uncertain it is difficult to initiate the Chinese investment needed to support development and give the clients’ political systems the respectability and leverage to accommodate Chinese wishes. For North America and Europe (at least Western Europe) this problem seems to be less pronounced because future economic growth will be in the service sector which is much less energy-intensive than manufacturing. These regions will be able to cope with a smaller increase in the energy supply than we have had in recent decades. At the same time they have the economic strength to channel a part of their welfare into energy-saving measures, which will decrease the amount of energy needed to produce a unit of gross national product even further. Energy and the environment can constitute either a vicious or a virtual circle. A virtual circle signifies that these two factors work together to promote sustainable growth. If this happens, energy consumption per unit of gross national product falls and the impact on the environment becomes manageable, contributing to prosperity and stability. This is what has happened in several rich countries after the oil price increases in the early 1970s initiated a strong policy drive in this direction. Heavy investment has taken place in research and development to find new and renewable energy sources, and some results have been obtained with regard to (for example) wind power. However, the renewable energy sources are not profitable and still require financial support from the state. A vicious circle is to be found where energy is still expensive and is used very extensively, leading to waste and bad scores with regard to conservation and savings. The cost of energy per unit of gross national product does not fall and in some cases may go up, while contributing heavily to pollution. Predictably this picture can be found in many developing nations that do not have the resources to change the pattern of energy supply away from that of the industrial society to that of the nonmaterial society. The worst potential crisis might arise if an energy shortage in one or more of the developing nations stopped progress towards industrialization, triggering a social and economic crisis that would make the population living there ponder whether the right course would be to stay

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where they were or migrate to greener pastures. It is unlikely that the people living in those greener pastures would welcome immigration on a large scale. The prime example would be China. In the interior of China several hundred million people live with very little hope of a better future. If such hopes materialize on the basis of industrialization, only to be crushed because of energy shortages, it could be difficult to keep people in the area and just as difficult to have them settle in the already densely populated coastal regions. CONFLICTS BECAUSE OF ABUNDANCE (INFORMATION, NEWS, ENTERTAINMENT) The coming of information technology and biotechnology has changed the basis of economic theory. Formerly economic theory was governed by scarcity. Value was attached to a good in scarce supply. For thoughtful students of economic theory it was incomprehensible that water and air were ‘‘free goods,’’ although they were vital for survival, while a completely useless good such as gold had a high value. Why? Because gold was scarce while water and air were plentiful. People, nations and nationalities fought for possession of gold and access to gold mines. The wealth of Spain in the sixteenth century was based on its supply of gold from the western hemisphere. Part of the explanation for the tremendous economic development of the United States in the second half of the nineteenth century was the discovery of rich gold fields in California and Alaska. This is, however, a superficial explanation. If we dig a little bit deeper we will find that the genuine explanation is that formerly new technology could be used in isolation to gain an advantage over adversaries, be it in economic competition or direct warfare. The development of the Hanseatic Kogge explains the economic power of a number of small towns along the northern coast of Germany in the fifteenth century. It quite simply carried a bigger cargo than its competitors. The development of the all big gunships by the British Royal Navy before the outbreak of the World War I explains why the British navy was superior to its German challenger despite the higher quality of the German guns and armor. In today’s world all this has been turned upside down. Information technology is only useful if the same or a comparable technology is used by other people and other nations. A mobile phone has a value of nil if no other people possess a phone. It increases in value with the number of other people having phones. Those who offer information on the Internet will know that the value of using the net is quite obviously dependent on how many people are on it. So modern technology derives its value from being plentiful, from being abundant instead of scarce. It

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is only useful and so only has value if used in cooperation with and not against other people. In the economic and military arenas the focus has shifted from possession of scarce goods or technology to the ability to use and offer the use of plentiful technology. In economic terms tomorrow’s conflicts will be over the control of information highways, and consequently the right to set a price for use of these highways. How much will it cost to send TV to a particular place? How much do we charge for telephone service from one part of the world to another? In military terms they will be over the ability to communicate and to prevent the enemy from doing so. Both these parameters boil down to satellites and cables and possibly other instruments for communication in tomorrow’s world. Technically the questions are what can be offered and what can be built? Economically who is able to control them and set the price? Future competitive struggles may well be decided by which enterprises can get the information first—or to be more precise, which enterprises are capable of getting the information to the spot where it is needed fastest. For a case in point we can choose container transport on ships. Competition is fierce. The enterprise spotting new trends and hearing the news first can offer the best price and the best guarantee of delivery. Even a company with the best ships and the best service will not succeed if it is behind with regard to information. The heart of the matter is that the more abundance there is, the more profitable an enterprise becomes. And abundance can only increase by enlarging the market or getting a larger market share. The market can be expanded by getting access to customers hitherto outside the normal business sphere. Opening up closed markets will often call for aggressive behavior vis-a`-vis authorities in nation-states and/or international institutions. Here the enterprise enters into a new kind of conflict: one over the right to disseminate information, news and entertainment. In today’s competitive world one of the instruments available to the enterprise is to threaten to cut the nation-state off from international networks if it does not grant access to markets. A nation-state can be left wholly in the dark if networks stop functioning, and that can easily happen if an enterprise feels that a nation-state has to be taught a lesson. The enterprise can exploit such opportunities because the international world has not established a legal framework to govern the dissemination of information, leaving this matter to the market and/or temporary political forces. Many enterprises will in the foreseeable future fight hard to preserve this status quo because they believe it to be in their interest. The big and powerful enterprises often take the view that as they are already major players they are better able to fend for themselves outside an international legal framework than inside it. Such a framework would constitute an opening for others to enter the market.

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So strangely enough what will often be termed the ‘‘market forces’’ will work to preserve an oligopoly/monopoly, while the setting up of a complicated international system may open the door for more competition. The market can also be enlarged by providing new kinds of information. This is where the big opportunities lie. Enterprises spotting new trends, new behavior and new patterns of demand will collect fortunes, as did Rockefeller in the age of petroleum, Carnegie in the age of steel, Du Pont in the age of fibers, and Ford in the age of the automobile. Furthermore, as information—even more than the products of the industrial age—commands power, they will also be more powerful. Market share increases by out-competing competitors, and to do that the enterprise has to enter the competitive game and be more ruthless than we have seen so far. Every inch gained in market share increases abundantly the wealth and power of the company. And those left behind cannot catch up. The costs are too heavy. Time is not available. The change in parameters from the nation state to the enterprise in this respect has occurred because in the industrial age the nation could choose to maintain seclusion. The cost of being left out of the international networks was not so frightening. Many countries in fact did choose more or less completely to do so. In the future the enterprise will get the upper hand because it amounts to a catastrophe for a nation-state to be secluded from international information, news and entertainment. No business will be able to thrive in a secluded nation. How could it, in a world where we all live by gathering information and putting it together to form the picture we need right now? Many people still find it difficult to grasp how the law of abundance changes the behavior of enterprises, nation-states and international institutions. The need to exploit abundance forces enterprises to go international and steadily increase markets and market shares. The prevailing approach is no longer that of ‘‘increasing returns to scale,’’ which governed a good deal of behavior during the industrial age and still left its mark on market strategy in the second half of the twentieth century. Increasing returns to scale means that an enterprise, by gaining access to a larger market, decreases unit cost, and so grabs a larger share of the market than those unfortunate fellows still producing at the old unit cost. Increasing returns to scale simply means that we compete by lowering our prices: a typical industrial age behavior. The law of abundance means that a product, once it is introduced to a sufficiently large number of customers, starts to increase in value for the customer, and at the end of the day becomes indispensable (like a mobile phone nowadays for many people), allowing the enterprise to attach a whole string of services, offers and other products to the basic product. The law of abundance means that the enterprise opens up a whole new world for the customer. The enterprise, so to speak, provides

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the infrastructure, and does it rather cheaply. After that it turns around and attaches to that infrastructure a number of services which cost money, and without which the customer will be left out in the cold while the rest of the world communicates. SOCIAL IMBALANCES For the last 200 years, wars have mainly been started by national forces. The Napoleonic Wars, the American Civil War (in part), the Franco-Prussian Wars, the Great War from 1914 to 1918 and its successor, World War II—all of them were triggered by national objectives. They were wars between nation-states over control of territory, which is the cornerstone of a nation-state. This has not always been the case, however, if we look at history in a longer and broader context. The collapse of the Roman empire was caused by overwhelming outside pressure on the borders of that empire when the empire was too weak to resist. The pressure resulted from migrations set in motion at least partly by social factors—that is, scarcity of food—forcing tribes to wander west, where it was supposed that food was available. The empire was too weak to resist because decadence had devoured it from inside. That was predominantly a social problem, as the emperors had not been able to maintain the social order of the empire. One of the greatest conflicts in the history of mankind, the conflict between the Christians and the Muslims, which started more than 1,000 years ago and was brought to a perhaps temporary end with the fall of the Ottoman empire after World War I, was caused by cultural and social forces. Of course two religions were clashing, but below the surface strong social forces were at work. The hard core of the crusaders was composed of knights who had been rejected at home and were now looking for land in the Middle East. Today we would call them entrepreneurs or dynamic businessmen. Most of the colonial wars had economic and social factors working behind the scenes. So it is not uncommon to see conflicts arise because of social tensions. And we may well see more of them. People will support a model of society which provides security, stability, welfare and prosperity. A model that leads to growing class disparity will with almost complete certainty lead to conflicts and confrontations and start the society on a downhill course towards domestic strife, threatening stability both inside the nation-state and in its geographical region. Regardless of the statistical evidence, which for most people is remote, there is a growing sentiment that internationalism is leading more disparity and divergence inside nation-states, instead of to equity and convergence. In an economic and social sense this is felt with regard to income distribution. In a sociological sense it is felt with

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regard to groups of people being left outside the evolution of society. In an educational sense we see a rising seclusion whereby facilities are provided for those already encompassed by the system, but almost impenetrable for outsiders. In a media context it is evident that information and news are directed not at the same groups but at different groups, each wanting their own set of channels. The impact of internationalism on society needs therefore to be guided in such a way that people feel that internationalism can help to avoid social disparity and imbalances and not the other way around. To achieve what we need to amend much of the social welfare system built up in many (primarily industrial) countries since the Beveridge Report was issued in Britain in 1944 and to a certain extent adopted in other countries around the world. The prime aim must be to keep society together by ensuring that as large a number as possible—indeed an overwhelming majority—is engaged and feel themselves to be members of and participants in society. They must be active in the productive part of society and they must contribute to rising productivity for society as a whole. Only by steering in this direction will the objective be within reach. We must abandon the old concept of social welfare focusing upon what kind of problems should give rise to social assistance and how large the payments should be. Instead we should design a system that makes it profitable to stay inside the productive part of society, and that defines the obligations the recipient have to accept visa`-vis society. The first item on the agenda is what may be termed preventive social policy. This sounds a bit fluid but does not need to be. The idea is to map out where problems arise, how much they cost and how we can cope with them. Alcoholism, for instance, takes a high toll on many societies, both in direct costs to the health sector and in lost working time. Preventive social policy can be implemented through education and information not only to the potential victim but also to people in the workplace, training them to detect if one of their colleagues has a problem. Enterprises, with the help of the public sector, could recommend a cure and take care of the person in question, whose job will be kept available while he or she is under treatment. The family could be mobilized too, to ensure maximum chances of success. Compare this to the old social welfare remedy, which consists of paying a sum of money for a while and then saying good-bye to the victim or client. The important part in this is that preventive social welfare aims at the social as well as the individual level. On the macro level, so to speak, there must be information. On the micro level a whole string of treatment procedures must be ready, all of them ensuring that the victim will get back to the same job, or at least a job in the same enterprise, surrounded by the same colleagues—and that these are ready to help. Many disabled

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persons have for years been dealt a very bad hand; they have been isolated from the rest of society and informed that they cannot work. This is totally wrong. Of course they can work, or at least the large majority of them can and want to work. To be included in the productive part of society is an acknowledgment. The investment of the enterprise and society is negligible compared to the contribution and the increased happiness following from such an approach. For many years it was not a good idea to demand something from the beneficiaries of welfare payments. They got the monthly sum by mail, and that was all. Now we detect in society ideas focusing upon demands by the social welfare system on the beneficiaries. With help comes some kind of responsibility, without which help may be withdrawn. Suddenly, beneficiaries get responsibility for their own fate and responsibility towards others as well. The best result is obtained when they feel that they are needed, that somebody else cannot do without them. The biggest and most remarkable revolution has taken place with regard to unemployment allowances. Hitherto unemployment compensation was regarded as temporary. The villain was the business cycle; sooner or later the economy would experience an upturn again, and when that happened all the unemployed would be enrolled again in their traditional jobs. So the lesson was to keep workers alive in the bad times and after that take them into the factories again. This was a pure theory of production in an industrial society, where labor was a production factor that could be translated into arithmetic. Not a word about human resources here, and even fewer considerations about fulfillment, pride and a feeling of belonging to some kind of community. Several countries have started to change all that. They no longer view unemployment primarily as a problem caused by the business cycle. The main reason is change in the composition of production inside the country and changes in the production process. Accordingly the chances of laid-off workers finding similar jobs is dwindling very fast and will in a couple of years approach nil. The only way out of this is to offer new kinds of jobs. A welder in a British shipyard losing his job in 1985 would be extremely unlikely to find another job as a welder in the same or another shipyard. But he could well find employment in the service sector (for example, with regard to information) or he could use his skill to find work with an enterprise in the metallurgy sector—provided of course that somewhere he could get the necessary training and education. So the policy gradually emerging is not to disburse unemployment benefits without training and education for another job. This leads one step further and that is towards lifelong education in the workplace. The basic idea is that nowhere is it possible to work using more or less the same knowledge and tools for a long period. Technology shifts the production process towards new tools, and demand shifts pur-

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chasing towards new goods and services. The worker must follow the process, and that can only take place if society ensures education along the lines of continuous change. The trend in this rather fundamental change of social policy is to perceive an individual as just that, an individual, and at the same time to allow those in need to be reintegrated with society and feel themselves to be members of the community. The Austrian-born economist Joseph Schumpeter, who spent most of his active life in the United States, is said to have coined the word workfare, by which he meant that we should not have a workforce on the one hand and social welfare on the other, but that people derive their social security from having access to the productive part of society. No one gets social welfare without the prospect of rejoining the workforce. No one finds him- or herself in the workforce without knowing that social policy measures will be available within the workforce, should they be needed. If this policy proves successful there is also a possibility that it will help in bridging some of the other gaps connected with social disparity: lack of information and the feeling of being left out. Only by integrating people in society and making them feel responsible for their own destiny is there a chance to turn the growing disparity around and replace it with a more equitable society, one more dependent upon human resources. It is regrettable that for many people and many countries social policy is still predominantly a question of social benefits. There is a risk of producing social disparity such that a large part of the population owes little or nothing to society and risks little or nothing by trying to tear it apart. Internationalism should help to promote social capital in the same way as the industrial age promoted economic capital and the information age promoted human resources. Social capital means that society hangs together, that people belonging to a particular society work together, contribute to developing society and are ready to share knowledge, experience and skills with others because they know that everyone will benefit from such an approach. In its best sense the term signifies that because of a feeling of egality and common purpose people will behave as members of society, delivering their share and shouldering their part of the obligations or burdens or costs. They will not do so because it is mandated in texts or regulations or laws. In fact there should be as few of these as possible. The opposite of social capital is social destruction, meaning that because of social disparities (economical, social, educational and information-related) people will not contribute to society but live in seclusion from the state, the public or the government, whom they regard as enemies and usurpers asking for part of the money they have earned and should keep for themselves, and/or from other groups in society, who are not so well off and who look to make up for their

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miserable lot by robbing those who in their minds have unjustly gotten a better deal. In this kind of society there is little social mobility, but instead rising barriers and rising costs associated with protecting oneself against almost everybody else. We see this in the United States, with private homes turned into semi-fortresses. That is indeed the lesser cost, though the most visible one. The real cost lies with the impediments to economic growth and the distortions brought about by the mutual dislike and mistrust among different population groups inside society. In the long run the combined costs of protecting oneself against the government and other individuals or groups and the diseconomies of various kinds may amount to a quite considerable percentage of gross national product, forcing those societies to become fractured and compartmentalized dinosaurs—confrontational societies, in fact. Here the combination of internationalism, the state and the market constitutes the heart of the matter, because it provides the interaction of culture and social policy inside a competitive framework. Internationalism imposes upon enterprises and individuals a stronger and more relentless competitiveness, thus invoking the law that ‘‘the strong get stronger and the weak get weaker’’ while eroding cultural roots for many people without offering anything else as a substitute. The market means that a price may be set for almost anything, but on the basis of today’s values and today’s people. The term ‘‘futures markets’’ is a technical one in the sense that the next generation (or just the present generation ten years from now) does not participate in the price setting. The market is now. The market also creates inequality and social imbalances, threatening the stability of a society at a time when cultural roots are being taken away by internationalism. The only permanent guide is the quest for ever more money. The market has no set of values, no ethics, no culture to offer. It operates in a self-created ethical vacuum. The state is supposed to limit the excesses of the market in an economic sense but rarely does so, instead falling victim to the ongoing hymn of money and profit. The wave of privatization in almost all nation-states bears witness to this. The state is also supposed to provide a framework for the set of values governing the play of the market forces. But as the state grows weak it surrenders almost unconditionally and lets the market play in its ethical vacuum. The state thus fails in one of its most important roles in modern society. Exactly at the stage in civilization when we need the state it abandons ship, as if under the influence of a strange kind of mass hysteria. Instead of assuming responsibility and limiting the economic excesses of the market, the state withers away (as Karl Marx predicted it would, albeit under exactly opposite conditions). The weak federal power of the United States, primarily in the last decades of the nineteenth century but also for long

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periods of this century, testifies to this. The situation in Russia in the 1990s is an even more striking illustration. As long as the state is not there as a counterweight to market forces and the entertainment onslaught by internationalism, society will develop in what can rightly be termed an annihilistic way. Internationalism serves as a turbo to promote risks, and provides little or no guidance in finding a solution. Even worse, internationalism works to break down social capital invaluable for keeping society together and increasing productivity. Thereby it undermines one of the most crucial factors in the development of a nation-state. If this tendency becomes permanent and decisive, internationalism faces a tough future. The concept of social capital is actually one of the most interesting and exciting economic and social-policy ‘‘inventions’’ in recent years. Social capital must ultimately be seen in the light of its contribution to sustainable development. Sustainable development can be defined as a process whereby future generations receive as much or more capital per person as the current generation has available. Traditionally recognized forms of capital include natural capital (soil, mineral resources), physical capital (machinery, plants, equipment) and human capital (intellectual resources). It should now be recognized that these three types of capital only partially determine economic growth, because they do not include the way in which the economic actors and production factors interact and organize themselves to generate growth, productivity and investment. This is exactly where social capital comes in. One country can have capital constituted by the three above-mentioned factors yet be unable to generate growth, while another country having the same or a comparable panoply may show considerable growth. The difference in performance may be explained by social capital—that is, the way the production factors interact and assist each other. Social capital is thus the ability of society to get the production factors to work together and stimulate each other. The evolution of Soviet and post-Soviet Russia over the last 80 years demonstrates this. In the old czarist Russia there was some social capital even if this regime was autocratic. This social capital was completely wiped out when the Communist Party assumed power around 1920. Instead of social capital—a network keeping society together—the Communist Party introduced a control system based upon a dirigiste approach. In such a command system there was no room or need for social capital; indeed, social capital became a dangerous element threatening the command system, and any attempt to build social capital was ruthlessly destroyed by the party. When the Communist Party was ousted from power around 1990 Russian society stared into a vacuum. The command system was gone and there was nothing to replace it, no glue to keep society together and to keep the production factors intact. Society

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collapsed, as there was no enforcement system anymore and no incentive system emerging sufficiently fast to assume the role as a substitute. Looked at in traditional economic terms the collection of production factors in Russian society from 1990 to 1998 was more than adequate to start sustainable growth, but this didn’t happen. There are many explanations, but one of them is certainly the total lack of social capital. In a more short and precise way, social capital can be defined as what arises when a sufficient degree of trust among individuals and/or groups increases productivity—that is, by sharing knowledge, sharing learning abilities and risk-taking leading to potential gains or where costs to society following allocation of resources to non-productive uses can be reduced or eliminated (small police force, no secluded areas, no private security systems, social mobility). IMMIGRATION AND REFUGEES Immigration constitutes a threat within the nation-state. Refugees constitute a threat from outside. Let us start with the more conventional threat, that is, the one coming from the outside. Refugees have rarely triggered off major conflicts for the very simple reason that they have always been limited in numbers. Until the end of World War I the number of refugees in Europe was small, perhaps because many potential refugees were absorbed as immigrants by the United States. In the period between the two major European wars in this century a considerable number of refugees left the newborn Soviet Union, Nazi Germany, fascist Italy and the newly established nationstates in Central and Eastern Europe, feeling that these nation-states could not be regarded as their home after the dissolution of the Habsburg empire. But most if not all of these people belonged to the upper echelons of society. They spoke foreign languages and could (if not without difficulties) be integrated into their new nations. The great movement of people from one nation to another took place in southeastern Europe. It is debatable whether they can be classified as refugees, but not that they felt compelled to leave the nation-states in which they suddenly found themselves. After World War II Europe saw a mass of refugees, from the East into Germany and between many nation-states in Central and Eastern Europe. Stalin, of whom not much good can be said, solved the potential problem of minorities overlapping the new Polish and German frontiers by forcing the Germans to move west (that is, out of Poland) and deporting those who stayed behind to Siberia. Today not many people who feel German are left in Poland. In other parts of the world the refugee problem has also arisen in recent decades. The Europeans and the Americans have discovered that refugees are not a problem reserved for the richer nations, but also harass

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the poorer ones. And this is where we find the main threat towards security and stability. Many nation-states in Africa and other parts of the world are so artificial that the word nation barely applies. They were born in the process of decolonization, and borders were drawn by the former colonial masters, often without much regard to traditions. Minorities were left in nation-states ruled by a majority with whom they had been fighting for centuries. This was viable in the short term. But time after time, place after place it has given rise to refugees fleeing, without any means of survival and dependent on the mercy of host nations often just as poor as the refugees themselves. Meanwhile CNN reports their misery to the rich world with appalling pictures on the evening news. Names and places such as Biafra, Rwanda, Burundi, Sudan and Cambodia spring to mind. In these cases hundred of thousands and in some cases millions of people living below what is definitely a low ‘‘minimum level of subsistence’’ constitute a humanitarian problem, but also a security problem. They do not constitute the threat towards security themselves, but the fact that they appeal to people of the same ethnicity in the host country can and in some cases has led to war or conflicts. Unfortunately, international institutions do not seem to be able to contribute much to solving this problem. Humanitarian aid is sometimes (and sometimes not) forthcoming, but the root of the problem has rarely been addressed: the right of the nation to solve its own problems inside its own borders, without interference from outside. So in many cases the international community watches in full knowledge of what is going on, as minorities are starved and persecuted until they leave the country to become refugees withering away in remote camps. It is incomprehensible that the rich nations of the world are not capable of solving the humanitarian side of the problem and that there is insufficient political will to establish rules to prevent such catastrophes from arising by guaranteeing minorities the right to shape their own cultural identities. The other side of the coin, immigration, is more complex and intricate. In many cases immigrants have been welcomed by the host nation. In the United States, Canada and Australia, to mention a few countries, immigration policies have been elaborated and have worked well for many years. These nations have been established by immigrants. Some of these immigrants have been linked to a mother country for so long that a firm majority has been established. This can be said for the White Anglo-Saxon Protestant group in the United States. In Australia the Europeans or Caucasians play more or less the same role. The United States still manages to welcome immigrants and despite some attempts to reduce the number of non-whites the United States can still be said to be multicultural and multiracial with regard to its immigration policy. Australia, on the other hand, has grappled with this problem for a number

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of years. Some years ago Australia began a program of realigning itself with Asia. It is debatable whether that policy succeeded, but it is quite clear that right now there is a strong backlash, with some Australians speaking out against minorities in the still predominantly Caucasian country. In Europe the economic upswing of the 1960s produced what is called the guest worker, meaning a person from Southern Europe (later the Balkans, and later again Turkey and some parts of the Middle East) coming to Europe to work and earn money. In some European countries this immigration has been accompanied by an influx of people belonging to former imperial holding and now in possession of papers giving them the right to settle there. France and Great Britain are cases in point. Even if the total number of these immigrants rarely exceeds 3–4 percent of the total population, they have become a problem in several European countries—a problem threatening internationalism. One of the reasons is that it seemed all right to admit guest workers when labor was scarce, but as unemployment grew in the 1980s and continued into the 1990s many Europeans, and especially those competing for the kind of jobs filled by the immigrants, failed to show magnanimity. They wanted the jobs for themselves and they wanted to get rid of a factor that depressed the wage level at the lower end of the scale. The problem became more ugly in the sense that most of the minority were Muslim, a fact they and their families did not bother to hide. For many Europeans this looked like a challenge, even a menace. The message seemed clear enough: we are here to take your jobs and we do not care about your country and your culture. This economic and cultural challenge has caused many European countries to question the continuation of internationalism. This is not a problem for international institutions but for the nation-states alone, with one exception: the European Union. The EU can negotiate agreements with many of the surrounding nations, providing them with the opportunity for higher economic growth and making it more attractive for people living there to seek employment in their own country. It is obvious that few immigrants have come from countries with a high rate of economic growth. By assuming the role of a center knowing and accepting what that means—leadership—the EU has a chance to solve or at least reduce the immigration problem in Europe. The nation-states themselves cannot do very much except one thing, which has so far been absent but is sure to come: follow suit. The immigrants and guest workers have come to earn money. When they do not want to do so any more they go back to the country from which they originally arrived. While they stay in the host country it is fair enough that they maintain their original culture, considering that they do not want to settle there. If they no longer consider going back to their

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original country then it is natural, indeed inevitable, that they change their attitudes with regard to culture and rules of behavior. They have chosen to shift nationality and must face the consequences. This does not mean that they have to abandon their original religion—far from it. Of course they can worship when and how and which God they choose. But they cannot demand special rules instituted for them. Nor should their behavior challenge the cultural identity of the country they themselves have chosen as their new home. This is their contribution to avoiding conflicts. The host nation accepting them should in return help them to find the right balance between integration and their own cultural identities. The host nation and its population must display an open-minded attitude to cultural minorities, and the immigrants belonging to such cultural minorities must show that they want to be members of society— not to disrupt society or behave contrary to its existing rules. Many European nations have grappled with the issue whether immigrants (and refugees) should be allowed to settle in areas together with other immigrants or should be forced to disperse into society, mingling with ‘‘the natives.’’ The answer is probably to be found by studying what has happened in those nations where nobody interfered. Here the lesson is that in the first period after arrival, immigrants want to stay together with people from the same culture, because immediate integration is too harsh. But after some time they start to disperse into society, geographically and socially. At the same time experience also shows that it is not a good idea to provide too much cushion for immigrants/refugees. It may sound harsh, but apparently they integrate faster and with better results by having access to only limited help and assistance. They must feel that they will solve their problems largely by themselves, and in this way build selfconfidence. This is comparable to the new pattern for social policy, moving towards putting more responsibility on the shoulders of the recipients. Only if people feel that they belong to society and are treated in a responsible way is the probability good for achieving a homogenous society. INFECTIOUS DISEASES Both Europe and Asia have gotten an idea of what the future may have in stock for us: infectious diseases. In Europe the British endured ‘‘mad cow’’ disease, which claimed a limited number of victims but at the same time threatened a much larger group. In Hong Kong the bird flu had more or less the same consequences, and Taiwan saw in the spring and early summer of 1998 young children succumbing to an evil virus. There are several reasons that the world is going to see infectious

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disease on a scale that we presently may find difficult to grasp. The most important one is that economic competition forces enterprises to intensify production of foodstuffs in a way that is out of balance with nature. One of the main bulwarks constructed by nature against the disease is diversity. But diversity is not compatible with high and rising production, so it is being sacrificed. Every time a virus strikes there is a risk that it will find a hole in the defense of the immune system and break through. The world has not yet seen this on a grand scale, but it may in the future if one of the staple foodstuffs is attacked and infects a large number of individuals. In a way this problem is not confined to infectious diseases. It is about destroying our biodiversity, making us vulnerable to infectious diseases and the destruction of crops. With modern travel and communication, not only people and goods get around, but so do such free riders as insects, various sorts of animals and other kinds of carriers, which travel with the speed of aircraft jet from an environment having a natural defense against them to one having no defense whatsoever. Sometimes this comes to our knowledge, as when one-third of the United States suffers from a particular cropdevouring insect or similar misfortunes visit Europe. Bearing in mind that it took a limited time for the Black Death to spread in the fourteenth century, and a much shorter time for the Spanish flu just after World War I, it is easy to comprehend what could happen to our world if such a carrier arrived on the stage once again. It would be particularly costly and conspicuous if one of the infectious diseases declared extinct made a comeback, reaping a rich harvest from a population no longer protected by vaccination. Finally, a large part of the world enjoys air-conditioning or air-renewal systems. While these systems may produce a marvellous climate inside houses and office blocks, they also offer a marvellous environment for the dissemination of infectious diseases. The conclusion is that the world is developing in a way that makes it more and not less susceptible to infectious diseases or comparable threats to our health. In this context the obvious observation is that some of the main reasons have to do with internationalism. People travel. Industries participate in international competition. So if disaster strikes we can be pretty sure that voices will soon arise calling for an end to participation in the international system. To a certain extent this happened in Great Britain some years ago during the onslaught of ‘‘mad cow’’ disease, when the European Union took steps to protect the rest of Europe from being engulfed in the same abyss as the British producers and consumers. In Britain anti-internationalism mainly took the form of criticism of the European Commission and the other member countries. But we can just as well imagine a case in which those exposed to infectious disease from abroad demand the abrupt isolation of the country of origin, with

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disastrous consequences for the economy of that country. The way out of this is prevention. A much stronger bulwark must be built, with earlywarning systems and mutual assistance frameworks. Unfortunately, infectious diseases are recognized as an important problem but not a sexy item attracting attention. It is hard to imagine politicians pushing this issue during international negotiations.

