Wednesday, January 30, 2002

Greed, fear and Saddam Hussein article in Economist. "Iraq is trying to mend fences in the region, even with its fiercest adversary--Iran." ... "And it is looking for friends in unlikely places." "A real strategic rapproachement is unlikely, given the legacy of mistrust." "Saudi Arabia harbours fears." "Those who would (advocate the overthrow of Saddam) have consistenly failed to explain why his removal is an urgent necessity rather than a desirable outcome." "Iraq's neighbors (except Kuwait) no longer consider Iraq to be a big security threat." "Iraq has launched another of its sporadic charm offensives." ... "praising the Gulf monarchies, waxing on the virtues of Arab unity ..." "Arab commentators (see) an attempt to bring Iraq back into the (Arab) fold at a time when a joint Arab approach is urgently needed to face the consequences of America's anti-terrorism campaign." 1:05:16 PM    comment  []

The noted management philosopher Peter Drucker describes how "complementary" trade was followed by "competitive" trade, then to be followed by the adversarial trade to which we are all now accustomed:       "Trade in Adam Smith's eighteenth century was 'complementary' trade. England sold wool to Portugal that Portugal could not produce, while Portugal sold wine to England that England could not produce. The English bought from India cotton that they could not grow, in exchange for machine-made cotton cloth that eighteenth-century India could not produce. The entry of the United States and Germany into the world economy in mid-nineteenth century brought about a shift to 'competitive' trade. The Americans and the Germans both sold chemicals and electrical machinery in competition with one another and bought chemicals and electrical machinery from each other. Almost unknown in 1850, competitive trade had become dominant by 1900.       "The emergence of new, non-Western trading countries -- foremost the Japanese -- creates what I would call 'adversarial' trade.       "Complementary trade seeks to establish a partnership. Competitive trade aims at creating a customer. Adversarial trade aims at dominating an industry. Complementary trade is a courtship. Competitive trade is fighting a battle. Adversarial trade aims at winning the war by destroying the enemy's army and its capacity to fight.       "Reciprocity is clearly the only trade policy that can effectively work in a world economy that features adversarial trade. Free trade can work under reciprocity if the other side reciprocates. But there will be protectionism if that is what either side chooses.       "Reciprocity is fast emerging as the new integrating principle of the world economy. Unlike traditional free trade and traditional protectionism, reciprocity will not be confined to trade in goods. Services have already become as important as goods in the world economy and require reciprocity even more. The treatment of investments is just as important as trade. Equally important will be reciprocity with respect to intellectual property, patents, technological trade-marks, copyrights, but also with respect to professional services." 12:12:20 PM    comment  []