Chapter 4

Zaibatsu

In 1996, "zaibatsu" is Japanese for a family corporation held together by economic bonds. But in this world of 2025, "zaibatsu" means much more.¹ Zaibatsu is a world dominated by corporate economic interests. Multinational corporations (MNC) have become extremely powerful and have loosely bonded together to serve their financial interests. The "zaibatsu," as used here, is the informal collection of MNCs cooperating to manage growth and maximize profits. Though some might view Zaibatsu as being prone to corporate greed and excess, usually there is peaceful cooperation to further world economic growth.

However, conflicts do occur when competition for emerging markets or newfound resources drives corporations to attack one another. When disputes occur, the Zaibatsu often acts against one corporation or another through surrogates such as states involved in border disputes or ethnic groups seeking better trade conditions. These conflicts are usually short-lived since the Zaibatsu considers wars bad for profits.

In Zaibatsu, the American world view is Domestic because of the relatively benign nature of this world (fig. 4-1). Profit-seeking corporations have fueled Exponentialⁿ technology growth and proliferation. The World Power Grid is Concentrated as power resides in MNCs acting collectively to increase profits.

Figure 4-1. Strategic Planning Space for Zaibatsu

In this world, MNCs have grown in strength, exerting sovereignty by virtue of the tremendous increase in international trade (fig. 4-2) and corporate influence in international organizations.² Since MNCs conduct most of the international trade, their influence is increasing relative to the sovereignty of states. The Zaibatsu seems to control everything, including the number and nature of conflicts. Military forces serve as de facto "security guards" to safeguard multinational interests and proprietary rights. However, this role is becoming more difficult as rising income disparities fuel resentment among the less-developed countries.

Figure 4-2. Trend in International Trade³

Plausible History

The world of Zaibatsu is characterized by the growing strength of MNCs. As the timeline in figure 4-3 indicates, the prosperity generated by a US-balanced budget in 2002 preceded this growth.⁴ The ever-increasing interdependence of MNCs and the resulting general rise in prosperity have encouraged worldwide political, economic, and military cooperation. This increase in world cooperation led to a UN-backed effort to deploy a planetary defense system in 2007.⁵

Figure 4-3. Plausible History for Zaibatsu

In 2010, computer technology leapt forward with the development of a microprocessor human-nerve interface which greatly increased the "intelligence" of computers.⁶ This development sparked a technological revolution that rapidly proliferated throughout the world and increased corporate profits. Corporations began to merge operations to better integrate various technologies while downsizing management and administrative functions.⁷

Despite the benefits derived from new technologies, occasional problems emerged, such as the Angola-Zaire border clash in 2011 (see map at fig. 4-4).⁸ Powerful corporations used this conflict to settle an oil-drilling-rights dispute.⁹

In the year 2015, safe nuclear fusion was developed, and it now, provides a significant portion of the world's electrical needs.¹⁰ As a result of the reduced demand, the price of oil fell to $10.00 a barrel in 2017.¹¹

In the 2020 presidential election, MNCs heavily influenced the outcome by contributing millions in "soft" money to a pro-business candidate.¹² In 2025, MNCs exert the dominant political force in Zaibatsu as most elected officials owe them their political careers.

Figure 4-4. Map of Angola-Zaire Conflict Region

The Nature of Actors

The principal actors are the multinational corporations known collectively as the Zaibatsu. MNCs form the major centers of power in a Centralized World Power Grid, and because of their influence, state sovereignty is less important.¹³ The Zaibatsu aggressively supports the establishment of powerful free-trade zones, further eroding state sovereignty. These free-trade zones contribute to the high degree of economic interdependence, preventing any state from acting to support indigenous corporate activities without adversely affecting many other states.¹⁴ Because of this recognized interdependence, wars are generally considered bad for profits and therefore are discouraged by the Zaibatsu.

The Zaibatsu often acts through the UN to maintain a relatively peaceful world. The UN is highly regarded for its effectiveness in dealing with complex global problems such as the asteroid threat. The UN implicitly supports Zaibatsu activity since their aims are peaceful and promote world development, directly supporting the UN charter.¹⁵ In addition, the Zaibatsu lobbies the US and other countries with capable security forces to provide the majority of the UN's small but technically-advanced mobile military. The UN uses these air, land, sea, and space forces to contain disturbances and to maintain relatively peaceful global conditions.

