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Will America compete?

Will America Compete?

Paul M. Kennedy's The Rise and Fall of the Great Powers has been called a standard by which future studies of great powers will be measured. The book spent eight months on the best-seller lists when it was published in 1988, clearly captivating a wide-ranging audience hungry for insights into the future of the United States and its place in the world order. Kennedy is the J. Richardson Dilworth Professor of History at Yale University and is internationally known for his writings and commentaries on global political, economic, and strategic issues. In the following excerpts from a speech given earlier this year to the World Affairs Council of Philadelphia, he dissects what he terms a three-level set of challenges from abroad that threaten the U.S.'s standing as a great competitive power.

Can America compete? Suppose one answered that question with a simple word, "no." The implications for this society, for its future, for its place in world affairs would be dire.

To put my own position crudely before I come to my subtopic, "The Challenge From Abroad," I would say that the answer cannot be either a straight yes or a straight no. The issue is far more complicated.

Yes, I think we can compete in the traditional areas of military and security issues. This country has, after all, specialized and prepared itself in being No. 1 in the military sphere.

Perhaps we can continue to compete in the more complex economic and technological sphere.

With difficulty, we may be able to compete in the sphere of educational attainment and technical skills that our children will need to have for the future.

The question really is, "What is the future of the U.S. in the world?" The U.S. faces a three-level set of challenges from abroad.

Political Instabilities

The first is one that we are well familiar with. It is a challenge of political instabilities, of foreign dangers and threats to American interests. It is something that has been there since 1776, 1812, or 1917. It is one that after 1945 was seen chiefly in the form of the Soviet Union. We do not know what will come out of the debate and the controversy about the future of the Soviet Union. But whatever emerges, that external threat is less acute than it was, and, by consequence, I think we are looking elsewhere when we talk about the challenges from abroad in terms of security and military issues.

We're looking these days much more toward regional instabilities. Local wars and clashes were always there in Latin America, in the Middle East, in Southeast Asia, but they had been for so long subsumed into the Cold War. When we looked at Egypt 30 or 40 years ago, the issue was whether it was our Egypt or the Soviet's Egypt. Or, whether we were losing China or gaining China. Now the conditions, the regional circumstances for conflicts and antagonisms, are removed from our Cold War interpretation. They are reemerging without Cold War implications. But they are there, and they are not likely to go away. Indeed, some would argue that we may be in for not a world of increasing harmony and goodwill as we go to the end of this century but a world of worsening regional instabilities because of certain broad factors for change that lie behind them.

The greatest of those, it could be argued, is demographic change - i.e., population pressures, particularly prevalent in parts of Central America, in the Muslim Middle East, the Muslim Soviet Union, and, perhaps particularly, in sub-Saharan Africa. Anyone who takes a look at the broad population trends as they have been unfolding cannot help but be concerned about their future social/political implications.

Take the case of sub-Saharan Africa, which already cannot feed itself. Its population just a few years ago was almost exactly the same size as Europe's - about 550 million people. By the year 2020, while Europe's population will remain almost the same, sub-Saharan Africa's population will have swollen to three times the amount - 1.5 billion people. Or, take India, where the population explosion going on there means that it is likely to overtake China sometime early next century in being the world's most populated country.

Or look at the demographics in Central America or in the Muslim Middle East. One of the reasons for the instability there is this extraordinary explosion, thanks to improved health techniques, in the number of young people. Not just in the Gaza Strip or the West Bank but in every large city and in every town throughout the Middle East you have hundreds of thousands of unemployed, disenchanted youth - which has been for ages the fertile breeding ground for revolution and social instability.

If you look at Elizabeth England, or at France just before the French Revolution, what you had was a demographic explosion, with 40% of the population under age 18. Those are the same sort of figures that you get in sub-Saharan Africa, in Central America, or in the Muslim Middle East. Perhaps they don't of themselves cause conflicts over tribal lands, territories, or long-disputed borders, but they fuel into and exacerbate them. They also fuel into what political scientists call resource wars - wars over grazing lands or wars over water.

