In The Next Global Stage, the formidable Japanese thinker Kenichi Ohmae uses the analogy of a stage to describe the emergent reality of business in the age of globalisation, and most especially, the global economy. Ciaran Parker reads between the lines.
In The Next Global Stage, the formidable Japanese thinker Kenichi Ohmae uses the analogy of a stage to describe the emergent reality of business in the age of globalisation, and most especially, the global economy.
Ohmae wastes no time in asserting that the global economy is not theory (or make belief) but a visible reality; we have no option but to accept it. It is a rather mercurial beast which shows its influence in many areas of the world, but which seldom gives up its secrets to the casual observer. Ohmae trained as a nuclear physicist, and so it is not surprising that he draws parallels between the global economy and the worlds of particle physics and chaos theory. The global economy does not operate according to the old rules of the game, so many observers fail to grasp important realities because they are applying old parameters. Much of the response to the global economy’s development is informed by defensive ignorance. It is easy to dismiss those things we do not fully understand as unimportant and trivial, but in the long run the march of human knowledge suffers. It is surely insufficient to denounce dissenting economic voices as cranks.
Among the obscurantist vanguard are those economists who insist on applying out-dated economic paradigms to a reality that refuses to conform to them. Ohmae demonstrates how the global economy has pulled the rug from underneath traditional Keynesian concepts of the role of money in the corpus economicus. Many of the prescriptions from the Keynesian medicine chest no longer work, or if they do, they have the opposite effect to that intended. They might have worked in a world dominated by discrete national economies. While attacking Keynes’ theories may appear like flogging the proverbial dead horse, the persistence of Keynes’ thinking on macro-economic decisions cannot be underestimated. His discussion of the shifts in exchange rate theories and practices demonstrates how central banks have gone from being lenders of last resort to buyers of last resort.
“The economy is no longer enclosed in a single country. Nor is the world an assembly of autonomous and independent nation states. Rather, we now have inter-dependent units of nations and regions. Some regions have populations of millions; others (such as the EU) have hundreds of millions,” Ohmae writes. “The trouble is that economists continue to interpret the economy through the lenses of the old masters. They modify antiquated equations and develop mathematical models which explain only a part of the global economy.”
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