The world is partitioned into seven major technological development regions. These areas are the US, the European Union (EU), Australia, China, Israel, India, and Ukraine. Other important areas such as Latin America, North Africa, and Russia remain underdeveloped and provide raw materials and cheap labor. The standard of living is rising everywhere, but the seven technological development regions are increasing their lead in per capita income.¹⁶ This situation creates a potential source of instability as the gap between the haves and have-nots continues to widen.¹⁷ The seven development regions cooperate on most issues because of a strong Zaibatsu influence. However, global markets in niche areas spawn intense competition between the various regions.¹⁸

The Nature of International Politics

The key Zaibatsu objective is to ensure that international relations remain stable and thus conducive to trade and profits. As a result, international law is intricately linked to corporate law. Actors whose actions threaten profits and business-such as going to war without Zaibatsu support-are dealt with swiftly and severely. If the Zaibatsu cannot coerce the offending parties economically, then it secures UN involvement, relying on UN credibility to quell disturbances. The UN can respond with permanently committed military forces, sometimes involving the US.

Most natural resources are controlled, mediated, and distributed by the Zaibatsu. The Zaibatsu also develops new markets and sources of skilled labor. Due to the intense competition for these resources among various MNCs, conflicts occasionally occur with various groups acting as surrogates. When these conflicts occur, the UN may be pressured by both sides to get involved. Sometimes, the UN deploys peace enforcers to the displeasure of both sides, placing involved US military forces at risk.¹⁹

Conflicts usually occur in the developing areas of Latin America, North Africa, and Russia. When conflicts occur, the Zaibatsu works through the UN and other international bodies to restore order quickly. Where American-based MNCs are heavily invested in developing countries, they may place considerable pressure on the US government to get involved when conflicts occur that are not being resolved to the US corporations' satisfaction.²⁰

The Nature of US National Security Strategy

Since Zaibatsu is a relatively peaceful world, there are few threats to US interests. Therefore, the strategic challenge for the military in this world is to remain relevant and proficient in a peaceful but potentially unstable world. The national security strategy is peace through world cooperation and multilateral deterrence. International economic interdependence is viewed as the primary deterrent to conflict. When Zaibatsu interests are threatened, the US military often acts with the UN to resolve conflicts. When conflicts occur, the US military can respond quickly by enforcing UN-backed blockades and embargoes. Each of the seven development regions maintains security forces to preserve stability. Consequently, US forces rarely act unilaterally, so far fewer military forces are required to preserve US interests.

The Nature of Humanity

Human nature in this world is dominated by materialism.²¹ Many religious, ideological, and cultural differences have been co-opted by economic concerns. However, a strong antimaterialistic attitude remains among some religious fundamentalists.²² Additionally, greed and a growing opulence are increasing social tensions as some resent the increasing difference in income between the wealthy and the middle class. Finally, poor people still exist in many areas despite the overall rising standards of living. The forces of greed, resentment, and religious fundamentalism threaten stability as the Zaibatsu is unable to co-opt everyone.²³

The Nature of Technology

In Zaibatsu, DTeK is Exponentialn as technological innovations rapidly proliferate around the world. The low cost of entry permits niche corporations to exploit breakthroughs, thus fostering an entrepreneurial attitude worldwide.²⁴ Technology advances at a revolutionary pace as the seven development regions fuel innovation through competition. Maintaining technological leverage is difficult in this world as access to organized information is nearly ubiquitous.

To ensure long-term market growth, the Zaibatsu funds the development of highly efficient infrastructures.²⁵ Mass transit systems using magnetic levitation create interstate systems of bullet trains reaching average speeds of 300 mph.²⁶ These mass transit systems eliminate the burden of maintaining large road networks. Automobiles are now used solely for pleasure or as a means to reach mass transit stations. Additionally, the Zaibatsu developed transatmospheric vehicles which permit the rapid movement of critical resources and finished goods.²⁷ Investments in information and communications technologies provide worldwide interoperability, and the information highway has evolved into an information-communication continuum.

