Mastering the "Worldeconomy"

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Does a global economy still exist? If one were to base one's judgment solely on the recent meetings of the world's most powerful decision-makers-whether at Geneva, Versailles or Cancún-the answer might well be "no." Conflicting perceptions, diverging priorities, and lack of any sense of direction suggest, indeed, that the concept of world interdependence has been lost in a policy and intellectual vacuum. Seldom have so many common interests run into so many common problems to produce so little common action.

Let us hope that the period extending from the July 1981 Ottawa summit to the Versailles summit of June 1982 and to the Geneva GATT ministerial meeting in November 1982 will be seen in retrospect as the nadir of international economic cooperation. The story of the 1960s had been that of a prosperous blossoming of the trees planted at Bretton Woods. With a few noticeable exceptions, the story of the 1970s and early 1980s was one of missed opportunities and growing intellectual disarray. We failed to plant the seeds of organization and reform that the emergence of a truly global economic system was beginning to call for.

It simply has not sunk in how rapidly the world has changed, not only during the fast-growth period of the 1960s but also during the lower-growth decade of the 1970s. We confuse stagnant growth with "no change" scenarios, when in fact the level of interdependence between countries may never have increased faster and the underlying structure of power changed more deeply than in the latter period.

Thus, we are still striving to overcome an international economic crisis through national economic policies. Models of closed national economies still govern much of our thinking, and we wonder with incredulity at their failure-be it on the Keynesian or on the monetarist side. Modest coordination proposals aimed at promoting a much needed world recovery still arouse controversy and skepticism-when in fact national policymakers have obviously lost control over their much cherished spheres of economic autonomy.

The time has come to realize that the international economy can no longer be defined as, and limited to, the intersection of national economies. Rather, it is now the national economies which must be looked upon as the extension of a global and integrated system with a logic of its own. To make the point clear, let me call the global system the "worldeconomy."