theglobaljournal.net: Latest articles of Jean-Pierre Lehmann

Global Statesmanship Is the Real Loser in the French Presidential Elections

2012-05-09T10:51:34Z

François Hollande has just been elected president of France: the first socialist president since François Mitterrand (1981-1995). The outcome was narrower than polls had predicted: 51.7 percent for the winner and 49.3 percent for the loser. What is important to note is that in the first round on 22 April, by adding up both extreme right and extreme left, over 30 percent of the French electorate voted for extremist candidates. (Results in elections in Greece which also occurred on May 6 were even worse in terms of gains of extremist parties.) To win in the second round, both mainstream candidates had to seduce the extremists, thereby abandoning the centre. France is clearly a fractured and confused society – reflecting a general European malaise.

While the world has changed considerably over the last two decades and the global economy has been marked by the rise of emerging economies - especially China, catapulted in a very brief period to the second biggest economy after the US, soon expected to overtake it, and the biggest trading and financial power - let us look briefly to how France stands in the global firmament.

Recent global convulsions notwithstanding, France still ranks as the world’s fifth largest economy and in the top twenty in GDP per capita terms. France is a rich country. It is also a geopolitically powerful country. It is a permanent member of the UN Security Council. It is a nuclear power state. French nationals head two of the most prominent international financial institutions – Pascal Lamy at the World Trade Organisation (WTO) and Christine Lagarde at the International Monetary Fund (IMF).

Though the French economy is smaller than Germany’s (by just under $1 trillion!), there are more French than German multinational companies in the Fortune 500. French competitiveness has decreased – and that is a problem that needs to be addressed – but France is still the fifth biggest exporting nation (after China, US, Germany and Japan). French luxury brands are highly prized - especially in China, which has become the biggest market for French luxury goods, wines and spirits. But aside from luxury, France also has highly competitive companies across virtually all sectors, from nuclear to lingerie. France is a major destination for inward foreign direct investment. It is also by quite far the world’s most popular foreign tourist destination. Most recently, Chinese tourists have been spending lavishly in the country. A Frenchman (Jean Dujardin) has just won the Oscar for Best Actor. The architect of the monumental new Beijing Opera (Paul Andreu) is also a Frenchman!

France clearly benefits really greatly from globalization. So it would be logical – indeed highly “Cartesian” – to assume that the ten candidates for the first round and the two remaining candidates for the second round would be competing like hell to determine who could best leverage and enhance France’s global position and prospects, and thereby strengthen the global market economy framework. It would indeed be totally logical. It would also be totally wrong.

What has been especially depressing in this election has been how all the candidates have competed to demonstrate that they would be most aggressive in “protecting” French citizens from globalization. And indeed, the outside world begins at the Franco-Belgian border, since Brussels has been relentlessly under attack. Some have gone further than others – for example, both the extreme right and extreme left have urged leaving the Euro and the EU. But both the mainstream candidates, Hollande and Sarkozy, took a quite stridently protectionist anti-globalisation stance.

There is a quite virulent anti-globalization/anti-capitalism psychosis in France. This is illustrated in what some caricature as the French collective “Astérix mindset”. Similar phenomena can be found, of course, elsewhere - not only in Europe, but also in the US; but it is in France that it tends to be the most vehement. Although a French economist of the early 19th century, Frédéric Bastiat, was one of the most influential leading exponents of liberalism, the concept has been rejected by mainstream political-economy thinkers in France for the last two centuries and seen across the political spectrum as an “Anglo-Saxon conspiracy”. The occasional liberal politicians, such as Raymond Barre or Alain Madelin, have had short and unsuccessful political careers. When I tell my compatriots I am a “liberal”, I am stared at as if coming out of a dark and dangerous closet.

Of course, once elected, rhetoric will have to cede to reality at least to a certain extent; many of the protectionist promises may be difficult to keep. While Hollande may have won, either candidate would have been a negative force for advancing the global agenda, especially in trade.

This is unfortunate. The world is clearly in a very fragile condition at the moment. This applies not only to state of economies and to social conditions – notably pervasive high unemployment in most of the industrialized countries and in many developing countries – but also to global governance and to global leadership. All the key global agenda items – trade, climate change, finance, immigration, food, fisheries, poverty, security, nuclear proliferation, drug, arms and people trafficking, and so on – are blocked. While it is too much to expect the French leader to be global statesmen – partly since neither Sarkozy nor Hollande speak the global language, English – it is alarming that what influence the French presidency will have – and it is not that negligible – will more likely impede than advance these global agendas.

In concluding, as a professor in a business school, I have to say that I consider French business leaders are greatly to blame. While their companies make great profits from, and succeed in global markets, with far too few exceptions they have been quite pusillanimous in speaking up in favour of a global market economy and demonstrating the benefits it brings to France and indeed the costs to France were globalization to be reversed. In France, business leadership has been, alas, an oxymoron.

(Photo © DR)

(Opinions voiced by Global Minds do not necessarily reflect the opinions of The Global Journal.)