MNC profits have soared due to these and other revolutionary advancements, including spectacular studies in genetics.²⁸ Researchers have identified the desirable genes for various careers and professions. This breakthrough offers the potential to genetically engineer the next generation of workers and professionals.²⁹ Consequently, the military plans to genetically engineer some of their future personnel accessions if ethical questions can be resolved.³⁰ Understandably, most people are still uncomfortable with manipulating human life.

The Nature of the Environment

Zaibatsu is characterized as a "gray" world because the developed areas are environmentally clean and have sufficient resources while the developing areas are polluted and experience resource shortages. Technological advances, such as the widespread use of nuclear fusion, have reduced the demand for fossil fuels for electrical production. However, advances in technology often have led to other problems. Air and noise pollution in developing areas are causing serious health problems.³¹

Additionally, MNCs exploit many developing nations by dumping toxic wastes in the environment and operating "sweat shops" with the emphasis on profits over human rights.³² The developing nations tolerate these sweat shops because they are accompanied by Zaibatsu investment in infrastructure to foster long-term economic growth. Many of the underprivileged believe their children's lives will be better than theirs because of improving standards of living.

The Nature of the Defense Budget

The US reduced the DoD's budget (fig. 4-5) beginning 30 years ago as part of the effort to balance the federal budget. Once MNCs began influencing world events and mitigating conflicts, the absence of threats to US interests caused DOD spending to remain well below 1996 levels. Meanwhile, MNCs spurred economic growth throughout much of the world. As a result, the US gross domestic product grew at an average rate of 5 percent over the past 30 years. This growth has resulted in a current US GDP of $29 trillion in 1995 dollars.³³ At $200 billion, the DOD budget represents less than 1 percent of GDP.

Figure 4-5. DOD Budget (Constant FY95 $B) in Zaibatsu

Because many potential adversaries can afford to purchase modern and sophisticated weaponry, the potential threat to US forces is increasing over time. To meet this growing threat and contain modernization spending, the US military relies heavily on technological improvements from the commercial sector. Even using this strategy, the US military has lost its technological edge in areas such as software and information warfare.

Capabilities

There are few areas in this world that have not been privatized by the Zaibatsu.³⁴ For instance, base commanders must be adept at negotiating with MNCs for base services and utilities. The military depends on private firms for all of its mobility and uses commercial virtual reality simulators and war games to retain proficiency in war-fighting skills. Only the evolving nature of the threat provides a rationale to train and equip with leading edge technologies.

A major threat to the Zaibatsu interests exists in the infosphere. As a result, information warfare is a primary focus of day-to-day military operations, detecting and countering industrial espionage.³⁵ This focus is a critical issue because corporate information systems provide a large portion of defense-related intelligence. For security reasons, MNCs employ their own "super" clipper chips and advanced encryption techniques to control access.³⁶ Consequently, the services must constantly "decipher" the latest chips and encryption keys to maintain access.³⁷

Several other DOD capabilities are needed in Zaibatsu. First, is the ability to enforce the primary Zaibatsu punishment tool-the economic embargo, or sanctions; second, guarding against individuals and groups illegally milking company profits and databases-electronic pirates and "info-bandits;" and finally, using biogenetics to reduce training costs and attrition by "creating" the perfect soldier.³⁸ Essentially, the military is offensive in nature and most operations are conducted near the US or in conjunction with the other development regions.

Implications

Zaibatsu poses many challenges to the US military. The first challenge is to remain relevant. Because of the relatively benign nature of this world, the tendency is to stagnate or become preoccupied with ancillary missions. Additionally, war-fighting skills atrophy because of the reduced opportunity for experience.³⁹ Because the majority of space and sensor technologies are developed at consortium labs, rather than national facilities, the US must depend on MNCs for space support. Many military training areas suffer from high congestion, air pollution, noise pollution, and electromagnetic interference. Additionally, the Zaibatsu continues to add to the number of training restrictions by closing some ranges and prohibiting aircraft flights over populated areas. This situation has affected readiness by reducing the opportunities for "live" training. Most training is now "virtual" and commanders worry about maintaining combat readiness. Finally, because defending Zaibatsu interests sometimes involves UN action, the US military often becomes involved in operations with no clear US interests at stake.

