Business: Competition Goes Global

1962 was a year when businessmen thought something worse was just around the corner, and it turned out not to be.

Measuring their final profits statements against their yearlong apprehensions, many businessmen at year's end might sigh along with Mark Twain: "I have known a great many troubles, but most of them never happened." It was that way in nearly all the world's industrialized nations—a year of growth but not of boom. Western European businessmen, lately accustomed to seeing their economies expand by more than 7% a year, had to content themselves with growth rates that ran as low as 4%. Japan's tycoons cried recession because their nation's expansion rate sank from a spectacular 19% in 1961 to "only" 5% in 1962. But the only real sick man of the free world was politically tormented Latin America, where there was serious unemployment and inflation, and trade deficits soared.

In the U.S.. 1962 was a disappointing year largely because it had been overbilled to begin with. In January President Kennedy's economists extravagantly predicted that the gross national product would spurt ahead 10% during the year. But the great growth fallacy exploded in the spring as overpriced stock markets suffered their worst crash since 1937, and unemployment (mostly of the unskilled) rose to a level previously unknown in a period of prosperity. Businessmen began muttering about, and taking precautions against, a recession dead ahead. But in fact by the end of the year most economic barometers were on the rise.

The Other-Directed Economy. Though most businessmen would look back on 1962 with contained enthusiasm, it was a time of significant opening out to the future. It was the year when the world's businessmen became fully aware that in place of many national markets there was emerging a single international market encompassing the whole free world.

Since the days when cockleshell Phoenician galleys first began to crisscross the Mediterranean, men have made fortunes trading abroad. But in 1962 as never before, business strategists made their day-to-day decisions and long-range plans in the light of the challenges and opportunities of a world market. Says Georges Villiers, president of France's National Council of Employers: "Like the Moliere character who spoke prose without knowing it, we are engaging in supranationalism without knowing it."