If there is no way of meeting the demand for food stuffs, for raw materials, of these billions of people in the underdeveloped world, one of the apprehended consequences will be vast migration. There are already millions of North Africans moving across the Mediterranean into Spain, Italy, and southern France. We all know about the migrations coming out of parts of the Soviet Union or Eastern Europe into Western Europe. We know about the migration coming out of Central America and Mexico into the southern U.S. If the demographic projections are any guide, we ought to expect those migratory flows to be much larger and more intense, and to produce many more significant social problems in the future.

The other broad force for change that is likely to bring about instabilities is the integration of the Third World into a global economic system. The coming of new technologies and new products seems very good to those who make them but has potentially destabilizing effects upon those whose production methods have been set aside by the new ones.

I've been doing quite a bit of reading on the global implications of the biotechnology revolution, at least in terms of food processing and agriculture. Some of those are now looking very disturbing indeed. It's all very good for large-scale pharmaceutical companies to be able to artificially produce in a laboratory the exact equivalent of tropical foodstuffs, such as sweeteners that have 1,000 times the intensity of sugar. But think of the fact that in Central America alone, millions of families are totally dependent upon the export of cane sugar - a monocultural commodity that could be defunct because you can make the equivalent in a North American or European factory. And if you go through the list of products for which scientists in the developed world are able to make biotech substitutions, you begin to wonder whether even those parts of the Third World that are still exporting their raw materials will be able to export in the future.

The implications of demographic explosions and technology-driven change are likely to cause social problems and political problems, and thus security problems, in different parts of the world. If these manifest themselves in security problems, this country has by far the largest concentration of military power to enable it to respond, at least in the short term, in the way it was able to respond in the short term to Saddam Hussein's takeover of Kuwait.

The problem for the U.S. is: As it gets to the end of this century, does it really want to spend the next 20, 30, or 40 years in the role of world policeman, stabilizing destabilized areas, intervening because there have been rebellions, civil wars, clashes, and annexations driven by these broader demographic and social forces? Of course, the U.S. can compete if it means sending aircraft carriers to the Third World or landing Marine Corps units. But can it compete in the more difficult area of understanding global change and organizing its partners to satisfy the deeper needs and drives that are changing world society?

Economic and Technological

Challenges

The second challenge from abroad comes in the broad realm of economic and technological challenges. If you look at the literature that has been spawned in the past 10 years or so on whether the U.S. can compete economically, very much depends upon the ideological standpoint of the person writing.

If you are what in the old days one would have termed a "national economist," you believe in the strength of your nation-state, in the need to preserve its manufacturing and economic foundations, and in the need to keep it in the hands of your own citizens and on your own territory. As the 1980s unfolded, you began to worry greatly about the way that this country, at least by some measures, switched from being the world's greatest creditor nation to the world's greatest debtor nation. You didn't like the idea of not being at the forefront of certain technologies, some of which have strategic and military implications, others of which are just very high per capita producing technologies and, therefore, good for the national economy. You worried about your increasing reliance upon foreign suppliers, not just for consumer electronics but for a whole array of other items of strategic and national importance. You worried that the U.S. economy was not growing as fast as certain other economies in the advanced world. You didn't like the idea of its share of world manufacturing, or its share of this or that product, shrinking. You didn't like it because you felt instinctively that it was making the U.S. relatively weaker than it was 10 years ago or 25 years ago. Hence, the whole competitiveness issue.

On the other hand, if you are a laissez-faire, cosmopolitan economist, somebody who believes in the coming of the integrated world economy - a good example would be the Japanese writer Kenichi Ohmae and his book, The Borderless World - then all of these things that worried the national economist really don't matter. Other countries lend to the U.S. because it is good business; the U.S. is a good place in which to invest. High technology can be bought. Foreign suppliers are okay because the age of great power wars is over. If other economies are growing a bit faster it doesn't really matter because the world economy is growing faster.

In the debate over America's economic future, this is probably the largest dividing line of all, and it will go on right through the 1990s. It depends upon your ideological standpoint. If you worry about the national economy as such, then you do worry about competitiveness and you do get concerned about indicators of the lack of competitiveness. If you think that an integrated, borderless world is on the way, you're less concerned and you don't think of it in national terms.