Summary

Zaibatsu is a world of powerful multinational corporations. Currently it is a relatively benign world, but tensions are building. The US military is small due to the absence of a perceived threat, with most of its activity oriented towards cooperation with international organizations and other militaries to deter and resolve conflicts. The American World View is Domestic due to the lack of threats to US vital interests. DTeK is Exponentialⁿ due to investment and R&D funding by profit-seeking MNCs. Technology is used to fuel economic growth, in turn generating additional technological advancements. Finally, the World Power Grid is Concentrated. Power is held by MNCs who loosely bond together to further their economic interests.

Notes

1. Robert L. Kearns, Zaibatsu America: How Japanese Firms are Colonizing Vital US Industries (New York: The Free Press, 1992), ix-xiv, 2-4; and T. A. Bisson, Zaibatsu Dissolution in Japan (Berkeley, Calif.: University of California Press, 1954), 1. For a discussion of the Zaibatsu role in World War II and their subsequent disestablishment during the American occupation, see Kazuo Kawai, Japan’s American Interlude (Chicago: University of Chicago Press, 1960); Russell Brines, MacArthur’s Japan (New York: J. B. Lippincott Co., 1948); and William J. Sebald with Russell Brines, With MacArthur in Japan (New York: W. W. Norton and Co., Inc., 1965).
2. Stuart Elliot, "The Cuervo Republic Will Have a Constitution But No 18th Amendment," The New York Times, 12 March 1996; and Gerry Khermouch, "An Island of Their Own," Brandweek 37, no. 5 (29 January 1996): 18-19.
3. Statistical Yearbook (New York: United Nations, 1994), 11.
4. Richard J. Cebula, "Federal Government Budget Deficits and Interest Rates: A Brief Note," Southern Economic Journal, January 1992, 821-823; and Richard J. Cebula and James V. Koch, "Federal Budget Deficits, Interest Rates and International Capital Flows: A Further Note," Quarterly Review of Economics and Finance 34, no. 1 (Spring 1994): 117-120.
5. One 2025 white paper discusses the techniques, timeframe, and technical risks associated with deploying a planetary defense system. The UN is one of the organizations suggested as a sponsoring body. Lt Col John M. Urias et al., "Planetary Defense" (2d draft white paper for Air Force 2025 study).
6. According to the Worldwide Bioelectronics Collection Guide (U), "Various biological molecules are currently being evaluated for bioelectronics. At present, bacteriorhodopsin (BR), a protein found in the cell membrane of a salt-water microbe, Halobacterium halobium, appears to be the most promising protein under investigation. It has great potential for application in high-speed, high-density optical memory devices." Data can be stored, altered, or recovered at 3 picoseconds (3 trillionth of a second). Microprocessor using "human" nerve interface is plausible and would deliver leaps in computer processing speed. Worldwide Bioelectronics Collection Guide (U) (Washington, D.C.: Director of Central Intelligence, December 1988), 1-2. (Secret) Information extracted is unclassified.
7. Cetron states, "A typical large business in 2010 will have fewer than half the management levels of its counterpart today [1996] and about one-third of the number of managers"; and, "Middle management will all but disappear as information flows directly up to higher management for analysis." Marvin Cetron, An American Renaissance In The Year 2000 (Bethesda, Md.: Future World Society, 1994), 8.
8. Dr Magyar points that Angola’s Cabinda is an oil-rich province that has historically attempted to secede from Angola. Zaire has often supported those efforts. Cabinda is separated from Angola by 30 miles of Zaire territory. Dr Karl P. Magyar, faculty, Air Command and Staff College, Air University, Maxwell AFB, Ala., interview with one of the authors, 9 April 1996.
9. Angola’s Cabinda province has regionally significant reserves of oil. Conflict in the region began in the 1970s with Cuban-backed Angolan troops protecting US corporate property from US-supported Zaire troops. Conflict over oil rights is plausible in this timeframe because safe nuclear fusion is not developed until four years later. Magyar, interview.
10. Cetron states that "fusion reactors producing ‘clean’ nuclear energy will appear after 2010; by 2030 they will be a major source of power." Cetron, 9. For contrary views on the imminence of commercial fusion see appendix B.
