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Yes....the Red Chinese are coming, the Indians have taken over world’s steel, and London real estate is now Russian and Arab occupied territory! Putting the wagons in a circle ought to fix the problem. Why not add pseudo-protectionism, brew a more confused cocktail, and satisfy the residual hype of the cold warriors? Does it make sense to go beyond the odd simplification that skews globalisation, capitalism and development in the same breath?
The question skews the interests of (for-profit) companies in the private sector. Alas, their complaint has a whiff of a desire for an easy, free rescue by the U.S. government as the industry hopes to surf the recent tides of “resource nationalism”. Surely the government can rescue Silicon Valley from its follies, since the Fed rescued Wall Street from its foolish deals. After all, both made fortunes from hype: one from irresponsible lending hype and the other from the Y2K bug. Never mind that the market value of Microsoft is now twice the value of Citigroup, the American banking giant!
The essential fact remains that such materials and the so-called intellectual property rights are privately owned, produced and sold with a fundamental “design flaw” of easy duplication that easily crosses national borders and is effortlessly duplicated on Main Street USA, in a Bangkok backstreet, or swapped over the Internet with one side being 12 time zones away from the other. These inventions have superseded the mindset of laws and international conventions enacted a long time ago, before Microsoft, Google and iPods gained currency. The IT sector has created a modern “give it away” business model, unheard of a few decades ago. These private companies operate on a worldwide basis and they, not their home governments, are best placed to challenge illegal practices in local (foreign) courts. If such jurisdictions are lucrative for their sales and marketing operations, they cannot run back to the U.S. government for cover and enforcement muscle, where those unresponsive “foreign” legal systems happen to be the source of other advantages gained by the U.S. economy. It can all be negotiated into a new legal structure, but chances are that other “shocking” findings (such as cheap or unsafe labor practices) will come up in any global rounds of fair trade negotiations. And what will be the impact on the price of goods that eventually end up at Wal-Mart, and the resulting inflation? Surely the U.S. Trade Representative knows the answer to that one.
The Current Discussion: Does the crisis on Wall Street mean that the American style of capitalism is no longer the model for the world?
The American money machine became lost in the woods after the Cold War. It embarked on a new path as a rogue and insubordinate creature, ignoring the need to prepare for a rainy day and the potential for a downturn. It was a rogue missile out of control; a pyramid scheme of debt, with financial institutions charging fees for every misguided layer they added until they lost sight of what was happening at the foundation: bad loans being issued to people who could not afford them.
The Current Discussion: Will the current financial crisis discredit free-market policies in your country? Is socialism an echo of the past or a preview of the future?
I write from what may be the country least affected by this crisis, where the impact of the latest post-hurricane storms in Anglo-American financial markets is virtually nil. Iran has no exposure to the problems and mortgage-related transactions that, over the last 12 months and according to the Financial Times, have nominally summed up to twice the total of all other credit transactions in the world.
The Current Discussion: American newspapers are in dire financial straits. How are newspapers faring where you are? Are you concerned about the future of journalism in America or in your own country? What does that future look like?
It is very ironic that newspapers have always been on the lookout for change, new ideas and the latest technologies and change but they have tried to keep a very old business model alive with very old-fashioned ideas and advertising. Moreover, the destructive competition has faded the contrast that distinguished one from another and technological advances has allowed the distribution of, say, a New York newspaper in Los Angeles, Chicago and Dallas (and Tehran, Beijing, Moscow and Berlin via the Internet which embeds video clips too.)
Advertising that kept the old-fashioned business up and running, and keep customers happy, at least for the older generation and a comforting relapse to read material on physical paper while glancing at advertising. Newspapers (and magazines) have a “push format” design and provide a selection of information, made by editors along with display advertising. But times and behaviours have changed: we are all increasingly pulling information that we require (if only to avoid the mass “infotainment” carpet bombing). We are increasingly seeking specific information by, say, searching on the Internet about shoes, cars or Darfur, or visit our favourite websites or program the machine to search news about that topic and send it to us (or change the TV channel when the stories of O.J. Simpson or Brittany Spears is pushed as news!). Newspapers are in a business plan dilemma as they have straddled both the digital and physical formats. They now have a global reach (and deliver this article from Tehran, for example) but do not have local roots abroad to derive revenue from advertising in the local language. But can they afford to kick the can down the road? It is decision time to rethink the business model.
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