The Big Picture

images For all America’s partisan divisions, we’re in remarkable agreement on one thing: the country is on the “wrong track,” the American dream is struggling, and our children will have trouble equaling, let alone surpassing, today’s living standard.

Each side blames the other. The right sees the left as buying votes with government handouts, fostering a feckless paternalistic culture, while killing businesses and jobs with over-regulation, and out-of-control spending presages financial ruin. The left sees rising inequality, with a corporate conspiracy to control government for its own greedy ends, heartless toward victims and their economic plight.

Both views reflect a generalized loss of trust in the institutions of society, which is not unique to America, but is mirrored all across the developed world – whether countries are governed by the left or right. In truth the difference is mere nuance on the edges of policy.

Take France (please). Sarkozy (on the right) was elected promising a “rupture” with past complacency. In office he could manage only minimal tweaks, but even that was too much for the French, who chucked him out for an assertively lefty Hollande – who promised they could have their cake and eat it too. Now he’s even more unpopular than Sarkozy, who is attempting a comeback.

Such serial disillusionment stokes the rise of populist third parties like France’s National Front and the United Kingdom Independence Party. This hasn’t happened in America mainly because our two-party system is more entrenched with structural roadblocks for third parties.

But behind it all, what is really happening is that globalization is a hugely disruptive force, breaking down economic barriers and putting everybody in competition with everybody else. For the world as a whole, this is hugely positive, enlarging the economic pie by making stuff less costly, opening opportunities for billions more people to productively participate, and creating a burgeoning middle class in countries where there was none before. Of course there are losers as well as winners, and that’s why the political climate has become so febrile.

But the remedy is not in trying to make globalization go away, demonizing businesses that strive to stay competitive via taking advantage of overseas opportunities; nor by decreeing higher wages or benefits as though the money comes from the sky (or from businesses being less “greedy”); or uselessly whining about inequality. Instead, the only thing that can actually save us is to raise our own competitive game: better products at better prices.

Along similar lines, Kishore Mahbubani, a Singaporean, reminds us of the “seven pillars of wisdom” that our Asian competitors have imported from the West, in their “March to Modernity” –

Free market economics and capitalism (large-scale investment). Sorry, lefties: not by socialism did worldwide average real dollar incomes grow five-fold in the last century – a giant fact that makes pining for an alternative economic system simply silly.

Science and technology. The central human story has always been our use technology to overcome nature’s impersonal forces. (Listening to all the anti-frackers you wouldn’t know that fracking has been massively underway worldwide for decades with only minimal problems; it has revolutionized America’s energy picture and overall economic strength.)

Meritocracy. China actually pioneered the idea yet pervasively violates it. One facet of a profoundly corrupt social system that bodes ill for realizing China’s full economic potential.

Culture of Peace. Russian military adventurism is a grave threat to the world system.

Pragmatism.

Rule of law (including secure property rights, contract enforceability, judicial transparency, etc.) China’s regime lately has been talking “rule of law,” but that’s a mistranslation. It’s really rule by law – a tool for maintaining control. Not the same thing. Here again, China actually fails to follow Mahbubani’s program.