Let's Talk About De-Globalization

2011-12-13T11:17:43Z

While business schools overall have been highly prolific in teaching and writing about the opportunities arising from the global market economy and emerging markets, they – as with the global business community in general – have been too complacent in respect to the fragilities and the threats.

Much of the teaching we do is aimed at emphasising the wider context of business, highlighting some of the threats to globalization and how business education can counter these.

But although the ardour has diminished since the crises of 2008, more attention still needs to be paid to these escalating centrifugal forces. The forces of de-globalization can be put into two inter-related categories: the horizontal and the vertical.

The horizontal refers to relations between states. The premise of globalization referred to the “borderless world.” As markets came to dominate, states and borders would become increasingly irrelevant. Furthermore, achieving the goals of a global market economy and facing the threats – climate change, immigration, poverty, food security, water, etc – required a spirit of global co-operation and the means to impose it.

This has emphatically not been the case. Especially as the number and roles of major national actors on the global scene have increased – and in the case of China with hallucinatory speed – mistrust rather than trust between nations has risen to the fore. Many examples can be cited to illustrate this point: perhaps the most egregious was the Climate Change Conference in Copenhagen in 2009. Nationalism, along with the spectre of protectionism, is back. As Philip Stephens recently wrote in the Financial Times (“A return to the world of Hobbes,” 27 October), “Thomas Hobbes is now prevailing over Immanuel Kant in the re-ordering of the global system.” This development, it must be stressed, has occurred in contradiction to the assumptions of business schools, consulting firms and the general global business ethos.

These horizontal centrifugal forces are in good part driven by the vertical forces. Among the generally upbeat books on globalization that appeared in the first decade following the implosion of the Soviet Union and the state collectivist central command ideology was one co-authored by John Micklethwait (currently editor of The Economist) and Adrian Wooldridge, entitled A Future Perfect. The authors coined the term “cosmocrats” to define a new emerging global elite that shares common backgrounds, values, aspirations, customs, lifestyles and so on. They described business schools as the “boot camps of globalization” and the training grounds of the cosmocratic elite.

Walk into any MBA classroom where there may be 40-plus nationalities (as there are at IMD) and one is struck not by the centrifugal, but by the centripetal forces. There are no tensions between nationalities; on the contrary, there are similarities. The problem, as Micklethwait and Wooldridge warned, is that by adopting values of men and women on the move and on the make, “in giving back less than they take out, they forfeit the support and undermine the health of their host societies.” There is not only a growing income disparity but also a cultural and psychological gap between the cosmocratic elite and the “ordinary” citizenry.

Not only has this new global class hierarchy created vast inequalities, but the fact that some members of the cosmocratic elite are seen also to be cheating has caused, understandably, a profound and increasingly strident backlash. For the multitudes who do not see themselves among those who have benefited from globalization, there is a profound sense of injustice borne of mistrust. Hence Occupy Wall Street, the anti-corruption protests of Anna Hazare in India, the demonstrations in Dalian, Athens and Rome, and the indignant movement in Spain. Globalization is perceived as having created a vast chasm between the “in” and the “out.” Perhaps an interesting – and encouraging? – phenomenon is that the plight and protests of the “outs” have generated a considerable degree of support and sympathy from at least some of the “ins.”

For the trends of de-globalization to be reversed and for the global market economy to survive, there is an urgent imperative for a radical change in attitudes, in policies, in strategies, and, for business schools, in pedagogy. Business schools and the business leaders they spawn must also recognise that only business is in a position to effectuate change that will at the same time ensure that the basic principles and structures of the global market economy are maintained, indeed strengthened, that growth will be sustained, and that greater social justice and fairness will prevail.

This requires serious attention to be paid to both the horizontal and vertical forces. In respect to the horizontal, business school curricula should include some basics of “international relations” to understand why global governance is currently at a perilous standstill and how business can make constructive contributions to enhance relations between states in a manner commensurate with the integration of global markets.

As to the pressing vertical forces, business schools must address the opportunities and challenges of inclusion. This in turn demands much greater attention given to the functioning (or malfunctioning?) of societies, to the psychologies of those individuals seen as the foot-soldiers of globalization, and to the excluded, the indignant and the oppressed. The humanities – literature, philosophy, history and the arts – have tended to be conspicuous by their absence in business school curricula. This is a mistake. In seeking to determine how business leadership, philosophies and strategies should evolve, studying the humanities will engender greater understanding of humanity.

Developments over the last two decades have provided hitherto undreamed of opportunities. Globalization has lifted hundreds of millions out of poverty; markets – including huge ones, China and India – that were closed have opened; and innovative technologies have created a new and potentially tremendously exciting business paradigm. We live in an age of great expectations and great possibilities. At the same time, we know that our universe is fragile. Unless adequate measures are taken – and seen to be taken – to heal the wounds of discord between and within states and thereby reverse the tides of de-globalization, the opportunities might metamorphose into calamities.