Reviewed by Mamoon Chaudhry
THOMAS Friedman is one of America’s most famous journalists, and Michael Mandelbaum one of its most distinguished academic experts on foreign policy. Friedman has contributed extensively on global affairs and economy for the last three decades and is gifted with a rare ability of discussing complex and intricate issues lucidly. They speak for free trade, open immigration, balanced budgets, green energy, consumption taxes, health care reforms and investment in education and infrastructure.
That Used To Be Us: How America Fell Behind in the World We Invented — and How We Can Come Back is an attempt to alert America to the dangers it is facing and offer some prescriptions for a revival. The “frustrated optimists” describe a country whose people are falling behind, a political system increasingly paralysed and institutions that seem even more inadequate to meet even more intractable challenges. They assert that the United States has a political system generating only small responses to big problems.
The authors say that “our country is in slow decline, just slow enough for us to be able to pretend or believe that a decline is not taking place.” They have identified that massive budget deficits, political gridlock, economic inertia and underperforming schools are the major problems. Friedman and Mandelbaum, in order to substantiate their contentions, have elicited expert opinions from political, academic and business leaders to explain this torpid state of American affairs.
America is falling behind emerging nations and is destined to fall further in the 21st century, they say. The authors identified four mistakes that they believe are key to America’s gradual slippage: misreading the end of the Cold War which brought a new challenge to the country with the advent of globalisation; underestimating the impact of technological change which radically brought down the barriers between countries; adopting a bad course after 9/11 by focusing too much on the losers of globalisation; and a generational shift from the “Greatest Generation” that believed in thrift and sustainable values to the “Baby Boomers” who prefer to borrow and spend.
American school children have fallen behind and the country risks falling behind in innovation, Friedman and Mandelbaum warn. The education system has failed to address deteriorating skills in science, mathematics and reading. “Thirty years ago, 10 per cent of California’s general revenue fund went to higher education and three per cent to prisons. Today nearly 11 per cent goes to prisons and eight per cent to higher education,” they point out.
The authors are also concerned about the widening income disparity. As Joseph Stiglitz says, “the top one per cent of Americans now take in roughly one-fourth of America’s total income every year. In terms of wealth rather than income, the top one per cent now controls 40 per cent of the total. Twenty five years ago, the corresponding figures were 12 per cent and 33 per cent.”
Moreover, the authors blame government apathy and lack of commitment for rising national debt and annual deficits. It has been asserted that the key component of America’s formula for prosperity was the adequate regulation of American businesses, which encouraged innovation, entrepreneurship and economic growth. However, during the last few decades, the lack of regulations on energy and financial sector has culminated in the recession.
The US administration has also failed to come to grips with problems associated with excessive use of fossils fuel, they point out, adding that no serious effort has been made by the government to tackle the menace of global warming. It has been suggested that for sustaining the rising standards of living, the US has to play a pivotal and leading role in developing energy technologies to cope with these challenges. Rising costs of fossil fuels and increasing pollution will raise the demand for clean, renewable energy; however, America does not have the rules, standards and regulations to stimulate innovation.
The authors’ emphasise that the ability of economic institutions to harness the potential of inclusive markets, encourage technological innovation, invest in people and mobilise the talents and skills of a large number of individuals is critical for economic growth. It is the education and skills of the workforce that generate the scientific knowledge through which countries progress.
Both leading political parties come under fire — the Democrats for profligate spending on entitlements and Republicans for intransigence on smallest of tax hikes. Serious commitment between the mainstream parties is needed for long-term deficit reduction which should be divided between tax increases and spending cuts.
The authors argue that America’s revival lies in tracing and learning from its history. They describe the “five pillars of success” behind the successful transformation of America into the “world’s greatest nation”: America provided its citizen with education in science and technology; it provided the world’s best infrastructure; it enforced regulation to encourage capital creation while also protecting society from predatory practices; government sponsored research and development culminated in innovation and advances in technology, communication and bio-technology.
According to the authors, the future of the United States depends on meeting four major challenges: globalisation, the revolution in Information Technology, the nation’s chronic deficit and its pattern of energy consumption. They have proposed a way out of the morass, a way that includes the rediscovery of some of the country’s most vital traditions and the creation of a new third party movement to galvanise the country.
The authors argue that empowering innovation from every worker must become a priority for employers, the military, schools, and policy makers, if America has to retain its international standing. The principle driving forces behind a more inventive worker is “access to more automation, more software, more machines and more people, and more talent of an above average quality”. The implication is that workers who just fulfill their mundane job descriptions are finding themselves left behind in the recession. The authors suggest that training of workers in every sector needs drastic changes which will inculcate entrepreneurial skills, creative thinking and an urge for acquiring knowledge in order to be more adaptive.
That Used To Be Us: How America Fell Behind in the World We Invented — and How We
Can Come Back
(POLITICAL ECONOMY)
By Thomas L. Friedman and Michael Mandelbaum
Thorndike Press
ISBN 1410441288
695pp. $35