5 The Political Enterprise INTRODUCTION The enterprise is no longer local or national. It does not feel attached to a particular locality but produces where most efficient and profitable. It uses the international transport system to move goods from one place to another. It uses information technology to keep the various departments and divisions together in one network. It uses audiovisual instruments to make its products known worldwide. Before the Industrial Revolution, the local manufacturer of goods was often sponsored by the king. Production was situated where it was because of access to energy sources, and could not be moved. It was not only a part but the heart of the local community, which would have had no life without the said enterprise. The Industrial Revolution gave birth to the national enterprise, producing for the domestic market and forging alliances with the government, trade unions, banks and others counted on to keep imports out of the market if possible. This enterprise was not local, but tended in some respects to assume the same role and obligations as the local enterprise because it was difficult and costly to move the plant—which would in any case be moved to another place inside the same nation-state. The enterprise became a player in the national political game and sometimes dominated the local community. In the later stages of the industrial age the enterprise started to become international. As the industrial age was replaced by the information age, the national/international enterprise became too narrow and was slowly but surely supplemented by the multinational enterprise—an enterprise not viable based on the national market alone, but having to market its goods and/or services internationally.

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At the present juncture we see the international enterprise being replaced by what can be termed the supranational enterprise. That is an enterprise having no roots in and no special relationship with any one nation-state. Its headquarters are wherever the chief executive officer happens to be. It exploits all the advantages offered by internationalization but has not yet run into an attempt by either the nation-states or the international community to impose obligations and responsibilities on it. In a sense it is a free rider. It is a player in world economics and world politics but has managed to avoid shouldering part of the burden of running the world. Experience indicates that such an approach is not sustainable in the long run. That is why we see something new on the horizon: the political enterprise, a truly international enterprise that assumes responsibility and takes a stance with regard to current political, ethical or economic issues. This political enterprise is not only going to be a player in world politics and economics, it is going to be one of the most important actors on the international scene. The withering away of the nation-state leaves a vacuum, and it is into this vacuum that the political enterprise cautiously but unhesitatingly feels its way forward. The nation-state can no longer safeguard the interests of the enterprise. The enterprises have to look after their own interests. Who is defending free trade today? Mainly the emerging political enterprises, and very often against politics in the nation-states. The nation-state is too small and insignificant to establish a framework for the development of enterprises. This has to be done by international channels such as the EU, NAFTA and ASEAN. Then of course the enterprise no longer asks the nation-state for favors. It goes to the international authority in question, skirting the superfluous nation-state. The nation-state also can no longer provide sufficient social security for its citizens despite rising gross national products. So the citizens look to other institutions, and stumble upon the (political) enterprise. What we see emerging is a powerful actor still masquerading as an economic and/or trade-oriented entity, but behind the political scenes calling the tune more and more loudly. In the following we will try to determine why and how this is taking place, and to pinpoint some of the repercussions for the global economy and world politics. We will consider in turn the power game, the strategies, the new instruments, the profile of management, and some imperatives for the political enterprise. THE POWER GAME The power game as the world used to know it is changing very, very fast. The traditional power game governing the world for centuries, the time of the Roman empire until Clausewitz and the end of World War II, held that armies in possession of territory were in command. That

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was what mattered. Even the mighty British empire, ‘‘ruling the waves,’’ used sea power not as an objective but as a means to maintain possession of territory. Command of the sea lanes was important to secure communication and trade with India and North America. Today and tomorrow such an approach will prove hollow. Military power is not decisive anymore. In fact since the end of World War II military force has not allowed any major power to achieve supremacy. The United States remains the superpower it was in 1945, but this position is due more to economic and technological leadership than to military power. The USSR tried to be a military power on an equal footing with the United States, but failed because it did not have the economic power and technological skill to match its enemy. Japan has risen to full G-7 membership, and despite the economic difficulties of 1998 few if any will dispute that this country belongs with the select few. The same can be said about Germany. Military power has not helped Iraq to climb the scale, nor has it done much good for India and Pakistan. Influence in the world and prosperity at home are not shining on a country with one of the world’s largest armies: North Korea. In today’s world military power is difficult to use, both for a superpower like the United States and for smaller powers. The world’s reaction towards India after it exploded nuclear devices in the spring of 1998 is interesting. Instead of accommodating another strong military power, the world declared it all nonsense and did not reward India. Japan, who has chosen not to produce nuclear weapons but relied on economic powers instead, is potentially more influential than India. Germany is influential in Europe because of its economic power. France and Britain have nuclear weapons, but who dares to say that these two mighty military powers have more influence in Europe than Germany? Economic might, technological skills and control over the audiovisual media offer more genuine power than a huge arsenal, with or without nuclear bombs. It would be interesting to analyze whether Bill Gates and Microsoft or Tony Blair and Great Britain has the bigger impact on world development. Military power is a tool available to nation-states, but if they dare use it they lose the power game. Territory used to be important as a measure of power. The larger the territory, the larger the potential for agricultural development. The larger the territory, the larger the market, and the easier it would be to control transportation. So both in the feudal age and in the industrial age up to the second half of the twentieth century territory was of vital importance. The nation-state delivered the economic and political infrastructure to use territory as an instrument of power. This is no longer the case. Territory can even be a burden requiring large investment from the center, as was the case for the Soviet empire. In fact, as all the old and wellknown characteristics of the industrial age disappear, territory fades

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away as an important parameter. And so does the nation-state. Territory and the nation-state cannot exist separately, and are held hostage to each other. The British geographer MacKinder coined the notion of the ‘‘world island’’ about 100 years ago. His theory was that a line drawn from the north of Central and Eastern Europe to the south could be used to determine who was ruling Europe, and thus who was ruling the world. If we accept this theory, the two world wars in this century were fought between Germany and Russia to push the line either to the east, which would give Germany hegemony over the world island, or to the west, which would give Russia the same role. The outcome of World War II put the frontier of Soviet aggression very close to MacKinder’s line, and a good many people think that the cold war held back further expansion, which could have tipped the balance. Later others floated the idea that power is not linked to land mass but to sea territory; this theory asserted that the next century would belong to the Pacific Ocean, as the twentieth century could be said to have belonged to the Atlantic. It is a bit difficult to see why control over the Pacific Ocean could give the power to rule the world. But it may not be difficult to see why around the Pacific would emerge a zone of economic prosperity incomparable to anything the rest of the world could mobilize. The problem is that this would not be a political or military power area, but an economic powerhouse encompassing nation-states, crossborder regions and political enterprises all operating at full steam. Regardless of the theories, the supranational enterprise benefitted from the shift away from military power and the disappearance of territory as the determining factor in the power game. The successor to the supranational or multinational enterprise—the political enterprise—will not turn the tables, but will use some of the tools developed by the military in the standoff between NATO and the Warsaw Pact. The political enterprise is implementing ‘‘C4IE’’ (communication, command, control, culture, information and entertainment) in its arsenal of instruments to allow it to survive, expand and even become a predator in the coming decades. Communication Communication is conditio sine qua non in today’s competitive power struggle. 1. Like the nation-state in the industrial age, the political enterprise needs to ensure that it is able to maintain its communication while at the same time threatening to disrupt competitors’ communication. It sounds obvious and easy, but is not. The British empire was able to do

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it for 100 years with regard to sea transport. The Roman empire was able to do it with regard to land transport for several hundred years. The Soviet empire did it for almost 50 years with regard to land transport, but on a limited land mass. When these empires found themselves unable to secure their own communications and threaten the communications of challengers they fell from the pinnacle. Their advantages in communication were attained through a combination of technology and superior organization. The Romans built roads, some of which can be seen and even used in today’s Europe. When they moved armies in territories threatened by enemies, the armies camped every night in fortified camps with prepared layouts and detailed organization. The British did it primarily because their industrial base allowed them to produce more guns than their enemies, but also because they introduced social mobility in the recruiting system for the top posts in the Royal Navy. Horatio Nelson was a poor child from Norfolk in England. One of his predecessors, John Jervis (who became Lord St. Vincent), had to make money as a midshipman by taking care of the laundry for his classmates. In today’s world it is a question, again, of technology and organization. The political enterprise must have access to modern and effective technology. It does not necessarily need to be the most modern, but it needs to be among the best. It has to be used in combination with the most efficient and beneficial organization. One of the main problems is to make sure that among the enormous masses of information available the enterprise in question can find exactly the information it needs when it is needed. That calls for a special breed of new information staff comparable to what used to be called ‘‘skimmers’’: people who had the sixth sense to go through a newspaper in about half an hour and find precisely the information requested. On the purely technological side, the evolution points to alliances between suppliers of channels (satellites, cable) guaranteeing that the political enterprise always has the ability to communicate—and there will be a considerable number of these enterprises. The ability to safeguard one’s own channels and crowd out other people’s communication will be priceless. It is likely that the sums needed for development and infrastructure will be so enormous that very few if any enterprises will be able to do this on their own. 2. The next step is to develop a tactic for communication. In today’s world the time available to penetrate people’s minds is extremely limited. The competition is so fierce that just a second lost means that many potential viewers/listeners may switch to another channel or another supplier of news and information. The key is to make it simple. The enterprise needs to have a clear idea of what it wants to communicate. Communication is not confined to marketing and advertisement. It also

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has something to do with production. It is primarily a question of which set of values the enterprise chooses and how it wants to present them to the audience, constituted by consumers and staff. As with military tactic the main thing is to choose one and only one principal characteristic and then stick to it. It is no good to switch from one characteristic to another and it is no good to offer several points. People are unable to absorb a complex message. If the enterprise lists five reasons for buying its products, for supporting its actions or for joining its staff, odds are that the public will get confused. Instead of picking upon one of these five reasons, the public may reach the conclusion that as the enterprise itself does not know precisely why one should buy its product, it is better to choose a competitor with a clearer mind. The enterprise must know what it does, why it does it, and especially why it does it better than its competitors. Once one has a clear idea about this, it is not so difficult to translate it into one or two key phrases. The business world is full of examples: ‘‘We try harder’’ (AVIS); ‘‘Intel inside’’ (Intel); ‘‘Runs on Oracle’’ (Oracle). Another option is to pick price, quality, service or culture as the main parameter, and put the parameter to the public in different contexts as unique to the particular enterprise. Transport enterprises may choose ontime delivery. Food and beverages concerns may choose the same high quality every time. Technology firms may choose high performance. Communication is indispensable for the enterprise in the sense that no enterprise unable or unwilling to communicate with its customers and the public will survive in the future competitive game. If a political enterprise is not known to the public, it does not exist. To defend its interests in the political game, to be on the screen in the international world, to attract competent staff—regardless of where we turn our gaze, the need to communicate the enterprise’s Why and How is a question of survival. The mass media will paints a portrait of the enterprise. It does not matter whether the enterprise wants this or not. It happens. The choice for the enterprise is whether it wants this portrait to be the only one on the scene, or whether it prefers to supplement or even offer an alternative to it. The closed, inward-looking enterprise cannot exist today because the mass media regard it as prey to be hunted. The drive for entertainment and news forces the enterprise to take part. The enterprise has to be a player among other players in the entertainment/adventure competition of portraits of enterprises competing for the attention, sometimes disgust even hatred and sometimes adoration of the public. The enterprise failing to comprehend this will die slowly. As society turns more and more towards values enterprises need to pick their values and then transform them into the foundation of a po-

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litical identity. As they become political enterprises, meaning that they take a stance, they have to communicate that stance to the public. They can only succeed if they know the values they hold. Command Command is a question of how to ensure that the staff of the enterprise follows the strategy and tactics laid down by the leadership. Command requires a choice between in principle three different styles of leadership: 1. Command by control, wherein the enterprise establishes a firm line of command-control specifying which kind of decisions can be taken at what level. If in doubt, a staff member pushes the matter one level upwards, with or without his/her recommendation. This leadership model petrifies enterprises in the sense that very few decisions of importance will be taken at the lower levels. Enterprises following this model will not be able to survive because it takes too long to decide what to do and in the meantime competitors move in with their offers. Furthermore, such an enterprise tends to become more and more self-centered in the sense that the staff thinks of control mechanisms as the most important part of the enterprise and forgets that it is actually the market and the customers that constitute the basis for the survival of the enterprise. 2. Command by rules laying down how and why the enterprise is to act in predetermined cases. This may work, and in fact most enterprises follow this approach more or less wholeheartedly. Whether it works well enough, however, depends on whether the leadership is able to specify a certain number of distinctions. One of them is the distinction between objectives and instruments, so the staff does not mix the two in the competitive game. The problem is that rules cannot foresee complicated situations and thus this model of leadership or command tends to be inward-looking, albeit not to the same degree as the control model. The rules start to assume a life of their own in the perspective of the enterprise. Time, resources and money will be spent to perfect the rules and cover all cases, which of course is not possible. Rigidity will sneak in and initiative will be crowded out. The fighting instructions governing the Royal Navy before Nelson arrived on the stage followed the command-by-rules model. A thick and cumbersome set of instructions was put in the hands of every captain, telling him exactly how to behave in all sorts of situations. The problem when battles were not won was that no reproach could be directed at the commanding officer provided that he had followed the fighting instructions. No better sleeping pillow has ever been invented. At the end of the day command-by-rules is the fallback position for weak leadership wanting to have an excuse in case something goes wrong.

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3. Command by a combination of values, objectives and examples. This is a difficult method for leadership and command because it must necessarily be fluid and open for interpretation. The enterprise using this method should eschew all kinds of seminars and courses and conferences forcing the staff to go through a thick set of papers collected by a consultant and accompanied by diagrams, charts and tables. Instead the staff should be allowed to get close to the executive officers and watch them in action, so as to learn how they react in various situations. Learning by doing, by watching and following examples is what matters. This should be accompanied by an active management policy of telling about the enterprise’s past performances—telling new staffers in specific terms and through examples what was done in the past and why it worked or did not work. Often people learn more by studying mistakes than successes. This method is linked to communication because it is about getting the message across to the staff of the enterprise. In every mind should be some kind of unwritten guidelines about how the enterprise tackles problems and why it is in business. It should leave the initiative to staff. Mistakes should be accepted—the first time—and used to draw the applicable lessons. The difficult thing with this kind of leadership is that it does not lend itself to textbook presentation. There is no technique for making the transition from another method to this one. It has to be done on the spot, building on the traditions and advantages of the enterprise in question. Normally one can tell after a brief visit to an enterprise whether the method is used. If the staff is proud of being with the enterprise, if they work overtime to complete their job, if they talk about the enterprise’s past and former top managers, then it is likely that they belong to the select few. No one is proud of working overtime because the instructions, the rules or the control requires it. The management does not need to allocate much time for themselves to teach or time for the staff to attend seminars. On the contrary, very little of this is required. What is needed is an open style of leadership in which the staff gets the opportunity to watch the management in action. This may require a somewhat larger staff, because they will be watchers instead of doing other jobs, but compared to the enormous waste of superfluous courses run by most enterprise this is definitely the cheapest as well as the most effective method. It paves the way for the enterprise to come to grips with the following four central issues in command: The first is core business, which is about why the enterprise is in business. What is it trying to achieve, and how? This favors not necessarily the specialized enterprise but an enterprise doing relatively few things, because otherwise somebody else will be better equipped to take

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over some of the business. Until the 1960s economic development promoted big conglomerates, which, if they lost in some areas, would gain in others. It was an advantage to be in many geographical markets and to market many different products at the same time. Some time around 1970 this changed, and not very many of those conglomerates survive today. Evolution started to favor the enterprise knowing what to do and what it could do best. Specialization with regard to tasks is paramount. The enterprise should not do a lot of things almost as good as everybody else, thus being number two or three in the competitive game in five or ten sectors. It should do one thing better than everybody else in one sector, and leave the rest to others. If an enterprise is good at transporting goods from one market to another it should concentrate on that and not diversify into trade and industry or banking, where it has little or no prior knowledge. The result of this is that we see fewer, but bigger and more capital-intensive, enterprises competing to belong to the select group of three to five enterprises running the show in a particular field. Core value added has to do with why customers prefer a particular enterprise to its competitors. While core business is about what the enterprise is doing, core value added is about ensuring a rising market share by concentrating upon the competitive parameters where it has an edge compared to other enterprises. Core value added means choosing the right competitive parameters for an enterprise based on its tradition and experience. In a way, core business is more production-oriented, spelling out what an enterprise is good at producing, while core value added is more concerned with marketing, telling us why customers prefer to buy a product or use a service from this enterprise and not from the runnersup. Following the tendency to specialize and exploit an already established competitive edge, management should ask itself two simple questions first thing every morning: What is our core value added (why do customers prefer us)? How do we strengthen our core value added? The core message is linked to communication, and is a question of how and when the enterprise wants its core business and core value added to be communicated. The decisive factor is to forge an association with the other core functions of the enterprise. As stated above, the enterprise must avoid confusion. The core message reflects what the enterprise wants to be associated with in the minds of its staff, as well as the minds of the customers and the general public. Core needs involves an attempt to go behind the veil and gather what the customer is really asking for, instead of just reading the statistics to see what the customer is buying. Core needs can kill an enterprise or increase its profits exponentially. It can kill the enterprise if new technology emerges without the enterprise’s knowledge. This can put an enterprise out of business in a very short time. The vacuum tube tran-

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sistor is the best example. Of course the customers did not buy vacuum tubes because they wanted vacuum tubes. They bought them because vacuum tubes offered something they needed. At the very moment a new and better technology was available, the demand for vacuum tubes fell to almost nil. The enterprise producing vacuum tubes and not realizing this would die. The enterprise having the ability to produce transistors, and recognizing the new market, would prosper beyond imagination. Core needs is a more explicit and more direct ‘‘going behind the veil’’ tactic than product concept, meaning that the enterprise tries to find out the total need of the customer permitting it to combine an investment goods with service. Control Control is the enterprise’s system for making sure that objectives and targets are met and activities run according to schedule. Some people take the view that strict control contradicts delegation and managementby-getting-the-message-through, because the word control has an unpleasant ring to it. However, many potentially prosperous enterprises have failed because they did not realize that control is the necessary condition for applying a less stringent model of leadership. In enterprises commanded by rules, or by submitting all important questions upwards, very little control is needed because control is itself a part of management. On the other hand, if the enterprise delegates it is important that somewhere in the system a panoply of measures and figures comes into play telling whether the enterprise is actually achieving the result it wants. Management needs to tell in rather blunt language which parameters it chooses for its control, and to follow through with consistency. The problem with this is basically the same as the information problem. Information is so plentiful that it sometimes can be difficult to decide which control parameters to choose. Culture Culture is taking over as the decisive competitive parameter in today’s business life. The political enterprise needs to have a firm command of its culture and to choose a set of values (a cultural profile) for the enterprise. This has nothing to do with sponsoring cultural events, something that has gained considerable popularity in recent years but which has a limited impact on the popularity of the enterprise (unless the events are picked with great skill, making sure that people watching

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associate the enterprise with the event taking place, and that the association is a positive one). What is needed instead is a firm set of guidelines, normally not written down, identifying what the enterprise stands for. Employees should feel that they do not work there, but rather they live a part of their lives there because they feel at ease. Customers should buy the goods or services offered by the enterprise not so much to satisfy a need but because they feel that the enterprise and they themselves pursue basically the same approach to the important issues society is grappling with. In the industrial age this was not unreasonably difficult. The reference was the nation-state, and that was that. The culture to be reckoned with was the national culture. Management did not need to spend much time deliberating over which issues relevant to its set of values were on the agenda for the time being. In the international world it has become very difficult indeed. The trick is to choose values that are universally acceptable, stick to them and adapt to local—not national—culture if necessary. Some enterprises seem to have discovered how to do this. Outside the business sector two of the longest-standing institutions are the Catholic Church and constitutional monarchy. Within the business sector we find several large enterprise that are more than 100 years old and still growing in importance. Their secret is culture. The staff is attached to the enterprise. It does not work there because of the wages. It has joined the enterprise because it fulfills cultural, sentimental and emotional demands of human beings. The Catholic Church is the most successful and enduring institution. It has a simple message. It communicates it in a simple and wellunderstood way. The message and the way it is delivered do not change very much. People adhering to the church feel secure. They know where they are. Monarchy thrives by maintaining a certain distance vis-a`-vis the subjects, and by keeping somewhat obscure what the monarchy actually does and how it actually functions. Myths and mystique constitute the vital parameter. For both the Church and monarchies, rational analysis cannot explain why people adhere to these institutions. A lasting institution apparently cannot be built upon reason. The Church and monarchy have not been confined to select geographical areas. They operate, with greater or lesser success, globally. That means that they are able to adapt to local circumstances without losing their main message. They do not take a posture with regard to ephemeral issues but keep a distance, stressing the basic values. This leads us to the following conclusions about culture as regards the political enterprise.

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• The set of values (culture) chosen must be generally applicable geographically and must outlive short-term cultural waves. • It must be possible to adapt them to local circumstances without losing their basic tenor. • Loyalty is a key issue, meaning that the staff must feel attached to the enterprise. • There must be some myth or mystique about the enterprise.

As the information age rolls on and as we see nonmaterial forces penetrate our daily lives, people looks for a safe haven with regard to their values and their loyalty. The supranational enterprise that senses this and develops as a political enterprise has a window of opportunity in tomorrow’s world. The nation-state more or less disappears. The cross-border regions are economic in nature and in any case too far away to satisfy most people’s cultural needs. The international institutions have still not achieved cultural legitimacy. So those who know what to offer and do it in the right way can fill a vacuum of emotions, sentiments and feeling, and be rewarded with a grateful staff and a satisfied army of customers. Information Information seems straightforward, but is not. In the industrial age the problem was too little information, so the staff was sometimes groping in the dark, trying to find out what the enterprise wanted them to do. The customers bought products without really knowing what it was they were buying. In the information age the problem is very often too much information. Staff and customers are flooded with information they can use or let float downstream. The problem is that despite this overwhelming flow of information they do not always have the information at hand when they need it. This is not a problem linked to the information age. In fact the American military establishment had all the information that analyzed together would have revealed that the Japanese were going to attack Pearl Harbor at precisely the time they did. But no military analyst in the American establishment was able to put the pieces together to get the right picture. With this as our starting point let us look at what is necessary to channel information where it is needed, when it is needed in the information technology age. Step number one is a very simple one: train and educate personnel to look for the right thing. The Pearl Harbor debacle happened because the American intelligence establishment did not expect that the Japanese could or would attack the base. They were looking

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for indications of a Japanese attack on Malaya and/or the Philippines. So we have to revert to what the enterprise stands for. If the staff knows that and has it as a natural reference they will have a much higher probability of collecting the bits and pieces and putting them together in a useful and appropriate way. The separator is a thorough understanding of the four cores outlined above by those taking a first look at the information stream. All too often established organizations, be they enterprises or ministries or institutions, look for what they are used to looking for. They do not adapt. The press reports that the American establishment had all the information indicating that India, in the early summer of 1998, was going to explode a nuclear device. The alarm was not sounded because those who looked at the photographs (or whatever they were looking at) had not been told that they should look for indications of this kind. And there was not sufficient ‘‘culture’’ in the intelligence establishment to fill that vacuum. The task for management is to remind employees of the objective and means of the enterprise; avoiding confusion and on that score, staff should be able to collect information and put it together. This is even more important today than formerly because information is more plentiful. So keywords and other instruments used in the electronic media to sort out information have to be precise. Staff must be trained, almost exercised, in putting information together. It is very rare indeed that one source of information tells the enterprise all it needs to know. The normal pattern is that several sources reveal a total picture. Who is going to spot this? A new kind of information staffer having the sixth sense to put it together. The education system should contribute by placing an emphasis on this ability. Unfortunately, very few people have this sixth sense naturally, so they have to be trained to develop it. To get an idea of what this means we can look at the evolution of the big trading houses from the 1960s to the 1990s. In the 1960s those doing well were diversified enterprises able to compensate for a slowdown in one sector by an upswing in another. Competition was not fierce, so enterprises could manage even if they were not experts in all the areas they covered. The fact that they were present at a particular location gave them a competitive advantage. Then times started to change. The big diversified conglomerate gave way to the specialized enterprise. Competition grew stronger and more ruthless. Diversified conglomerates suddenly found themselves outmaneuvered in practically all areas because they were reasonably good at many things but not very good at any one thing, and for every product they marketed they were up against one or more enterprises specializing in that particular product niche. Gradually they found themselves squeezed out of market after market.

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Now, back in the 1960s there certainly were indications that this was going to happen. Specialization could be detected. Profit margins were squeezed. But very few of the big conglomerates had a staff with the ability to put this picture together and give the management the unpleasant news that time was running out for the kind of business they were running. The message was shrouded by good news in the form of profits, concealing the bad news that market shares and shares of profits were falling. Management must see to it that information is cut down to what is really necessary. The so-called need-to-know basis is crucial in present circumstances. All too many organizations, ministries and enterprises still circulate a large volume of material allowing everybody to see what everybody else has been doing and has written to various customers. This unnecessary practice should be stopped. ‘‘Nice to know’’ is a phrase a competitive enterprise cannot afford. There is no doubt that many organizations are dying of keeping themselves informed of what is going on. Everybody can take a full day to follow CNN, the Financial Times, the International Herald Tribune, Le Monde, Frankfurter Allgemeine Zeitung, the New York Times, the South China Morning Post—the list is endless. We could get an oracle out of reading this. But what use is all this information? If there is no firm and unequivocal answer there is no need to follow the news. Those who follow the news fall behind those who make the news. (To avoid misunderstandings: here we are talking about the line officer and not the staff who have exactly the job of keeping up with development as explained above.) The customer must get all necessary information about the product, but nothing more. This is of course dangerous for the enterprise, because someone must decide what is necessary information. The customer can be drowned in an enormous amount of information about the product. The enterprise should regard it as its responsibility to sort out and channel the information to the customer. But the enterprise should be careful to avoid a situation where it could be regarded as hiding unhelpful information. This is especially true with regard to the environment and safety in the workplace. If an enterprise is caught concealing embarrassing information of this kind, it will face a very difficult task achieving a good reputation. Necessary information is what the customer needs to know now and what it is likely that the customer will need to know in a foreseeable future. The artful provision of information to customers looks forward and tells the customer something that will find its way into the headlines some time ahead. An enterprise able to do so will stand unblemished and gain enormous credibility.

