When the chief economist at Morgan Stanley says globalization is
set for demise, it is tough to know how to respond. We tend to feel
ill-equipped to argue with someone in such a powerful position, with
such knowledge of global capital markets. And yet one wonders how much
Stephen Roach was looking to grab headlines with this statement.
Since the first group of serfs decided they could more effectively
provide the food for their village if they amalgamated their strips of
land, focused on one crop, and then swapped some of that crop for
another crop from another village, capital markets have grown
Not only have they expanded over space, but also over time - using
various credit mechanisms, mortgages, stocks, bonds, futures, and so on.
Will the September 11 attacks stop globalization in its tracks when
several plagues, wars, and natural disasters have not done so? Highly
unlikely, because it is imperative for corporations to keep growing if
they are to stay alive, and to keep growing they must keep finding new
resources and new markets.
At last week's ICCO summit (see p. 5), Ketchum chairman Dave Drobis was
similarly dismissive, insisting that globalization would not fail, and
also that it can be a force for good. He said PR has to help change the
image of globalization. "If globalization was a brand, some of its
stakeholders would be demanding a name change and a relaunch," he said.
"No people are better suited in the world to tackle this beside our
Perhaps he is right, but he and the PR industry in general must realize
that this is one of those examples of an issue - a huge issue - where PR
must work on changing behavior within organizations before it does too
much work externally promoting a sometimes flawed product.
Sure globalization has sometimes been a force for good, providing jobs
for the jobless, homes for the homeless, healthcare for those who have
been without. But it has also been a byword for American, Japanese, and
European corporations acting in oppressive, environmentally damaging,
and culturally insensitive ways. It was telling that just hours after
Drobis gave his speech, Kirk Stewart, VP of corporate communications at
Nike, was admitting that Nike accepts that its developing world
employees are doing "tedious, repetitive jobs" that do not pay
sufficiently for them to support a family.
His honesty is admirable, and presumably he would argue that it is OK to
pay people these wages because they are still better than the average
wages in the countries in question. But, if we are to make a more
positive case for globalization, we will have to do a bit better than
"we're paying above the average wages in that country" as an
It is back to the eternal issue of global corporations justifying their
actions according to free-market economics and short-term profits,
rather than looking at their impact on society and possible long-term
benefits of investing more heavily - and carefully - in the countries in
which they operate. There are positive stories out there, but PR pros
who start taking these stories to the media had better be damn sure
their corporations are practicing what they preach or else the PR
person's credibility, as well as the credibility of their paymasters,
will be seriously undermined.