*{What Model for 21st Century Capitalism? [http://www.weforum.org/site/knowledgenavigator.nsf/Content/What+Model+for+21st+Century+Capitalism%3F?open&topic_id=300250000&theme_id=300]

            13.09.2000
 Asia Pacific Economic Summit 2000}

            Julian Disney, President, International Council of Social Welfare, Australia, described globalization as a natural force. "But it cannot and must not be allowed to override all other natural forces," he said. He likened globalization to a river, which can bring substantial economic, social and environmental nourishment to those who are in a position to benefit from it. "But it can erode, devastate and overwhelm if it rushes too fast or spreads too far," he said.

            Many business people and economic commentators arrogantly and ignorantly dismiss community concerns about the impact of globalization. But their globalization sloganeering is neither intellectually nor morally superior to the frustrated excesses of some of the marginalized dissidents for whom they express such contempt, he said.

            "Many of the self-styled advocates of globalization are vehemently anti-globalization on many issues. For them a crucial attraction of recent trends in globalization is that corporate activities by becoming increasingly international are freer from the constraints of democracy, rule of law and fairness. They do not want globalization of taxation, anti-monopoly regimes, labour rights, human rights or codes of corporate conduct.

            The economic and social benefits of globalization might be much greater if many of its champions were to practice what they preach. If they support democracy they should support global democracy and reject the dominance of international economic policy and regulation by groupings such as the IMF which are controlled by countries which represent not much more than 10% of the world's population.

            Francis Finlay, Chairman, Chief Executive Officer and President, Clay Finlay, USA, said that over the past 30 years there has been a widening acceptance of free market capitalism.

            "But trends have a nasty habit of reversing. There can be a flywheel effect when momentum takes things too far," he said.

            He pointed to the recent Asian economic crisis, and the stringent measures taken to correct it, as a warning. "It doesn't necessarily mean the pendulum is swinging back, but we would be prudent to watch out for straws in the wind."

            He said increased social pressure over the widening financial and social disparity should encourage capitalism to reconsider its direction, particularly in the light of social disaffection with business scandals, excessive executive remuneration and business-related environmental disasters.

            Yotaro Kobayashi, Chairman and Co-Chief Executive Officer, Fuji Xerox Company, Japan, said the economic model for Japan formed just after the Second World War served the country well in the 1950s, 1960s, 1970s and 1980s. He said the model, often described as capitalist socialism or socialist capitalism, emphasized sharing benefits and values.

            But he said that since the US, European and some other Asian markets became more productive and flexible in the 1990s, the Japanese model is being evaluated very harshly.

            "We have a very effective community of professional fund managers, so Japan is now rushing towards that model. They don't want to be left out. But is this model Japan is now rushing to the right one overall, or the right one for us?

            Jean-Pierre Lehmann, Professor of International Political Economy, International Institute of Management Development, Switzerland, said capitalism is very much dependent on what it can deliver.

            "We should stop and ask ourselves if it is delivering wealth creation, jobs, well being (including environmental benefits) to people living in capitalist societies," he said. "There is a perception that capitalism has been successful, but in the 1930s capitalism failed after the depression in 1929 and it lead people to find alternatives." He said we have seen two very significant cases of capitalism's failure recently: Japan in the 1990s and the Asian economic crisis. "The Japanese economy concerns us all. What would be the effect if the Japanese disease infected the US and Europe?" he asked.                  

                  *{Contributors:       Disney Julian
                  Finlay Francis
                  Kobayashi Yotaro
                  Lehmann Jean-Pierre
                  Schwab Klaus}