Jewish World Review April 13, 2010 / 29 Nissan 5770
5 Ways to Keep America Great: Americans are used to being at the top. Here's how we stay there
By Mort Zuckerman
http://www.JewishWorldReview.com | There are good news days and there are bad news days, but altogether Americans are a little sadder. Everyone seems to be talking about decline and recession, about an aging America that no longer leads the world and is falling behind a rejuvenated China. Once we had the air of what Mark Twain described as "the serene confidence which a Christian feels in four aces." No more.
We worry that we are losing our technology lead. In the year 2000, we had a $29 billion surplus in high-tech products; today, we have a deficit exceeding $60 billion.
We worry that our children will not enjoy the opportunities we so long took for granted.
We worry that our runaway financial system has not been fixed and our healthcare problems are not really solved. We face trillion-dollar deficits as far as the eye can see.
Hardly anybody, it seems, has confidence anymore in our governmental system. It is not surprising. Democrats and Republicans voting against each other has become de rigueur. One recent study found that 70 percent of bills today face a filibuster; in the 1960s, only 8 percent did. There is a sigh of "too true" in Mancur Olson's contention (in his book, The Rise and Decline of Nations) that one of the consequences of institutional aging is the creation of a culture of entitlement: Special interest groups inevitably take bite after tiny bite out of the total national wealth through tax breaks, special appropriations, earmarks, and other favors that are all much easier to initiate than to end.
Yes, yes, but sadness should not give way to despair. If the new frontier of the world today is the global economy, we are as well placed to exploit that as we were in the new continental marketplace of a century ago. In 1800, America was a nation of farmers with about three quarters of the labor force in agriculture. Today, agriculture employs less than 3 percent of the workforce, and food is cheaper and more plentiful than ever. And, troublesome as the transition is, we rely less than ever on the old industrial economy.
Sure, we are challenged in technology, but our past investments and high-tech training have increased quality control and improved information systems to adjust supply, prices, and output more quickly. Today we spend twice as much per capita on info tech as Western European firms and eight times the global average. We've replaced large, mass-produced consumer products with sophisticated goods derived from intellectual output and knowledge-based industries, now the fastest-growing segment of the world's economy. Management has been assisted by a labor flexibility that is the envy both of Europe—whose legacy is one of management demarcations by unions and crafts—and of Asia, where management is stifled by large oligopolistic networks and government mandates.
Throughout history, America has uniquely encouraged the development of a culture of enterprise and management. How else could it serve a market stretching vast distances over mountain, desert, and river? How else could it have met the needs of such diverse populations? Psychologically, our business culture has long valued individualism, entrepreneurialism, pragmatism, and novelty. But with these came an abiding respect for the rule of law by which the country was founded. So American business came to be dominated by contract and law rather than kinship and custom, not by primogeniture but by merit and a common belief in technology and scientific management. It was an American, Frederick Winslow Taylor, who pioneered time-and-motion study, and an American who developed the assembly line.
Our people are mobile physically and mentally. No other country has a population so given to self-help, self-improvement, even self-renovation. No other country invests so much in training and retraining, not to mention boasting the largest and most advanced graduate and undergraduate business schools. No other country draws so many of the world's best and brightest to its labs and universities. Of the world's top universities, the majority are American, and none is Chinese. The young Chinese—and Indians, Brazilians, and Europeans—know that the level of opportunity in America and the potential to participate in the businesses that stem from innovation are far beyond what they have at home. China's public spending on education—for a population four times as large and an economy four times as small—is about one third of that of the United States. No other country sees its most talented people move so overwhelmingly into the private sector, where the most successful are rewarded as symbols in a nation of doers.
Blue-chip companies no longer have a lock on recruiting the most outstanding workers. Instead, they compete with thousands of smaller companies, roughly 2 million in the last decade, that have the potential to blossom and grow, even as thousands have gone belly-up. And as soon as new products and services are developed, American businesses' unique marketing and advertising skills give them the potential to establish success at home and abroad.
We are even better suited for today's rapidly growing knowledge-based economy than for the mass-production industrial economy. We grow from the grass roots in a way that enhances our capacity to absorb, adapt to, and manage ongoing revolutions in technology, information, and logistics that are too dynamic and complex to be handled by a top-down system. This is how we are able to marry a new economy to an older economic culture.
In fact, everything about American society nurtures the traits that offer the greatest rewards to the industries and technologies of the future: flexibility, openness, reinvention, and a get-up-and-go spirit.
America is the only country that invests in so many of its young people, who are the most comfortable and creative with the new technologies. We increasingly fund the future, not the past; the new and not the old. And this is not short-term capital but long-term, risky investments, reflecting a merit-based, diversified financial environment. Only when there is money to back good ideas will the necessary economic synergy emerge.
To all of this we must add America's cultural sway in the world. Seven of the 10 most-watched TV shows around the world are American; Avatar is both a technological advance and the world's top-grossing film; U.S. nationals from McDonald's to Nike book more than half their revenues overseas. To a greater extent than anything else, what binds the people of the world is American culture: its music, its entertainment, its electronic games, its consumer brands, Google. We are still living in an American century, even as it frays a bit at the edges. The notion of American exceptionalism still endures.
Worry has always preceded reform in America. We have had periods of decline and loss of confidence as we do now. But America has always bounced back.
We are not (most of us!) subservient to some outdated theory or attached to some ideology. There is a developing consensus on what we have to do:
1. Invest in the nation's decaying infrastructure, including the electric grid and broadband network. Remember those long-term projects initiated by the government that were taken up and developed by private enterprise: the Internet, created by the Pentagon; the GPS networks, started by the Department of Defense; and the technologies related to the human genome, begun by the National Institutes of Health.
2. Make it easier for foreigners to come here for education and easier for them to get advanced degrees in science and engineering and then stick around after graduation. We cannot afford to lose this talent. The number of H1-B visas for which these people would qualify was reduced from 195,000 at the beginning of this century to 65,000 as a result of union pressures. This is no way to run a railroad.
3. Create an institution similar to the U.S. Export-Import Bank, which lends to companies so they can fill export orders.
4. Establish our own version of the large industrial zones in Taiwan, Singapore, Malaysia, and much of China. (I speak from experience, having had a hand in developing large-scale industrial parks.) They offer one-stop shopping for all the necessary permits and regulatory approvals, including land, water, and power for manufacturing facilities.
5. Re-conceptualize immigration as a recruiting tool. Immigration, I know, is a contentious issue. I don't advocate a wide-open door. Welcoming immigrants is a demonstrated core capability of America's political economy, enabling us to improve our stock of human and intellectual capital. We might well set up recruiting offices around the world to look for the best possible talent, an immigration policy practiced by countries like Australia and Canada to their great advantage. These are not people who replace American jobs; they create American jobs, even though the benefits are harder to perceive in the shorter term.
In the end, it's a question of vision and leadership for regeneration of the American dream. It can be done. It must be done.
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Mort Zuckerman is editor-in-chief and publisher of U.S. News and World Report.
Mort Zuckerman is editor-in-chief and publisher of U.S. News and World Report.
© 2009, Mortimer Zuckerman