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Entertainment Entertainment is a key word for the supranational enterprise. The competition to catch the attention of individuals in today’s world is so strong, so fierce, so unrelenting that an enterprise cannot avoid being involved. The staff and customers are used to, expect and even demand entertainment at all times. They look to the enterprise to offer at least some kind of entertainment at least some of the time. A boring enterprise cannot keep the staff interested in its activities and the customers attached to its products. The staff may not look for entertainment in the strict sense of the word, but they definitely look for something exciting enough to make them concentrate on their work during the time they spend there. The enterprise must wrap its message in an attractive envelope, and that means entertainment, amusement or excitement. That is what the staff is used to, and without it the staff loses its motivation. One of the methods the enterprise can use is to put its activities in the context of what is on the political or social agenda in society. Then the staff may relate their daily activities to what they meet outside the world of the enterprise. Examples are contributions to reducing or solving an environmental problem, or contributions to a special cultural development. Whether or not the enterprise is successful can very easily be determined by asking the staff about their feelings when they arrive every morning. Recently some American airlines have tried to do this by mobilizing the staff to provide amusement for passengers. This is good for passengers but a side effect is that the staff starts to amuse themselves by inventing ideas for amusing the passengers. Another method is to entertain the staff by telling or retelling great and exciting events from the enterprise’s past. In so doing the enterprise actually follows in the footsteps of monarchy by producing entertainment that itself reproduces the past. The staff feels that they belong to a tradition which they have to carry on. Customers like an enterprise to tell them about the product it sells, but it is even better if this can be done with a little bit of humor or wit. Again, the point is that the enterprise competes with many others in its attempt to catch and maintain the attention of the customer. That cannot be done by a boring and tedious explanation of the product. Instead the enterprise needs to find out what the salient features of its products are and then concentrate on presenting them in a humorous way. Advertisements have gradually swung away from the old-fashioned presentation of the product’s performance to entertainment highlighting one or several factors to get the customer to take a closer look at the product itself. What we see here is a two-stage approach. First, get the customer attracted by entertainment, then use this attention to tell about the prod-

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uct. If in doubt about how to do so, follow the method used in caricature: focus upon what is special about the product and forget the rest, at least in the stage where the aim is to attract customers’ attention. THE STRATEGIES For the political enterprise, choosing the right kind of strategy is vital. As it operates in an environment that may be extremely hostile this will often be a question of life or death. Besides other competing enterprises the surroundings include a diminishing nation-state fighting for a raison d’eˆtre, international institutions carving out some kind of competence for themselves, international pressure groups and, in this context, the dangerous risk of a potentially hostile population questioning internationalism, which is the very core of the supranational and political enterprise. Basically the political enterprise may choose among four distinct variants drawn from the traditional military language of battles and encounters: (1) attrition, (2) defense, (3) offensive, and (4) the defensive/ offensive maneuver. Regardless of which strategy is chosen the enterprise must observe one simple but indispensable requirement: having a battle plan and being sure that all the generals know what it is. 1. The battle of attrition is a very dull and also very costly way of fighting. The basic idea is that the enterprise makes a calculation showing that its resources are larger than its competitor’s, and waits for the competitor’s arsenal to be depleted. In a military context this was a very cruel way of fighting because it meant that the two sides were killing soldiers until the most populous side had an army remaining while the least populous side had only a large graveyard. In more civilized warfare it meant fighting until the enemy had run out of ammunition. This kind of strategy was followed during World War I, but during World War II generals were more competent and fought alternative types of battles. The Reagan administration won the cold war by fighting a battle of attrition with the USSR. The United States scaled up its armaments and launched several new types of weapon systems—no one knew whether they would work but everybody knew that it would be enormously costly to try to make them. As the United States pursued this course it left the USSR with the choice of following suit or abandoning its status as a superpower. The USSR tried to follow and went broke in that attempt, with disastrous consequences for the rest of its economy. This was a very cunning strategy by the Reagan administration and in the end it did not even prove very costly for the United States, as the most costly weapon systems never reached the production line. An enterprise with the force to fight a battle of attrition must be sure it has done its math correctly. Montgomery fought a battle of attrition against Rommel in the Western Desert during the battle of El Alamein

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in 1942 and won. He had the largest resources, and he had the will to fight such a battle and tolerate relatively high casualties because he had come to the conclusion (probably correct) that otherwise Rommel and the Afrika Korps could not be chased out of their defensive positions. But Hitler made the wrong decision in the late spring of 1943 on the Eastern Front when he adopted exactly the same tactic as Montgomery. The idea was to let the infantry go ahead of the tanks and clear the minefields, and when the road was open let the panzers loose on the enemy. This was in fact the right tactic to attack the German position at El Alamein, but not the Soviet one at the Kursk salient. Montgomery at El Alamein had superiority against his enemy and could win such a battle; the Germans were only numerically equal to the Red Army at Kursk, and lost the battle. In the business context a competitive struggle means lowering prices, stepping up advertising or continuing to introduce new products, forcing the adversary to do the same. The battle of attrition follows well-known lines, with no surprises. Prices go down and everyone sees that this happens because of practices established by a particular business. This kind of battle was fought for many years between GM and Ford. It can also be seen in the relationship between Coca-Cola and Pepsi, although it seems there have been changes recently. Boeing versus Airbus also has some characteristics of a battle of attrition. Normally, it takes a long time before one of the competitors gives in, and it is very rare that the winner—if that is the correct term—is allowed to enjoy the fruits of victory. Very often new competitors have had time to squeeze in during the battle and suddenly find themselves with an enviable market share. The main drawback with the battle of attrition, however, is that it is detrimental to creativity and innovation. For many years IBM held a quasi-monopoly with regard to computers. It felt so secure, it became complacent. It ruled out inventions and innovations not fitting into its production strategy and business concept, without looking at what the customers would like and what the markets had to say. So in a relatively short time IBM was whisked away from the top slot, though it still is among the world’s largest software firms. Henry Ford made exactly the same mistake in the 1920s, producing the famous Model T and following it with the Model A. His production line set limits for his thinking, and furthermore he became complacent. He was shortly overrun by GM and Alfred Sloan, and Ford has since been relegated to the second slot in the US market. 2. The defensive battle is not much more entertaining, but it is sometimes necessary. It is a kind of battle you rarely choose yourself; it is forced upon you. Defensive battles are normally fought in circumstances where change imposes new patterns on the established industrial framework. These changes can be technological or geographical. A shift in

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competitive parameters is normally very difficult for management to deal with unless they see it coming very early and act fast to adapt, which very rarely happens. Normally management in supranational and political enterprises engulfed by such changes regard them as temporary, even ephemeral, and accordingly try to shrug them off without reviewing their own strategy and tactics. The result is a long, drawn-out battle in which the enterprise loses market share year after year, but in sufficiently small quantities to nourish the illusion that next year may see a turnaround. Customers’ attraction to fast food left a large segment of the restaurant business stranded in parts of Europe, and also affected the foodprocessing industry. The compact disc had an immediate impact on the recording business. The container meant that a considerable amount of shipping tonnage became obsolete and rather useless in a very short time. The same happened to harbors. All the enterprises engaged in these kinds of businesses had the opportunity to shift, provided they did so very fast. A few made it. The rest fought a defensive battle, trying to keep customers attached to their products—an impossible mission regardless of pricing and anything else they could come up with. In the short timespan available a whole new range of enterprises popped up and took possession of vacant market shares. Geographically, the shift from high-cost producers to low-cost producers left its mark on shipbuilding and the car industry. Back in the 1950s not very many thought the Japanese would be capable of outcompeting the Europeans and Americans (or be outcompeted themselves by the Koreans, who in turn face a competitive challenge from the Chinese). This shift took place primarily because production technology became well known and available to producers outside the established circle. As production technology did not develop very much for a long time, lower labor costs in other countries made it profitable to shift the production of ships and cars elsewhere. For quite a while the Europeans and Americans fought a defensive battle, using state subsidies and various protectionist or semiprotectionist measures to combat the rising sun—with predictable negative results. First, when new production technology (in the form of robots) and shifts in competitive parameters (towards more design and higher quality) were introduced it was possible to establish a new front line, so to speak. But this constituted another type of battle. In the meantime the defensive battle imposed considerable costs on the Europeans and Americans. The subsidies and protectionist measures kept in noncompetitive sectors production factors that should have been and eventually were shifted into more profitable sectors of the economy. So the defensive battle is costly not only for the enterprises but also for society

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and for the nation-state mobilized to furnish the ammunition for this policy. 3. The offensive battle is fascinating, thrilling and enormously costly. For small and medium-sized enterprises offensive is a must. They have to gain a certain size to survive. Competition in their part of the market resembles jungle warfare. Most of these enterprises never make it. For the larger enterprises it is only partly a question of survival. They struggle to be in the top five in their respective markets. Those who make it thrive. Those who do not are forced out of the market. The problem for these enterprises is that if they do not take the initiative their competitors may do so, setting the terms of battle according to their own preferences and strengths. So enterprises find themselves forced to launch the battle. Basically they can choose between two pure kinds of battles. The first is the so-called rencontre battle, meaning that the enemy is attacked where it is strongest, on the assumption that if a breakthrough is achieved here the battle is won. This is the tactic chosen by the allies during the World War I on the Western front. Hundred of thousands of soldiers were launched into headlong attack on fortified lines. The theory proved right. When the German lines broke the war ended in hardly more than a couple of weeks. The drawback is that a rencontre battle runs a great risk of developing into a battle of attrition. The allies won because they had more soldiers than the Germans. We do not need a highsalaried chief executive officer to manage such a battle. So a rencontre battle should only be attempted if there is a reasonable chance of breaking through fast, in this context gaining market shares of a magnitude that changes the balance between the enterprises in question. If an offensive is launched against a competitor in a geographical market where he is very strong or along a competitive parameter where he has his greatest advantages, odds are normally not good for gaining large market shares. There is a considerable risk that the enterprise, having started this, will need to use its capital to maintain the battle, thus depleting the resources of both enterprises; they may end up with more or less the same market shares, but their depleted capital will put a brake on research and development. Only if we spot a weakness in the armor of the competitor is it worthwhile to attack, and then the attack should be strong and merciless, achieving breakthrough immediately and ending the battle quickly. The key in the second kind of offensive battle is outflanking the enemy, attacking where he is weakest, pushing him back and forcing him to draw on reserves; this will thin out other areas of his front line, which will then be open for attacks. Outflanking is the normal procedure for success in battles. The German master plans for the Great War, which almost succeeded, and the plan for the offensive against France in May/

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June 1940, which did succeed, both applied this tactic: attack where the enemy is weak and does not expect it. Surprise him, force him off balance and move in for the kill. In a competitive struggle a battle of outflanking means that the attack comes in markets where the competitor is weak, in the hope of gaining market shares there. If this is successful the competitor is robbed of small markets but markets which contribute to increasing returns to scale. By pushing the competitor back towards his heartland, his hope of expanding is crushed and he is put on the defensive. Decreasing returns to scale reduce profits. Reduced profits mean less money for research and technology and advertisement. Then it becomes even more difficult to maintain product development and impossible to increase market shares. The enterprise ceases making new products and is relegated to being a manufacturer. Military history shows that with few exceptions success comes with the outflanking tactic. So does business history. The snag is that this kind of offensive takes longer and may give the opponent time to rally his forces to stage a counterattack before the offensive has achieved its objective. One of the successful offensive battles was the launch of Airbus about 30 years ago. At that time the American producers (Boeing, Douglas, Lockheed) had a near monopoly on the production of passenger planes. The Europeans or rather the French decided to attack and they created Airbus; they also found the right plane at the right time in the Airbus 300. There is every reason to doubt that this attack would have been launched if the nation-states had not stood behind it, though there is debate over whether, and if so to what extent, Airbus was subsidized. In the same track we find the satellite launcher business. How do we get a satellite into space? In the early 1980s the Americans again seemed to take an almost insurmountable lead with the space shuttle. When everything started to go wrong for the space shuttle, the Europeans went on the attack with the Ariane rocket, and have since held a commercial lead. The key to both these successes was to use simple technology and to make sure there was somebody to support the enterprise in case it went wrong. If the Americans had used simple technology to pursue their venture into space the Europeans would probably have been outcompeted, as the Ariane rocket is not based upon new or superior technology. The Americans made a jump in technology, which is praiseworthy if looked at from a long-term perspective, but economically and commercially unnecessary. That left an opening for the Europeans, who exploited it. Some years before the roles had been reversed. The Europeans were convinced that the next step in avionics would be the supersonic jet plane flying people across the Atlantic with a speed around Mach 2. That proved to be a fatal mistake. The public did not want such a plane. The

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Americans built the Boeing 747 based on the best use of new but proven technology, and offered travel fares much lower than before. Boeing almost went broke during the development of the 747. There is reason to believe that without its military business it would have been in deep trouble. 4. The battle of maneuver is the most interesting, the most rewarding but also the most difficult one, demanding great risks. It is a battle for the great captains, whether in the military or the business context. In military terms the tactics consist of exploiting the enemy’s weakness or, even better, forcing the enemy to open a weakness in his front line. Almost all great battles fall within this category, with the defensive offensive battle being the high point. The best example is the German offensive on the Ukrainian front in 1943, when Field Marshall von Manstein again and again forced the Red Army off balance and took the opportunity to make spirited counteroffensives. In fact, had it not been for Hitler’s stubbornness and Stalin’s rare willingness to listen to his generals the outcome of the war might have been different. The two opposing captains—von Manstein on the German side and Sjukov on the Soviet side—both had the same idea. As the two armies faced each other around the Kursk salient they each wanted to lure the other side to attack, let the attack roll on for a while until losses mounted and supplies became scarce, then launch the counteroffensive when and where the enemy had run out of steam. This was how von Manstein stabilized the German front line and reconquered Kharkov in the spring of 1943, after the German deroute on the Stalingrad front. Hitler decided that the German army should attack first and it was left to Sjukov to show how right he and von Manstein had been. The German army did not break through. After fierce fighting it had sustained losses that were untenable at that time in the war, and the Red Army started the offensive that took it to Brandeburger Tor in the heart of Berlin. Exactly the same can be done in economic competition: lure the competitor to attack where the enterprise is strong and has a ‘‘fortified position’’ by using psychological warfare—spreading the rumor that the enterprise is weaker than previously thought. Let the competitor expend financial and human resources, and when these are depleted launch the counteroffensive. The Japanese have provided a good illustration with their automobile strategy in Asia and Africa. They realized early on that competition would be very fierce in North America and Europe, squeezing profits. So they looked for emerging markets which they could enter and for some time regard as their turf. They found them in Asia and Africa. Fortunately for them these markets started to grow strongly, and the Japanese car manufacturers could increase their output more than their competitors in the well-known markets. The Japanese reaped increasing returns to scale, allowing them to be profitable and channel

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funds back to research and development, something that proved difficult for their competitors. They started to export higher-quality cars at lower prices to the markets in North America and Europe, and were rewarded by strong gains in market shares. When the Europeans tried to counterattack in Asia and Africa they realized that it was not easy to enter a market dominated by their Japanese competitors for a considerable amount of time. In fact many of them lost money trying to do that, and instead of inflicting losses on the Japanese car manufacturers fell even further behind. The battle of maneuver, which in business terms could be called the all-round competitive game, shifts the parameters permanently. It can only be fought if and when the enterprises accept their role as political enterprises and endorse instruments and tactics hitherto reserved for the nation-state. It is impossible to lure the competitor to attack without psychological warfare. Thus the enterprises need to apply espionage, sabotage and propaganda. THE NEW INSTRUMENTS Espionage may not be used in the open by the political enterprises, but it is certainly employed by them around the world. There is less secrecy and hesitation about revealing the use of counterespionage. As the most important breakthroughs in business are either in the sphere of high technology or in areas with a considerable time lag between the actual decision to go ahead and the product becoming available, the reward for being first is enormous. As General Patton said, ‘‘Get their firstest with the mostest.’’ This also means that if an enterprise can reap that reward, or at least achieve simultaneous arrival without paying the large sums in research and development, it is a sure winner. It can be seen how enterprises protect themselves against espionage. It is difficult to get into the headquarters or the office blocks, and it is almost impossible to enter the plants or have a look at the research facilities. In the military context many of the great battles have been won because one side possessed the adversary’s plans. The vital battle in World War II was not the Battle of Britain or the Battle of the Atlantic but the battles between the code-breakers on both sides. One of the reasons Rommel was so successful in North Africa was that he could read the British military dispositions, which were being tapped by an advance team put forward by the Afrika Korps. This was detected by the British in July 1942. One of the reasons Montgomery was successful was that he could read the German dispositions, and his ability to do that was not impaired but improved during the war. In business terms a new car or a new container ship is guarded like a military secret until its final launch, and even after that some of its secrets

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(at least for the container ships) are kept away from competitors. To do this some shipyards try to shelter erect roofs over their production facilities. Container transporters see advantages in having their own shipyard so that they can design and build new types of vessels away from the impertinent eyes of competitors, who undoubtedly try to get in anyway. It is never revealed how many containers the newest and largest types of these ships can carry. Maybe 6,000, maybe 7,000, maybe 8,000. This places the competitors in the unpleasant situation of not knowing the basis for fixing prices. Board rooms gradually shift to war rooms in these times. Every enterprise will have access to espionage facilities even if it does not want to make use of them. Even the most prudent enterprise is forced to use large sums of money to protect itself and its secrets against the prying eyes of competitors. Sabotage may not yet have entered the arsenal of measures used by the political enterprise, and if it has only a very few people will know about it. It goes without saying that a successful sabotage action against a competitor is not talked about but kept secret. An interesting case can be found in the aircraft business. A few years ago Boeing attempted to break up the partners in the Airbus consortium by holding out a tempting offer to one of the German partners. The answer was no. This is strictly speaking not sabotage, at least not in the normal way this notion is understood, but it is obvious and was never denied that the objective was to destroy the Airbus consortium. We can therefore conclude that what we see today is verbal sabotage, meaning attempts to lure away partners from competitors or attempts via advertising to give a false impression of the competitors’ products and/or production method. This topic will be dealt with under the heading ‘‘propaganda.’’ Another example appears in an article posted on the Internet, August 25, 1998, by Wendy Goldman Rohm, with the headline ‘‘Microsoft planned to sabotage competitors.’’ The article itself starts with the quote, ‘‘We should crash the system,’’ which, according to the article, was written in a memo from one Microsoft staff officer to another concerning a competing operating system. Now, no one knows exactly what these words meant and no proof has been offered that Microsoft or the staff member quoted actually intended sabotage. The point is, however, that people are beginning to think in these terms. The advantage of keeping competitors out can be so enormous that staff members are attracted by, shall we say, extraordinary methods. Propaganda has entered the panoply of measures used by the political enterprises. Some prefer to call it advertising, but this is hairsplitting. In 1995 a French-built ATR 72 aircraft crashed in the United States. It was a successful aircraft that had flown for a number of years and carved out a nice share out of the market for the French consortium. When it

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crashed an inquiry was launched. The American authorities said that the accident happened because the aircraft was not suitable for flying in winter conditions. The French maintained that it was due to bad management by the American pilots and sloppy maintenance by the Americans. Who was right? The point is that the statements by the American authorities could be used by the competitors of the ATR 72 whether or not the context in which these statements were made was taken into consideration. In 1995 a new Danish specialty (Gaio) was launched on the Swedish market. Shortly afterwards researchers at a Swedish institute went public with statements detrimental to the reputation of the product, which was developed to improve health. Then it was announced in the press that the two researchers had some sort of connection to a Swedish competitor to the Danish enterprise that marketed Gaio. Who was right? In the big battle over the Brent spar platform in the North Sea, much of the controversy was about whether Shell’s method for disposal of the platform was environmentally sound or not. Shell maintained that it was. Greenpeace said the opposite. After the dust had settled there seemed to emerge a consensus that Shell had in fact been right. Then of course the relevant question is, why did Greenpeace move as they did, and what was their interest? Who supplied the information forwarded to the public by Greenpeace, giving the impression that the method proposed by Shell was not a good one? This is not a question of who was right, but of why things went as they did. Boeing and Airbus are competing in the lucrative market of long-range civilian aircraft. Boeing is offering the 777, a big plane with two engines. Airbus is offering the A-340, also a big plane but with four engines. As some routes take passengers across oceans, there is a legitimate concern among passengers as to whether two engines are sufficient. Is it fair advertising or propaganda by Airbus to raise this subject, and are there lines that should not be overstepped? Espionage, sabotage and propaganda are instruments still in the embryonic stage as far as the competitive game is concerned, but judging from historical experience we may expect them to enter business life in the context of the political enterprise. This is why we will see the development inside political enterprises of what can be termed the enterprise’s ‘‘intelligence bureau’’ or ‘‘intelligence system’’: a group of people working more or less in the same way as the CIA, Mi5 and other wellknown intelligence agencies of big nation-states. Their purpose will be to collect and analyze information of interest to the political enterprise, whether or not that information is readily available. This is also the place where espionage, counterespionage, sabotage and propaganda will be considered.

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THE PROFILE OF MANAGEMENT As the political enterprise develops so will the way it is managed. And the trend will be towards amalgamating business culture with military culture. This calls for simple, strategic management at the top, and a staff to take care of the more detailed operative and tactical questions. Top management will be far less involved in daily decisions and instead devote more and more time to the fundamental questions about the competitive position of the enterprise and how to manage the competitive battles. The conceptual point is to institute simple management principles applicable every time there is a change in management. A change in management should be no more than a change of nameplates indicating which persons are responsible for managing the enterprise in accordance with principles known to all employees. Consistency, continuity and credibility (‘‘⫹C3’’) are the key words. All the rest belongs to logistics and should not bother top management. General de Gaulle made that clear when he was a student at the French War Academy. He was ‘‘appointed’’ commander-in-chief of the French forces and much to the chagrin of his teacher launched a terrific and unstoppable offensive by the forces he was commanding in the war game. To stop him from the ultimate triumph the teacher interrupted and said, ‘‘How do you manage your supply trains to sustain the offensive?’’ General de Gaulle did not hesitate for one moment but turned to the student having the role as his chief of staff and said, ‘‘Chief, answer the colonel’s question, logistics do not fall within the competence of the commander-inchief.’’ Six basic rules emerge as the lesson of several hundred years of military warfare. 1. Get the message across to all ranks so that they understand what the army/enterprise is going to do, and what the ranks are expected to do in that particular context. Today we are dealing with human resources and the aim is to attach them to the enterprise. Labor is no longer a production factor to be put in an equation on the same line as capital. It is a question of managing human beings. The story goes that Field Marshall Haig, who commanded the British armies in northern France from 1915 to 1918, was told by his staff that he needed to communicate more with the troops. The background was that he was living a long way behind the front, in comfortable surroundings, while his soldiers were living in the mud in the trenches. At a parade he followed the advice and stopped in front of a stunned sergeant, who suddenly found himself looking into the face of the field marshall while thousands of other soldiers were spectators. Haig asked, ‘‘Where did you start this war, my good man?’’ The perplexed soldier

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answered, ‘‘I did not start this war, sir, I think the Kaiser did.’’ This was Field Marshall Haig’s last attempt to communicate with the troops. It is a prime example about how not to do it. Two better examples can be found following Field Marshall Montgomery during World War II. When he took command of the Eighth Army in the Western Desert in August 1942, he delivered a short and precise lecture to the bulk of higher-ranking officers. He went right to the point and did not back away from telling unpleasant things. When he was in command of the Allied troops before the Normandy landings he personally went to meet the troops constituting the first wave of attack and talked with them sitting on the front of his jeep. He practiced what has later been called management by walking around. The lesson from Montgomery’s leadership is that the leader needs to be known and seen and understood by the troops. This inspires confidence. Montgomery boasted that all his battles went according to plan. That was of course not true. But the troops believed it, which increased morale. Montgomery also drew the line about what to communicate to different ranks. And that is important for the manager in the political enterprise. High-ranking officers must know exactly what the enterprise is doing, why it is doing it and how. Otherwise they cannot react on the spot. They must be in the know, so to speak. The commander/manager must open himself up to this group. It is not necessary that they like him—in fact, it is irrelevant. They must know what he is trying to achieve and it must be clear that those who do not want to come along should quit instead of remaining there as deadwood. Trust, confidence and openness are key words. The leader/manager must be open to suggestions, even criticism, from the higher-ranking officers. They must never be afraid of approaching him/her and they must always be encouraged to say what they mean, even if it is unpleasant for the leader to hear. Too many leaders have succumbed to the temptation to turn their surroundings into a haven for yes-sayers. This is a real danger for the successful leader, be it in a military or business framework. When a new leader takes over he is normally surrounded by people who have followed his/her rise to the top. They know his/her weaknesses and they are used to saying more or less what they mean. As the leader grows more and more successful these people will be rewarded by promotions from the staff function to the line function. Their successors will be people who have not followed the leader during times of weakness or self-reproachment—for example, a politician in opposition or the sidelining of a business leader. They only see and know the successful leader who has achieved many important objectives. So instead of thinking about what advice they should give (which is why they were appointed) they think about what the leader wants to hear. Gradually the leader loses touch with the grassroots re-

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ality of the situation, because well-meaning people do not perceive their real duty. They may think that the leader they serve has a magic touch. This is what happened to Margaret Thatcher, General de Gaulle, Konrad Adenauer and many other long-serving government leaders. For lower-ranking officers and the rank and file the need to know the content of the plan and the strategy does not exist. They need to know their role and they need to know that the leader cares about them and takes the time to communicate with them. For soldiers this means that they should feel that the commander tries to fight the battles with minimum casualties. Montgomery was good at that, even if his first major battle at El Alamein was a battle of attrition. In an enterprise it is a question of job security and attachment to the enterprise. If the enterprise gets into trouble the last thing to do is to lay off staff. This conveys the impression that the leader does not care, as a general would by casually throwing his army against enemy positions. A leader must never give the staff/soldiers the impression that they will be the first ones to bear the costs/burdens. The first one to do that must be the leader. Field Marshall Haig, in the evening of the first day of his Somme offensive in the summer of 1916, after hearing that the total losses for that day had been 60,000, remarked ‘‘highly satisfactory.’’ One wonders what might have happened to the morale of the soldiers if they had heard that remark. The leader must also be seen and heard. In this way the staff can put a face on the name. They know that the leader exists, and if he/she is successful they will start to tell anecdotes and stories about him/her. It is said that in the McDonell company the manager from time to time would come on intercom communicating to all staff news of different kinds relevant to the company. This conveyed the impression that the leader cared that staff knew what was going on, even if the same information was readily available from many other sources. 2. The capacity to make decisions is the hallmark of good management, be it in the military, an enterprise or public administration. Staff must know exactly where an organization is going, as it has run with great speed to stay ahead of competitors. No decisions means that somebody else is making them, imposing consequences on management. Changes in decisions mean confusion, chaos and collision—the ‘‘⫺C3’’ of a badly run enterprise. During World War II two golden opportunities to decide the outcome were lost because of indecision. In July/August 1941 the German army had an open path to Moscow, but Hitler and the generals disagreed as to whether the army should continue onward or move south to eliminate the south wing of the Red Army. Finally, after almost six weeks of dithering, Hitler made up his mind and moved southwards to catch 600,000 soldiers from the Red Army. It was a great tactical victory, but also a

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strategic disaster that may have lost the war for Germany. In August/ September 1944 Eisenhower could not make up his mind about how to shape a plan for the further campaign by the Allied troops after the victory in Normandy. Without a master plan, his subordinates were left to quarrel. Montgomery, Patton and Bradley all thought that they were going to lead the attack and dearly wanted to do so. Eisenhower listened to all of them, and said nothing. Exactly at the moment when clear and decisive leadership was required, Eisenhower displayed indecision. He simply lost the firm grip on his armies which was and is vital when a battle is reoriented. The war also provided visible examples of clear decision making, leaving nobody in the dark and assuming great responsibility. Hitler’s decision in early 1940 to reject the plan proposed by his general staff for the attack on France (almost a copy of the Schlieffen-plan from 1914) and opt for the plan proposed by von Manstein (which aimed at isolating the left wing of the French army against the Channel coast) is a good example. The Japanese plan to attack Pearl Harbor can be criticized on many accounts, but its strategic outlook and the determination with which it was planned and put in motion reflects great resolution. The implementation—unfortunately for the Japanese but fortunately for the Americans—was not as brilliant as the plan itself. In the context of managing a political enterprise it is important to realize that leadership is about leading. As Admiral Nimitz stated during the war, ‘‘When you are in command, command.’’ The staff and the workers and the customers expect such leadership and start to wonder when it is not forthcoming. It is a mistake to think that informing the staff means consulting the staff about the strategy and tactics of the enterprise. Instead, the staff should be informed what the enterprise is planning to do—after the commander/manager has made up his/her mind. Admiral Nelson once stated, ‘‘If you want an excuse for doing nothing, convene a council of war.’’ Meetings are called with this purpose in mind. Henry Kissinger writes in his memoirs that in a crisis most people are ready to go along with a consensus but few are ready to shape it. In the political enterprise no meetings should be called, except purely for information purposes, without the chairman of the meeting having a clear idea of what the conclusion should be. The good leader, the strong leader calls the meeting to make sure that he has not overseen objections or traps to the decision he has made and is about to communicate. He does not call a meeting to find out what should be done. The purpose of meetings is not to find solutions but to communicate them, and to make sure that everybody knows what they are supposed to do. If policymaking is moved out of the hands of management, or management surrenders it, ‘‘⫺C3’’ effect starts to work. Those who attend meetings will not have been educated, hired or trained for policymak-

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ing. Most if not all will have been educated, hired and trained to carry out policies communicated to them in clear and unequivocal language. If management calls a meeting without having made up its own mind, it ceases to be management and instead assumes the role of arbiter between factions and groups in the lower echelons of the enterprise, the army or public administration. It is in fact very simple. People like to have a leader or management that carries out leadership. But they like just as much to be told what the policy is. 3. Without realizing the distinction between objectives and means, the political enterprise will not be able to respect the ‘‘⫹C3’’ (consistency, continuity and credibility). What is right if seen as a means can be deadly wrong if it really is an objective, and vice versa. The enterprise must in its communication avoid all risks of a mix-up between these two key concepts. In many other areas mistakes can be detected by the individual committing them, but a mix-up between objectives and means can lead a fully competent member of the staff to drive headlong into disaster still believing that he or she did the right thing. From military history we can quote several interesting examples. In 1915 the Allies sought to open the way to Russia by forcing the Turkish Straits. The plan was the brainchild of Winston Churchill. It called for the Royal Navy to destroy the Turkish coastal batteries and sail through the Dardanelles. To perform that task the Admiralty in London selected a group of old but appropriate battleships to bombard the coastal batteries. These battleships could not be used in the North Sea against the German High Seas Fleet because of inferior protection and speed, but they could be used as floating batteries. Everything went according to the plan until the last and decisive days. Some of the British (and French) ships hit a minefield and sank. The commanding admiral broke down in tears and withdrew. The lesson to learn here is that the Admiralty should have spelled out in detail to the commanding admiral how important the operation was strategically and that he had been allocated ships for which no other role could be envisaged, so losses would not be important as long as he got through. This was done in a small way in December 1944 by an American colonel to a young and inexperienced officer during the German Ardennes offensive. A strategically important crossroads had to been held by the Americans. No other forces were available than a collection of units that had been thrown out of their forward positions by the German onslaught. The only officer at hand to take command was a lieutenant newly graduated from West Point. The colonel called him in and told him that he had to hold the crossroad, or Patton’s third army would be unable to relieve Bastogne. The colonel informed the lieutenant that during the impending German attack he would many times, on the basis of what he had learned, come to the conclusion that the position could not

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be held and that he should withdraw. Every time he did so he should recall the imperative of holding the crossroad. This was a very clear message, leaving the young commander in no doubt. His tiny force was the instrument. The objective was not to save it or minimize losses or keep it intact as a fighting force. The objective was to hold the crossroad. The British Admiral at the Dardanelles thought that to conserve his ships was an objective. It was not. The American officer at the crossroad knew that his force was an instrument. The management made the difference. In the first case the management is to blame and in the second case it is to be praised. In business terms exactly the same principles apply. If, for example, an enterprise decides to launch an attack on a competitor by taking away some of its market shares through aggressive price-setting, leading to losses for the attacking enterprise, this must be known by people on the spot, so that they do not get nervous when they see the ledger sink into the red. What matters is whether they actually gain the market shares management wants. A temporary loss is accepted as an instrument. When Boeing and Airbus compete to offer a long-haul aircraft such as a beefed-up version of the 747 or the A-3XX, the objective for each is to prevent the other from getting a monopoly in that particular segment of the market. Boeing has had that for decades with the traditional 747, which has contributed handsomely to Boeing’s profit. That has made it possible for Boeing to compete with Airbus, possibly to offer low prices. So Boeing has used financial resources earned in one segment of the market to reduce Airbus’s profits in other segment of the market (shortand medium-haul aircraft). Airbus is trying to turn this around by launching a competitor to the 747, eroding Boeing’s profits in that segment. In neither case is the objective to earn a profit in that particular segment. The objective is to reduce the profitability of a competitor. Daimler-Benz, VW, BMW and Toyota all operate in the upper echelon of the luxury car market, making it impossible for anyone to reap a profit in that segment. This is because they cannot allow one or two manufacturers in the segment to reap a profit that would immediately be channelled into attacks on market shares in other segments. When a military or a business operation is launched, management should write down on a piece of paper what the objective is and which means are envisaged to achieve that objective. And management should make sure that no one confuses the two categories. 4. A calculated risk is unavoidable in war as well as in business competition. Risks have to be taken, but there must be a threshold above which further risks are not acceptable—and the staff must know where that threshold is. Excuses for continuing loss-yielding operations should only be tolerated if accompanied by substantial evidence explaining why and how such an operation can be made profitable. Bismarck was un-

