One Slice of the Pie

For all their worries, businessmen rarely sound like apocalyptic prophets. Yet last week President Rudolph A. Peterson of the San Francisco-based Bank of America, the world's largest private bank, gave ominous voice to a problem that increasingly dismays many U.S. leaders. In a London speech, Peterson warned that Europe's "new economic nationalism" and the protectionist response it seems to be stirring up in the U.S. have created an impasse that could undermine world prosperity and even lead to war.

"The growing spirit of factionalism is a clear danger to the cohesion of the Atlantic community," said Peterson. "At the very best, its projection into the future implies a slowdown in the economic growth rate of the free world and a particular slowdown in continental Europe. At worst, it raises the specter of accelerating restrictions on capital flow and along with it those notorious handmaidens of capital control: tariff walls, trade wars and isolationist trade blocs. While these projected consequences have unpleasant economic results, the political reverberations could be awesome. We are marching steadily toward a dangerous confrontation between the rich and poor nations of this small planet. Together, the U.S. and Europe can avert tragedy. But without the cohesion of the Atlantic region, the peace and prosperity--indeed the ultimate survival--of mankind could be in dire jeopardy. We are approaching a crossroads of profound importance."

Beyond Nationalism. Though Peterson's audience was composed of British and U.S. businessmen at a Savoy Hotel lunch of the American Chamber of Commerce of the U.K., his words were plainly aimed at corporate and government chiefs everywhere. "It is just possible," said Peterson, "that businesses have the potential to handle internationalism better than governments." Specifically, he proposed "increasing operational cooperation" among businessmen on both sides of the Atlantic, especially through multinational corporations--companies owned and operated by citizens of several nations.

Similar views have lately been aired with growing frequency by other U.S. executives, notably former Under Secretary of State George W. Ball, now chairman of Lehman Brothers International, Ltd., the overseas arm of the Manhattan investment banking house. Last month Ball even suggested that multinational companies be allowed to escape the control of individual nations through a treaty creating an "international companies law." Only thus, Ball argues, can global enterprises avoid "the stifling restrictions imposed on commerce by the archaic limits of nation states" and realize their potential to "use the world's resources with maximum efficiency."

Shadow & Substance. Peterson not only backs Ball's suggestions, but last week he also urged the world's businessmen to nudge their governments toward six other reforms: 1) a multinational investment guarantee system within the World Bank to ensure against what he called "nonbusiness" (political) risks, 2) an international legal code to protect private property from expropriation, 3) development of the European capital market, 4) more closely meshed national patent systems, 5) broader approaches to antitrust problems and 6) a freer flow of technology. "We have created the illusion of multinationalism without the reality, the shadow without the substance," he argued. "To borrow from Cassius, the fault is not with the concept but with ourselves."

In their pursuit of multinational activities, Peterson added, U.S. businessmen must learn to "temper the typical American goal to be first and biggest. Our effort must be to help expand the market for the benefit of all and to be content with one slice of an ever-growing pie."

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