JACK MA, FOUNDER ALIBABA GROUP
With a nuclear crisis brimming on the Korean Peninsula perhaps an outside perspective on the West from China’s biggest millionaire can bring fresh insights. When the second WTO was convened, according to Ma, everyone worried that international companies were coming to take away all their stuff. As a result of globalization US companies, and others, made billions. Globalization is Great. But it needs to be improved and made more inclusive.
Over the past 30 years 60,000 big companies have benefited from global reach. Over the next 30 years we need increase that 100x to 6 million businesses, and add 20 million small businesses with global reach.
Initially the concept of globalization was simple. The West was going to outsource the manufacturing and service jobs to Mexico, China and India. And they were going to keep all the technological and financial work at home. It was going to be what Thomas Friedman called in the New York Times, “The World is Flat” concept.
However the balance sheet analysis of the money flows—where the money came from and where it was spent—paints a troubling picture of how things turned out.
1. IBM, Cisco and Microsoft… US multinational’s profits were greater than the Bank of China. Their market capitalizations grew by more than 100x in 30 years.
2. Where did the money go? Â In the past 30 years the US fought 13 wars spending U$14 trillion dollars.
3. What if a fraction of that money was spent on infrastructure: on blue and white collar workers? Governments are supposed to spend money on their people. On the ones that were not good at school; on health; etc.
4. And there is other money I am curious about. Ford, Boeing…. In the last 10 or 20 years all I heard about was Silicon Valley and Wall Street. U$19.2 trillion was wiped out in 2008. Worldwide 34 million jobs were lost.Â
5. What if that money had been spend in the mid-west developing the industry there?
Jack Ma makes the point that no other country stole the jobs. The ‘flat society’ strategy is not distributing the money in a proper way.
My own view is that we will get to a finer grain distribution of global assets faster and safer through reform and open dialogue. And I wager that the flawed economic and political model of the west will continue to produce far better results overall than the centralized communist regimens in Russia and China.Â