The Trilateral Commission (© 1982)
Miriam Camps, Ryokichi Hirono and Karsten Laursen
ISBN: 0-930503-24-4
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Foreword
I. "Trilateralism" and the Governance of the International
Economy in the 1980s
Miriam Camps
A. Introduction
B. Six Propositions
II. More Interdependence, More Diversity: Trends and Issues in Trilateral
Relations with Centrally Planned and Third World Countries
Ryokichi Hirono
A. Introduction: Interdependence, Multi-Polarity, Differentiation
B. Trends and Issues in Trilateral Relations with Centrally Planned Economies
C. Trends and Issues in Trilateral Relations with Third World Countries
III. The Inflation-Unemployment Nexus: Policy Choices and Growth Prospects
for the Trilateral Countries in the 1980s
Karsten Laursen
A. Introduction
B. Policy Priorities in the 1970s
C. Trade-Off Between Full Employment and Stable Prices: The International
Element in the Phillips Curve
D. Two Policy Implications
E. Prospects for the 1980s
F. Statistical Appendix
Text of Foreword
The broad purpose of this project has been a reexamination of "trilateralism" in the prospective world economy of the 1980s -- a world economy that has already changed in considerable ways since the Trilateral Commission was conceived in the early 1970s.
"There are grounds for questioning some of the assumptions underlying the 'trilateralism' of the seventies and for suggesting that we may be better served by a somewhat different conception in the eighties," Miriam Camps writes in the opening essay; and she goes on to sketch six broad "propositions" about the governance of the international economy in the 1980s. First is the need for a "new multilateralism" that reaches for a modified set of rules acceptable to almost all countries (particularly rules for the management of money and conduct of trade) while allowing special or additional arrangements for various clusters of countries, consistent with the global framework. A few relatively effective global organizations -- the IMF, IBRD and GATT in particular -- need to be strengthened to provide overall surveillance of these special or additional rules and also to help provide the kind of "leadership and steering" the system requires, buttressed by "key countries" (not always trilateral ones) that will vary over time and according to the issue at hand. "Gradually moving some of the advanced-country consultation and coordination of policy that is now carried on in the OECD and at the Summit to inner groups within the IMF and GATT should help to ensure that the needs of the wider system and of other countries are given more adequate consideration. It should also make it rather easy to add, and perhaps subtract, countries from these key-nation inner groups as changes in the economic weight of countries make this desirable."
The Camps argument rests partly on the perception that the trilateral countries are becoming less distinguishable from the rest of the world. Continuing differentiation within the "First World" group -- and Second and Third Worlds as well -- is making it less useful to think of countries in these terms. Important new actors are emerging beyond the trilateral countries -- sometimes with different ideas about how the world economy should be organized. These themes are also prominent in the essay by Ryokichi Hirono, "The traditional intragroup bonds that have bound the OECD countries, the Group of 77, and the centrally-planned economies will continue to be eroded away in the 1980s," he argues. "Attempts will certainly be made by those central to these traditional international groupings to re-cement the old ties.... The logic of the growing multi-polar world, however, will continue to brush aside such attempts. Nations will negotiate in different coalitions on different global issues, cutting across existing power groupings." Hirono projects a higher degree of economic interdependence between trilateral and both centrally-planned and Third World countries, and he sees increasing economic and political diversity in both of the latter groupings. Within the Third World, he concentrates on the OPEC countries, the NICS, and the low-income countries, laying out some of the challenges each will present in this decade. "The 1980s will be an era of negotiation among countries and groups of countries and we will experience continuing birthpains in seeking a new set of principles and rules suitable for governing international conduct in a more multi-polar world economy."
While the Hirono and Camps essays both stress the intensification of interdependence beyond the trilateral regions, the Karsten Laursen essay suggests a new dimension of interdependence among the trilateral countries: Recent empirical analysis indicates "a large international element in the rate of wage inflation" in OECD countries. Such a link among the OECD economies carries important policy implications. For instance, "if a country pursues contractionary policies to reduce inflation, the international wage link operates in such a way that the process becomes even more painful" because the wage inflation imported from abroad necessitates even sharper contractionary policies to accomplish the domestic inflation-reduction goal. At the global level, a wage link of this nature casts additional doubt on some of the supposed economic virtues for the industrial countries of international "pump-priming", such as through massive transfers to developing countries. "While it is true that an increase in demand from the developing countries will have an expansionary impact in the industrial countries, it does not follow that this expansion will be any less inflationary than domestic 'pump-priming'. In fact there will be a reverse tendency if, as suggested above, there is an external element in wage inflation in the OECD countries. This international linkage will hold back the inflationary impact of expansionary measures in an individual country, whereas this brake will not be at work if the increase in demand is distributed over the whole OECD area, as will be the case if it originates in the developing countries as a result of international 'pump-priming'." Laursen makes these points about OECD-level and global-level interdependence in the course of an essay on the inflation-unemployment nexus in the industrial countries. He is very critical of the current emphasis on contractionary measures to bring down inflation, and argues "an urgent need for supplementary policy instruments. Most important among these is a policy of wage restraint.... To the extent that expectations in wage formation contain an international element, a national wages policy is likely to be greatly facilitated if it becomes an integral part of the policy arsenal in all industrial countries."
We have departed from our usual practice in this booklet and present three essays -- the first by the North American author; the second by the Japanese author; and the third by the European author. Each author acknowledges his or her debt to the range of individuals with whom they each discussed the general themes or actual drafts of their separate papers, though the responsibility for each paper remains that of the individual author alone. Unlike our usual practice, the authors share no collective responsibility for each other's views.
The authors first met in June 1980 in Paris to discuss the overall outline of the project. In the early fall of 1980, Hirono prepared his first draft, on which some consultations were held in each of the three regions. Laursen prepared his first draft in November, which was discussed at the meeting of European members of the Trilateral Commission in Dublin late that month. Camps' first draft was completed in early January 1981. Revised drafts of each of the three papers were discussed at the Trilateral Commission meeting in Washington at the end of March. In the months that followed, each author completed the final draft of his or her essay. Laursen held consultations in Tokyo at the end of June. Camps came to New York for a discussion of her draft in October. The editing of the three papers was completed in January 1982.
CHARLES B. HECK, North American Secretary
PAUL REVAY, European Secretary
TADASHI YAMAMOTO, Japanese Secretary
Authors
(titles at time of publication)
Miriam Camps, Fellow, Wolfson College, Cambridge University.
Ryokichi Hirono, Professor of Economics, Seikei University.
Karsten Laursen, Professor of Economics, Aarhus University.
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