The markets demonstrated the dangers of financial linkage last month as stock markets fell in dramatic succession. But globalization of commerce is setting off harbingers of far more frightening dangers.
No one denies the enormous benefits of globalization. But like other revolutions, globalization also has a shameful face. William Greider, author of the essay that begins on the next page, argues that the incredible productivity that globalization has wrought leads to overcapacity across a wide range of industries. With supply outstripping demand, companies cut prices. That, he fears, will lead to worldwide deflation and, eventually, an implosion of globalization.
But potentially, chief executives whose companies transcend national boundaries have more clout than do kings and presidents. Since companies are the standardbearers of globalization, it is their moral obligation to fix its problems. Since companies won't survive (at least in their present form) if the time bomb explodes, it is their practical imperative to do so.
Some companies are taking action. Avon Products, Toys 'R' Us, and KPMG Peat Marwick joined with other global companies to launch The Social Accountability 8000 pact last month. These companies agree to use suppliers …