11. Steve Hanke discusses the relationship between oil prices and supply. He cites several factors leading to lower oil prices in the future. For instance, "since 1944 worldwide annual production as percent of reserves has steadily fallen from over 5 percent to less than 2.2 percent today." In other words, "in 1944 we had 20 years’ worth of known reserves in the ground. After more than half of century of ‘prodigal’ consumption, we have 45 years’ supply." Several non-OPEC countries are developing oil resources and some OPEC members have left the cartel. These developments will lead to a glut in oil supply. Consequently, prices will fall. In 2025, if demand is reduced due to reliance on other, and cheaper, means, prices will fall to levels much lower than 1996 prices. Steve H. Hanke, "Oil prices are going down," Forbes 157, no. 4 (26 February 1996): 140.
12. Both President Clinton and Senator Dole are taken to task in Jimmy Carter’s book The Buying of the Presidency for providing legislative favors to corporations in return for significant campaign contributions. Molly Ivins uses this point to support her contention that America is evolving into a corporate oligarchy. Molly Ivins, "A Look at the Real State of the Union," The Atlanta Journal/The Atlanta Constitution, 27 January 1996.
13. Originally, Zaibatsu consisted of large MNCs, such as those found in the Fortune 500. The 2025 advisors, during the Alternate Futures briefing on 7 February 1996, pointed out that large MNCs were on the decline because of the growth of small companies using technology. Various members used the automobile and aerospace industries to illustrate their point. As a result, the Alternate Futures team changed the concept of "large" MNCs to "powerful" corporations. Those MNCs may not be large in number of employees but do control a large share of the market, such as Microsoft in the 1996 computer software industry.
14. Cetron states that "regional political and economic arrangements such as the European Union, the Organization of American States, and the North American Free Trade Agreement will play a larger role in world political and economic affairs." Cetron, 3.
15. Yearbook of the United Nations 1993 47 (Boston: Martinus Nijhoff Publishers, 1994), 1335.
16. The 2025 advisors asked a question regarding the disposition of the "haves" and "have-nots" on 7 February 1996. The team determined "all boats would rise" with the increase in multinational corporation profits, but the gap between "haves" and "have-nots" would widen.
17. Kennedy discusses the factors contributing to the separation between "winners" and "losers" in the developing world. He states "At the moment, . . . the usual cluster of factors influencing relative economic performance--cultural attitudes, education, political stability, capacity to carry out long-term plans--suggests that while a small but growing number of countries is moving from a ‘have-not’ to a ‘have’ status, many more remain behind. The story of winners and losers will continue, therefore, only this time modern communications will remind us all of the growing disparity." Paul Kennedy, Preparing for the Twenty-First Century (New York: Random House, 1993), 193-227.
18. Lt Gen Jay W. Kelley, the study chairman, has described the Zaibatsu as the National Football League with the seven development regions being the team owners. They cooperate on issues to increase revenues but competition remains intense on secondary issues (such as winning games or developing new markets).
19. In Zaibatsu, the UN retains some degree of autonomy. Even though the UN often acts in Zaibatsu interest, it will act as a "third-party" to resolve conflicts involving two Zaibatsu surrogates.
20. This pressure comes from the contributions made to candidates to safeguard MNC interests.
21. Zaibatsu is also known as "schmooze" world because advancement in the corporate structure requires a certain amount of "playing the game." The key corporate rewards are getting noticed by the boss and going to lunch or playing golf with superiors.
22. Kennedy discusses the impact of Islam in hindering economic development in much of the Arab and Muslim world. Additionally, he discusses the resentment of many Islamic religious fundamentalists toward foreign powers and materialism. Kennedy, 208-211.
23. For a recent example of the tensions between corporate technological "opportunism" and the plight of those left behind, see John Stremlau, "Dateline Bangalore: Third World Technopolis," Foreign Policy, Spring 1996, 152-168.
24. Cetron states that "globalization of the economy calls for more independent specialists. For hundreds of tasks, corporations will turn to teams of consultants and independent contractors who specialize more and more narrowly as markets globalize and technologies differentiate." And, "The 1990s will be the decade of microsegmentation as more and more highly specialized businesses and entrepreneurs search for narrower niches." Cetron, 6, 11.