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doubtedly one of the greatest statesmen because he knew how and when to stop. One of the best examples of calculated risk in warfare is the Arnhem operation in September 1944, where the Allies landed three airborne divisions behind German lines, in an attempt to conquer the bridges over the lower Rhine and create an opening for an armored thrust into the heart of Germany. It was definitely a calculated risk. Everyone from Eisenhower and Montgomery down knew that the stakes were high. If the operation had been successful the war might have ended in autumn or early winter 1944 instead of late spring 1945. The Allied forces would have met the Red Army in Poland instead of central Germany. Millions of prisoners in concentration camps would not have perished. The huge potential reward warranted a high level of risk. As we now know the operation ended with a spectacular Allied advance but it failed in its strategic purpose. Another example—this time of unnecessary calculated risk—is the Japanese operation in June 1942 to take Midway Island. At that time in the war the Japanese Imperial combined fleet was so superior that regardless of the American ability to read the Japanese codes Midway could hardly have been defended. The Japanese overlooked this fundamental fact and engineered a complicated action that split up the fleet and involved diversionary attacks on the Aleutians Islands near the Alaskan coast. As it turned out, the US Navy was just able to assemble a task force capable of defeating the Japanese; the three American carriers faced four Japanese ones, despite the fact that the full force of Japanese carriers at that time in the Pacific was about eight. Had they all been at Midway such an overwhelming superiority would probably have resulted in a quick American defeat. It is difficult to understand why the Japanese chose to fight such a decisive battle without employing their full strike capacity. Here is a lesson for calculated risks in business and competitive games: know exactly, before the game starts, whether it is necessary to take a risk, and if it is not, use the full force of the enterprise to achieve the objective. If calculated risks are to be applied, make sure that a good deal of work is put into an effort to spell out what it means and what the enterprise will need to sacrifice to achieve the objective. Benchmarks should be used to follow developments, telling management to call off the operation in case it goes wrong. Most if not all successful enterprises have lost money in one or several operations, but what distinguishes them from unsuccessful enterprises is that they stopped and cut their losses. This can be generalized in a positive and a negative way. In a positive sense, the enterprise should be clear, before the operation starts, about the expected evolution. If the enterprise is prepared to sustain losses

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during a certain period, they should not panic when the losses actually manifest themselves on the accounts. If a loss in market shares is anticipated, this should be remembered when it happens. Enterprises should always keep in mind what the original plan foresaw in terms of unpleasant developments. All too often unpleasant news leads to revision of the original plan, even if the news was foreseen. If management is not prepared to go through unpleasant but planned or predicted stages, then the operation should not be launched. In the negative scenario management swings the other way and becomes so hypnotized by the scheme that regardless of what happens they continue to accept losses. If losses rise above what was foreseen in the calculated-risk approach, management must discontinue the operation. This can be difficult, especially if the idea came from top management. To call it off means that top management admits mistakes. But here another catchphrase is worth remembering, and that is the title of one of Solzhenitsyn’s books: We Never Make Mistakes, Comrade. Those who cannot do so will fail in top management. The story told by Field Marshall Montgomery’s chief of staff is that he often gave the field marshall advice that was rejected out of hand. Then a couple of days later the field marshall would advance an idea fairly close or identical to the one proposed by his chief of staff. Whether Montgomery knew that the idea actually came from his chief of staff is irrelevant. Both men found a way to shape ideas and be creative, and both men probably rejoiced in their beliefs about who fathered the idea. 5. There is something called ‘‘unity in command.’’ The idea is very simple but not always observed. With the stress on human resources responsibility and competences must be distributed following clear lines, so that everybody can act without fear of being overruled. This not only promotes quick decisions but also encourages bold action in the framework of calculated risk. If something goes wrong the worst thing for the staff member is not to have to defend the decision, but to be dragged into a procedural discussion of whether he or she was actually allowed to make such a decision in the first place. In that case the whole scene shifts from a normal business issue to a question of rivalry and judgment in interpersonal relations. Even worse, if everything goes right envy can arise if somebody feels that the wrong person gets the rewards. The story goes that after the Battle of the Marne a French general was approached by a lady during a dinner party. She said, ‘‘General, from what I hear the honor for winning the battle is not really yours. Is that correct?’’ ‘‘I don’t know, madame,’’ he answered. ‘‘But I do know that if it had been lost you would certainly have heard that the responsibility was mine.’’ Command requires the distribution of competences, leaving no one in the dark. Any obscurity, any doubt must be removed. The responsibility for this rests exclusively with top management. The problem is that this

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distribution must answer the absolute need for transparency and at the same time allocate responsibilities to the individual in accordance with his or her ability. If too much competence is allocated to a certain individual, that person will face too much stress and in the long run will be lost to the enterprise. If too little competence is allocated the individual may be frustrated and may be lost just as quickly. It is a little bit like young football stars. They should be selected for the first team exactly when they are ready. The art is to know when that moment comes. That is why a good coach is worth millions of dollars! Many people live under the impression that dictatorships are efficiently run organizations. This myth has been difficult to destroy. Both Nazi Germany and Communist Greater Russia were in a mess of confusion—in fact they were among the world’s best examples of ‘‘⫺C3!’’ Hitler used to play his subordinates one against another so that no one ever knew what he could do. Hitler interfered incessantly with tactical dispositions on the front, with disastrous results. Stalin ran a system of government and a party, and even if it was well known that the party had the upper hand, much depended on personalities. The lesson is quite clear. Two or more organizations competing to do more or less the same constitutes a recipe for disaster. Democratic Britain constructed one of the most efficient government machines the world has ever seen, and mobilized a greater part of the population in the war effort than anybody else—a much higher percentage than Nazi Germany, which first started to talk about total war in January 1943. This was due to the fact that the population was almost unanimously behind the government, which did not need to persuade or force people to join in the war effort. It could reserve its whole effort to getting the maximum out of Britain’s resources. To a large extent the credit should go to the spirited leadership of Ernest Bevin, who came from the trade unions and went on to become foreign secretary in the postwar Attlee government. Enterprises and organizations often have two sets of command lines. One is the official one printed in booklets about the enterprise, giving names of people who fill various slots. The other one is kept in the drawers in top management offices and shows who is actually in command—or in other words who top management contact in various spheres. This is deadly in the long run. If the official line of command does not correspond to top management’s wishes it has to be changed to do so. Unity and clarity in command also require a certain amount of forgiveness when managers a bit lower makes decisions and fail, providing that the decisions fall inside their competence. When they do make mistakes an inquiry may be made. However, the purpose should not be to find out who did it, but to find out what went wrong so as to remedy

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the procedures or way of thinking. Mistakes are all right provided they do not occur too often—but do not repeat them! If top management does not accept a certain number of mistakes, the result will be a reduction of speed in decision making. Everybody will start thinking that mistakes will have to be avoided and that all sides of the problem will have to be painstakingly examined to make sure that nothing is overlooked. While that happens, a competitor makes the right decision and moves ahead. Top management must have full confidence in the ability of people they have put in various slots to make decisions. If they do not there is something wrong with top management. What top management can and should do is—without slowing the decisions—to put the right questions to the decision makers. By doing that top management gives the staff the feeling that top management is backing their decisions but at the same time directing them a little bit and giving a helping hand without pulling the rug from under their feet. If done gently it may be felt as a great support, but the key point is that the question should be asked and the decision implemented. Finally one question needs to be answered: what does top management do if or when somebody down the line disobey orders but achieves success? If the move is successful and the decision maker is reprimanded, nobody else will do the same again and the enterprise will start to work according to the fighting instructions for the Royal Navy before the Napoleonic wars. If the decision is lauded there is a risk that discipline will break down and everybody will feel that they can do what they want. The study of military history can help top management in the political enterprise. In 1797 then Commodore Nelson disobeyed orders given by Admiral Jervis. Nelson was right; Jervis’s original order was wrong and could have led to a defeat because the enemy fleet behaved otherwise than envisaged by Jervis. When Nelson acted as he did Jervis’s flag captain made an unkind remark but was cut off by Jervis, who realized that Nelson was right. In the beginning of the twentieth century Admiral Lord Fisher of the British Admiralty declared, ‘‘anybody can obey orders, the art is to know when not to do it!’’ The answer is that it can indeed be done in exceptional circumstances and then top management shall make it clear why it was right not to obey orders but to exercise its own judgment. In fact top management could take some of the credit for it! 6. Correct assessment of possibilities is vital for an enterprise. The enterprise must always act in accordance with its strength to avoid overstretch, which will give the staff the impression that top management is not fully in command. From military history we can find an example of adapting to a change in one’s own strength by studying the German plans for attack on France in 1914 and 1940. The 1914 plan (Schlieffen-plan) aimed at wheeling

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around the western flank of the French army. At that time the German general staff felt that Germany was sufficiently strong to conquer the whole French army. That was also the original plan in 1940 but General von Manstein realized that the relative strength of the armies had shifted to the disadvantage of Germany. He accordingly proposed to limit the German operation to destroying, in the first place, about one-third of the French army, and then, from such a much better tactical position, moving on to destroy the rest of the enemy. Or in other words he interpreted the consequences of diminished German strength. To apply a copy of the Schlieffen-plan in 1940 would have been overstretching, and most likely the German offensive would have been stopped in southern Belgium or Northern France. The French were less cunning. They thought—for some time, correctly—that the German offensive in 1940 would follow the same lines as the one in 1914. They also anticipated that the enemy would use the same tactic as in 1914, even if a study of the German offensives at the Western Front between March and July 1918 showed that the Germans had introduced a new offensive tactic aimed at attacking where the enemy was weakest and pressing on relentlessly. So even if the French did not commit overstretch, they committed another sin—namely, complacency in thinking that today and tomorrow will be exactly as yesterday. This leads us to the conclusion that correct assessment of capabilities must include: • One’s own strength (strangely enough, this is often overlooked by policymakers who devote time and energy to studying the strength of the enemy or competitor). • The strength of ones’s enemies and/or competitors. • Instruments available to the enterprise and its competitors.

In business terms, IBM demonstrated complacency when overlooking new technology and its applications in the 1980s. So from a position of formidable strength IBM went down the ladder, even though it could have applied the new technology. A whole string of European enterprises have broken their necks trying to penetrate or establish themselves on the American market. They did not perceive the risks, the costs and the strain of entering this market. Especially liable to combine complacency and overstretch are enterprises going outside their normal business: for instance, a trading company entering manufacturing. Such ventures may go well, but only if the enterprise has done its homework to find out completely and without reservation whether it has the managerial skills and financial resources to make the transition. The answer is No more often than management

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concludes. Does an insurance company entering the banking business know something about banking? If not, it is unwise to move in that direction. SOME IMPERATIVES FOR THE POLITICAL ENTERPRISE As the enterprise gets more and more into the mold of a political enterprise it is necessary for it to learn and adopt certain skills applied and refined by the nation-state and politicians. This is primarily a matter of depicting the desired picture or profile of the enterprise for the public. Politicians did not care much about this some decades ago. They fought elections on platforms of policies. Now it is different. Elections are rarely won or lost on policies, which hardly play a role in the struggle to get on the screen. Today many enterprises need to be recognized in order to attract business. If they do not enter the game themselves they can be pretty certain that people from the media world will devise an image for them and the picture or profile they present will probably not be what the enterprise wants. The enterprise cannot avoid the battlefield, but it may have the privilege of choosing between fighting on substance (its policies and what it stands for) or a superficial image based on procedures and manners of behavior. The wise enterprise will choose substance as its battlefield. In the following it is tacitly assumed that this is the case. 1. The enterprise needs to have a clear strategy and to map out the tactic to pursue that strategy. Only if the enterprise is clear about what it wants and why and how it will pursue these goals can it face the media with any prospect of success. An enterprise confident of its own abilities to act as a political enterprise stands a much better chance of getting the upper hand than an enterprise that does not really know or care, and just waits for the media to find the weak points in its armor. In fact this requires an offensive posture by the enterprise whereby it wants to be known and does not shy away from meeting the media. In fact it may decide that since media contact is unavoidable, the tactic visa`-vis the media should be an offensive one. The offensive strategy could also be named a preventive tactic in the sense that an enterprise, having built up credibility over many years and having managed to get through with its message, stands an immeasurably better chance of being believed if it has to explain mistakes or faulty judgment to the public. In the political world President Clinton’s problem in telling about Monica Lewinsky was not what he said or did not say, but the years during which he built up negative capital regarding his credibility, instead of the positive capital that would have made his explanations satisfactory. The enterprise can learn by following the slogan of the British special troops known as the SAS: ‘‘Who dares win?’’

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At the least, the enterprise must realize that those who do not dare are sure to lose. They will not even enter the playground or the battlefield. 2. The enterprise must develop what could be called an ethical profile or an ethical bible for spelling out in very clear and unequivocal terms what it stands for. Many nation-states have for centuries had such a profile and called upon its citizens to die for it. With an enterprise the sacrifice asked for is less, but could be described as ‘‘total commitment.’’ No half measures are tolerated. Management must assume full responsibility and design the profile. Staff must follow it, understand it and even worship it. If they are unwilling they should be encouraged, even asked, to leave and find another place to work. This is not a luxury game for management. It is vital that the profile sinks into the heart and soul of every individual spending his or her active life with the enterprise. And it must be worded in such a way that it is easily understood by staff in the lower echelons: simple, understandable, relevant to real life. What does the enterprise stand for? What does it support and encourage? What is against the principles of the enterprise? What does it reject? The difficult thing is to craft this ethical profile in such a way that it relates to actual society so that when the staff reads it they will associate it with something that they see or meet in daily life. If this is not done, it is extremely difficult to reach all the staff and a good many points will be lost. The ethical profile should be general in nature, applicable not only to a particular enterprise but in the daily lives of the staff members and their families. Otherwise the staff will not really use it, because family is a necessary part when it comes to attracting people through ethics. In the long run it is not only staff, but also their families, who are associated with the enterprise and constitute its most valuable capital. The profile should be useful in the daily activities of the enterprise. It is an easy task for top management to sketch ethical parameters meeting these demands. Those who make it can be pretty well assured that their enterprise will be successful. Those who cannot will be assured that for a considerable distance into the future they will pour money into consultants. There is nothing wrong in that, but consultants are unlikely to define what the enterprise stands for if top management cannot do so itself. 3. Nothing is really the way it looks, so when the ethical profile has been created the first thing is to go through the enterprise to see whether it fits the bill. Management may think that the ethical profile reflects the enterprise as it is and as it works, but this is rarely the case. The problem is to find the right group to make such an analysis. Using an outside consultancy is hardly a good idea, as the problem is one closest to the

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heart and soul of the enterprise. Neither should management conduct the analysis, as they made the blueprint on the basis of what they think they saw and the way they think the enterprise operates. This is a case where the enterprise needs a guerilla group recruited from inside and loyal to the enterprise but trained to disbelieve anything they are told. From time to time such groups are necessary. We may also call them internal auditors with regard to substance. They should be asked to go through the whole scheme and find all the mistakes possible: the more mistakes the bigger the reward for the group. In fact they should use methods corresponding to what the enterprise’s enemies or competitors—or even better, a prosecutor—would apply. Only on the basis of a report from such a group can management rest assured that the ethical profile is applicable and corresponds to the enterprise’s tradition. 4. The next step is do the same with regard to competitors and suppliers. That is, go through their heart and soul. For this to work the enterprise must tell suppliers and possible partners, in clear language, what the enterprise stands for; it must also mark its turf vis-a`-vis competitors. To do that the enterprise needs an intelligence system like the one described in ‘‘The New Instruments’’ earlier in the chapter. It is perfectly legitimate to draft such a profile for competitors and even more legitimate to do so for suppliers. Doing it for competitors takes the political enterprise a good deal of the way towards defining and understanding its own uniqueness or lack thereof. If many enterprises draw a more or less congruous ethical profile the segment risks to be overcrowding. Besides helping in drawing the profile of the enterprise itself, the information gathered about other enterprises will be useful in the competitive game. At the same time, suppliers must understand and accept the kind of ethics applied by the enterprise. It is out of the question to spend large sums of money to develop an ethical profile and then be caught redhanded by the media because one or more of the enterprise’s suppliers have not undertaken all necessary efforts to comply with the regulations and rules. In many cases such conformity—and the certainty that it will be respected—are even more important in relations with suppliers than are price, quality and delivery guarantees. There must be no bellyaching or backpedalling. In fact the political enterprise must be quite ruthless in its dealings with suppliers. Here we see a kind of patron-client relationship in the political sense. The political enterprise takes the suppliers under its wing and in return for protection demands complete ethical loyalty. To make sure that it gets this loyalty, it may once again need to call upon its intelligence group. 5. According to Murphy’s Law, anything that can go wrong, will go wrong. Sooner or later mistakes will be made; wrong judgments will

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lead to wrong decisions and the enterprise will be exposed in the media. In such cases the enterprise has a very limited amount of time in which to get control over events. Sometimes it can be a matter of hours. If the critics come first they will take over, and soon it will not be a question of what went wrong but whether the enterprise is trustworthy and credible. And a public discussion on that turf, after being caught in some wrongdoing, is a difficult game. How to react? The key rule is, ‘‘It always goes wrong in the cover-up phase.’’ Step One: However painful, whatever the costs, get to the media first with an explanation of what happened. Do not wait. If the enterprise cannot get the whole explanation ready immediately, but knows that somebody else is on its trail smelling blood, it should announce the essential problem and add that the matter is under urgent investigation and further details will be given as quickly as possible. Then the enterprise acts first, making it clear that it wants to cooperate with the media and not work against the media. Step Two: Put all—I repeat, all—the cards on the table when available. If there is uncertainty about crucial elements awaiting further analysis, say so. When things go wrong in politics and in business it is almost always because initially a half-baked explanation is attempted, and is later revealed as insufficient or misleading. And here the ground shifts in a split second from the substance of the issue to the credibility of the enterprise. If the problem is a dangerous material still being analyzed, then say that there does indeed seem to be a risk with regard to that particular product. Say that the seriousness of the problem is unclear, but it is being tested and in the meantime the product will be withdrawn. The enterprise will make announcements as soon as there is further news. And then it should follow through, returning to the matter at regular intervals and telling about the interim findings and how the investigation is going on. Otherwise the enterprise risks somebody else finding out and informing the media. Step Three: Announce without hesitation the policy being implemented by the enterprise to reduce risks. When some years ago there was a problem with bottled-water manufacturer Perrier the enterprise decided right away to recall bottles, without hesitation. The enterprise gained credibility. When the Mercedes Benz A car failed during the Elk case Daimler-Benz very soon announced a plan to solve the problem and stopped the marketing of the car. The public was assured that the problem was being taken seriously. This approach will almost always be cheaper in the long run. People know that we all make mistakes, including political enterprises. We do so ourselves in our daily lives. What people do not like is when problems are explained away, swept under the carpet or not addressed.

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Admiral Cunningham was in the eastern Mediterranean in 1941 when the German army attacked the Greek island of Crete, which was reinforced with British troops. The defense could not repulse the German paratroopers. In the headquarters of the Royal Navy in Alexandria, Admiral Cunningham and his staff debated whether evacuation should be carried out or not. As the Luftwaffe had air supremacy, evacuation would be costly and many warships would be lost. The staff advised against it. Then the admiral said, ‘‘Gentlemen, we cannot let the army down. It takes three years to build a new ship, it takes three centuries to gain a reputation. The evacuation starts tomorrow.’’ Step Four: Be prepared to engage in dialogue with the victims or those who have suffered in one way or another. At first, the enterprise does not need to be specific. Just the announcement of readiness to address the problem and to see what can be done is enough. Later, of course, the enterprise needs to be much more specific and put flesh on its promises. The fact that the enterprise pledges help removes the victims or potential victims from the group of aggressors, and as they are the ones directly involved this constitutes a vital achievement for the enterprise. Otherwise the media will start to show pictures and interview victims, who will gain public sympathy. If real harm has been done to individuals the enterprise will have to pay anyway. If harm has not been done the token of small compensations will be to the credit of the enterprise. 6. Such a plan will only work effectively if the enterprise has prepared the ground by mapping out a publicity strategy concerning its ethical profile—that is, a strategy to make its profile known—and implements it. The political enterprise will thus be well known to the public, as will the principles it stands for. This will allow the political enterprise to take the offensive with regard to certain decisions that clearly will meet opposition. So instead of allowing these decisions to be detected later and then having to apply defensive or damage-limiting maneuvers, the enterprise should publicize the decision before it is implemented. Shell could have announced that it was going to dispose of Brent Spar in the way it did, accompanied by extensive explanations as to why this method seemed the best. Companies investing in a country whose human rights record is questionable, and who therefore are closely watched by Amnesty International or Human Rights Watch, may announce that they have come to the conclusion that their investment is in the interest of the people living in the country—and provide evidence to that effect. Or the enterprise can say outright that it does not care about human rights and will invest where it chooses. That is a possible posture provided that the enterprise has decided to stand its ground when the storm breaks. It is a catastrophe for the enterprise to make its announcement and then give in when faced with criticism. If the enterprise does not

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feel it can and will weather the storm, then it should adopt a different policy. An offensive strategy stands a good chance of benefitting the enterprise and securing its reputation as a political enterprise not afraid to take positions and stick to them. Even if the enterprise makes decisions that most people regard as wrong, it will nonetheless show that it is not afraid to follow suit and face the consequences. The strategy also requires the enterprise to do its homework and put all the cards on the table from the start. The facts and considerations leading to the decision must be well founded. 7. The bold political enterprise goes a step further. It seeks, even demands, contact and dialogue with its potential attackers. In the environmental field the adversary may be Greenpeace. With regard to human rights it may be Amnesty International or Human Rights Watch. The political enterprise should invite these organizations to meet regularly with the enterprise and brief them thoroughly on upcoming decisions deemed to be of interest to them. The threshold should be high enough that no cases slip past, because the organizations might think these oversights intentional and a considerable share of the benefits hoped for from this approach could be lost. The reason most enterprises do not take this tack is that they are afraid of criticism. But they will be criticized anyway if there appears to be something for these organizations to criticize; that is their purpose. By putting all cards on the table the political enterprise may with a bit of luck achieve some kind of trust between itself and these organizations. If the organizations do not accept the enterprise’s invitations—that is also a possibility—the political enterprise has an advantage before the battle starts. It can point to the fact that the organization was invited to talks on the topic but chose to stay away. In such a case the enterprise may turn the tables. The organization will have to explain why it declined the invitation, and the enterprise can say that the situation might have been different had the organization chosen to come in the first place. So, the enterprise may position itself as the honest fellow unfairly attacked. This can only be done by a genuine political enterprise acting in good faith. The potential benefits are enormous. The risks are small— unless of course there really is something to hide or push under the carpet. And if that is the case not even the best strategy can save the enterprise. 8. Sometimes the political enterprise is regarded as one in which top management takes part in the public and political debate. This is a wrong perception. It may be useful and may benefit the enterprise in many ways if top management does take such a role, but it has nothing to do with its status as a political enterprise. The political enterprise is an en-

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terprise with an ethical profile, but it need not have opinions on how society should be governed, what kind of social welfare is desirable, how high or how low taxes should be, etc. This is another ball game, and the two should not be confused. It could even be contradictory if top management took part in political debates in society while at the same time completely ignoring the ethical values of its own enterprise. Much the same is true with regard to sponsorship of cultural events. Sponsorship may be great as an advertisement policy, making the name of the enterprise known in a suitable context. But it rarely conveys the notion that the enterprise is especially cultural. There is, however, one political or cultural aspect the political enterprise should devote attention to, and that is the relationship to the local community. As funds become more scarce the local communities find it more and more difficult to survive, and an active role for the political enterprise may be mutually beneficial in this respect. The enterprise may develop a genuine source of support, which would be of extreme value in case of difficulties. The local community could get some of the infrastructure and events otherwise beyond its financial reach.

6 A World Model: Some Obsolete Concepts As the world enters the year 2000 it has passed the mark of more than half a century of the present international system, which was born in the five years immediately following the end of World War II. Measured by any historical yardstick it would be strange—indeed very strange—if the system could run on without some kind of updating. It would be even more strange in light of the enormous changes—economical, political, cultural and social—that have taken place in the last half of the century. The world is quite simply a totally different place today from what it was in the period 1945–1950. We can go a step further and say that it is a wonder that the system has been able to survive for so long and served the world so well. The system was shaped by magnanimous American statesmen in the aftermath of a war that left the United States as the only nation-state capable of doing much more than feeding itself and surviving. The Americans did not fall for the temptation to reserve their economic strength for themselves or to use their military might to dominate the world. The American statesmen at that time, primarily Harry Truman and George Marshall, got their analysis right and applied the correct approach to the world’s problems. If we look back at Chapter 5 we find with these men an extremely good example of focusing upon the right objectives and applying the right instruments. At the end of the century and after 40 years of rivalry between the United States and the USSR, the world is more or less back to square one, with the United States in possession of military, economic and political power far outranking everybody else. However, there is one big difference compared with 1945–1950. Between 1945 and 1950 the United

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States, once an isolationist nation-state, broke with its past and established a new, international system depending on a strong US commitment. Even if this system gave the United States preponderant influence it included those elsewhere in the world who wanted to join. At the present juncture in history the United States is still committed to the international system, but there is no attempt to lead in the sense of shaping a new system that takes into account the winds of change. The system is managed but it is not under revision. That seems to be a lost opportunity for the United States, which is running out of time to put its mark on a new international system in the same way as it did during the Truman administration 50 years ago. The real danger is that if the system is not adapted to changed circumstances it may start to look sufficiently unfair and biased in the eyes of a number of actors to warrant their breaking away. The time has come to design a new international system reflecting the flywheels of change, the role of different actors and the changing vectors of power governing the world. We must shape a framework for dealing with the problems ahead of us, be they security, economic growth or culture. Many people may hope for a continuation of the present system with minor changes. That is unlikely. There are too many omens indicating that the system is under pressure. It is likely that the present system will be overloaded with problems it is not designed to deal with, and will fail to find suitable solutions or will at best produce half-baked solutions leaving everybody dissatisfied. A situation could arise in which the strongest start to act on their own, to the obvious detriment of the weakest. If this were to occur, a number of nation-states and other actors (political enterprises, cross-border regions) would come to believe that they are better off without an international system, and a number of weak actors would determine that they have nothing to lose by breaking away from the system. The result would be chaos or anarchy, with 50 years of strenuous effort towards establishing an international system based upon rules and respect for the law completely wasted: a system in which the law of the jungle would prevail. The strongest and richest would reserve for themselves the largest part of the wealth, and the weakest and poorest would hit back with acts of desperation (terrorism, state terrorism, international crime) in an effort to unsettle a system they feel has let them down. It is to be hoped that such a prognosis will encourage a good deal of thought and reflection about what to do, and that this will lead to some political initiatives. The starting point could be to look at some of the parameters on their way out of the international system as it was shaped almost 50 years ago. This will be painful for many people raised and educated in a world that they now have to realize is not viable anymore.

