Coming CrisesReally?
Beware of books whose titles blare: "The Coming...." something or other crisis.
"The Coming [stock market] Crash of 1992" ushered in one of the greatest bull markets in history. Earlier, a "coming crisis" in natural resources disappeared in a whirlpool of falling commodity prices. Now we have "The Coming Conflict With China," which posits that insatiable Beijing leaders will have their Western trading partners for lunch, and run roughshod over Asian neighbors.
We seem to be in a period in which pundits are busy nominating assorted new hobgoblins as substitutes for the certainties of the cold war. In just the past week there have been accusations that:
* The Clinton administration has kowtowed to China on human rights violations, and is about to do so on World Trade Organization membership, in order to win big trade deals for US firms. The accusers add that those trade deals create US jobs now, but in a few years parts factories in China will reverse the job growth.
* President Clinton yielded ground on tactical nuclear weapons that protect American (and NATO) troops in order to persuade Boris Yeltsin to get his Duma (parliament) to ratify the START II nuclear arms reduction treaty and begin bargaining on a further START III reduction.
* The coming eastward growth of the European Union (EU) will jeopardize jobs in Western Europe as lower-wage labor enters the common market. Furthermore, say skeptics, economic belt-tightening required for the EU's 1999 deadline for a common currency and new central bank is already worsening unemployment.
* Mr. Clinton's request that Congress help speed the integration of Chile into the North America Free Trade Area (NAFTA) will jeopardize more US jobs for the same reason as EU expansion eastward does.
That's only the top of the list of alleged "coming" crises. Let's examine each for soundness.
First, there should be no doubt that China's Communist leaders (or any conceivable future leaders) will be guided by national interests. No surprise there. But those interests increasingly mean playing by international trade and tariff rules if China is to supply jobs, housing, vehicles, and prosperity for its citizens.
Yes, US, Japanese, and European negotiators must be calmly tough in insisting upon Beijing's compliance with trade, tariff, and copyright/patent laws. Yes, the US and China's neighbors must press for negotiated solutions to territorial and resource disputes. And, of course, the major powers must demand Chinese restraint in selling weapons (and nuclear know-how) to disturbers of the peace.
Second, Mr. Clinton's success at getting Mr. Yeltsin's promise to press ratification of nuclear arms reduction and to start on a further warhead reduction is just that - a tentative success. He hasn't given away the store on tactical weapons that might prove a deterrent in areas such as the Middle East.
Third, continental Europe has indeed suffered high jobless rates and stunted growth as Germany and France, in particular, have tightened budgets. And more of the same can be expected from assimilation of low-wage former Soviet-bloc states into the EU. But there is likely to be a long-run payoff. That payoff will come in both peaceful stability and economic growth.
UNITED Europe this week passed the 40th anniversary of its 1957 founding in Rome. What has been accomplished in less than half a century truly merits that overused word "historic." The original six members have expanded to 15. Another 10 nations to the east and southeast are knocking to enter (including Yeltsin's Russia). Once parochial firms now market to hundreds of millions of customers. Trucks roll through formerly tight borders. But, as the Financial Times notes, there is still that gnawing jobs problem - as many people are out of work as the combined populations of Denmark, Finland, and Sweden.
Fourth, the same fear of job losses looms even in the low-unemployment US when NAFTA membership for Chile and other Latin American nations is mentioned. At its root this is a worldwide phenomenon. The US, Europe, and Japan have so-called graying populations. Most of the developing nations have huge numbers of unemployed youths. That leaves a fundamental choice: (1) watch immigration pressures rise, or (2) allow more factories and jobs to be farmed out to developing countries.
Part of the fear of Algerian and other Islamic immigrants in Europe and Latin American immigrants in the US rises from this fundamental imbalance. Hence the perennial apprehension over immigrant threats to the majority culture.
The best solution remains increasing the size of the global economic pie. That means more, not less, trade. More investing in factories abroad. And it means a new emphasis on technologies that protect the environment while allowing growth. There's plenty to do. But fear won't help.
