Another big reason is that the innovation that we have had (and something I have talked about quite a bit here) is made up of nothing. The CDO, the hedge fund, and the complex stock derivative have replaced actually investing in actual goods. Part of the reason for this is that our country is not really a manufacturer of goods any longer. Just as we changed from an agricultural society to an industrial one, now we are shifting from an industrial one to a global-technological-served based one.
Yet another reason is that change is just fucking difficult for cultures. Manzi describes the historical effects of this quite well. He concludes his discussion of societal transformation with these two paragraphs.
One obvious response is to use the political process to both slow down the rate of innovation to an acceptable pace and redistribute the country's economic output in a manner designed to maintain social harmony. That way, the pain of innovation is avoided and the pain of stagnation is mitigated — especially for the middle and lower classes, who are most vulnerable to the effects of both. This is the logic of the welfare state, and the direction pursued by much of Western Europe since the Second World War.
The problem, however, is that the United States does not exist in a vacuum, and making our internal economic changes less stressful is far from our only concern. We also face external challenges, especially rising competition from abroad. And our position in the global order means we cannot afford to go easy on ourselves and constrict innovation. Quite the opposite: We need rapid growth just to keep up.
Indeed. Witness the effect of what happens when you use the government to slow down the rate of innovation.From 1980 through today, America's share of global output has been constant at about 21%. Europe's share, meanwhile, has been collapsing in the face of global competition — going from a little less than 40% of global production in the 1970s to about 25% today. Opting for social democracy instead of innovative capitalism, Europe has ceded this share to China (predominantly), India, and the rest of the developing world. The economic rise of the Asian heartland is the central geopolitical fact of our era, and it is safe to assume that economic and strategic competition will only increase further over the next several decades.
Wow. That's a 15 percent drop in global output. To be honest, we can't afford to lose 5 percent. The way our economy stands right now and given how much we owe China, our country could end up in economic ruin.
The one question I have for anyone reading is this: how did China, with its restrictive government, end up beating Europe? I have a few ideas but need some rounding out. Juris?
And now the death of Markadelphia's dream:(
It is common to think of the post-war global economy as a baseline of normalcy to which we wish to return. But it seems more accurate to see that era as an anomaly: the apogee of relative global economic dominance by the West, and by the United States within the Western coalition. The hard truth is that the economic world of 1955 is gone, and even if we wanted it back — short of emerging from another global war unscathed with the rest of the world a smoking heap of rubble — we could not have it.
Yet the strategy of giving up and opting out of this international economic competition in order to focus on quality of life is simply not feasible for the United States. Europeans can get away with it only because they benefit from the external military protection America provides; we, however, have no similar guardian to turn to. We do not live in a Kantian world of perpetual commercial peace. Were America to retreat from global competition, sooner or later those who oppose our values would become strong enough to take away our wealth and freedom.
To put it simply, the world has changed and no one has our backs. That is why I applauded President Obama's acceptance speech in Oslo. America, more than any other country in the world, has to protect the economic freedom of the world. Because the world is filled with a bunch of greedy scumbags (Chavez, Jong-il, Ahmadinejad), our armed forces are the ones that are going to insure this stability and peace.
Unfortunately, our country has currently become "A House Divided" which will be the topic of the next post.
8 comments:
Just to anticipate your next post, I really don't think we are as divided as the media, and sometimes our imaginations, lead us to believe. I tend to think it is more like academic politics, where the viciousness is driven by the lack of real stakes.
When real survival is on the line, the petty differences tend to blur over very quickly. That explains both our immediate sensibilities after 9/11 and once the real threat was fading, our retreat to division and venality.
And M I've got to tell you, that right at this moment, your blog is more interesting to me than TSM. This is the kind of thinking and writing you should be doing, rather than the cheap partisan ranting you've done in the past.
Agreed. More actual rational thought. Less partisan bomb-throwing. I know the yippy dogs love that shit, but you need to continue to rise above that as you have with these past few posts.
Indeed one of the reasons we saw a healthy manufacturing economy in the 50's was that competing economies just got done being bombed. I've said on this blog that the days of getting paid $30/hour to turn a bolt on an assembly line are over. Change isn't always easy.
Agreed, juris. I am going to talk about how playing up that divide makes money.
Thanks for the kind words all. I can't promise that something won't set me off in the future (I am only human after all) but I think I've figured out a way to vent AND to be more thoughtful at the same time. This article really has gone a long way to inspiring me to do that.
I have my doubts about the current GOP being thoughtful. I'm willing to look at less regulation (or none at all) in regards to the market. How willing do we think the GOP will be to considering social cohesion?
Read the article - you can't have both.
Funny how you idiot lefties are always having your doubts or wondering about the right. Have you wondered at all today why obama had to go campaign at the last minute up in the bluest of the blue states?
I won't concede that the article says you can't have both. I think the article says that you must have both, as each is fundamental to the other's existence, and yet each undermines the other constantly. Like a flowing river, the very forces that determine its direction are the same forces that constantly drop obstacles in its own way, reshaping the landscape around it as it goes.
How willing do we think the GOP will be to considering social cohesion?
I think you're giving them less credit than they deserve. I don't think they are against social cohesion, I think it's more accurate to say they object to trading long term liberties and basic principles for it. The rank and file that is, the senior leadership of any political parties the age of both the Dems and the GOP can be pretty safely assumed to be corrupt and interested primarily in maintaining their own power.
As examples of this, I don't believe conservatives are against blacks, or anyone else, being successful. Nonetheless the majority of them oppose Affirmative Action, not because it helps blacks or anyone else, but because it embodies in law the idea of getting an extra advantage for not being white. You want to help everybody get a fair shake, no problem. Let's find a way to do it that doesn't demand racism become an accepted, even praised, feature of US law.
The same thing can be said for hate crime legislation. Sure, there are places in this country where ________ crime won't be treated as serious if a _______ person is the victim. Yes, that needs to be addressed. Now that we've agreed on that, let's find a way to address it that isn't dependent on throwing the concept of equal justice under the law out the window.
It's not that conservatives disagree with the goal, I don't think. It's that they don't consider it worth throwing away the foundational strong points of self-government to get those goals right now. In short, if you can't take the time to do it right, how will you find the time to do it again?
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