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But it is a well-known truth that we cannot make progress without agreeing to discuss issues and discard a number of taboos. Sometimes the key is to ask the right questions even if one does not know the answers. Perhaps somebody else does not know the questions but will be able to find the answers. The nation-state is a much beloved subject. Many people are attached to the nation-state without realizing what it means for them. It is like the story about the elderly American woman, emigrated from Sweden in the beginning of the twentieth century, who started to weep when half a decade later she heard that the king of Sweden had died. Why? Because she had learned that he was a symbol almost to be worshipped by all true Swedes. In the same way, the nation-state is for many people a symbol of stability and security, even if in our times it is much more likely to lead to instability and insecurity. Not for the first time, emotions are up against rationality and logic. The creation of the nation-states took place about 200 years ago during the Napoleonic wars. The nation-state has brought nothing but wars, suffering and disasters to the people of Europe, where it has had its heyday. After the colonial period the colonial masters created nationstates in Africa, drawing lines on the map regardless of the fact that these borders often separated natural entities, severed tribal connections and disrupted economic trade patterns. Since about 1960 the ‘‘blessing’’ of the nation-state has been haunting Africa. Very few people will have the courage to say that this way of proceeding was successful. Instead it has thrown a large part of the continent into turmoil with wars, civil wars and guerilla operations. More or less the same happened in Asia, where nation-states suddenly appeared on the map without much foundation in history. The Asians have been able to cope with the problems better than the Africans, but several Asian nation-states seem less than stable. Burma, now called Myanmar, is a case in point. The artificial nation-state of Pakistan broke down in 1971 and became two nation-states—Pakistan and Bangladesh. There is a strong drive for decentralization inside India. Even when and where the nation-state is still operative it is losing strength, as is seen in the effort to establish international organizations like the European Union, ASEAN and NAFTA. The participating nationstates transfer some of their power and competence to the international institutions. They do so, not because they like it, but because they feel compelled to. Domestically they find it difficult to finance the same level of services as they could some decades ago. Some people observe that all this is being negotiated and masterminded by the nation-states themselves and conclude that they are living in the era of the nation-state. That analysis is wrong. We live in the era of the nation-states burying themselves. It is accordingly a safe starting point to assume that a new interna-

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tional system cannot be built upon the nation-state as a participant, but has to be built upon the transfer of sovereignty from the nation-state to international institutions. The nation-state will be at the table, yes. Decision making will reflect that the nation-states have not abandoned, but merely transferred some part of, their sovereignty. Joseph Schumpeter got it right when he coined the term ‘‘creative destruction’’ for this kind of process. The era of nonintervention belongs to the dustbin of history. For a long period it was conventional wisdom not to intervene, not even to interfere with domestic problems in a nation-state. Around 1960 the Nordic countries—later known for their staunch anti-apartheid policies—refrained from admonishing South Africa for its apartheid policy, referring to this matter as a domestic problem. The international community has developed tremendously in recent decades to a more mature posture vis-a`-vis intervening and interfering in nation-states’ policies. There is a long list of countries who have suffered economic sanctions: Rhodesia, South Africa, Iraq and many others. There are also lists of particular products, especially weapons, not to be exported to certain nation-states. And there are bans on granting entry visas to political leaders in these nation states, though not all nation-states observe these bans (the European Union’s stance with regard to visas for the political leaders of Burma is a case in point). From time to time air travel to and from certain nation-states has been banned; Serbia and Montenegro at the beginning of the 1990s is an example. There is an equally long list of military actions carried out in the territory of a nation-state, against that particular nation-state or persons supposed to be there. NATO conducted such actions in parts of the former Yugoslavia in the mid-1990s. However, the list of cases in which one nation acted alone, with or without the blessing of the international community or parts thereof, is much longer. In most cases the actor was the United States, and the target was terrorism or state terrorism. Libya in the mid-1980s and Sudan and Afghanistan in the late 1990s may be the most well-known cases. It is a myth to say that we live in an era in which the territory of a nation-state cannot be violated by military actions carried out with the blessing of the international community. Nonintervention is dead and buried. Intervention happens right before our eyes. The question is whether we have the courage to admit it and go one step further to address the issue of whether we want to shape some rules to govern it. The international community is trying to come to grips with the issue but the process is still in the embryonic phase. Some think that the way ahead is to cling to nonintervention. If they get their wish the most militarily powerful nation-states, in particular the United States, will if necessary act alone. We may even see a consortium of military strong nation-states emerge telling the rest of the world what

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they will tolerate or not tolerate and threating retaliation in case of noncompliance. As the world is shaped they will have no other choice. The market has lost its magic power as an infallible guide to prosperity and wealth. Think about the following examples: an investor putting US$1 million in the Singaporean market for property stocks in July 1997 would one year later have had $250,000 left (25 percent); If he had done the same in the Indonesian market he would have had $25,000 left (2.5 percent). The market as it currently exists has nothing to do with the notion of the market as coined by Adam Smith more than 200 years ago in his book The Wealth of Nations. Adam Smith thought that the so-called invisible hand of the consumer, selecting and choosing among various offers, would automatically control the market and out of this civilized struggle would emerge the most efficient producer. This was termed perfect competition. The market today has nothing to do with perfect competition. Today the market is dominated by a few big players who call the tunes. Increasingly the terms money and profit seem to be understood in a very short-term way taking no notice of longer-term interests and the interests of those who are not players in the market. So proof of the rectitude of the market may materialize every time somebody makes money because then ‘‘the best man wins’’—or every time somebody loses money, because that may prove that the inefficient are being punished. But is that really what the communities and societies we live in want? Is that really what the enterprises—the future political enterprises— want? It looks increasingly like the market stimulates a development of our communities and societies contradictory to the political objectives and political pledges given by politicians campaigning for office. On top of that the market seems to have chosen its side in the competition between internationalism and nationalism in the sense that it uniquely favors internationalism. As the market increases social imbalances and social disparity, the time may be ripe for a change in our mindset. The market implies that most political systems can no longer deliver what they promised and what the majority of the people want. This does not necessarily mean that we will move towards a new mercantilism or siege economy (though we may, if things are handled wrong—and the world has earlier shown its capability in that respect). What it means in the short term is that some kind of rules are called for to make it legitimate to deviate for some time, and under surveillance, from the market rules. It is odd indeed that the market—this manyheaded monster with the steel jaws and unforgiving sharp claws—is able to topple a government for the sole purpose of making profits for a few people living in a faraway country. History may or may not have a tendency to repeat itself; that can be

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debated. It is more difficult to argue against the statement that history tends to swing back when it has been forced to one extreme. In the last decades the market has had its turn. Academics and politicians have tried their miraculous cure for everything. They may still be committed to track. But the majority of people are not. It is fine that production has increased many times over, but it is not fine that the benefits are being channelled to fewer and fewer people. Meanwhile, competition is declining. Instead of a large number of airlines, car producers and cosmetics firms we see what the economists call oligopoly which means a small number of large producers. Whether good or bad, this is far from the idea of perfect competition expounded by advocates of the market. It is fine that capital flows freely across borders—or is it? Capital tends to be concentrated in the hands of a few people who wield tremendous power and influence, not only in economic matters but also with regard to politics. It is fine that the market works to get domestic prices in a number of countries in line with international competition—or is it? It may mean that many countries will be prevented from taking up production, instead to be locked in the role of provider of raw materials to the world economy. As synthetic products get increasing market shares these countries really feel the squeeze. When we go through the list of the blessings following the market economy it is probably still in the end a positive sum that emerges. But so many legitimate questions crave an answer that it is difficult to see the market system continue unchecked, primarily because there are so many cases where it is more than doubtful that market forces are really decisive; this gives rise to the suspicion that behind the market lies not Adam Smith’s ‘‘invisible hand’’ but an iron glove of control exercised by a very limited number of people. Unanimous decisions have been the main rule for international cooperation for decades. This policy belongs to the era when the notion of sovereignty, defined in the old-fashioned and legal way, had a meaning. A nation-state could safeguard its sovereignty by closing its borders or adopting an introverted attitude. Sovereignty was a question of shaping one’s own society regardless of international development, and could be achieved by a policy of seclusion. In that age unanimity was the right approach. It guaranteed that a nation-state could block international decisions when it chose to do so and the world would move on, absorbing some harmful but not-too-serious effects. In today’s world where the room for maneuver of the actors, be they nation-states, cross-border regions or political enterprises, is shaped by the international framework, the rule of unanimity does not work any longer. Either an actor participates in an international institution because it sees an advantage in doing so (and then it negotiates as everybody

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else does to get the best out of various deals being struck), or the actor comes to the conclusion that the institution is inappropriate and so it leaves. The middle way, which is to block decisions—thereby putting everybody in the unacceptable situation that no international response can be found to international problems—is simply not viable. Actor after actor (primarily nation-states) are being forced by events to draw that conclusion. In today’s international world an actor defends its interests at the international negotiating table, allowing the actor to pursue its own preferences within and in conformity with the rules. If unanimity is applied it will be almost impossible to reach decisions and no rules will be determined. A breakdown in the safeguarding of interests will follow. A nation-state cannot defend itself against international capital movements outside an international framework. Yes, it may try to do so by abdicating from the international economy, but that is hardly a worthwhile recommendation. The situation is even more striking if we look at the growing tendency of powerful actors to interfere and intervene in political and economic events in other nation-states. If unanimity is applied these actors will find themselves hostage to one or two nation-states who threaten to withhold consent. That is simply not viable. It is highly unlikely that the main actors will accept such constraints. Consequently, the age of unanimity is past. If internationalism is to succeed another form for decision making is required. The necessary condition to move away from unanimity is a certain set of rules so that everybody knows what can be done and in what circumstances. To transfer sovereignty while knowing that the possibility of being outvoted exists can only take place if there are limits to how far such decisions can go. In a way this will lead to a harsher system: a system in which an actor can participate or not participate. But if the actor is inside and participating it will have to abide by some kind of majority voting. The difficulty then will be to negotiate basic treaties in which participants know about their rights and the magnitude of their obligations. Such treaties may require unanimity, but in this case it is unlikely that a single actor will be able to block action. If it has participated and does not want to go along anymore, the solution may be to find some kind of trailer. More and more the tendency is to underline that an actor is either a participant who accepts majority voting, or it is not a participant and thus cannot exercise any right to block what the other actors may agree to. The Anglo-Saxon period of dominance may well be drawing to a close. Since the revolution in Great Britain in the middle of the seventeenth century, Britain, the English language and the Anglo-Saxon culture have managed a remarkable and in a historical perspective unique domina-

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tion. When England became too small the British empire took over, and when it ran out of resources the Americans took over. The last 250 years have belonged to this culture. English may not be the language with the largest number of speakers, but the plain fact is that the English language is the language of the elite. It then has also become the language of internationalism. It is simply not possible to participate in the international world today without mastering the English language. Most communication channels for the internationally oriented elite use English. It is the language of the computer, the Internet, information technology. Today English is a bit like mathematics: it is a tool. It is perfectly possible to imagine Anglo-Saxon dominance diminishing at the same time that the English language continues to maintain its stronghold as an instrument for communication among the elite in various nation-states. It would not be so different from the situation in the Middle Ages, when Latin was the instrument of communication used by the international elite regardless of where they were living. But no single people or state used Latin as their native tongue. The United States is still dominated by the Anglo-Saxon culture, but for how long? Beneath the surface this culture has lost a lot of its links to the old world on the other side of the Atlantic. The voting procedures in most international organizations were laid down immediately after World War II and naturally reflected the influence of the United States and Great Britain. Today the result seems a bit odd. Still, a good deal of the elite in many nation-states around the globe have been educated and trained at universities in the United States or Great Britain. They think, reflect and act, not surprisingly, in accordance with the Anglo-Saxon tradition. But as new generations grow up they will free themselves from this intellectual and emotional link. For them the Anglo-Saxon culture will be one of several available cultures, but not necessarily one that they attach preponderant importance to. The exciting question is whether the Anglo-Saxon dominance and internationalism are linked together. Is there anything inside this culture that promotes and supports internationalism and that will be missing when it loses its dominance? It will be fascinating for future historians to examine whether internationalism survived the coming of cultures other than the Anglo-Saxon, and what the impact was on the internationalism-nationalism pendulum. The old-style political parties and politicians campaigning on a platform different in principle from that of competitors is almost extinct. The world has run out of ideologies and ideas and different styles of societies from which the electorate can choose. Read carefully the program of most political parties (at least those that stand a fair chance of assuming governmental responsibility) and look for differences. They will be small,

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if not negligible. Then compare the policies written down in the programs with the policies pursued by the party when in office. The conclusion will be that the main political parties, when in office, pursue almost identical policies. There are several reasons for that. One of them is internationalism. With the participation of so many actors in the world economy and world politics, the room for maneuver is indeed very small. Are there any major differences between the policies of John Major and Tony Blair in Great Britain? Between the Bush administration and the Clinton administration? Between the conservative Juppe government in France and the socialist government under Jospin? Internationalism is a strong unifying force regarding domestic policies, for the simple reason that the problems to be dealt with become more and more similar. As more and more instruments are transferred from national to the international level, the scope for policymaking and policy implementation becomes limited. Most policymaking takes place at the international level, in international institutions or organizations. The rules approved there constitutes a framework or a constraint on domestic policies, without really taking into account of the political party in office or the political program in effect. But there are differences between parties. They are just not about policies. They are about management and style. Right now the electorates of nation-states choose managers as their political leaders: people who can control development, who can find answers quickly to the complex problems the society faces. The electorates reject big swings or major changes in policies. It is as if they realize that the margin for maneuver is limited, drawing the conclusion that it is much better to have leaders who know how to manage without trying to change. Judging by reelection results one can, with some exceptions, conclude that good managers are reelected to office, while bad managers are not. The modern politician looks more and more like a business manager managing an enterprise for profit—with profit in this case being economic growth. It is a paradox, one example of history’s capriciousness, that as the nation-state and governments gets more and more nonpolitical, the enterprises get more and more political. Politicians are seldom asked to take positions vis-a`vis values. But business leaders, at least those in charge of the political enterprises, are. In a way we can see a parallel development inside the nation-states with a large public sector. Here public enterprises take on a more and more businesslike attitude. They need to show surplus (sometimes it is good to avoid the word profit, even if the substance is the same). Instruments such as productivity are being introduced to harass innocent public servants. On the other hand, the political enterprises are being asked to forward accounts showing their responsibility to-

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wards society—for example, with regard to the environment. Gradually it is coming more difficult to tell a private but political enterprise from a public enterprise participating in the competitive game. Style determines whether a politician gets the chance to show whether he or she is able to assume governmental responsibility. Note that the mechanism works this way and not the other way around. Style is slowly but surely replacing substance. This is true even if management takes over from politics as the criteria determining who is going to be elected. This is precisely because old-style politics is out. We are not yet at the point where style replaces managerial ability. But in cases where the public judges two politicians to be equally good managers chances are that style will decide who will be elected. Style also has something to do with entertainment. People want to be entertained and politics is gradually being regarded as one of several offerings in the entertainment business. Some people would say that President Clinton maintained his popularity for a long time despite all sorts of accusations because of his ability as manager of the American economy. There is no free lunch and that will also be the case in the future for the nation-states. It has been seen in too many cases during the last 50 years that some nation-states have governments too weak to implement the measures imposed upon them, not by international institutions or organizations, but by the international economy and world politics. Such measures appeared to be too painful and to pose too many risks for these societies. The very international institutions seeking to establish order and some kind of equality under the law on the international level got the blame for the incompetence of weak international political leaders. They tried, often successfully, to shift the political burden to international institutions; the victim was internationalism. This will not be allowed in the future. No nation-states and no political leaders facing internationalism will be able to skirt responsibility. Those who are in, will be in—participating fully—and those who are out, will be out, and will fend for themselves as best they can. The rest of the world will not tolerate ‘‘fare dodgers’’—nation-states that reap all or some of the benefits from participating in internationalism while at the same time stirring up animosity against internationalism within their own borders.

7 A World Model: A Sketch INTRODUCTION The world faces two alternatives: either some kind of world governance (in which case some machinery must be put in place) or a new age of which we know very little but which does not seem to promise much good. In this chapter we take a look at the prospect of world governance and how it might look. In Chapter 8 we take a look at the alternative. For the optimists a world model (world governance) would not be very different from projecting into the future what the international community already is doing. Admittedly the international community in recent years has taken steps towards what could be called world government. The problem that arises concerns if or when nation-states should admit and institutionalize this reality. The main change compared to earlier periods in history is to shrug off the timid approach regarding interfering in the domestic matters of nation-states, either on the part of the international community or of somebody authorized by the international community to perform such intervention. This calls for little more than institutionalizing what the international community is doing or trying to do. For the optimists this falls into line with the depreciation of the nation-state. As it is no longer strong enough to resist international development, the nation-state will also be too weak to resist a concerted effort by the international community to intervene. As the nation-state is too weak to safeguard its interests alone and isolated, intervention may provide the crutches that make it possible to continue walking. There is no need to hide that the world is at a crossroad (an often

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used—and abused—term). From 1945 to 1990 the political world revolved around the confrontation between the United States and the USSR. This rivalry or competition was won by the United States, fortunately without armed conflict. The vanquished nation-state in that contest, Russia, tried to join the club of the victors. For some time it looked as if Russia would be able to turn around without social and economic upheaval, and do it within a decade—even after the 70-year rule of the Communist regime. However, the Russian experiment showed two fundamental weaknesses. The first one was that the newborn democratic system, albeit admirable in many respects, was not sufficiently focused upon decision making to maintain the new course for the economy. The president had executive powers but was frustrated by the Duma for a long period, especially during his second term. The second flaw was that the market forces took over. The lack of an economic framework presented the ugliest face of capitalism to Russians recently exposed to the ugliest face of a totalitarian regime. There was no public sector or social capital to counterbalance the market forces. History will one day tell why Russia failed to make it during the 1990s. What was the main reason? Did it come close to success or was it doomed to failure before it even started? History will also take a long view on the efforts to support Russia put forward by the Europeans and the Americans. Let us hope that a benevolent attitude will prevail at that time. The former satellites of the Soviet empire split up into two groups: those who made it and those who did not. In the first group we find the Baltic states, Poland, Hungary, the Czech Republic and to a certain extent also Slovakia. In the second group are most of the others, including Ukraine, the most populous and potentially the most prosperous of the areas inside the Soviet empire. They have struggled to make it and maybe some of them will, but it is an uphill battle. China had already, long before the breakdown of the Soviet empire, left the camp of centrally controlled economies (command economies) and joined de facto the club of those countries applying market principles. Prime Minister Li Peng, who masterminded China’s economy for a long time in the 1990s, seemed more reluctant than his successor, Zhu Rongji, to force through necessary but painful reforms concerning state enterprises, the financial sector and social policy. Some people would say that valuable time was lost while the fundamental problems got worse. Just after the breakdown of the Soviet empire most if not all major countries were pursuing the same basic model: the market economy. Even if China was not on the course towards democracy it can be added that the large majority of the major nation-states in the world were democracies or on the way towards democracy in one form or another. A unique opportunity presented itself. Without any opposition a world order could and should have been forged on the foundation of the mar-

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ket economy and democracy. A rare and valuable window of opportunity for humanity was available. The ball was in the hands of the Americans. The United States was (and is) the only nation-state able to take the lead in plotting where we should go. When Iraq invaded Kuwait the Bush administration took the lead and shaped a coalition stronger and more determined than most people would have thought. Under the auspices of the UN Security Council difficult decisions were made endorsing the coalition to do its job. In a certain way the situation ran parallel to the Korean crisis in 1950. At that time, just after the start of the cold war, the United States was able to form a coalition to stop North Korean aggression. The willingness of the United States in 1950 to send soldiers and wage war to defend the principles of the charter of the UN was reassuring for the many nation-states taking shelter beneath the wings of the eagle. After some confusion the United States settled for a compromise in 1953 to end the Korean war. This was exactly what the Bush administration did when it refused to conquer Baghdad or topple Saddam Hussein (the objective being to liberate Kuwait). For both the Truman administration and the Bush administration it seemed more important to maintain the coalition intact than to gain total victory, which was probably within reach in both cases, but which would have isolated the United States and cast doubts on the United States’ credibility and willingness to act within international rules. Internationalism got the upper hand over an ephemeral military triumph. For a moment in the beginning of the 1990s it looked as if the parallel from the 1950s would continue in the sense that the United States could build upon the Gulf War to design a world order suited to new conditions. But this did not happen. In fact, during the 1990s the United States has pursued its foreign policy almost as if circumstances prevailing in the middle of that decade would continue, which everyone could see would not be the case. This means that in the period after the end of the cold war when the foundations could have been laid for an international system strong enough to take the world some decades into the next century, not much happened. All the basic institutions, rules and patterns are the same at the end of the decade as they were in the beginning. There was no urgent need for a new or adapted international system to carry on after the end of the cold war. Of course the established system could do the job, because the vanquished nation-states wanted to join that system. They felt that such a policy required that they accept the international system as it was. How could they rebel or even protest against the system they so dearly wanted to join? The international system carried on with no change. But something else started to change: the willingness of those belonging to the former

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Soviet satellites not in the ‘‘success group’’ to stay the course. They have started to debate and question whether it was right for them to embark upon the course towards a market economy and democracy. We also find a question mark regarding their attitude towards the international system and in some cases internationalism as such. Just as some of the social losers inside nation-states ask what they have to lose by not belonging to society and not respecting society’s rules, these nation-states start to ask what they stand to lose if or when they break away from the international system which was so stingy and so reluctant to help them in the transition from command economies and authoritarian systems to market economies and democracies. In brief, the United States and Western Europe can now congratulate themselves for reaping what they sowed in terms of their inactivity, over a number of years, regarding Russia and a number of nation-states in the sphere of the former Soviet empire. The odds are gradually tipping away from a future based on the market economy and democracy. Still there is time provided that those who have the wealth and the power take the lead. But time is running out. DEMOCRACY Democracy is a notion everybody understands and everybody likes. Those who have it want to preserve it and those who do not have it want to achieve it. And yet it has some flaws. Winston Churchill once said that democracy was the worst kind of government—except of course for all the others. If we take as a starting point that democracy means freedom of speech, a parliament elected by the population in free elections and secret balloting, and that laws can only be implemented if approved by parliament, the world has seen several kinds of democracy. One appears in the nation-states where we have a strong parliament and a weak executive branch. Often the problem stems from the fact that having many parties in parliament makes it impossible to constitute a majority government for any period of time. More and more of the power traditionally vested in the executive branch gets transferred to parliament. The committees in parliament erode the power of the executive without anybody really noticing or at least speaking up against it. One day we discover that a major shift in the distribution of competence between the executive, the legislative and the judicial branches has taken place. It is difficult to oppose the assumption of power by parliamentarians. Presumably that is what parliamentarians are elected for. The caveat in this is, however, that parliamentarians may get bogged down in details and lose sight of what their real purpose is, namely to constitute and control the government. Gradually, a running battle between the gov-

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ernment and the parliament emerges so that at the end of the day it is no longer the government that governs but the parliament. The parliament does not have the resources (ministries, civil servants, etc.) so they build a parallel or even competing network of civil servants offering other views than those put forward by the government. They have to. Otherwise they would be superfluous. The government is relegated to a body which proposes while parliament disposes. As parliamentarians come to like the political game, which becomes more and more attractive as they get more powers, they tend to play for the sake of the game. Instead of devoting their efforts to controlling the government they devise often very complicated rules and procedures which they force upon the government. This alienates the population from politics. Ordinary people may be interested in what is going on in parliament as far as legislation is concerned. People are not interested in political intrigues involving particular ministers, committees, articles and regulations. The majority of the population may slide into a dangerous kind of boredom with regard to parliamentary life. Parliament and parliamentarians become like a dog chasing its own tail. They run and run after two things: violation of procedure by ministers, and all kinds of details and individual cases that they bring forward in the media to try to catch the attention of the population. Rarely is a political debate seen in parliament. After some time this kind of parliamentarianism loses sight of what the government and the parliamentarians are there for: to govern the nation-state. When this happens the nation-state cannot make strategic decisions—only small ones to be changed again the following year. Such a nation-state will find it difficult to defend its interests in the international power game. There is seldom a clear policy to follow. Parliament will (as in domestic cases) often go after the details and lose sight of the long-term implications. A second form of democracy is seen where parliament is strong and wishes to take a different political direction than the executive. This can and very often does lead to a stalemate between the parliament and the executive branch. The executive branch’s proposals for legislation are rejected by parliament. Parliament approves laws in conformity with its own majority and hands them over to the executive branch—which does not like them. Such nation-states may be able to make important strategic decisions but the implementation is often very difficult. The executive branch and the legislative branch use a lot of their power to quarrel against each other. When the executive branch makes decisions that have to be endorsed by the legislative branch, the latter often imposes conditions or in some cases refuses outright to support the former. In the context of internationalism this is a very dangerous situation. Other participants in the international game never know whether the nation-state is reliable. International treaties often have to be ratified, and

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if ratification becomes part of domestic politics for or against the executive branch the other participants will be reluctant to negotiate in earnest with the nation-state in question. It quite simply loses credibility. An even worse situation has arisen in some of the former parts of the Soviet empire where the executive has tried to push through reforms blocked by a reluctant parliament. Russia itself is the best example of such a situation. President Yeltsin tried several times to get parliament to approve wide-ranging legislation regarding the reform process, but without success. At best some parts of his proposals were approved. In the end the reform process proved unsuccessful—at least within the time span available. For the ordinary Russian the reform process failed; it did not deliver what was promised. The truth is that it never got a chance because the necessary legislation was never passed by the Duma. In the eyes of the ordinary Russian, internationalism was supposed to deliver rising welfare but did not. The obvious conclusion was that internationalism failed, even if it was never really tried in the way its supporters wanted. It is a strange kind of democracy where people elect a president to govern the nation-state and elect a parliament without a majority to pass the legislation the president wants. There are undoubtedly many reasons for the failure of the reform process in Russia but the stalemate between the president and the Duma is the one of interest in this context. In an international world it is difficult to see such a situation in important nation-states like Russia. It puts a question mark not only on the capability of Russia and nation-states in a similar situation to participate in internationalism, but also on the sufficiency of democracy in such circumstances—or at least democracy practiced in this particular form. The United States has also seen this ball game. Congress enjoys meddling in the efforts of the president to manage foreign policy. A shudder will pass through the world the first time we see important international negotiations approved by the president but thereafter rejected by Congress. In France some of the same was seen with the contest between the socialist president and the conservative government in 1986–1988, and with the conservative president and the socialist government from 1997 on. A third form of democracy is found in cases where governments have a firm majority in parliament. In these cases the government is perfectly capable of governing and knows that it has the support of the parliament. The danger in these cases lies with the risk of complacency—or even worse, abuse of power. Without the fear of opposition in parliament the government relaxes and tends to propose legislation not always as sound and throughly examined as it should be. Ministers tend to take the view that they have a natural right to their role, that they were born to it.

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Such systems often materialize in nation-states with an electoral system producing large swings in the composition of parliament, even if the swing in the percentage of votes for different political parties is modest. With bad luck, important policy changes can take place every four or five years, as the government changes and the opposition party assumes governmental responsibility. In the context of internationalism such a nation-state is easy to deal with, because it normally knows perfectly well what it wants to achieve and there is no doubt that it can get the result ratified in parliament. The snag is, however, that is also tends to produce exactly the kind of governing elite that prefers internationalism to getting the support of the population. Inside the nation state quite a strong antagonism to internationalism may be building up among the population and not finding any outlet. The trend for the time being still seems to be quite strong that in the coming decades democracy in one form or another will have the upper hand. It is firmly established in a large part of Europe. It is working in North America. Around the world nation-states are moving towards some kind of democracy. This does not mean that we will see the European style of democracy take root worldwide. This particular form of democracy is the flower of several hundred years of development in Europe. It has grown up from below. The people have become accustomed to it. They know what it means. They know what is required to make it work. All the unwritten rules are known, sometimes better than the written ones. It is too much to expect this to be repeated in Latin America, Asia and Africa in the course of a few decades. And why should it? Exactly because it has grown from below it is designed for Europe and Europeans. Who says that this kind of democracy is necessarily also the best one for other nation-states around the world? A democratic system is only viable in the long run if it is firmly anchored in public support reflecting that the people themselves have chosen the system, not that it has been chosen for them by well-meaning politicians. So what will happen? What kind of democracy will we see? What kind of democratic system can be expected to grow from below, to be chosen by the people themselves in various parts of the world? To our mind people around the world will not willingly surrender the freedom of speech and the freedom of access to information that they have already gained or are in the process of gaining. On that score we can expect a robust defense from below. Governments may be free for some time and in certain circumstances to exercise some kind of control or censorship of information, but not in the long run. It is a lost game. They can only do it if they at the same time accept total seclusion, not only encompassing information but also economics and trade. And very few nation-states are willing to take this step. Here we have possibly the

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strongest bulwark against authoritarian forms of government. The strongest form of democracy and control of the governments is to be found in cases where the population takes it upon itself to control the government and has the means to do so. The government knows that it can and will be questioned when it is caught not telling the truth or violating basic rules. With modern technology the attachment to free speech and free information seems to be irrevocable. The reason is that modern information technology constitutes a court of appeal—that is, appeal to world opinion. The world saw that when Boris Yeltsin gave democracy in Russia its breathing space by climbing a tank while the CNN cameras were rolling. If Yeltsin had been shot, the world would have reacted strongly in the sense that public opinion in a large number of Western countries would have demanded some kind of punishment for the new rulers of Russia. A nation-state can only violate basic and fundamental rights if it is prepared to risk isolation from the international community. Very few are. And those that are do not belong to internationalism anyway. This is one of the blessings of the international dissemination of news and information and the strong role of the news media. They actually do constitute a powerful body. A kind of world opinion is emerging in the 1990s and its key point is readiness to put up a fight to secure basic rights all over the world. The other side of the coin is that if the world media, such as CNN, does not take an interest in a particular nationstate or particular events the court of appeal stops functioning in that case. It only works when world public opinion is informed, and that depends on the news media. That is why it is so imperative to avoid monopolization of the transmission and dissemination of news and information. There must always be a number of networks, a number of operators so to speak, so that at least one of them will feel tempted to cover any given situation. The competition will be fierce among those operators to catch the right cases, so they will give almost all of them a try. The danger is obviously that a few networks or operators will monopolize the business and select particular kinds of cases, thereby communicating to the world that dissimilar cases will avoid scrutiny. Dictators and police states around the world would not overlook that fact. Handled in the correct way, information technology may be the safest and surest guarantor of freedom to speak and express opinions in the decades to come. Handled in the wrong way it will not. The parliamentary system as we know it in Western Europe and North America will with some adaptations be introduced and will work in large parts of Central and Eastern Europe. In many of these nation-states there is a tradition for democracy as practiced in Western Europe and North America. It has been tried before during this century even if Nazism or fascism or communism brought it to an abrupt halt. Nation-

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states such as the Czech Republic have this tradition. They are sufficiently close to Western Europe to be attracted to the model, which they watch every day. They want to join the European Union and to do so they need to fulfill certain criteria, among which we find democracy. The Baltic states do not have such a tradition but they have got off to a good start. Several times their governments have changed in accordance with all the rules for a well-functioning democracy. Russia poses a big question mark. The state became so weak in the 1990s that it could not constitute a bulwark against flaws in the democratic system—and these flaws are of such a magnitude that it is doubtful how well democracy will go in Russia. On top of that the Russian tradition is not in the democratic mold. Their way is to have a chief (a czar, a warlord, a secretary general) who determines the fate of his fellow Russians. The tradition tells us that he is expected to take care of his citizens. The czar was known as the little father. The Russians could come to the chief with their grievances and he would listen. Stalin, by secluding himself from his people, was an aberration from that tradition. But he was not Russian; he was Georgian. With luck some kind of democracy will be maintained in Russia, perhaps even a robust one. For almost a decade Russians have tried democracy. It is to be hoped that they will constitute a sufficient barrier against any new form of authoritarian rule. Beyond these geographic borders Western-style democracy may be found where special historical circumstances have played a role. Typical examples include Australia and New Zealand. In most other parts of the world the trend is towards and not against democracy, but not necessarily the kind applied in Western Europe and North America. The key concepts are a weak parliament, strong executive branch and free elections, the results of which are respected. In short parliament still plays the natural role of parliament—constituting and controlling the government, but not much more. The attempts by parliaments to monitor the executive branch and have a say in everyday administration are rejected or not even floated as serious suggestion. In these nation-states the executive branch and the legislative branch are not waging war against each other. They do what they are supposed to do. The majority in parliament reflects the political orientation of the government. However, the governments can be dismissed, and here parliament can play a role. We have seen this happen many times when majority-shifts take place in parliament, or when popular sentiment vis-a`-vis the government becomes so strong and articulate that the government is forced to resign. In these cases a considerable part of the popular discontent is channelled through parliament. In 1997–1998 Asia saw three cases of strong civic society leading to the downfall of powerful governments. Seen from the perspective of democracy this is one of the most encour-

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aging developments for the region and the world, in a year that did not bring much good news to Asia. In Korea the former dissident Kim Dae-jung became president despite all the maneuvers to prevent him from being elected. The majority of the Korean establishment was against him. He succeeded against the odds, because he had the support of the population, the civic society. When the results were known, they were respected. He assumed presidential power. In Thailand a new prime minister, Mr. Chuan Leekpai, took over from the usual merry-go-round of generals and/or retired generals. This was due, again, to civic society in Thailand. The Thais simply were fed up with government as usual, and perhaps also with the army sparring internally and neglecting the interests of the nation. The pressure became too strong. Mr. Chuan was summoned to take over even if the establishment knew that he had nothing to offer them. In Indonesia the civic society dealt President Suharto a mortal blow through mass demonstrations and mobilization of parliament. In the end President Suharto gave in instead of trying to stay in power by reverting to the use of force. He handed over the post as of president to Vice President Habibie, meticulously following the procedures of the Indonesian constitution—a fact that was more or less overlooked by most observers in the West, but which signifies an important step towards working democracy in Asia. It is more interesting, even fascinating, to watch what has been going on in Indonesia since the change from President Suharto to President Habibie. The armed forces have retreated into the background as a political force. They are there, but are not as visible as they used to be. When mass graves were discovered in Aceh (in Sumatra) there was no attempt to sweep the matter under the carpet. The new government met the challenge head-on and did not hesitate to admit that atrocities had been committed in the past. This would not necessarily be difficult for a new government. But bearing in mind that the present president was a member of the former administration, and that he and the armed forces (Abri) commander, General Wiranto, both have roots in the political game going back many years, such an attitude reflects courage and a determination to show the world and the population of Indonesia that the government has adopted a new interpretation of human rights and is serious about it. So there are clear signs that public discontent can topple governments regardless of how many years they have been in power. As this has happened three times in the course of 1998, it is irrefutable. Governments have started to listen much more carefully to the grass roots in order to steer a political course reflecting the wishes of the people. In many European nation-states, and probably also in North America,

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this development is not well understood. Here the perception is that discontent with the government is to be expressed at the next election, leading to a change in government and a high turnover in the composition of parliament. But between these pollings one wonders how much and how strong the dialogue is between the politicians and the population. It may well be that the politicians desire such a dialogue, but indications are that political meetings, to put it mildly, are not attracting large crowds. So the politicians are left to dialogue with the faithful who come every month or so to local meetings with their member of parliament. As they are members of the same political party and have long grown accustomed to the political machine, one wonders what they will say that is new to the parliamentarian. The point is that dialogue between the electorate and the parliamentarians tends to weaken. Not so in many of the nation-states outside Europe and North America. It may well be that the same political party constitutes the government for a long period. It may well be that elections do not seem to lead to large swings. But in these cases the government and the political party behind the government runs a strong and full-fledged information machine behind the scenes, picking up the current thinking of the people and giving politicians an idea of what the people want. They try in various ways—not often in public, because the politicians may be sensitive to criticism—to find out what the people think. Where are the difficulties? Where do we have to adjust? When important decisions are planned, this machine is set in motion. After having digested the signals, the government puts forward a proposal to parliament. Then comes the parliamentary process, which is also not always well understood in Europe and North America. In the eyes of the government consultation has taken place, so the deliberations in parliament do not need to be long. This is the forum to present information regarding new measures, but not really to have discussions leading to amendments to the proposals. Possible changes in the government measures will already have been incorporated following consultations behind the veil. The session in parliament serves to demonstrate that the measures are the right ones, not to show the population that politicians disagree about just about everything in the proposed legislation. This system can work well—as proved by experience—provided the following conditions are met: • There must be sufficient consultation before proposals are taken to the parliament. • Important criticisms must be addressed before proposals go to the parliament. • It must always be clear that the parliament can force the government to resign.

