The Bi-Sectoralists: Competing in a Global Era
When we started the Bi-Sectoralists series, our thesis was that the public and private sectors as well as the major political parties had to work better together for America to succeed. To that end, we laid out five guiding principles to help the United States revitalize domestically and compete globally.
Our first four -- "Strength from Within", "Policy and Markets", "Beyond Short Term-ism", "It's the Economy, Stupid II" -- were more domestic in focus than international. The fifth principle, recalibrating America's role for "competing in a global era," shifts this emphasis to the global stage. More actors, bigger problems, a greater need to work better together.
We stand at a unique point in American and world history. For much of its history the United States either sat apart from or atop the world. Insulated by the oceans and blessed by a richly endowed land, the U.S. was able to selectively engage with the outside world, competing when and where it chose well into the 20th century. While not as isolationalist as some depict, the U.S. did mobilize in extraordinary fashion in World War II. During the Cold War we were dominant by most every measure -- economically, technologically, diplomatically, politically, ideologically. Today, though, we neither stand apart nor sit atop. With insulation stripped away amidst globalization, our vulnerabilities are more apparent. And with dominance chipped away by the rise of the rest, our competitiveness is less assured.
This unique point in time extends to the rest of the world. History provides few modern examples of what happens in the absence of a clear number one. Geopolitically, most countries continue to believe the US has a major role to play in solving the world's ills. But with other powers rising (China) recovering (Russia) emerging (Brazil, India, Turkey, others) and engendering their own revolutions (Tunisia, Egypt, et al) there is much less deference to US preferences and privileges. How we integrate our strengths, needs and lessons learned with those of others will go a long way to determine the nature of the next quarter century and America's role in it.
Much of global competition is of course economic. The U.S.'s own National Intelligence Council points out how globalization has "less of a 'Made in the USA' character." And it's not just China. It's "the billion people joining the middle class in Asia," not the U.S. consumer, as Jeffery Immelt, General Electric CEO, acknowledged, who "are the engines driving global growth." Given that the developed world (US, Europe, Japan) has gorged itself on debt, it is a welcome sight indeed that the rest of the world is growing wealthier and hence more able to purchase goods made in the USA. Middle class expansion abroad cannot mean middle class erosion at home however; that ability to purchase may well be the key to maintaining the viability of America's own middle class.
Emerging economies are expected to account for about 60% of global growth this year and next, up from about 25% a decade ago. The International Energy Agency projects over 90% of world oil demand growth will come from non-OECD countries while The Economist notes that in 2010, emerging market firms accounted for a third of the world's $2.4 trillion in mergers and acquisitions. The Rise of the Rest can be viewed as a threat or an opportunity; that determination is up to us. The Rebirth of Middle America, spurred by competitive manufacturing, fueled by cheap domestic energy and capable of feeding the world, suggests more opportunity than threat.
That rebirth doesn't absolve us of the need to better balance our diplomatic and military commitments with our resources and capacity. This is NOT about isolationism or retreat. But it most definitely is about being less prone to open-ended commitments and inflated threats. We have to close this era's "Lippmann gap," named for Walter Lippmann, the leading foreign policy journalist of his day, who almost 60 years ago established the need for foreign policy "solvency", defined as "bringing into balance, with a comfortable surplus of power in reserve, the nation's commitments and the nation's power."
The looming nature of automatic cuts to the Pentagon's budget, the spiraling cost of our Afghan presence, the lack of economic vitality at home and abroad highlights the urgent need to bring into balance our commitments with our power. The tendency of some to push all the cuts on those least able to defend their needs raises the risk of greater inequality and rising social tensions. This is true bi sectoralist territory. Recent history suggests a very great crisis (2008) is needed for any truly big decision to be made; otherwise it is punt, punt, and punt. We need to do better and doing better means working across the aisle and across the public -- private divide. Only in this manner can we can protect our security and contribute to global growth and prosperity in ways that are fiscally sound as well as strategically solvent.
Even our soft power is not as uncontested as we may like to think. The global marketplace of ideas, fertilized by the Internet, ensures that different countries and cultures illuminate their own paths, affirm their own traditions and provide competing visions of the world to come. Yet, no new grand "-ism" is taking shape and no one country is becoming the new paragon. How this global marketplace shakes out remains to be seen - this is new territory. Leadership is needed, at both the national and international level to solve the global questions of financial deleveraging, climate change, demand rebalancing, resource utilization and more.
While our political system still stands out as a guarantor of individual freedoms, its policy capacity is hardly a model. Where does the US lead today: Health care? Public education? Infrastructure? Job creation? We close museums while others build them. Even our vaunted Horatio Alger social mobility lags not leads most other industrial democracies.
Perhaps even more important than the particular proposals made to address these issues is the way we think and talk about who we are as America and Americans. Enough of the attacks on those who point to our problems as "declinists." The true declinists are the denialists unwilling to recognize problems that need to be addressed. Enough of the invocation of "American exceptionalism" as anesthetic, trying to soothe today's uncertainty and fear by looking backwards to what made us great. Instead, lets use it as a stimulant, energizing this generation to solve the challenges of the 21st century.
And enough of the cross-demonization of the public and private sectors. Each needs to do better in its own domain, and they need to do better together. Revitalizing domestically and competing globally will require nothing less.
Bruce Jentleson is a professor of public policy and political science. Jay Pelosky is a private investor and member of the World Policy Institute. This commentary was originally published on May 8, 2012, as part of a series The Bi-Sectoralists, in The Huffington Post.