An Overview of Coordination Concerns

Abstract

As it becomes increasingly clear that the post-Second World War cold war, if not already dead, is dying, a new world order is emerging. The USA and Japan fit everyone’s definition of “superpower”. The cold war political superpowers had treated the world as if it were a dusty “Wild West” Main Street on which they challenged one another for supremacy, each convinced that only one could walk away. Whatever may be the merit of that view of political and military power, it should be clear that economics and business differ and are not such a zero-sum game. The fundamental concept of comparative advantage teaches that every nation can gain by trade, cooperation and coordination. Charles Morrison’s “US—Japan Relations in the 1990s”, which appears as Appendix A to this book, addresses the mutual dependence of the economic superpowers, and the likely areas of conflict for the decade of the 1990s. On the one hand an economic “gun fight” (a trade war) would exact a profound price. On the other hand economic and business coordination and cooperation can produce dramatic improvements, not only in the welfare of the superpowers themselves, but also in the rest of the world. It can produce a positive-sum game.