Looking at political developments in various nation-states, including China, it seems that such a model is emerging as a kind of common

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denominator for the version of democracy that the world will see in the coming decades outside Europe and North America. China is currently debating whether, how and when it should start to apply such a system to constitute its government. Different timetables have been offered. In the meantime China is gradually implementing a system in which the political leaders occupy their posts for a certain period of time. This means that political leaders are not there forever. They change. In an emerging system, not only the present political forces but other political forces may have a say in these changes. It is unlikely that many Asian countries will adopt the Western style of democracy, channelling discontent through elections and abruptly changing politicians and policies. It is much more likely that they will institutionalize a system in which the signals are transmitted in other ways, and in which parliament has the role of constituting and controlling the government, i.e., it can force the government to resign. The people thus have an instrument to get rid of the government if they so wish, but the government will continue to wield power until that happens. It can always be debated whether such a system is better or worse than the democracy and parliamentarian system that has evolved in Europe and the United States over several centuries. There is no answer to that question. However, there is an answer to the question of whether the world will move away or towards democracy. The answer is unequivocally that it is moving towards democracy, but with many variants of the basic model. In the context of internationalism that gives rise to a number of reflections. It will certainly be easier to adopt some form of world governance if most participating nation-states employ a congruous system of government, at least with regard to principles. It has been possible for the democratic government of Western Europe to introduce the strongest form of internationalism the world has ever seen in the form of the EU. Provided that the politicians are prepared to defend internationalism theirs is in fact the optimal model. The snag is, however, that if the politicians, under pressure from extreme political forces, fall victim to egoistic measures, internationalism will be in serious danger. It will also be dangerous for the support of the system if some nation-states feel that they know the only true form of democracy and are thus entitled to criticize others for their version of democracy. Those most inclined to think that their model is the only correct one are the Western nationstates, who have applied democracy for a very long time and feel, rightly, that the roots are deeper in their garden than is the case with their neighbors. The plain fact is that there is no correct model. Each nation-state should adopt the version it thinks best suited to its traditions and social structure. The Western world often forgets that democracy in the West

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has in some cases produced odd results. The great Winston Churchill came back to power in the early 1950s in Great Britain after an election that gave the British conservative party more seats in the House of Commons than the Labour Party, despite the fact that it won a smaller percentage of total votes cast than did the Labour Party. Many American presidents have been elected on the basis of votes cast representing about 60 percent of eligible voters. In the mid-1990s there was some criticism in the United States of democracy in Russia. The criticism disappeared when somebody pointed out that the percentage of eligible voters casting votes when Boris Yeltsin was reelected was larger than the percentage mobilized in Bill Clinton’s reelection. There are still those who maintain that the results from the state of Illinois in the 1960 presidential election, giving the state to Kennedy instead of Nixon, was rigged by Mayor Daley of Chicago. Many American presidents have been elected with less than 50 percent of the votes cast due to the presence of more than two candidates on the ballot. These examples only underline the need for those who support democracy to be careful before voicing criticisms. Democracy may be implemented and maintained with many different systems. What matters is that the fundamental principles are respected. ETHICS AND VALUES The way people think governs how they act, and culture—how they were brought up, what kind of ethics they were taught in childhood, and the impact of experiences early in life—determines the way they think. Many philosophers have pondered the apparent paradox that almost all religions preach peace among people and yet many wars have been fought in the name of these very religions. The simple explanation seems to be that competition pushes people to be better off than their neighbors, regardless of the spiritual influence telling individuals to help their neighbors. Nowhere are these incentives to conflict between human beings (not nation-states) stronger than with regard to the set of values we apply. If we look at history, many human beings have taken the view that conflict and killing are acceptable if the victim is somebody not subscribing to their own set of values. If the killing can be done in an apparent effort to convince the other to shift to one’s own values, so much the better. Many wars, often of a very cruel nature, have been fought in the name of imposing upon innocent people a religion other than their own. So it is quite natural to ask whether the world will be able to iron out its differences with regard to culture and avoid confrontations, conflicts and wars. Will internationalism in the context of world governance be sufficiently strong to perform this task? As the road to understanding the human brain is still quite narrow, the answer must involve a good deal of guesswork. However, there are

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some omens indicating how people will behave under the onslaught of worldwide information. Maybe we can find some common ground regarding which problems are important and which instruments should be applied by looking at international developments in recent years. Here we find a growing interest among the majority of governments in finding solutions at the international level despite all the differences and difficulties involved. If this is correct, the way to a better intercultural understanding is through common problems and common solutions. That means trouble shooting moves from the national to the international level. The reason that this seems to stand a good chance of success is that it is a practical way of thinking, one that allows us to avoid getting bogged down in principles, leading nowhere except to conflicts and confrontations. There is nothing as sobering as putting a number of politicians around a table and asking them to confront a common problem and come up with a solution. They nearly always come up with something. It is not always a viable solution, but very rarely is it war against each other. The more we institutionalize and organize the world, and the more we set people side by side to find solutions, the higher the probability that we will avoid cultural confrontations or a clash of civilizations. Exactly because nation-states are not able to cope with problems on their own, the world could witness the emergence of congruous thinking with regard to problems regardless of cultural background. The pressure for solutions could be so strong that even the animosity towards dealing with other cultures could be swept aside and an operative framework could emerge. This is to a certain extent what is happening in the global economic and political framework, although it would be too optimistic to say that it is a firmly established trend. On such a basis the world could move towards a stronger sort of congruity with regard to cultural patterns. If the notion of mondoculture will become a reality, it is probably in such a context. It requires, however, that the different cultures and the nation-states devote effort and resources to promoting better intercultural understanding. It is a mistake to think that this will come by itself. It will not. Several thousand years of human history bear witness to that. There is a need for a systematic effort, at all educational levels, to teach intercultural understanding, to explain how and why cultures have different sets of values and what these values really mean. The world must move away from superficial representations of cultures and religions. Beneath the surface different cultures and religions have much in common. In fact, for those bothering to dig somewhat deeper, many of the virtues and vices are in principle the same. People must learn to think that their culture or religion is not better or worse than other peoples’. It is simply different. And the reason for the differences must be well known.

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It is all too easy to paint cultures and/or religions superficially, highlighting differences, and then go on from there to point at a threat to one’s own culture. No culture is threatening another. Cultures are there to help and support individuals and societies in choosing values to forge a framework for daily life, so we know where we stand vis-a`-vis other individuals and what is good and what is bad. It does not seem that the world is approaching a clash between the major cultures or civilizations. On the contrary, it seems that there is an emerging trend towards a better understanding. Provided it is supported by the main actors in the power game, this trend can be successful—not in removing different sets of values but in promoting a better understanding of, and thereby a higher degree of respect for, other cultures. If the Internet continues to work, and if the attempts by some politicians to exercise censorship are overcome, this trend may well prevail in the next century. CASES FOR INTERVENTION The UN charter is fine, and under the auspices of the United Nations a large number of treaties and conventions have blossomed to benefit the world. All that is good and admirable. The problem is that most of these international rules are based on the realities of the immediate postwar world, which is no longer the one we have to deal with. The political changes are obvious. Instead of being dominated by the United States and the United Kingdom, the world today is complex and many nationstates vie for a say in international affairs. The economic changes are just as sweeping. Instead of siege economies we have the global market. The technological changes are almost too visible; every time we start up our PCs or laptops we feel their consequences. So maybe the time has come to draw up a new charter, specifying in more detail the rights and obligations of nation-states and taking into consideration that much of the political game has moved from the purview of the the nation-state to the international level, pulling along pressure groups and lobbyists. We can ignore all this if we wish. We can take the stance that everything is just fine, that we have all the instruments in order in the form of treaties, and that we just need to use them properly. To start a new negotiating round would be a waste of time. This overlooks several problems. First, many nation-states do not feel at ease with a system designed almost 55 years ago, when they were still colonies and had no say. They are loyal to the present system but they would like to see a new system drawn up with their participation. Second, technological development since the late 1940s has not been incorporated into the system. It is not that the system has ignored these changes. They have made their way into the system in one way or another, but they have been added as appendices, not integrated into the system as such from the beginning.

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Moreover, the system does not offer appropriate channels for many of the grievances minorities feel when exposed to the majority. And that is probably the most important criticism of the system. It is designed for and still operates in a world dominated by the nation-state. The most difficult item for a new charter would be to transform into operative international rules new concepts of sovereignty and integrity, opening the door for intervention by the international community in what used to be termed domestic affairs of the nation-state. As many if not most of these interventions would take place because of human rights violations it would be difficult to write the paragraphs concerning an international definition of human rights in operative terms. The problem would not so much be the theoretical definition, because we already find such a definition in the existing conventions, but of which kinds of violations could and should trigger off international action—and without progress in this respect it would not be worthwhile proceeding. A few examples. Is it acceptable to watch a famine in a region rebelling against its central government and be refused the right to supply food to those in need because the central government takes the view that it is just fine that the rebels are starving? Is it acceptable to witness the genocide of a minority carried out by a national government? Is it acceptable if a government does nothing to prevent an environmental disaster possibly having severe repercussions for some of its neighboring countries? These are just a few of the questions that are not being addressed today because they belong to domestic matters, and in conformity with existing doctrine regarding the sovereignty and integrity of the nation-state the international community can do little more than watch. As the world gets more and more interactive—meaning that virtually no nation-state can take any actions without consequences for one or several of its neighbors—logic tells us that sooner or later the international community will have to be in a position to act. No one would tolerate a neighbor burning his garden or threatening his house. No one would gleefully watch a man beating his wife and children to death or starving them. Why should it not be the same on the international level? If the international community does not address this problem there is a considerable risk that in certain cases nation-states will act unilaterally against offending neighbors. Then there would be action because the targeted nation-state would resist fiercely and possibly appeal to the international community. REGIONAL BUILDING BLOCKS The international system must and should build upon the three large blocks which gradually have emerged over the last few decades: (1) the European Union, (2) NAFTA, and (3) East Asia. They are here listed in

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the order of integration. Europe has gone furthest, North America has gone part of the way and East Asia is lagging behind. Some people may like to contest an approach based upon international regionalism, and some nation-states outside the three regional groupings may voice opposition to this approach. The main criticism would be that by endorsing regional groupings the world risks halting its evolution towards internationalism and world governance. The three groups could come to the conclusion that they are much better off stopping integration at that level instead of moving on. After all, we are here speaking about the wealthy part of the world, and a broader international integration may not necessarily be to the short-term economic advantage of the nation-states belonging to the three groupings. This, however, is a narrow view. The world cannot stop there. If it does, we will institutionalize on the global level a split between the rich and the poor. In a short while that could trigger off a clash, not between civilizations, but between those who are well off and those who are not. Some have also voiced the criticism that regional economic integration could be used to seal off regions, so to speak, from the genuine international trade system. This criticism is simply not warranted. During the last few decades the world trade system has been supported strongly by the European Union and we dare say that the European Union has had a stronger influence in maintaining this system than the United States— certainly than many other nation-states around the world. The world needs the regional trade arrangements, such as customs unions and freetrade areas, as stepping stones to a global free-trade system. If the world kills the regional arrangements the prospect of further liberalization on the global level will fade away. It has also been said that the regional groupings such as the European Union will not be able to support the global evolution because they are not able to maintain security in their own backyards. The former Yugoslavia is sometimes mentioned as an example. This is both true and false. The European Union has contributed substantially to avoiding a full-scale civil war in the former Yugoslavia, though admittedly it has not been able to secure peaceful and stable development there. Even if there is a lot to be said for the European effort it is difficult not to admit that this chapter is not the most shining one in the history of the European Union. It is also correct that to make the system work it is natural that the main partners in the regional groupings take the lead in solving problems in and around that region. Europe and the European Union have a good deal of catching up to do here. The European Union has been the mainstay in Europe for the last decade, promoting peace and stability by just being there and constituting a bulwark against renewed protectionism and currency turmoil. The political benefits are obvious, as the traditional Franco-German rivalry

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has been replaced by a concerted effort to integrate Western Europe, first economically and later politically. It seems obvious that the European Union has for decades been a stabilizing factor both within Europe and externally through its substantial contribution to the world economy. What is less obvious, at least at first glance, is that during the financial crisis in East Asia starting in the second half of 1997 the EU and the determination to proceed with the establishment of the euro may well have been decisive in avoiding a worldwide financial crisis. The EU and the plans for the Euro (which were finalized as late as May 1998) locked the door to the stable before the horse thief could get in. It prevented speculation against some of the weaker European currencies. No one knows exactly how the currency markets would have fared without this integration but chances are that we would have seen a rehearsal of the game witnessed a number of times before: upward pressure on the deutsche mark and downward pressure on the weaker currencies, mainly in the southern tier of the Union. It did not happen this time. The European Union is already a heavyweight in international negotiations with regard to trade matters. It is beginning to throw its weight around with regard to international monetary matters. It is still very much missing in foreign and security policy. However, we are far from the lamentable but correct description Henry Kissinger gave Europe back in the 1970s when he said that if he wanted to speak with Europe and dialed its number, no one answered the phone. In one respect the EU has managed what could be called a silent revolution or rather an evolution in international politics. That is with regard to human rights. Without much attention the Union has started slowly but unhesitatingly to write into its treaties with nation-states around the world that fundamental human rights must be respected. The Union furthermore reserves for itself the option to declare void some or all parts of these treaties if violations of human rights occur. This is no mean achievement and in the context of world governance it certainly provides a good omen. The nation-states entering into more formalized relationships with the EU have accepted these obligations. Together with the EU’s stabilizing influence on Central and Eastern Europe this show that in some cases the EU manages to play a very active role in foreign and security policy. With all its shortcomings and plans for improvement the EU is ready to form one of the building blocks. NAFTA and North America are dominated by the United States, with Canada an industrial nation-state to the north and Mexico a developing nation-state to the south. NAFTA itself will probably be extended into Latin America, thus constituting a framework within which to form links with the Asian nation-states and economies on the other side of the Pacific. In economic terms NAFTA could well develop into something suffi-

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ciently robust to allow the participation of North America, and in the longer run the Western Hemisphere, in the shaping of some kind of world governance. The problem is obvious: the United States is so much stronger than the other participants that it could pose troubles. The other countries do not want to be controlled or guided by the United States, but the United States takes the view that its clout gives it a natural role that should be respected. The move towards European integration is lucky in that no one player could dominate. There were two or three or four major players, more or less of the same size and economic power. In political terms this problem is exacerbated in the sense that except for the United States and Canada, the Western Hemisphere has lived in somewhat splendid isolation. The Latin American nation-states have no tradition of interfering in foreign and security policy matters outside the hemisphere. That will pose problems when the world starts to ask for volunteers in its quest to shape world governance. The Western Hemisphere and NAFTA are less homogenous than Europe and the European Union. These countries have a lot of work to do to organize themselves. This is an even larger problem in East Asia. So far ASEAN has done a good job keeping the group of Southeast Asian nation-states together during difficult, even turbulent times. ASEAN is almost as old as most nation-states adhering to the organization. Had it not been for the consultations and cooperative feeling spread by ASEAN in the good days it is possible that the economic recession following the financial crisis would have led to the arrival of ‘‘beggar thy neighbor’’ policies. Even if the weaknesses of ASEAN are clear to everybody the significance of this organization should not be underestimated. The main problem for Asia lies elsewhere. The big players—China, Japan and, outside the geographical definition of East Asia, India—do not belong to an institutionalized or organizational body sufficiently strong and buoyant to keep the nation-states together and find answers to common problems. There are several organizations with the ASEAN countries and China, Japan and Korea as members, but none with them alone. And certainly none with sufficiently strong institutionalization to find and enforce answers to their problems. The need for organizing is strongest and most urgent in East Asia. This is where we find the major political and economic problems today and probably for the next couple of years. At the same time the world needs input from Asia if world governance is to take place. This is the only group of nation-states fully outside the European-American world. If East Asia cannot get its act together, Asia itself will of course be the main loser. But another risk of global consequence is that either the present institutional framework will continue until it breaks down (because it is unlikely that Europe and the United States will change the system by themselves) or the system will change but in a way that maintains

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Western dominance. Neither of these alternatives will provide the world with a lasting international system. In the minds of many people the Europe—North America—East Asia model already works. APEC, encompassing almost all nation-states around the Pacific Ocean, is a clear example. ASEM, encompassing all the members of the EU plus ten nation-states in East Asia, is another. Looked at together we have here the embryonic framework of a consultation mechanism among the three big building blocks. Many nationstates may not like it and many may try to prevent it, but it is only a matter of time before the next step is taken: the creation of a common body between APEC and ASEM, providing the mechanics for meetings. These will not be decision-making meetings but, for the foreseeable future, will continue to be forums for discussion. Decision making will come because the world needs it, and when it does come it will be a step towards world governance. QUESTIONS TO BE ANSWERED A successful movement towards world governance calls for a position vis-a`-vis a number of difficult and awkward questions. Who Are the Actors and Players to Be Incorporated in Such a World Model? Many would take the view that it is the nation-states who would fill this role. If so, we would have something like the system we already have. As the hypothesis is that things have changed, this will not be our starting point. The model must take into account that many new actors have arrived at the scene since the late 1940s. The most difficult new players are probably the international organizations and international institutions. On top we have the UN system, which certainly works better than its critics say but not well enough to form the uncontested backbone of our efforts. The UN system must be modified to take into account that the political and economic architecture of the world has changed. The composition of the UN Security Council must be adapted to reflect the arrival of major players and the fact that the world has at least four types of nation-states engaged in the international economy: the postindustrial ones, the industrial ones (almost all of them newly industrialized), the developing ones and the ones that produce raw materials. The Security Council also needs to consider whether the basic and very simple outlook from 1945 is still relevant. The five victorious nations decided that they should govern the world. Is that still the best solution? Whether the world should be governed by

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the Security Council is itself an interesting question, but if so should it then be these five nations who should do it? In the late 1940s the world saw the emergence of many UN organizations addressing economics, trade, culture, health, etc. They were supposed to play a major role but unfortunately they have not. Since then other and different types of institutions have seen daylight. Among them we find some of the most successful ones like the European Union. We also find organizations like APEC and ASEM linking the three big blocks together. These organizations must be accommodated by the system. As it is now they are outside the UN system and to a certain extent compete with this system, or at least provide alternative channels for communication between the main blocks. We have less a concert than three solo players with their own separate backing groups. The regions and the cross-border regions are slipping away from the straitjacket of the nation-states. Some of the biggest and strongest economies in the world are to be found in regions and cross-border regions. California and both sides of the Rhine are examples of such entities with very strong and buoyant economies. As long as they were firmly anchored in a nation-state it was no problem, but now, as they slide away from the grip of the nation-state without having been fully integrated into another political framework, they are candidates for having a say in how the world should develop. As they have valuable experience in how to overcome legal issues connected with border problems, it may be quite useful for the world to have them on board. Some of them have institutionalized themselves, as is the case for example on both sides of the Rhine, making it possible to accommodate them in some kind of international decision-making machinery. Others may not yet have done so, but the emergence of an international system may act as a spur for them. It may prove more difficult to find a mechanism for including the political enterprises. For some time they may have to stand outside looking in, but that will hardly be sufficient for them in the long run. The fact is that it is hardly conceivable to decide important rules in a particular segment of the market without the major political enterprises agreeing. The question is whether that agreement is sought and obtained by proxy or whether the political enterprise itself is invited to take part. The approach that in the end will recommend itself could be not to make decisions likely to be contested by political enterprises without these enterprises present. It would be better for the system to have them on board and to have their views brought forward in an open debate than to exclude them formally while in reality consulting them by proxy. The same goes for many of the large and well-known pressure groups speaking on behalf of a great number of people.

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So we end up with a kind of layered machinery. The first layer is composed of the nation-states plus the international institutions with a competence of their own (the European Union is the prime example), plus regions and/or cross-border regions with a formalized structure and competence of their own. These are the players that decide formally. The second layer is composed of political enterprises strong enough and large enough to render decisions made against their will impossible. We may not yet have got a full-fledged example but Microsoft, Boeing and Airbus come close. These are players to be consulted openly, and their views taken into account in final decisions. The third layer is composed of the regions and/or cross-border regions not operating inside a framework giving them a competence of their own, and pressure groups representing the views of nongovernmental circles and civic society. These are players with the ability to voice an opinion but with no guarantee that it will be taken into account. Around these three layers a global and regional institutional framework could be built. The starting point should be to build upon the mechanisms that are already working. Much of the work could and should be done on the regional level. The Europeans, North Americans and Asians could solve a good many problems among themselves without bothering the rest of the world. It would also expedite things if they were able to sketch positions for the irrespective regions prior to negotiations on a global level. An example is international trade being negotiated in the WTO, where negotiations from scratch, encompassing around 130 countries, would not look promising, but where negotiations on the basis of positions put forward by the regional groupings could be effective, as indeed it has in the past. On the global level three sorts of issues would have to be dealt with. The first involves global negotiation rounds concerning trade, the environment, development and health, more or less in line with the UN conferences the world has seen in recent decades. The second involves thorny issues like human rights, where we find major and sometimes deep divisions between nation-states and groups of nation-states, but where it is necessary to obtain some kind of global agreement about how to proceed. The third concerns security or even military matters requiring the international community to intervene fast and decisively. In this context we should also mention international assistance in case of catastrophes or environmental disasters around the world. Which Kind of Decision-Making Procedure Do We Apply? There are a lot of thorny issues to be dealt with in this context. Voting rights and voting procedures are the most obvious ones. If we accept the

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analysis and conclusions of earlier chapters it is unlikely that a true international system can work unless some kind of majority voting is accepted. It is also obvious that a balance must be struck between the major players, who believe themselves capable of doing without the system, and the smaller ones totally dependent on the system. The first type of player will naturally expect to have greater influence in view of their economic and political clout. Otherwise the system would make no sense for them. They need to arrive at the conclusion that their loss of sovereignty will be more than compensated for by their influence on international development. They should also recognize that their being outvoted will be the exception to the rule. The smaller nation-states have to recognize that they are just that, but at the same time they must feel that they are real partners in the decision-making procedure. Without an international system the smaller nation-states will be bullied by the larger ones, and it will happen behind closed doors. The advantage for these countries in an international system is that negotiations will not be between one large and one small nation but between a number of countries. They must feel that they are better off operating inside such a decision-making system even if it requires the transfer of some of their formal sovereignty. In all successful international institutions this equation has been solved by producing a system that slightly overrepresents the smaller countries. These considerations rule out the requirement of unanimity and simple majority voting on the basis of ‘‘one nation-state, one vote.’’ The solution could be found by looking at how international institutions such as the European Union and national federations such as the United States have solved this problem, which in principle was the same for them as it is now for the international system. The key is a form of minority protection—not protection of minorities inside a nation-state (we will come to that later), but of nation-states in the system. How do we prevent a nation-state with real concerns based on legitimate considerations from being outvoted in matters it regards as vital to its own interest? In the national federations this is solved by the two-chamber model, where one chamber operates on the basis of the size of member states’ populations and the other chamber is normally composed of an equal number of representatives from each of the member states. This in itself is a strong form of minority protection. Moreover, voting rights are more and more restrictive the more fundamental and far-reaching the decision is. In the European Union qualified majority voting has gradually established itself as the normal way of proceeding. Each nation-state is allocated a share of the votes, reflecting the size of its population, gross national product, etc.—but not proportionally. The voting system is lopsided in that it slightly favors the smaller nation-states. To make a decision more than half of the votes are required—normally about 60

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percent. The full procedures are much more complicated but for our purposes this will do as an explanation. As a political compromise there is a non-binding gentleman’s agreement to pursue discussions aiming at unanimity in case a member state feels a vital national interest is at stake. But there is no veto right and according to the Treaty of Rome a vote can be taken. If so the proposal is adopted and it enters into force as EU legislation. In the EU unanimity is required in some specific cases including any change to the Treaty, enlargement of the union and some fiscal matters. In an international system voting rights and voting procedures could be based upon a few key principles: • Some fundamental matters and matters of principle should require unanimity. • For most of the issues majority voting should take place, with each member state allocated a share of total votes more or less reflecting its weight in the international community. • Some kind of minority protection should be provided. It could for example consist of a combination of members required to adopt a proposal, and this combination should represent a share of population and Gross National Production well above the simple majority. • The protection of a minority of members or even a single member could be supplemented by rules such as a right to demand postponement of a decision or its implementation for a specific period of time, depending on the kind of issues being dealt with. In many cases the system could also incorporate a kind of escape clause stating that under certain circumstances a member could ask to be released from the obligations flowing from the decision—or it could get a grace period, meaning that the decision would enter into force somewhat later for that member than for the rest of the members.

There need to be measures to punish those who do not follow the rules of the international system. Those who violate rules should be taken to court, and if they do not accept the decision of the court they should not continue as members. The basic idea of all this is to create some form of international legal system. The same goes in cases where one or more members do not pay their contributions. Various forms of sanctions for all these possible kinds of noncompliance would have to be incorporated into the system. For some such a model would be impossible. For others it would not vary greatly from the status quo, as many nation-states already participate in international institutions operating more or less on the basis of these principles. The idea is not that one body should be established making use of all these, but that gradually the UN and various institutions, organizations and agencies should amend their voting procedures to reflect these principles.

