business policy on this new transnational superpower structurenof business and industry.”nIndeed, Mr. Drucker goes on to insist that what reallyncounts is international money flows. The rise or fall of thendollar isn’t, he argues, a matter of a business manager’snconcern from the standpoint of the US national interest.n”The ‘real’ economy of goods and services no longerndominates the transnational economy. The symbol economynof money and credit does.” He goes on to say thatn”ninety percent or more of the transnational economy’snfinancial transactions do not serve what economists wouldnconsider an economic function. They serve a purelynfinancial function.”nUnderstand what that means: a transnational companynwould not be primarily concerned with manufacturednproducts or services, but with financial transactions involvingnmany countries, many banking institutions, and manyncurrencies. Where, one wonders, is the public good in suchna system, specifically the public good as envisioned by thenAmerican people and their government?nMr. Drucker is not alone in favoring this new economicnorder. George Gilder, author of Wealth and Poverty,nis another ardent advocate of the “no national borders”nschool of thought. He has argued that there is no morenreason for a balance of trade between the US and Japan thannbetween New York and Ohio. Ignoring the fact of nationalnsovereignty, he favors the repeal of all security restrictions onnstrategic trade with the Soviet Union. For him borders havenno meaning at all: he would open America’s gates to anyonenwho wants to move here. His anti-national one-worldismndovetails with the transnational concept.nCall this protectionism, mercantilism, ornwhat you like, but every country in thenworld is determined to maintain sovereignncontrol over its assets.nHerbert Stein thinks along these same lines. He believesnAmericans should be free to acquire capital from thenlowest-cost source, whether foreign or domestic. That thenchoice might create national dependency gives him nonpause. He apparently is unconcerned that unsupervisednflows could result in a loss of American control of Americannassets. In a letter to The Wall Street Journal he made thenrevealing statement that “I think this whole subject isnconfused by treating the flows of capital and goods as if therenwere flows between ‘countries.'”nBut of course they are just that. Like it or not, Messrs.nDrucker, Gilder, and Stein can’t deny the fact that the worldnis still organized on the basis of national states — nationalnstates with historical memories, historic and present-daynpolitical and military ambitions, cultural identities, andnspecial national interests. Thus, while there are vast numbersnof international economic transactions, there isn’t a truenglobal economy, without barriers and state objectives.nAmerican companies don’t just “happen” to exist innAmerica. Their American officers and managers are Ameri­n26/CHRONICLESnnncan citizens, with all the duties and responsibilities ofncitizenship. The companies themselves are incorporatednunder US law and are subject to it. As American companiesnthey enjoy many benefits, including the protection that thenUnited States government provides to American citizensnand American commercial entities. At least part of thesencompanies’ assets are held in American banking institutionsnthat enjoy public safeguards. An American company is justnthat; it doesn’t exist in legal and constitutional limbo.nCorporations aren’t stateless creatures; they, like citizens,ncan’t have it both ways. If a company doesn’t interid to be anpart of the United States and help safeguard Americanneconomic interests, then it should incorporate somewherenelse.nThe problems that domestic American companies havenexperienced in recent years stem from two sources. The firstnis the penetration of the American market by foreignncompanies — often using transplant factories that displacenAmerican-owned, American-directed companies, as theyncome here with a host of home-based suppliers. The secondnis the hostile takeover craze and leveraged buyouts that havencaused a mushrooming of corporate debt. A related problemnis the use of so-called junk bonds in the LBOs, a financialnpractice designed for speculation rather than investment. Anhealthy free enterprise economy requires a very differentnkind of approach to the corporation:nInsofar as companies operating on the American scenenare concerned, small, mid-size or big, law and public policynshould be developed with the aim of minimizing regulationnin a degree consistent with safety and financial regularity.nBut we cannot get away from the fact that the problem ofnforeign adversarial trade and the buying up of Americannassets also requires public understanding and legislativenaction. Call this protectionism, mercantilism, or what younlike, but every country in the world is determined tonmaintain sovereign control over its assets and businessnstructure. The great economic superpower of our time,nJapan, protects its home market and closes its doors to ansignificant degree to imports, despite its lip service to freentrade. Thus Japan awards all its public works contracts tonJapanese firms — whereas in this country Japan is allowed tonbid on and is awarded similar contracts, such as the buildingnof a major new museum in Los Angeles.nIt should be obvious that the United States can’t maintainnits business and industrial system if this double standardncontinues to prevail. One step in the right direction by thenReagan administration was its creation of the Brady Commission,nwhich called for more safeguards in the markets innorder to prevent speculative abuses. (The commission’snrecommendations were not implemented.) Passage last yearnof the Omnibus Trade Act was an important first move bynthe Congress. Also significant was President Bush’s decision,nunder the terms of this law, to cite Japan for unfairntrading practices — a presidential action that would havenbeen unthinkable a few years earlier.nWhat of large-scale overseas manufacturing by Americanncompanies for the purpose of selling their products in thenAmerican market? Here the government,,and public mustnrecognize that the Commerce Clause’ of the US Constitutionngives Congress the rz^/if to’determine business rulesnin accord with the national interest. Alexander Hamilton,n