The Provenance and Development of a Global Ethic

Global Virtue Ethics Review, Oct, 2000 by James Gazell

Furthermore, by the 1970s, an international economy had turned into a global economy because of what sociologist M.D. Litonjua called a "microelectronic revolution," the development of new technologies in the areas of nuclear power, missiles, supersonic aircraft, television, and computers. Under the international economy, a division of labor had existed between the first and second worlds (Europe and the United States) and the third world. Raw materials were extracted mostly from the latter; largely the former manufactured finished products. An emerging global economy eroded this dichotomy, for the world was rapidly becoming a single market for money, goods, quality workers, and technical knowledge--all of which readily crisscrossed national borders in search of the most lucrative investments and profits on goods and services. Worldwide communications and transportation systems fostered this development. Third world nations began to industrialize; first and second world countries started to diversify from manufacturing to services (Litonjua, 1999: pp. 2-3)

In addition, multinational corporations began to be replaced by transnational organizations. Under the former model, the parent company (the headquarters) designed and manufactured products for its domestic market whereas the offspring (the subsidiaries) produced what the parent had designed and then sold the products in the local markets. There was intra-organizational specialization analogous to the division of labor among nations. Under the latter paradigm, any company with a business could design, manufacture, and distribute products or render services, or handle any combination of these functions. Subsidiaries of a single headquarters in an international economy became functionally complete and virtually autonomous units in a global economy. Top management, which consisted of the executives of the parent company, became diversified by including executives from the former subsidiaries (Drucker, 1989: pp. 124-125).

The most salient result of these developments was, by the 1980s, the creation of a virtually laissez faire global economy dominated by transnational corporations. Moreover, this outcome was fueled by widespread discontent in the western world with the welfare state in its then extant form because of its steadily rising taxes to fund current or declining levels of benefits. People increasingly objected to paying more for less. As a consequence, the position of governments vis-a-vis the corporate world declined and weakened their individual and collective ability to regulate transnational institutions. In fact, the influence of the corporate world over governments was greater than the converse. National governments in the western world sought to privatize some of their long-standing functions. They devolved others to regional and local governments, deregulated businesses, and promoted free trade. They became more business-like in their operations because of the new public management and reinventing government movements. Their counterparts in much of Asia (such as China and Vietnam) moved away from state control of their economies. Third World countries with strong private sectors let them alone by declining to nationalize or regulate them to any significant degree. Market values were regnant on a global scale as transnational and mid-size businesses pursued efficiency, productivity, and profitability virtually at will with little fear of individual and collective government interventions to restrain them in the name of a common good (Kettl, 1998: pp. 7,12-15, 35; Lane, 1997: pp. 1-2; De Montricher, 1998: pp. 108-109; Peters and Wright, 1996: p. 629; Uvegas and Keller, 1998: p. 29; Guess, 1998: pp. 535,552-554, 557, 559).