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The national political system is based upon transparency, legitimacy and accountability. That means in practical terms that it should be possible to know who is responsible for decisions and to punish or reward them at the next election. The problem for the international system is that no such transparency, legitimacy and accountability exist. There is no legitimacy because very few of the decision makers are actually elected to decide but do so without the blessing of the voters. Even the nation-states cannot get rid of most of the decision makers on the international scene as long as they sit within the time frame allocated. While very few would defend such a system, it is possible to do so on the grounds it is necessary to make decisions. The unspoken meaning is quite clear: we are dealing with an immature, maybe even stupid population that cannot be trusted, so somebody else has to step in and decide. So far the international system has done without direct public support from the nation-states. It has not been necessary because the system worked very well and produced what people wanted. But now that it is being questioned whether the system can continue to deliver, the lack of public support for and knowledge of what is going on carries a deadly risk. Transparency is about being able to determine how the political system works—or even better, understanding the system and feeling like an insider. Transparency does not mean that decisions are made in public; they may or may not be. It means that the public knows who is actually responsible for these decisions, how they were made and what they mean. That is more easily done in a nation-state, and the smaller the nation-state is the easier it becomes. On the international level the difficulty is that international decision makers, sitting far from the voters, need to overcome the distance and the various obstacles to communicating. Unfortunately, most communication takes place via impersonal audiovisual media, making it easier for the decision maker to hide behind artificial barriers. Maybe the Internet can be used to give better access to the foundations for decisions and the arguments for and against them. Technically, transparency will be the easiest of the three items to solve. Legitimacy means that those who actually make decisions are chosen by the people to do so. On the national level legitimacy is normally present in democratic or nearly democratic political systems. The problem is on the international level, where a good many decisions are made by persons not chosen by the electorate but by national governments. In the European Union the European Commission can be said to possess legitimacy in the sense that the members are normally politicians chosen by national governments to sit on the Commission. But even in such cases the question is raised from time to time whether they actually have democratic legitimacy. Many of the international organizations such as

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the IMF, the World Bank and the WTO are run by civil servants, though ones nominated by national governments. These civil servants make decisions of great importance. The normal procedure requires the endorsement of an appropriate body, often but not always composed of politicians representing their nation-states. The criticism is often heard that these international civil servants constitute an international elite with no legitimacy, because they are not elected to the posts they fill. When they make decisions of great importance to a nation-state, a conceptual clash may arise. The political leaders of the nation-state are elected. They have political legitimacy. The international civil servants are not elected. It is difficult if not impossible to envision an international system where decision-making powers rest with civil servants who have little or no legitimacy. Accountability means that those who make the decisions can be replaced if the people (the voters) do not like those decisions. It works more or less the same in many nation-states around the world. Again we find the problem in the clash that may arise between the international institution and the nation-state. National politicians are responsible to the electorate for the decisions they make, and also for the repercussions on the domestic scene of decisions and agreements entered into with international institutions. The civil servants in those institutions do not have to answer to any electorate. Yes, they may not be nominated for a new term when their old one expires but that is not exactly the same. So when the nation-state meets the international institution the balance of negotiating power is skewed. Unless the civil servants from the international institution understand the domestic political problem—and they may or may not—things can go awfully wrong. It may seem odd that decisions of far-reaching economic, monetary and commercial importance can be made by the IMF and/or the WTO, sometimes jeopardizing the political life of domestic political leaders, while the civil servants simply disappear into the office buildings of the organizations they work for. They do not have to meet public outrage and defend decisions face-to-face with those who are going to suffer. One of the most difficult items to deal within an international context is noncompliance. There needs to be some form of sanctions against nation-states not living up to their commitments. In the European Union there is a Court of Justice. At the international level there is the International Court at The Hague in the Netherlands. In some specific areas courts have been established—for example, with regard to human rights, where there is a court of justice in Strasbourg. When establishing the European Economic and Monetary Union it was agreed that in some cases noncompliance with the rules concerning finances could lead to the imposition of fines.

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THE ECONOMIC OUTLOOK In the 1970s and 1980s the USSR proved that socialism in its pure form did not work. In the 1990s Russia proved that capitalism (the free market) in its pure form does not work. The problem this poses is that internationalism has nailed its colors to the mast of the free market and in the eyes of a good many people the free market is synonymous with capitalism. The conclusion to be drawn is that as of now the world has no single, best model available. The models tried to this point simply have not worked. Accordingly the world is being pushed relentlessly towards a hybrid model, a model based primarily upon the principles of competition and the market but equipped with safeguards and escape clauses making it possible to avoid what some would call abuses and others inevitable consequences of the free market. The model could be called the manageable or managed market. The reason for this conclusion is that for the time being technology is driving internationalism and globalism sufficiently strongly to constitute an almost insurmountable barrier against the lure and temptation of a siege economy. A world without information technology, the Internet, email, etc., is almost inconceivable. And as long as that is the case it follows that enterprises will develop from national to supranational to political enterprises. Any country trying to circumvent or escape from the combination of the international imperative and the new kind of enterprise will face an awkward dilemma. Even if some nation-states are flirting with the idea of breaking away from the international imperative, almost all nation-states still choose internationalism instead of a seclusionary/siege economy. What we see at the international level is exactly the same as at the national level—the game of growth and distribution. The question is, What more can we produce and how shall it be distributed among the participants in the community, international or national? In this context we also see the conflict between producers and consumers. This political problem is going international as reports and analyses point to the fact that despite growing gross national products around the globe, income disparities and disparities with regard to the quality of life are widening. Such was the conclusion, for example, of the report by the UNDP (United Nations Development Programme), published September 9, 1998. The main problem is that on the national level many decades of industrialization have forged an institutional framework to deal with these problems. Such an institutional framework does not exist at the international level. In most nation-states the state is sufficiently strong to constitute a counterweight to the market. This is not the case on an international level.

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The trade issues are somewhat better organized than the economic and monetary questions, albeit in none of the cases much scope for applause can be found. Substance is the decisive matter and institutions are established to implement the agreed substance. Substance determines what kind of institutions will be built, but the strength of the institutions determines the vigor and resolution with which the agreed substance is implemented. Thus, neither side of this coin can be neglected. The likeliest outcome with regard to the international economy and international trade contains the following elements: The Trade Issues The founding fathers of the system in the late 1940s said the objective was freer trade and not free trade. According to preamble of the General Agreement on Tariffs and Trade (GATT) the objective is ‘‘substantial reduction of tariffs’’ (italics mine). Neither the words ‘‘free trade’’ nor the words ‘‘freer trade’’ appear in the preamble setting out the objective. Also integrated was a mechanism to protect the very weak from the very strong nation-states. So the trade system designed in the late 1940s is a liberal one—a very liberal one—but it does not elevate free trade above everything else. There are checks and balances. This seems to be forgotten sometimes when the system at work is being discussed. That may be because back in the late 1940s (almost) all participants were industrialized nation states and very few were developing nations. The problem as it has emerged during the decades leading to the end of the century is that many other nation-states with industrial capacity want a place in the sun. To a certain extent that could be accommodated within the system because world population and world consumption were growing. A larger pie made it possible for the newcomers to get a share without substantially reducing the absolute amount at the disposal of the already established industrial nation-states. During some of the 1980s and certainly during most of the 1990s the sentiment was clearly in favor of stronger liberalism, that is, a system aiming at free trade and without many of the checks and balances inherited from the immediate postwar system. It was generally agreed that such a system would produce higher trade, higher economic growth and thus higher standards of living across the world. It was generally overlooked that it would also produce more disparity in income levels both between and within nation-states, and in particular between the groups attached to internationalism and the groups still tied up in the national economy—the latter being exposed to international competition with little time to make the transition and without recourse to safeguards. At the same time an institutional issue arose: the vacuum created by

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the fact that GATT was not an international organization based upon a treaty. As the US Congress refused to ratify the ITO in the late 1940s, GATT was invented as a stopgap measure and functioned as such until the creation of the WTO in the mid-1990s. This promoted a decisionmaking procedure far removed from all considerations of transparency, legitimacy and accountability. The creation of the WTO solved the problem of there being no underlying treaty but sacrificed what we may term democratic safeguards in favor of efficiency. That would be fine if there was unanimous support for the trade policy, but the reality is quite different. The WTO faces a double challenge at the end of the 1990s: an institutional one and one of substance. Both are more urgent and more important than most people like to think. The institutional question is about integrating transparency, legitimacy and accountability into the decisionmaking machinery. As the WTO grows in importance in accordance with its increasing role, it will become more and more clear to the political leaders and the public in member states that a good deal of competence has been invested in that organization. This is probably good for the world economy, but underlines the need to adopt a more open decisionmaking procedure. The substance issue can be divided into two parts: one concerning well-known issues and the other new issues. For the well-known issues the problem to decide is whether the world will go from freer trade to free trade (and if so, according to which timetable) or whether the world should stop at the present level of free trade and wait for a number of newly industrialized countries to catch up before taking the next step. Here we find the problem of safeguards and escape clauses. The faster and more abruptly the world wishes to move towards free trade the stronger the pressure will be to get in place an efficient panoply of such measures. If the likeliest outcome materializes, the world will still have a chance to maintain completely free trade as a long-term objective, but only on the condition that in the short term deviations from that objective could be granted to nation-states, international institutions and sectors for which a case can be made for derogation. The world may face the dilemma of choosing between more free trade (with the risk that many nation-states will find it difficult to accept the obligations flowing from such an approach, and will leave the system) or granting derogations accompanied by international supervision. As a special new element we will probably see the emergence of an antimonopoly institution on the international level, able to enforce competition by breaking up business empires—especially within the information technology and the information, news and entertainment

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industries. As a first step such a body could ensure free access for all to the technical infrastructure, making it impossible for a few operators to monopolize that infrastructure. This leads us to the next issue, new items. In the past GATT and then the WTO devoted a lot of effort to agriculture and manufacturing. This is not exciting anymore. In the future we will have to look at financial services, access to the Internet and electronic commerce. Very few nation-states have considered what the Internet will mean to them and their economy, especially their tax system. The implication is rather obvious, even if it will take some time to filter through both the political circles and the mind of the public. It will be difficult to operate a tax system fundamentally different from the ones applied by other nation-states with the same standard of living, because goods, commodities and services can and will be bought through the Net. The nation-states will be pushed towards a choice: they can either maintain a tax structure tailor-made to their own political objectives (with the implication that many people will start to trade on the Net, thus making it imperative for the nation-state to introduce regulatory measures cutting it off from the international community) or they can change the tax system to match international standards. A middle way might be available. At the international level (that is, in the WTO and international institutions) some rules could be established creating a framework for what can be traded on the Net. If the international community does not address this issue the world risks sliding towards a very awkward dilemma. One of the victims could easily be free trade, in the sense that national restrictions regarding trade on the Net could pull other, related measures along. The Economic and Monetary Issues In principle the economic and monetary issues do not deviate from the trade issue—the decision-making mechanism and the distribution problem. The decision-making problem is much more acute in this area than in the trade area because of the immense tasks being thrown on the shoulders of the IMF in recent years. Nobody thought in the late 1940s that the IMF could actually play such a decisive role in the future of nation-states as it has for Russia and Indonesia in the late 1990s, and probably also for Mexico in the middle of the same decade. These were monumental tasks where success or failure would determine whether the world continued towards a capitalist and free market model or whether that model had to be reigned in. This is an economic problem of the utmost political significance. It seems that neither full success nor complete failure is at hand. The IMF and its ‘‘customers’’ are muddling through. But is that good

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enough? Many supporters of the free market believe that these countries managed their economies badly and are now paying the price; there is no reason for pitying them. But is that correct? In the case of Indonesia the IMF and the World Bank for years lauded the economic policy the government pursued. That nation-state was among the cases both institutions were proud of. If Indonesia had asked in the spring of 1997 whether its economic policies should be changed, the IMF would in all probability have answered No. For Russia it can be said that without knowing it and without asking for it that nation-state became a sort of laboratory for various economic policies emphasizing the free market. The IMF did not do very much to smooth the transition from a command economy to a market economy but was satisfied to let things develop. And for a time it looked as if Russia would make it. In 1996 and 1997 the economy approached the stage where limited growth replaced the previous dismal negative figures and inflation was brought under control. Compared to other nation-states around the world the Russian economy did not do so bad. A swing of such magnitude brought off in less than a decade would by most standards represent a considerable achievement. One wonders what would have happened to the Russian economy if the price of oil in 1997 and 1998 had been around US$20 per barrel instead of less than US$15. The Western world did not hesitate to pocket the windfall flowing from the falling oil prices, and did not think about compensating Russia, even though it knew quite well that oil was one of few resources available to the Russian economy and one of the few sources of tax revenue. No one heard the IMF or the international community stating that in such circumstances it would have served the world well to make up the difference. The political and institutional problem for the IMF at the end of the decade is that it has sided with one particular policy and thus with a limited number of member states; those adhering to the free market and the capitalistic model. The heart of the prescriptions worked out by the IMF conforms to world competitiveness as conceived by free marketeers. And these decisions are being implemented in nation-states with little or no choice. When on the brink of bankruptcy a nation-state has to accept loan conditions that otherwise would not appeal to it. The international monetary system has always seen conflict between creditors and debtors. That was the case under the gold standard, run by Great Britain before 1914. The system broke down in the interwar period because of this conflict. With the pre-1914 system and the interwar system the creditors had the upper hand—as is likely to be the case, because the creditor has the money that the debtor wants and needs. But the raison d’eˆtre for an international system is exactly to introduce a counterweight to that economic lopsidedness. John Maynard Keynes, who was the British chief negotiator at Bretton

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Woods in 1944 when the present system was born, saw that and proposed a quite different system based upon credit creation on the international scale, instead of credit transfer, which is the cornerstone of the IMF system as it has been practiced for more than 50 years. When Keynes could not get his way he grudgingly submitted, but managed to integrate a special clause, called the ‘‘scarce currency’’ clause, into the system. The idea was that in case a currency became scarce on the international level because of the economic strength of its mother country, it could be declared scarce and certain actions against the nation-state in question would be allowed to remedy this imbalance. The scarce currency clause was aimed at the United States, as Keynes clearly saw that in the postwar world the United States and the US dollar would be too mighty for the others. However, because the United States not only became stronger than anybody else but probably also stronger than envisaged by Keynes, this clause was never used and quickly became forgotten. What a pity! Because it points exactly to the burning issue: Which nation states are going to shoulder the burden of adjustment? The rich and strong ones or the poor and weak ones? As it happened, during the last five years of the 1990s the answer given to that question by the IMF was ‘‘the poor and weak ones,’’ regardless of the circumstances. There is no doubt that a good deal of restructuring was called for in Korea, Thailand and Indonesia, that a good deal of basic construction had to be done in Russia, and that only these countries themselves could deliver that. But how much of the burden was allocated to the rich and wealthy countries? Much can be said to support the conclusion that the IMF system is not trying hard enough to strike a balance between creditors and debtors. To do so is not easy, especially since the major part of the resources has to come from the United States, and the US Congress by instinct always takes the creditor’s view. To our mind the time has come for a new look at the international monetary system. The two burning issues—political control and a better balance between creditors and debtors—should rank at the top of the agenda. If the system is allowed to run as it does now the risks are considerable that some nation-states will find it necessary to break away, introducing restrictions contradictory to the system. That could easily trigger a major clash with grave repercussions for the international monetary system. As the ideological struggle between capitalism and socialism is over, the remaining system—the capitalist one—has to defend its existence on its own merits. And that is increasingly difficult. On the national scene nation-states have to construct a counterweight to prevent the disparities produced by the market economies from running amok, without losing the ability to produce more and more efficiently.

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Unfortunately, disparities in the United States seem to continue to grow—almost alarmingly during the 1990s, a decade with growth rates ranking around the very best of any in the history of the United States. Japan looked for some time as if it had an answer, at least to the extent that the Japanese could integrate the ability to produce into the fabric of society while safeguarding old cultural values. That model ran aground in the 1990s. The other Asian countries ran into a financial storm which they may weather but that at least temporarily rules them out as having the model for the future. The European economies have often been accused of being a bit petrified, in so far as they do not possess the mobility deemed indispensable for continued growth. That may be correct as long as we are talking about geographical mobility. As far as social mobility is concerned there is growing evidence that it is high enough and probably higher than in the United States. At the same time the European economies do not display the same growing disparity as the United States. The Europeans have practiced international institutionalizing and are now better prepared for this process on a global scale after almost half a century with the European Union. All is not well in the European economies and in the European societies. Far from it. But at the present juncture in the history of civilization it seems more likely than not that the main principles of the European model may find their way into other societies and economies around the world. Its strongest asset is the ability to keep a large part of the population inside what can be termed the active part of society, and not eject or ignore them. That produces a more homogenous society—admittedly a little less productive and a little less efficient than the competitive part of the American economy, but in the long run the Europeans may win this race. It is, at any rate, head and shoulders above the noncompetitive part of the US economy. The Europeans have this kind of society because of their tradition of employing counterweights in the political and economic system, preventing extremes from assuming uncontested control. The free market has never been allowed to play its hand without some kind of control. The state has been there and has played the role of checkpoint to ensure some kind of balance in society. Exactly the same is called for now at the international level. The market should not be put aside. It should still be the mainstay of international economics and trade. But there must be some controls to prevent the worst kind of abuses. Without them, the free market (as we have seen in several cases) will overplay its hand, and gradually the feeling will filter through that the market is not able to do what is required. The extremes kill themselves. What is called for now is a market system with checks and balances. The middle road, but not mediocrity.

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THE SECURITY OUTLOOK The 1970s and 1980s gave proof that two superpowers in a military standoff can prevent major wars. The 1990s gave proof that one superpower alone cannot prevent arms races between medium-sized nations, nor can it prevent local conflicts. The world was a safer place to live in during the 1990s in the sense that the risk of a deliberate nuclear war which would wipe out mankind had ceased to exist. But unfortunately, the 1990s produced an arms race between medium-sized military powers. Even more unfortunately, this arms race concentrated upon the kind of weapons capable of destroying mankind. India and Pakistan conducted nuclear tests. Iraq may or may not possess weapons of mass destruction. North Korea may or may not possess medium-range missiles and be capable of putting a nuclear warhead on top of them. In the former USSR a whole range of nuclear weapons is still on the scene, with or without sufficient guards. The risks of a nuclear war in the next decade may actually be much higher than it was in the decades of the cold war. The problem is the lack of ability and political will to enforce international treaties, rules and regulations. To maintain and increase security in the coming decades the world needs to address the following issues: 1. Human rights have for decades been a hot potato. Some of the Western nation-states think that they have the privilege of holding the only answer in their hands. That is not so. Human rights are a much more complicated issue than appears at first glance. They have to grow from culture, tradition, civilization. Nowhere can human rights be pasted on a society. They must have support from the population of the nationstate itself. Whether or not the world wants to replace or amend the present UN charter, the way ahead is to promote better understanding between cultures around the world about their interpretation of human rights. This is an indispensable first step. Only by doing so will it be possible to move towards some common ground. The world and its various cultures are different. History shows that. The behavior of people shows that. It is useless to charge ahead with an inflexible idea of what human rights are and how they should be implemented if that is contradictory to what others think. It may be that information technology and the Internet will help to promote such understanding, and thereby also facilitate the task of finding common ground between cultures. If so, rapid progress with regard to human rights could be obtained. It therefore seems to us that the most important step is to ensure free access to the Internet and electronic communication for all. That sounds rather obvious. But it not only means that people can get access to the Net to pick up news. It also means that

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no monopolies and interests dictated by money can prevent people from disseminating information on the Net. 2. The international machinery and the composition, training and equipping of national military forces have to take into account that the main task ahead is not to fight a major war like an armored clash in Germany or a sea battle in the Atlantic to keep the sea lanes between North America and Europe open. The first step in what experts may call genuine and traditional security policy is improved intelligence. In the very midst of the information age the world suffers, at the same time, from too much and too little information. Or rather the world suffers from the inability of intelligence networks to pick what policymakers need. It sounds odd that the world does not really know whether Saddam Hussein in Iraq is complying with restrictions on arms development imposed upon Iraq by the United Nations; whether North Korea is developing medium- or long-range missiles, and whether they can be equipped with nuclear, chemical or biological warheads; whether Colonel Gadhafi in Libya is able to manufacture chemical weapons. The world also did not know that India could or would start tests of nuclear weapons. Perhaps somebody knew, but apparently the policymakers did not. If the world is to be a safer place, the collection of information telling us whether these things are going to happen or not is of vital importance. The second step is to make it clear to all nation-states that membership in the international community requires certain obligations with regard to what kinds of weapons are and are not allowed. It is fine that the United Nations has assembled conventions and treaties to prevent the development of infamous weapons, but the threshold should be a good deal lower—and most important of all, there should be some kind of sanctions in case of noncompliance. These sanctions could in extreme cases imply the use of military force under the aegis of the United Nations. The third step should be to organize world security, encompassing peacemaking, peacekeeping, humanitarian tasks and crisis management. Some (modest) steps have been taken in this respect in recent years. The WEU (Western European Union) has drawn up such a plan, and even if the organization has not been able to put flesh on it the preparatory work has pointed the way. Inside the UN framework there are attempts to build a standing high-readiness force (SHIRBRIG) able to intervene with very short notice on behalf of the United Nations. A number of nationstates have earmarked military forces for that objective. What could be helpful in present circumstances is a set of guidelines making it clear when intervention of this kind could be envisaged. The knowledge that the UN could and would react fast might well serve as a deterrent in some cases.

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3. Weapons of mass destruction seem to be easier and cheaper to produce. Many observers take the view that it is only a matter of time before the world is threatened with the explosion of a nuclear device or the dropping of a biological or chemical weapon in a heavily populated area unless some concession or change of policy is granted. Technology offers so much to mankind. Perhaps the world should put more technological and financial resources into making it possible to trace such weapons and maybe also to destroy them or render them inoperative remotely.

8 The Alternatives A Danish philosopher once said, ‘‘it is difficult to make predictions, especially about the future!’’ And so it is. Nonetheless, let us try to take a brief look at the alternative to continued internationalism and some form of world governance. To our mind the alternative would be based upon the nation-state. Its most striking feature would be more nationalism, more egoism and more selfishness, with the blame for everything bad laid on foreigners and the nation-state gradually sliding into seclusion. Such a development could take place under three scenarios—a chaotic development, a clash of civilizations and a regrouping of nation-states—with the joker having the best odds. The world could slide into chaos with more or less the same number of nation-states as we have today, large and powerful supranational (but not political) enterprises, and international organizations with dwindling power, competence and influence. The United Nations and its agencies would still be there. The UN Security Council would still hold its meetings but it would run into growing opposition every time it tried to get a vote on important issues. The attempts to decide on a number of security issues would be thwarted by vetoes by the permanent members of the Security Council. In such a scenario it is likely that the number of permanent members of the UN Security Council would increase, and it is possible that the right to veto a decision would be granted to more than these five members. The European Union would still be there but all plans to deepen the existing integration and/or to enlarge the circle of members would disappear on the horizon. The EU would have its hands more than full

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defending what it has already accomplished, and the European Economic and Monetary Union would after a brave start run aground and be aborted. NAFTA, ASEAN and Mercosur would all still have offices in high-rise buildings, and their bronze doorplates would still be polished twice a month, but their powers would not really be worth discussing, and any comparison with their original objective would present a sad picture. Gradually, a vacuum would arise. No real decisions would be made at the international level to come to grips with the political and economic problems plaguing the world. The strong players would sense this before the others and start to behave accordingly—which means that they would look after their own interests. All magnanimity among nationstates would wither away. The large enterprises would bully smaller nation-states and potential competitors into submission. A number of rogue nation-states would make their entrance, as there would be nobody to call for order and enforce order. In the not-too-distant future, chaos or anarchy would creep into the international picture. That would spill over into the national sphere; nation-states would start to break up, as the imperative to stick together—namely, to defend common interests in international negotiations—would not longer be there. Warlords and rump states would take the place of the nation-states. The final picture would be one of semi-autarchy and semi-seclusion for most political entities. International trade would virtually disappear, and information over the Internet and other instruments would not be free but under strict supervision by various local bodies. Such a picture is not the most likely one. It would break with the historical progression, almost uninterrupted since 1945, towards more international development. But if the world comes to the conclusion that internationalism cannot deliver the desired results, this scenario is indeed thinkable. A clash of civilizations has been debated for much of the 1990s. The basic presumption is that several of the great civilizations would find it impossible to get along with each other, resulting in an inevitable clash. The world has seen clashes between civilizations before. At the end of the eleventh century the Christian world declared war, in the form of crusades, on the Muslim world. An army went on the attack, travelling through today’s Turkey (conquering on the way Constantinople, the capital of the Byzantine empire) and continuing along the eastern coastline of the Mediterranean to the ancient city of Jerusalem, which was taken in the year 1099 after a siege. They then established the kingdom of Jerusalem, which they held for almost 100 years until the Battle of Hattin, when they were defeated by the armies of Sultan Saladin. This was truly a clash or war between civilizations, as the predominant factor behind the crusades was religious. One of the reasons that the Christians lost

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was that the kingdom of Jerusalem did not get sufficient support from its hinterland in Europe, while the Muslims for a time buried their quarrels and rallied under the banner of Sultan Saladin. Most people when they talk about a clash of civilizations think about some kind of reenactment of the clash between the Christian world and the Muslim world. They point to the strong reaction in large parts of the Middle East against Western, especially American, influence. However, such a clash of civilizations is unlikely. Even if we start with the assumption that the high point of the Anglo-Saxon culture is behind us and many new cultures are emerging, it is more likely that we will see some form of competition instead of a clash. Genuine conflict is difficult to comprehend in this case, insofar as the actors who manage conflicts are outside the clash-of-cultures context. The nation-states, the international institutions, the political enterprises, the cross-border regions are all themselves actors with several cultures to contend with internally. It is difficult to see them take sides in a clash or even a competition among cultures. It is much more likely that culturally-based conflicts and confrontations will take place inside these entities and contribute to tearing them apart, thus destroying the political and economic architecture for major conflicts. The almost indispensable condition for a major conflict of civilizations—that each major civilization be master over a large and largely undisputed geographical area—seems simply not to present. Of course we can look at the map and draw some lines between predominantly Muslim, predominantly Christian and predominantly Buddhist areas, but this does not necessarily lead to conflicts among these major civilizations. The regrouping of nation-states is a possible outcome, among other reasons because it is what we have seen for a long period of history. Nationstates expand in periods of strength, whereafter they diminish and even disappear. One of the great European powers around 600 years ago was Lithuania, which then was wiped off the map, only to reappear in this century and in a much more modest shape. If internationalism loses the struggle and has to give way, we may see groupings of nation-states in the patron-client configuration that characterized a large part of politics in the Roman empire. Small and weak nation-states would seek the protection of large and stronger nationstates. In Europe many of the smaller nation-states would be drawn into a sphere of interest dominated by Germany. Britain, France, Italy and Spain would try to resist this and it could be exciting to see whether they would be able to do so. However, the great risk for Europe is that this could easily lead to a clash between Germany and Russia. Germany might consider its western and northern hinterland secure, leading to expansionist plans concerning Central and Eastern Europe. If successful,

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that would make Germany the dominant European power, especially in Eastern Europe and around the Baltic Sea. Such a development could and probably would lead to a Russian reaction. Similar cases would appear in the Middle East, the Far East and in North as well as South America. Each major continent would organize itself around one big power, which would be the undisputed master of that continent. Between themselves these five to ten large nation-states would work out a power-sharing arrangement, or go to war to grab a part of each other’s territory or sphere of interest. The smaller and medium-sized nation states would be called to order by their patron, who would dictate security matters, economic and monetary policy and trade policy. Formally, an institutional machinery would be set up—not for negotiations, but to communicate to the client nation-states what the regional superpower wants them to do. It would be a very well organized world. Everyone would know what to do and what not to do. The drawback is that it would not be based upon democracy and would not attempt a balance between large and small nation-states on the international level. International institutions such as the United Nations, the European Union, NAFTA and ASEAN would possibly be allowed to go on existing but they would not be in control. They would constitute scenery behind which the regional superpowers manage their territory and their client states. Some European and Asian nation-states know a little about such a model. It was practiced (albeit in the extreme) by Nazi Germany and Imperial Japan during World War II. The occupied nation-states were arranged according to the wishes of the patron in Berlin and Tokyo, and from time to time their leaders were summoned to be told what was expected of them. Not a very nice world. Of the above-mentioned alternatives to internationalism and world governance the most likely one is the third model. However, an even more likely model, which I will call the joker, is a kind of muddling through. The Western observers of developments in Russia have for years pointed to ‘‘muddling through’’ as the most likely outcome. Little did they know that muddling through could also be the fate of their own nation-states if we allow the international world to slip away. In such a scenario, the United States would continue to be the most powerful nation-state in the world. But the United States would gradually lose its commitment to internationalism. More and more security problems would be deemed not to call for American intervention. As the other nation-states lack the necessary military potential, especially with regard to intelligence and transport, no one else would be able or willing to take over. Potential rogue states around the world would sense this and stir up trouble, seeing to their surprise and joy that they are allowed to do so. And then they would move. They would annex territory, even

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whole neighboring nation-states. When that happens the international community would start to wail and wring their hands, possibly asking whether the aggressor would be so kind as to surrender the fruits of his aggression. And then no more would happen. Small and medium-sized nation-states would look around for protection and soon realize that the only protection available lies with their own military arsenal. This regrettable conclusion would trigger a substantial armaments race around the world. Whether or not somebody at some point would rise to the occasion and try to stop the backsliding is an open question, and even if they did chances are that it would be too late. Trade policies around the world would at least for a considerable period be characterized by free trade, but gradually nation after nation would find it advantageous to impose tariffs and/or restrictions. The trade system would probably not slide into protectionism but it would move away from the present state of liberalization. The trend would be reversed, so to speak. The international rules would still be there—on paper. But there would be very few to enforce them and very little punch behind their efforts to do so. Instead we would see unilateral multilateralism, which means that the strongest nation-states would impose their rules, or rules tailored to their economy, on the world economy and other nation-states. Other nation-states wanting access to the market of the strongest nation-state would have to apply the rules that nation-state wants. Economic and monetary questions would follow the same pattern. There might be a movement towards two major currency areas: the dollar zone and the Euro zone. The dollar zone would be an American backyard and the Euro a European one. It might go so far that the U.S. dollar and the Euro would be made legal currency in the adhering nation-states (the client states). They would surrender all their independence and sovereignty with regard to economic and monetary policy, but in return they would get stability. Client states would have no currency problems and no problems with regard to monetary and interest rate policy: all that would be determined by the United States and the European Union. But of course the policies pursued would be those preferred or rather chosen by the United States and the European Union. Instead of policymaking taking place in an international institution with well-known procedures, policy would be determined for these nationstates by another nation-state not very likely to take into consideration the concerns of others. The international machinery would still be there, and seen from the outside it would work. However, the results of negotiations would be decided before hand by the dominant nation-states, and the meetings would not do much more than endorse (albeit in a polite an orderly way) these decisions. In brief, muddling through means that the international system 20 or

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30 years from now would look more or less like the present system on the surface, but inside would work almost exclusively according to the wishes of a couple of strong nation-states. It would not be an international world. We would have nationalism exercised—by a few—on an international level. A slightly different version of muddling through involves American dominance, with the European Union as a poor runner-up and Asia not able to organize itself or define and express its opinion. This model would leave the world in a strange situation. The United States would be the only superpower, but would be unable, unwilling and uninterested in exercising global leadership and global responsibility. In a way it would be like the interwar period, when the United States was the strongest nation in the world but did not want to realize its power and appear as leader. The difference would be that the United States would know very well how strong it is, but would refrain from using its power and influence except in pursuit of its own interests. The European Union would not be a union but would try to appear as such. It would have the economic strength but not the machinery to exercise leadership. It would lack both the will and the means to exercise political and security policy leadership. It would be a muscular figure on the stage but without a role to play. Asia would possess one of the world’s largest economies (Japan), but judging from Japanese policies so far it is unlikely that leadership in Asia would be forthcoming from that country. The exciting question will be whether China—still a weak economic power—would be able to rally a sufficient number of other Asian nation-states around itself to assume leadership, and how the other nation-states in such circumstances would handle their relations with China. If the Europeans are not able to transform their union into a body capable of and willing to exercise leadership on the international stage, and the Asians continue to be unable to organize themselves, the world may well see the emergence of an American-Chinese partnership. Or what would be worse and more threatening: an American–Chinese confrontation. Each of these scenarios is thinkable; some are more likely than others. The world may well see one of them come about in a decade or two unless a determined effort is made to strengthen internationalism and move towards some kind of world governance.