25. The Zaibatsu use their ingenuity to rapidly improve infrastructure. They use advanced technology when necessary but low technology solutions where appropriate. For example, many industrial countries use bicycles for commuting where possible to reduce pollution, congestion, noise, and parking problems.
26. Magnetic levitation trains in Japan already travel at speeds up to 320 mph. Speeds of 200 mph are possible on unimproved tracks within the US. See "Swords into Plowshares," Discover 16, no. 11 (November 1995): 36.
27. Transatmospheric vehicles are systems that provide spacelift and weapons deployment from the earth’s surface to low earth orbit using a rocket-powered vehicle that takes off from a runway like a conventional aircraft. The vehicle starts with a full load of propellant but minimal oxidizer. It flies up to rendezvous with a subsonic air refueling tanker to pick up a full load of oxidizer before continuing to orbital altitude and speed. SPACECAST 2020: Operational Analysis (Maxwell AFB, Ala.: Air University, 1994), 34.
28. Cetron states that "genetic engineering will do $100 billion worth of business by 2000. . . . Newborn babies will be artificially endowed with particular disease immunities." Cetron, 5.
29. John L. Petersen, The Road to 2015 (Corte Madera, Calif.: Waite Group Press, 1994), 54.
30. Cetron states that "the ethical issues raised by technologies such as organ transplants, artificial organs, genetic engineering, and DNA mapping will cause a growing public debate." Cetron, 5.
31. Worsnop states that prolonged exposure to noise at 85 decibels and above is being linked to numerous health problems. Studies have established that loud noise causes permanent hearing loss, constricts blood vessels causing less blood flow to vital organs, affects entire nervous system, sparks seizures in epileptics, and disturbs unborn children to the point of causing possible harm. Richard L. Worsnop, "Indoor Air Pollution," CQ Researcher 5, no. 40 (27 October 1995): 958.
32. During the Alternate Futures briefing on 7 February 1996, the 2025 advisors felt eventually corporations would assign a "cost" to pollution and would discontinue damaging the environment when costs exceeded marginal return. The Alternate Futures team felt these costs have traditionally been difficult to assess and would not occur before the MNCs significantly damaged the developing countries’ environment. Therefore, Zaibatsu remains characterized as a "gray" world.
33. US GDP in 1995 was approximately $6.74 trillion. At a growth rate of 5 percent over the next 30 years, the US GDP would be $29.1 trillion in 1995 dollars. The World Factbook (Washington, D.C.: Central Intelligence Agency, 1995), 444.
34. Cetron states that "privatization is a growing trend, with governments around the world selling off public services. . . . Globally, this means a transition from governmental to private ownership of airlines, railroads, water, and electricity." Cetron, 4.
35. Schwartau believes industrial espionage will define relations between the world’s economic regions, those competing at the leading edge, and those attempting to vault into, or over, the industrial development phase. Winn Schwartau, Information Warfare (New York: Thunder’s Mouth Press, 1994), 47.
36. William H. Gates III, The Road Ahead (New York: Viking Penguin, 1995), 270.
37. Remarks by National Reconnaissance Office personnel following an Alternate Futures briefing on 22 January 1996. NRO personnel stated that military access to commercially encrypted communications was already becoming a problem and would become a big problem in the future.
38. Lecture on the Joint Cognitive Job Analysis System on 18 October 1995 to the 2025 Study participants. The lecture discussed new screening tools to reduce training costs and attrition. The point made was that if the "right" traits and characteristics could be identified then the "right" people could be accepted into the military. Most people in the audience were visibly upset with notion of selecting only those people who fit a certain profile for military duty. However, everyone admitted that selection of "right" people would lower costs and reduce attrition.
39. US Army aviation has already demonstrated that an institution can "forget" about a skill and mission if it loses the systems to perform the mission and fails to preserve the idea in its doctrine. Ronald Fogleman documents how the US Army attrited specialized ground attack aircraft after WW I to the point the task could not be effectively trained. Eventually, ground attack began to disappear from army aviation doctrine. Ronald R. Fogleman, "The Development of Ground Attack Aviation in the United States Army Air Arm: Evolution of Doctrine, 1908-1926" (master’s thesis, Duke University, 1971).

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