Akio Morita, chairman of Sony Corp., told U.S. business leaders here that as an engineer and inventor he had always believed that things could be improved.
”We`re told that today`s exchange-rate system is the best,” he said.
”Well, if we think the product is the best, then we`ll stop making inventions.”
In fact, he said, the exchange-rate system is not doing its job because price relationships are ”improper.”
”If the price is improper, it`s very difficult to make business,”
Morita said, adding that the monetary system needed ”further engineering.”
The audience at a meeting of the Business Council, leaders of America`s largest corporations, could not have agreed more.
”I think he`s 100 percent right,” said Edmund T. Pratt Jr., chairman of Pfizer Inc. ”It`s baloney to think that the present system should not be changed.” The annual meeting of the council ended Sunday.
Reuben F. Mettler, chairman of TRW Inc. and chairman of the Business Council, said the members wanted to see exchange rates at levels that more closely represented trading relationships.
In other words, a large trade deficit would make the dollar weaken, not strengthen as it has recently.
”The monetary system is the umbrella under which trade relationships stand and fall,” Mettler said. ”And yet values are determined in the financial markets.”
The council is an official government advisory body that has been in existence since 1933. This was the first year in which foreign officials and corporate leaders were invited to one of its meetings.
The reaction to Morita`s comments showed the concern of business–and its frustration–over the interrelated problems of trade and the dollar. ”The frustrations could flare up,” warned G. William Miller, former Treasury secretary and former chairman of Textron Inc. ”We`re likely to repeat some of the mistakes of the past.”
He was referring to the possibility that Congress might react to the problems of the high-valued dollar and accompanying huge trade deficit by pursuing protectionist legislation.
With Friday`s 50-49 vote by the Senate for a deficit-reduction package, many of the business leaders left here less depressed than when they arrived. Should the House go along, a deficit-reduction package was expected to lead to lower interest rates and a lower dollar.