This raises the other issue, of course, of whether in phrasing the question of whether the U.S. can compete we are discussing an anachronism, something that is disappearing like the Cheshire cat in the tree until there is only the grin left.

Robert Reich, in his recent book The Work of Nations, suggests that it is no longer countries that count but individual companies and individual sellers of goods - those creating products that are in demand in the international marketplace. What Reich argues is that the boundaries have broken down. We see it in a whole number of ways. Japanese automobile companies are now assembling and building in this country and exporting to Europe. Is that an American product or a Japanese product? And should we be concerned about that?

Or, is what Reich is concerned about the most important thing - the fact that this society is dividing itself into two? The top one-fifth he identifies as symbolic analysts, people who analyze information and produce information - lawyers, consultants, engineers - catering to an international demand. And the other four-fifths are discovering that they're becoming more and more dependent upon the decisions of CEOs who have turned their company into a non-national, completely cosmopolitan international corporation. Is the issue for the U.S. not about whether it can compete but whether it is producing enough members of its society who can take advantage of these global changes in investment, in manufacturing, and in careers?

My own sense is that there are, and will be, American companies and individuals who will do very well if this borderless world is upon us. But there will be others that will not. And, therefore, we will get a muddled and confused debate right through the next decade. Those who lose their jobs, companies that are eliminated, will provide evidence for the school of relative decline. Those who do well will provide evidence for those thinking that the tendencies are upward.

Human Capital Concerns

The third issue of the challenge from abroad comes in the quality of life and the quality of the people we produce in the U.S. The argument would go this way: If military power, which the U.S. is very good at, rests upon the country's economic and technological competitiveness, which it has a mixed record on, then its economic and technological competitiveness at the end of the day rests upon the skills and quality and inventiveness of its population - its human capital. And that population will only flourish if its quality of life and encouragement of its resources is good.

Here the evidence, if we look at international comparisons in public health, education, or infrastructure, is less than impressive. Now, this may have been of less importance to earlier generations. Some economic historians argue that from the 19th Century development of American industry through until the middle of this century, the U.S. was a materials-based society. It had vast amounts of raw materials of land, ores, and grain, and this helped its rise. But it becomes a matter of concern if the U.S. is switching from being a materials-based society to being what's called a knowledge-based society. If knowledge is going to be the key to survival of this society, the key to competitiveness, then these technical skills indicators in which the U.S. falls so far behind are cause for concern.

We need educational reform and we need it swiftly. There are security implications in having a society that is less well educated and trained than other advanced industrial societies.

These sorts of issues have been asked before in other societies. Almost all of them were asked in Great Britain at around the turn of this century. Was Great Britain producing the levels of education and the skills for the work force that it required? Were its industries competing or falling behind? Could it maintain itself militarily for decade after decade if its economy was not keeping up with faster-growing economies? At that time, all sorts of reform ideas were around about educational change and improvements in industrial practices and healthcare.

The problem was that all of these suggested reforms bumped into vested interests who didn't want to change the school system or the fiscal system. And, therefore, the issue was not "Can Great Britain in 1900 compete?" but "Would Great Britain compete?" That may be the better question to ask ourselves.

This country has vast resources and vast talents. No one doubts the enormous resources, inherited wealth, technological know-how, and educated talent of this country. Just talk to Japanese who have been in this country and have traveled across the continent and goggle at the sheer resources of it.

But in many respects, because of our vast size and because we can always escape to somewhere else in a way that the Japanese could never escape very far on their crowded islands, we don't like organization. If we were better organized in our healthcare, in our social provision, in our public education, in our infrastructure, who on earth could compete with us? America can compete in theory. The real issue is: Will it compete?
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Title Annotation:Chairman's Agenda: Being a Global Leader; excerpts of speech given to the 1991 World Affairs Council of Philadelphia
Publication:Directors & Boards
Date:Sep 22, 1991
Words:2738
Previous Article:Richard J. Stegemeier, Unocal Corp.
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