Selected Bibliography Barnett, Christopher. Valueware. Twickenham, U.K.: Adamantine Press, 1999. Bauer, Joanne R., and Bell, Daniel A. (eds.). The East Asian Challenge for Human Rights. Cambridge: Cambridge University Press, 1999. Bryant, Ralph C. International Coordination of National Stabilization Policies. Washington, D.C.: The Brookings Institution, 1995. Buzan, Barry, and Segal, Gerald. Anticipating the Future. London: Simon and Schuster, 1998. Coates, Joseph F., Hines, Andy, and Mahaffie, John B. 2025 Scenarios of U.S. and Global Society Reshaped by Science and Technology. Greensboro, N.C.: Oakhill Press, 1997. Collins, James C., and Porras, Jerry I. Built to Last. New York: HarperBusiness, 1994. Davies, Norman. Europe. Oxford: Oxford University Press, 1996. Didsbury, Howard F. Frontiers of the 21st Century. Bethesda, Md.: World Future Society, 1999. ———. (ed.). Future Vision. Bethesda, Md: World Future Society, 1996. Fallows, James. Looking at the Sun. New York: Vintage Books, 1995. Fukuyama, Francis. The End of History and the Last Man. London: Penguin, 1992. ———. The Great Disruption. New York: The Free Press, 1999. ———. Trust: The Social Virtues and the Creation of Prosperity. London: The Free Press, 1996. Gates, Bill, with Collins Hemingway. Business @ the Speed of Thought: Using a Digital Nervous System. New York: Warner Books, 1999. Giersch, Herbert (ed.). Privatization at the End of the Century. Berlin: Springer, 1997. Heurlin, Bertel. Security Problems in the New Europe. Copenhagen: Copenhagen Political Studies Press, 1996. Hill, Michael, and Lian, Kwen Fee. The Politics of Nation Building and Citizenship in Singapore. London and New York: Routledge, 1995.

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Hobsbawm, E. J. Age of the Extremes. London: Abacus, 1995. ———. Nations and Nationalism since 1780. Cambridge: Cambridge University Press, 1990. Huntington, Samuel P. ‘‘The Clash of Civilizations.’’ Foreign Affairs, Summer 1993. ———. The Clash of Civilizations and the Remaking of World Order. New York: Simon and Schuster, 1996. Jensen, Rolf. The Dream Society. New York: McGraw-Hill, 1999. Kanter, Rosabeth Moss. World Class. New York: Touchstone, 1995. Koh, Tommy. The Quest for World Order. Singapore: Times Academic Press, 1998. Lazear, Edward P. Economic Transition in Eastern Europe and Russia. Stanford, Calif.: Hoover Institution Press, 1995. Lingle, Christopher. The Rise & Decline of the Asian Century, rev. 3rd ed. Hong Kong: Asia 2000 Limited, 1998. Mahbubani, Kishore. Can Asians Think? Singapore: Times Press International, 1998. Mann, Jim. Tomorrow’s Global Community. Philadelphia: BainBridge Books, 1998. Mazarr, Michael. Global Trends 2005. New York: St. Martin’s Press, 1999. Møller, J. Ørstrøm. The Future European Model. Westport, Conn.: Praeger, 1995. ———. Technology and Culture in a European Context. Copenhagen: Handelshøjskolens forlag, 1991. Ohmae, Kenichi. The End of the Nation State. New York: The Free Press, 1995. Paret, Peter (ed.). Makers of Modern Strategy. Princeton, N.J.: Princeton University Press, 1986. Putti, Joseph. Culture and Management. Singapore: McGraw-Hill, 1990. Putti, Joseph, Koontz, Harold, and Weihrich, Heinz. Essentials of Management: An Asian Perspective. Singapore: McGraw-Hill, 1998. Schmidheiny, Stephan. Changing Course. Cambridge, Mass.: MIT Press, 1992. Stokhof, Wim, and van der Velde, Paul (eds.). ASEM: The Asia-Europe Meeting. London and New York: Kegan Paul International, 1999. Toynbee, Arnold. A Study of History. Oxford: Oxford University Press, 1972. Tushman, Michael L., and O’Reilly, Charles A. Winning through Innovation. Boston: Harvard Business School Press, 1997. United Nations Development Programme (UNDP). Human Development Report. New York and Oxford: Oxford University Press, 1998. ———. Human Development Reports. New York and Oxford: Oxford University Press, 1999. Wang Gungwu. The Chinese Way. Oslo: Scandinavian University Press, 1995. Wang Gungwu and Wong, John (eds.). China’s Political Economy. Singapore: Singapore University Press, 1998. Yergin, Daniel, and Gustafson, Thane. Russia 2010. New York: Random House, 1993. Yip, George. Asian Advantage. Reading, Mass.: Perseus, 1998. ———. Total Global Strategy. Englewood Cliffs, N.J.: Prentice-Hall, 1992.

Index A-3XX, 130 Abri, 162 Abundance, Law of, 88 Accountability, world model, 177, 178 Aceh, 162 Adenauer, Konrad, 127 Afghanistan, 77, 146 Africa, 145 Afrika Korps, 117, 122 AFTA (Asian Free Trade Area), 4 Air: condition system, 99; renewal system, 99 Airbus, consortium, 117, 120, 123, 124, 130, 174 Alamein, El, 116, 117, 127 Alaskan coast, 131 Alcatel, 61 Aleutian Islands, 131 Alps, 50 Alsace, 49 Alternative to world model, 189–192; chaos, 189–191; clash of civilizations, 190–191; joker, 192–194; regrouping of nation-states, 191–192 American: automobile industry, 16; Civil War, 63, 89; enterprises, 16, 26; universities, 16

America’s Cup, 27 Amnesty International, 57, 140, 141 Amsterdam Treaty, 44 Andersen, Hans Christian, 2 Anglo-Saxon: culture, 78, 149; economic model, 29, 30; period of dominance, 150; representative of international economy, 24 APEC (Asian Petroleum Exporting Countries), 172, 173 Ariane Rocket, 120 Arms race, 186 Army: conscription, 36, 63, 64; professional, 64 Arnhem operations, 131 ASEAN (Association of Southeast Asian Nations), 4, 13, 53, 102, 145, 171, 192; bible, 83 ASEM, 172, 173 Atlantic Ocean, 104 Attali, Jacques, 11 ATR 72, 123, 124 Audio-visual: instruments, 101; media, 11, 28, 34, 103 Aung San Suu Kyi, 74 Australia, 19, 69, 82, 96, 97, 161 Austria, 83 Avis, 105

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Index

Baden-Wurttemberg, 43, 44, 49 Baghdad, 155 Baltic: area, 48, 49, 50; Council, 49; Sea, 49, 50, 192; states, 47 Bangladesh, 145 Barcelona, 46 Barseback, 82 Bastogne, 129 Battle: of Atlantic, 132; of Britain, 122; of Hattin, 190; of Marne, 132; of Valmy, 63 Battle, political enterprises: attrition, 116–117; defense, 117–119; maneuver, 121–122; offensive, 119–121; rencontre, 119 Bayern, 43, 44 BBC (British Broadcasting Corporation), 73 ‘‘Beggar thy neighbor’’ policies, 171 Belarus, 49 Belgium, 46, 135 Belgrade, 47 Benelux, 19 Berlin, 44, 121, 192 Beveridge Report, 18, 90 Biafra, 96 Bin Laden, Osama, 77 Biotechnology, 34 Bird flu, 98 Bismarck, Otto von, 130 Blair, Tony, 59, 103 BMW, 130 Boeing, 117, 120, 127, 174; 747, 121, 130; 777, 124 Bolsheviks, 39, 41 Bond, James, 26 Bonn, 44, 45 Bosnia-Herzegovina, 27, 40, 70, 71 Bradley, Omar, 128 Brandenburger Tor, 121 Brazil, 53 Brent Spar platform, 124, 140 Bretton Woods, 183, 184 Britain, 13, 37, 59, 66, 73, 90, 103, 191 British Columbia, 6 British empire, 7, 41, 103, 105, 150 Brunei, 83, 84 Brussels, 42, 45, 46, 47; bureaucrats, 12

Bundeskanzler, 43 Bundesland(er), 43, 44, 45 Burma, 57, 58, 74, 145, 146 Burundi, 96 Bush administration, 151, 155 Byzantine empire, 190 –C3, 127, 128, 133 +C3, 125, 129 C4IE, 104 California, 58, 86, 173 Cambodia, 96 Canada, 6, 19, 96, 170, 171 Canute, Danish king, 13 Carnegie, Andrew, 88 Cases for intervention, international context, 167–168 Catalan language, 46 Catalonia, 46 Catholic Church, 111 Cattenom, 82 Caucasians, 96 Caucasus, 67 Cavour, Camillo, 46 CDU (German union party), 43, 44 Central and Eastern Europe, 2, 26, 47, 48, 95, 170, 191 Central Asia, 68, 145 Chernobyl, 84 China, 7, 30, 31, 41, 51, 60, 64, 67, 69, 72, 73, 82; Asian context, 171; democracy, 154, 163, 164; energy shortage, 84, 85, 86; India, 69; oil reserves, 68; and the United States, 194 Chinese: empire, 8; model, 30 Chip, 125 Chirac, Jacques, 59 Christian world, 190, 191 Chuan Leekpai, 162 Churchill, Winston, 129, 156, 165 CIA (Central Intelligence Agency), 124 Civic society, 14, 161 Clash of civilizations, 4, 8, 190 Clausewitz, Carl von, 7, 66, 102 Clinton, Bill, 58, 136, 151, 165 Club of Rome, 81

Index CNN (Cable News Network), 27, 57, 73, 84, 96, 114, 160; diplomacy, 27, 160 Command: by combination of values, objectives and examples, 108–110; by control, 107; power game, 107– 110; by rules, 107 Communication, 25; power game, 104– 107 Communicators, 35 Communism, 132 Communist empire, 7 Competitive society, 21 Computer(s), 15, 16, 17, 22, 150 Conflicts: caused by abundance, 86–89; caused by scarcities, 80–86; different kinds of, 65 Congress, US, 6, 37, 158, 180, 184 Constantinople, 190 Consumption, context of production versus consumption, 29 Container, 87, 118, 123 Control, 110 Coolidge, Calvin, 80 Copenhagen, 49 Core: business, 108; message, 109; need, 109; value added, 109 Cover-up phase, 58, 139 Court of Justice, 178 Crete, 140 Cromwell, Oliver, 9 Cross-border regions, 35, 48–50, 112, 174; Baltic area, 48; both sides of the Alps, 50; both sides of the eastern Pyrenees, 50; both sides of the Rhine, 49; Wien-Budapest-Prague triangle, 49 CSU (German union party), 43 Culture: family, 59, 60; in the context of technology and culture, 4, 15–18; leisure, 59, 60; parameter for political enterprise, 110–112; work, 59, 60 Cunningham, Andrew, 140 Czar, 39, 161 Czarist Russia, social capital, 94 Czech Republic, 49, 154, 161 Daimler-Benz, 130, 139 Daley, Richard, 165

199

Danube, 82 Dardanelles, 129, 130 Decision-making process: European Union and Germany, 44; international, 12, 54, 55, 76; world model, 174–178 Democracy, 156; in coming decades, 163, 164; firm majority in Parliament, 158; outside Western Europe and North America, 159, 161, 163; strong parliament, 156, 157 Denmark, 83; Maastricht Treaty, 45; nation-state, 13, 35 Dichotomy, 25; elite and population, 11; in societies, 21 Diseases, infectious, 98–100 Disparity(ies), 19, 92, 147, 179 Dollar zone, 193 Douglas, 120 Duma, 154, 158 Du Pont, 88 East Asia, 168, 169, 172 EC (European Community), 4 Education system, industrial versus non-material society, 21–23 EEC (European Economic Community), 4 Egypt, 53 Eisenhower, Dwight, 128, 131 Elite internationalism, 4, 6, 11, 12 Elk test, 139 Empires: breaking up, 7; building up, 7 Energy, conflicts because of scarcities, 84 English language, 38, 150 Enterprises: caught by the media and steps to be taken, 139–142; diversified, 108–109; ethical profile, 110, 137, 140, 142; guerilla, 138; intelligence system, 124; as international actors, 35, 51–53; national/international, 101; political, 101–142, 173; profile of management, 125–136; propaganda, 123; provide amusement and entertainment, 115–116; publicity strategy, 136, 139, 140;

200

Index

strategy and tactic, 116–122; suppliers, 138; supranational, 7, 52, 53, 102, 112 Environment, conflicts because of scarcities, 82–84 Escape clause, 176, 179, 181 Espionage, contra and enterprise, 122– 123 Estonia, 48 EU (European Union), 2, 12, 13, 31, 42, 44, 46, 48, 53, 97, 102, 146, 161, 164, 168, 169, 170, 171, 173, 175, 176, 177, 185, 189, 192, 193, 194; centralization/decentralization, 47; decision making, 45; former Yugoslavia, 40; human rights, 170; regional building blocks, 168, 169, 172; regions, 47 Euro: financial crisis, 170; zone, 193 Europe, 36, 37, 39, 47, 50, 55, 85, 98, 169, 172, 187, 191; Western, 48, 156, 160, 161, 164, 170 European Commission, 47, 55, 99, 177; negotiator for European Union, 40 European Court of Justice, 55 European Economic and Monetary Union, 40, 178, 190 European industrial heartland, 49 European integration, 11 European single market, 15, 40 Fascism, 95, 160 ‘‘Fare dodgers,’’ 151 Fast track, 6 Fighting instructions, 107 Financial side, of welfare model, 26 Financial Times, 114 Finland, 48, 52 Fisher, John, 134 Ford, 117 Ford, Henry, 117 Foreign legion, 78 France, 15, 16, 50, 59, 63, 73, 82, 97, 103, 125, 134, 158, 191; and Germany, 1, 45; nation-state, 13, 37, 38, 41 Franco, Francisco, 38 Franco-German war, 1, 64, 169

Franco-Prussian Wars, 89 Frankfurter Allgemeine Zeitung, 114 Free trade, 180, 181, 182 French language, 38 French Revolution, 36, 63 G-7 countries, 103 Gadhafi, Mu’ammar, 187 Gaio, 124 Gates, Bill, 51, 103 GATT (General Agreement on Tariffs and Trade), 52, 180, 181, 182 Gaulle, Charles de, 45, 125, 127 Genetic engineering, 15, 17 German constitution, 43, 45 Germany, 34, 48, 49, 52, 59, 64, 66, 73, 86, 95, 97, 103, 131, 135, 187, 191, 192; and France, 1, 45; nation-state, 13, 39, 41, 43; ratification of Maastricht Treaty, 45; regions, 43, 44, 45; social security, 19 GM, 51, 117 Gold standard, 183 Grand Canyon, 17 Great Britain, 34, 35, 78, 99, 149; nation-state, 41; regions, 43 Great Depression, 34 Greenpeace, 57, 141 Gulf War, 64, 155 Gustavus Adolfus, King of Sweden, 63 Gutenberg, Johannes, 27 Habibie, B. J., 162 Habsburg empire, 36, 39, 46, 49 Haig, Douglas, 125, 126, 127 Hanseatic: Kogge, 86; League, 48 Himalayas, 67 Hitler, Adolf, 121, 127, 132 Holstein, 36 Hong Kong, 3, 98 House of Commons, 45, 57 Human resources: in context of education, 22; welfare model, 19, 20, 21, 23 Human rights: EU policy, 170; international politics, 74, 75, 168, 170, 174, 186–187

Index Human Rights Watch, 140, 141 Hungary, 49, 154 Huntington, Samuel P., 4, 8 Hussein, Saddam, 155, 187 Iberian Peninsula, 47 IBM, 117, 135 Ideologies, political parties, 150 IMF (International Monetary Fund), 5, 29, 34, 178, 183; and United States, 5 Immigrants, into Western Europe, 5 Immigration, security policy, 95–98 India, 7, 41, 53, 68, 69, 72, 103, 145, 186, 187; nuclear test, 113 Indian Ocean, 68, 69 Indonesia, 7, 69, 72, 83, 182, 183, 184 Industrial: age, 33; culture, 19; society, 10, 18, 20, 21, 22, 39; technology, 39 Industrial revolution, national enterprise, 101 Infectious diseases, security policy, 98– 100 Information: find the right thing, 105, 113; highways, 87; instrument for political enterprise, 112–115; necessary, 114; power game, 112–115; putting pieces together, 114; society, 10; technology, 25, 34, 86, 150, 186 Innovation, 9, 15, 17, 18, 117 Intel, 105 Interchange, culture and technology, 9 Internationalism, versus nationalism, 1, 27 International Court, 55, 78 International Herald Tribune, 114 International organizations, 35; as international actors, 52 International pressure groups, 35; as international actors, 56–58 International system, 5, 6, 34, 155; accountability, 177; legitimacy, 177; noncompliance, 178; present one, 143–144; transparency, 177 Internet, 150, 167, 177, 179, 186; tax system, 182 Invention, 9, 15 117

201

Iran, 67 Iraq, 67, 82, 103, 146, 186, 187 Ireland, 38, 41 Irish rebellion, 38 Israel, 38 Italy, 13, 39, 46, 50, 191 ITO (International Trade Organization), 34, 180 Jakarta, 83 Japan, 14, 31, 40, 41, 103, 171, 194; imperial, 192 Japanese model, 30, 185 Jerusalem, Kingdom of, 190, 191 Jervis, John, 105, 134 Joker, in the alternative model, 192 Jordan, 82 Jordan River Valley, 82 Jospin, Lionel, 151 Juppe, Alain, 151 Kennedy, John F., 37, 165 Keynes, John Maynard, 183, 184 Kharkov, 121 Kim Dae-jung, 162 Kingdom of Two Naples, 46 Kissinger, Henry, 128, 170 Korea, 3, 162, 171, 184 Kosovo, 27, 70 Kuala Lumpur, 83 Kursk, 117 Kuwait, 155 Large market, technology, 15, 16 Latin, 150 Latvia, 48 Lebanon, 65, 71 Libya, 77, 146, 187 Lifelong education, 91–92 Lithuania, 48, 191 Localization, freedom of, 28 Lockheed, 120 Lombardy, 46 London, 46, 129 Lorraine, 49 Louis: XI, 45; XIV, 45 Luxembourg, 49, 82, 83 Lyon, 50

202

Index

Maastricht Treaty, 44; ratification, 45 MacKinder, Halford John, ‘‘world island,’’ 66, 104 Mad cow disease, 98 Madrid, 46 Major, John, 45, 151 Majority voting, Germany and Maastrict Treaty, 44 Malaysia, 83 Malleable society, 14, 15 Malthus, Thomas, 81 Management: calculated risk, 130; correct assessment, 134; decision making, 127; distinction means and objectives, 129; getting the message across, 126; unity in command, 132 Managers, as political leaders, 151 Manstein, Fritz von, 121, 128 Mao Zedong, 67 Market, 29, 88 Marshall, George, 143 Marx, Karl, 11, 93 McDonell, 127 Media moguls, 7, 60, 61 Mercedes Benz, 139 Mercosur, 190 Mexico, 170, 182 Mi5 (intelligence agency), 124 Microsoft, 52, 61, 123; international role, 54, 103, 174; regional headquarters, 52 Middle East, 14, 70, 89 Midway Island, 131 Milan, 50 Minority protection, 176 Mitterrand, Francois, 45 Model: A, 117; T, 117 Monarchy, 111 Monde, Le, 114 Mondoculture, 59, 60, 166 Monnet, Jean, 1 Monopoly, 30 Montgomery, Bernard, 116, 117, 122, 126, 127, 128, 131, 132 Moscow, 127 Motorola, 61 Murdoch, Robert, 61 Murphy’s Law, 138

Muslim world, 190, 191 Myanmar, 72, 74, 145 NAFTA (North American Free Trade Agreement), 4, 13, 53, 102, 145, 168, 170, 171, 190, 192 Napoleon, 45 Napoleonic: era, 63; wars, 9, 36, 38, 63, 89, 145 Nation-state: army of, 64; artificial/ genuine, 37; conflicts inside, 70; in Europe, 13; industrial age, 33; welfare model, 40 Nationalism, context of nationalism/ internationalism, 1, 27 Nationality, nation-state, 35, 37 Nations, 36; open to the outside, 3 NATO (North Atlantic Treaty Organization), 2, 48, 51, 64, 104, 146; former Yugoslavia, 40, 71 Nazism, 43, 95, 132, 160, 192 Nelson, Horatio, 105, 107, 128, 134 Netherlands, 49 New York Times, 114 New Zealand, 161 Nimitz, Chester, 128 Nixon, Richard, 17, 69, 165 Nokia, international role, 52 Nomads, 11 Noncompliance, world model, 178 Nonintervention, out of world model, 146 Nonmaterial society, 10, 20, 21, 22 Nordic states, 146 Normandy, 128 North America, 6, 38, 53, 85, 103, 159, 160, 162, 169, 170, 187 North Korea, 69, 77, 103, 186 North Korean aggression, 155 North Sea, 57, 124 Oil price, Russian economy, 183 Oligopoly, 30 O’Neill, Tip, 55 Oracle, 106 Organization, context of culture and technology, 9 Organized crime, security policy, 80

Index OSCE (Organisation for Security and Cooperation in Europe), 51 Ottoman empire, 7, 39, 68, 89 Ottomans, 7 Pacific Ocean, 104, 172 Pakistan, 68, 69, 103, 145, 186 Paris, 45, 46, 50 Patton, George, 122, 128 Peacekeeping, problems, 72, 73 Pearl Harbor, 112, 128 Peloponnesian War, 66 Pepsi, 117 Perrier, 139 Pfalz, 44 Philippines, 83, 113 Poland, 48, 49, 95, 131, 154 Political parties, old-style, 151 Prague, 49 Production, context of production versus consumption, 29 Propaganda, political enterprise, 123– 124 Prussian-Austrian war, 64 Pyrenees, eastern part, 49 Qualified majority voting, 175 Quebec, 6 Reagan, Ronald, 58, 116 Red Army, 121, 127, 131 Refugees, security policy, 95–98 Regional building blocks, world model, 168–172 Regionalism, in Europe, 40–48 Regions, nation-states, 35, 40, 174 Renaissance, 11, 27 Retaliation, terrorists, 77 Rhine, 49, 131, 173 Rhodesia, 73, 74, 146 Richelieu, Cardinal, 45 Rockefeller, Nelson, 88 Rohm, Wendy Goldman, 123 Roman empire, 8, 82, 89, 102, 105, 191 Rome, 50 Rommel, Erwin, 116, 122 Roosevelt, Franklin D., 17

203

Royal Navy, British, 86, 105, 107, 129, 134, 140 Rules, in organization, 10 Russia, 39, 48, 64, 68, 73, 104, 128, 156, 161, 179, 182, 183, 184, 191, 192; Baltic area, 49; after cold war, 154; democracy, 154, 158, 160, 161, 165; and Germany, 66; reform of economy, 154, 158, 183; social capital, 94 Russian empire, 7, 18 Rwanda, 27, 96 Sabah, 83 Sachsen, 43, 44 Sachsen Anhalt, 44 St. Germain, 41 Saladin, Salah, 190, 191 Sarawak, 83 SAS (British special troops), 136 Savoie, House of, 39 Scandinavia, 19 Scandinavian countries, 50 Scarce currency clause, 184 Schlieffen plan, 128, 134, 135 Schro¨ der, Gerhard, 59 Schuman, Robert, 1 Schumpeter, Joseph, 92, 146 Scotland, 38, 41, 42, 44, 45 Scots, and English, 41, 42 Scottish rebellion, 38 Seclusion, 25, 26, 88, 90, 159; from reality, 27; from technology, 26 Second empire, 45 Security policy, 63 Serbia: Greater, 70, 146; Montenegro, 146 Shah of Iran, 2 Shell, 57, 124, 140 Shirbrig, 187 Siberia, 45 Siemens, 57 Simple majority voting, 175 Simpson, O. J., 59 Singapore, 3, 83, 147 Six basic rules of management, 125 Sjukov, Georgi, 121 Ska˚ ne, 82 Skimmers, 105

204

Index

Slesvig, 36 Sloan, Alfred, 117 Slovakia, 82, 154 Slovenia, 50 Smith, Adam, 147, 148 Social: capital, 92, 94, 95; destruction, 92; mobility in welfare models, 19, 23, 93; preventive policy, 90 Social imbalances, 75, 93, 147; security policy, 89–95 Societies, in international political and economic system, 14 Solzhenitsyn, Alexander, 132 Somalia, 65, 71 Somme offensive, 127 South Africa, 69, 74, 146 South China Morning Post, 114 South China Sea, 84 Southeast Asia, 5, 6, 83 Sovereignty, nation-state, 2, 3, 13, 76, 146, 148, 193 Soviet: empire, 13, 68, 72, 103, 154, 156, 158; Russia, 94; Union, 15, 42, 47, 95 Spain, 38, 46, 86, 191 Spanish flu, 99 Specialist, education system, 22 Spratley Islands, 84 Stalin, Joseph, 41, 95, 121, 161 Stalingrad, 121 State: nation-state, 35; terrorism, 75 Strasbourg, 178 Strategic fault line, 67 Stoiber, Edmund, 44 Strauss, Franz Joseph, 43 Style, and politicians, 151–152 Sudan, 77, 96, 146 Suharto, 162 Super Bowl, 27 Sweden, 48, 52, 82, 83, 145; southern, 82 Taiwan, 3, 98 Taleban, 77 Technological and cultural trends, new, 17 Technology: in context of technology and culture, 9

Territory as power base, 103, 104 Terrorism, 75, 146; inside nation-state, 75; international, 75; state, 75, 146 Thailand, 83, 162, 184 Thatcher, Margaret, 127 Theater missile defense, 78 Third Republic, 46 Three Gorges, 17 Threshold, for intervention, 74 Thucydides, 66 Tiger countries, 3 Tito, Joseph, 70 Tokyo, 192 Torino, 50 Toyota, 130 Trade issues, world model, 180–182 Transparency, 7, 12, 15; technological risks, 10; world model, 177 ‘‘Trooping the colors,’’ 36 Truman, Harry, 143, 144, 155 Turkey, 67, 82, 97, 129, 190 Turkish Straits, 129 UDI (Unilateral Declaration of Independence), 73 Ukraine, 47, 84, 154 UN (United Nations), 2, 40, 51, 53, 72, 155, 167, 172, 173, 174, 176, 187, 182; Security Council, 172, 173, 189 Unanimous decisions, world model, 148, 149, 175, 176 UNDP (United Nations Development Programme), 179 Unemployment allowance, 91 Unilateral multilateralism, 193 United Kingdom, 167; nation-state, 13, 38, 41; regions, 41, 42 United States, 15, 16, 17, 23, 27, 31, 35, 37, 40, 52, 53, 58, 59, 66, 72, 86, 92, 99, 123, 143, 144, 150, 156, 158, 164, 165, 167, 169, 170, 171, 180, 184, 192, 193, 194; arms race, 16; China, 51, 194; immigrants, 15–16, 41, 95, 96; international coalition, 155; international system in the aftermath of World War II, 13, 154, 155; market/consumer policy, 15; military power, 64, 73; risk of war,

Index 16; superpower(s), 2, 15, 67, 103, 154; terrorist(s)/terrorism, 77, 78, 79, 146 Unity in command, 132 USSR, 84, 143; military power, 186; risk of war, 72; superpower(s), 2, 66, 103, 154 Versailles, 41 Veto right, 176, 190 Voice recognition, 17 Wales, 38, 42 Warsaw Pact, 104 Water, scarce, 81–82 Wealth of Nations, The, 147 Welfare model, 18; Anglo-Saxon, 18– 19, 23, 24; Asian, 18, 20; definition of increase in welfare, 3; financing, 19, 20; industrial society, 18; Northern European, 18–19; sociological aspects, 23–24; stress factor, 14 Western front, 119, 135 Western hemisphere, 86 WEU (Western European Union), 187 Wien, 36, 49 Wilson, Charles, 51 Wiranto, General, 162

205

Workfare, 92 World Bank, 5, 34, 175, 183 World model, 153–188; Anglo-Saxon period, 149; decision making, 174– 176; economic and monetary issues, 182–185; intervention/nonintervention, 146; layered machinery, 174; market, 147; nation-state, 145; obsolete concepts, 143–152; political parties, 150; protection of minorities, 175; qualified majority voting, 175– 176; security outlook, 186–188; trade issues, 180–182; unanimous decisions, 148, 175–176; voting procedures, 174–176; voting rights, 174– 176 World War I, 41, 70, 86, 89, 99, 116 World War II, 25, 64, 66, 73, 89, 95, 102, 103, 104, 116, 122, 126, 127, 143, 150, 192 WTO (World Trade Organization), 13, 31, 51, 52, 54, 174, 178, 189, 182 Yeltsin, Boris, 158, 160, 165 Yugoslavia, former, 2, 40, 47, 65, 67, 146; nation-state, 41, 70, 71, 76 Zhu Rongji, 154 Zimbabwe, 73, 74 Zimmer frame, 24

About the Author J. ØRSTRØM MØLLER is Danish Ambassador to Singapore. Formerly the State Secretary in the Danish Ministry of Foreign Affairs, Ambassador Møller is the author of 28 earlier books, including The Future European Model (Praeger, 1995).