July 04, 2005

What is Tom Friedman Talking About?

So I had nothing better to do on 4th of July then to plop out by the beach and leaf through Tom Friedman's new book, The World is Flat, and I have to say—beyond the inept prose, beyond the actually offensive metaphors—that I just don't get it. I don't get any of it. The whole book is, implicitly, very worried about whether or not the United States can be "competitive" in this day and age. A similar theme runs through most of Friedman's columns. And just a short month ago, our man was mugging it up with Sen. Evan Bayh at a PPI event outlining the need for a "national competitiveness strategy."

My big question, though—and maybe it's not a good one, but it's the one I've got—is: why should we care about "national competitiveness"? What does that term even mean? Countries, of course, are not like corporations; the United States won't get driven out of business because someone else does something better than us. We don't need to worry about profit margins and market share. Not only that, but most of our "products" we sell to... other Americans, especially non-tradeables and services. As Paul Krugman (before he entered his China-bashing phase) used to teach us, international trade and technological innovation isn't a zero-sum game. The United States benefits greatly if, say, Finland becomes much better at inventing new cell phone technology than we are; in fact, I hope they continue to do so, because my reception is awful here in the Presidio, and Finnish ingenuity on this front would be appreciated.

The main thing that matters, really, is that standards of living in the United States continue to rise. And that, as far as I can tell, has very little to do with what other countries are getting up to, and much to do with whether: domestic productivity is rising, wages and mobility are improving, people are able to buy more stuff for their money, and we're all happier and healthier. Not all of that has been happening over the past few decades, obviously, but very little of that slide seems to have anything to with national "competitiveness".

Now if Friedman's "competition" message was just patriotic-sounding camouflauge for the purpose of promoting otherwise intrinsically good policies, that would be fine, I'd join in the charade. For instance, it's okay to worry that Japanese and Korean kids are so much better at mathematics than our kids, because it's a signal that we could be doing things to improve our math education here at home, which would be a good thing. But it would be a good thing because better math skills are always a good thing, and they would be even if there was only one country left on the planet. They're not a good thing because we should be concerned about "falling behind" Japan and South Korea. Same with broadband. The fact that we're 13th in global broadband Internet usage matters because it means there's no good reason why you and I can't have faster internet. But unlike Friedman, I don't think the fact that Japan's kicking dust in our face on this is, in itself, any concern.

And then there's the danger from too much Friedman-ism: Worrying about a "national competitiveness strategy" could be a very bad thing if it leads to bad policies. Protectionism and government subsidies to flailing industries could be justified in the vague and hazy name of "competitiveness". Ditto with export controls on technology. Or gutting labor laws. Or fretting too much about trade deficits. (Brad Setser has done a convincing job arguing that the current trade deficit is both unsustainable and troublesome, but not, if I understand him correctly, for the reason that it's an indication we're "uncompetitive".) The point is that it's perfectly possible to jack up living standards and remain a prosperous, healthy and happy nation regardless of what other countries are doing relative to us.

The only reason I can think of for worrying about "national competitiveness" is this: arguably, it's a good thing that we live in a unipolar world where the United States is the undisputed hegemon. As Gregg Easterbrook has written, this period of American hegemony has coincided with a sharp decline in global conflict, and it's not implausible that preserving American military dominance is necessary to maintain this trend. This may not be the case. But if it is, then it would seem to be good for peace and happiness if we kept, say, our technological edge over any and all possible military rivals. But at least, then, let's be clear about our reasons here.

No? Or am I wrong and still hopelessly mired in my non-flat world, unable to see the walls tumbling down, the ceiling flying upward, and the windows opening up to the 21st century?
-- Brad Plumer 8:14 PM || ||