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The man who put crunch in candy

R. Sundaram

TODAY, if politicians everywhere in the world harangue endlessly about anything, it is globalisation.

Globus is a Latin word but should anyone be given credit for making the word common currency, it should be the pioneer in the field of globalisation, Mr. Raymond Vernon, who died a year ago at the age of 85. He wrote extensively about globalism, as he li ked to call it, and was an oracle on the subject.

In his last book, The Hurricane Years, he drew a picture of the emerging clash between commerce and politics. He predicted that the relatively benign climate in which firms such as IBM, Microsoft, Toyota, Siemens and Samsung, which were generating half the world's industrial output and half of its foreign trade, faced a spell of rough weather as the growth of transnational corporations was increasingly perceived as eroding the sovereignty of the nation-states, a familiar refrain of both: The tiresome left and the strident right.

Mr. Vernon was a member of the Marshall Plan team that guided the economic revival of Europe after the Second World War, and worked on the development of the International Monetary Fund and the General Agreement on Tariffs and Trade. After serving in the US government in the Securities and Exchange Commission and the Department of State for nearly two decades, he went to Harvard University in 1956 and never left. At Harvard, Mr. Vernon focussed for decades on the study of the international economy -- es pecially the increasing role played by multinational corporations and the limits to governmental power.

``Ray Vernon was the father of globalisation long before people used that term,'' said Mr. Daniel Yergin, an author and business consultant. ``His work has had a phenomenal effect on several generations of thinking about how the global economy works.'' M r. Vernon's books on these subjects -- including Sovereignty at Bay in 1973, Storm Over the Multinationals in 1977, and Beyond Globalism in 1989 -- were influential and often far-sighted. In The Commanding Heights, a 1998 best seller by Yergin and Joseph Stanislaw, the authors wrote, ``It is impossible to write about issues like relations between government and the global marketplace without acknowledging the profound intellectual impact that Prof. Raymond Vernon has had on them over the half century.''

Born on September 1, 1913, in New York, Mr. Vernon was one of four children in a family of Russian Jewish immigrants. His father, Hyman, drove a truck delivering mineral water to restaurants and bars in the Bronx, and Mr. Vernon and his two brothers hel ped their father carry the crates. Their family name was Visotsky, but the children changed it to Vernon, beginning with Mr. Vernon's older brother, who changed his name to improve his chances of being accepted into medical school. All four of them went on to earn doctoral degrees. Mr. Vernon received a bachelor's degree from the City College of New York in 1933, and earned a doctorate in economics from Columbia University in 1941.

Mr. Vernon began his research into multinational corporations in 1965. His early work anticipated that multinationals -- as efficiency-seeking enterprises -- would transfer labour-intensive work on standardised products to developing nations. In Storm Ov er the Multinationals, he analysed how the pragmatic decisions of increasingly global companies held sway over economic forces once controlled by governments, like trade flows and levels of investment. Later, when European nations tried to combat the pow er of American multinationals by fostering the creation of state-owned ``national champion'' corporations, Mr. Vernon predicted early on that the tactic would prove to be poor policy. ``His view was that state-owned enterprises could not compete with the investor-owned multinationals, which are more flexible,'' said Mr. Robert Stobaugh, a professor emeritus at the Harvard Business School, ``His research became part of the foundation for the privatisation push of the 1980s.''

Mr. Vernon, the renowned student of multinationals, was once employed by a multinational-in-the-making, the now famous Mars candy empire. He oversaw the development effort of a new peanut variety which earned him the sobriquet, ``the man who put the crun ch in M&Ms.''

For the markets, his basic belief in them tempered with the awareness of their weaknesses, will remain signposts for long.