Wriston Sees Information Era Diffusing Power
INTERVIEW. Former banker points to a transfer of control from corporations and nations to people
WHEN Walter Wriston talks about the "currency" of ideas, one can't help but listen carefully. Mr. Wriston, after all, speaks from the perspective of one who probably knows more about the currency of commerce than almost any living American.
Wriston is the former chairman and chief executive officer of Citicorp, who helped build New York-based Citibank into the largest commercial bank in the United States. Until his retirement in 1984, Wriston had been with Citibank for 38 years. Today, Wriston is active in public service and serves on several corporate boards.
He says that far beyond the power of national governments and corporations, a new world democratic order is emerging. And the catalyst, Wriston argues, is the profound information revo-lution that is sweeping the globe.
In a book released last month, "The Twilight of Sovereignty," (Charles Scribner's Sons), he says that "in our new world, both nations and corporations will have relatively less power."
Instant communication technologies - from fax machines to global communication grids to international television outlets such as Cable News Network - are moving power directly "to the people." Those societies that best understand the changes in global information will adapt and prosper. The new source of wealth, he says, is not financial capital, but information. Pundits hype the downturn
Wriston remains relatively upbeat about the US economy, despite the stock and bond market gyrations of recent weeks, as well as currency crises abroad. Moreover, he notes that the US continues to post growth, albeit at a relatively modest level. Inflation is down; some parts of the economy, such as export-based firms, continue to do well.
Part of the reason why this recession has seemed so bad, he says, is because this downturn has affected the broadcast networks and newspapers. "They've been in a significant retrenchment for some time now," he says, so for many newsmen it is easy to extrapolate the difficulties in their own offices and regions, particularly along the Eastern Seaboard, out to the rest of the US.
Still, Wriston recognizes that many Americans have been unhappily caught in industrial and corporate downsizing. Many middle managers have lost jobs. The banking industry has been directly affected by lost management positions, many of which will never be restored.
Wriston also says that the new information-based economy will be a special challenge for the less-educated members of society. In the US, for example, only one-fourth of the work force under 40 has finished college; another fourth has technical training. That means that half the work force is poorly equipped to make its way in an increasingly technological economy. Revamping education
Part of the answer, Wriston says, is education. Wriston favors choice in education, including the voucher system backed by the Bush administration. The GI Bill, a form of voucher system that helped soldiers returning from World War II, was one of the most successful pieces of social legislation ever passed in the US, he says. A similar system should be applied to primary and secondary education.
Wriston bristles at the suggestion that US banks have been supplanted in importance (and assets) by overseas banks, especially Japanese institutions. The higher asset levels of foreign banks, he notes, are explained in part by currency differentials.
Still, he is concerned that US banks may not be adapting to the changing demands of the marketplace. Of all the major US commercial banks, he notes, only his former bank, Citibank, still maintains a major presence in most overseas nations. And at home, US banks continue to face intense competition from nonbanking institutions who now lend money to other corporations and to consumers.