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Monday, May 13, 2002

'FUNDAMENTALIST' CLASH

Wider economic gaps ahead


The first decade of the 21st century is likely to be no less turbulent than the last decade of the 20th century. It is next to impossible to predict how the world will change in this coming decade, but one thing is certain: The world in 2010 will defy predictions based on today's knowledge.

I would predict that this decade will certainly reveal contradictions or distortions possibly linked to the development of postindustrial society since the 1990s through the information-technology revolution as well as globalization.

Among other things, economic gaps between nations and individuals will widen at an astounding rate. Although globalization -- or moves toward a global market economy -- may help all national economies prosper, it will inevitably widen economic gaps among nations.

It should not be forgotten that the Sept. 11 terrorist attacks in the United States were consequences more or less of the development of globalization and advanced information technology during the past decade. Afghanistan is among the few Islamic nations that have been excluded from, or have rejected, globalization.

As far as economic growth is concerned, globalization makes all participating nations better off. On the other hand, countries excluded from globalization are quite likely to suffer from economic stagnation. As a result, economic gaps among nations will widen.

Furthermore, advances in information technology bring national economic gaps into sharper focus on a real-time basis. Hence, resentment tends to grow in regions excluded from globalization-driven economic growth.

For non-Western cultures buffeted by waves of globalization, their raison d'etre becomes ambiguous. Some of them disintegrate; others become fundamentalist. Cultures that have evolved toward fundamentalism tend to clash with those favoring globalization.

Islam and other religions are not always the source of "fundamentalism," but the progress of globalization has turned Islam into a "beleaguered tradition," writes Anthony Giddens in "Runaway World: How Globalization Is Reshaping Our Lives" (2000). With their raison d'etre in doubt, Islamic cultures are driven toward fundamentalism.

At each of the sites of the World Trade Organization's ministerial conference in Seattle in December 1999 and the Group of Seven summit in Genoa in June 2001, 100,000 to 200,000 people held antiglobalization demonstrations. What they were protesting against was globalization in the narrow sense of the word -- moves toward a global market economy.

The "market fundamentalism" defined by the moves to promote a market economy worldwide was bound to cause strong resentment and resistance and to become a "beleaguered tradition" itself eventually. Market fundamentalism flourished in the 1980s following British Prime Minister Margaret Thatcher's political debut in 1979. In the 1990s, however, we observed that market forces tended to lead to domestic and global violence; hence they became beleaguered by those who were trampled.

This perspective supports the opinion that the Sept. 11 terrorist attacks resulted from a clash between Islamic fundamentalism and market fundamentalism. Giddens says one of the major issues in the 21st century will be a collision between cosmopolitan tolerance and fundamentalism, adding that fundamentalists do not hesitate to resort to violence to protect their tradition. Defenders of U.S. interests regard the Sept. 11 attacks as a conflict between Islamic fundamentalism and cosmopolitan tolerance represented by the U.S. In other words, they regard Islamic fundamentalism as the enemy of freedom and democracy, and the U.S. as the guardian of those values.

To the extent that freedom and democracy are universal values, they will not become beleaguered, but market fundamentalism should not be equated with freedom and democracy. As a matter of fact, market fundamentalism can often erode democracy.

If the market economy widens income gaps among nations and individuals, weakens public medical care and education, and leads to a situation where a few winners reign over many losers, it will be certainly incompatible with democracy. Those who can enjoy the benefits of global expansion of the market economy support market fundamentalism, while those who cannot side with the opponents of market fundamentalism.

Supporters of democracy have no choice other than to stand in opposition to market fundamentalism.

Takamitsu Sawa, professor of economics at Kyoto University, is also the director of the university's Institute of Economic Research.


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