Page 235 - The Drucker Lectures

216 [ The Drucker Lectures

guay, which is not exactly in the center of things, especially if
you get into the interior. And yet it was very clear that in this
desperately poor country with little education, the values are
clearly those of, well, the developed world. And maybe in the
interior of China, way back in rural China, globalization has not
yet really penetrated—though I think it might be getting there.
But other than that, this is now a universal phenomenon.
The first implication is that competition means something
different than it used to.
And this is why I am convinced that protectionism is inevi-
table, not in a traditional form but in new, nontraditional forms.
And yet it will not protect.
Let me give you a simple example. A few months ago, as all
of you perhaps remember, the U.S. steel industry complained
about the dumping of hot rolled steel, which is used for au-
tomobile bodies. And so President Bush ordered steel imports
stopped. But the automobile companies in this country, includ-
ing the Japanese, are not paying the price the steel companies
ask. They negotiate to pay the price that they would have had to
pay if Bush had not stopped the dumping. Toyota, for one, has
said very loud and clear to the steel companies: “If you don’t give
us the steel at the world market price (which is 40 percent be-
low the American price), we will simply shift more of our body
manufacturing to Japan and to Mexico. We’ll cut body manu-
facturing in this country by 80 percent within six months.” And
they are now negotiating for the next model year. Ford is doing
the same. And that is going to be the norm. Globalization does
not mean that there is worldwide trade in goods or services.
It means that there is worldwide information. And that is the
determining factor.
There is also talk that all of our jobs are being exported over-
seas. This is simply nonsense. It’s labor union propaganda—pri-
marily garment workers’ propaganda. Actually, foreign investors