Is America Losing Its Competitive Edge?

Second crisis blindsides U.S. by Thomas Friedman Thursday, April 22, 2004

Thomas Friedman worries that we are neglecting our advantage in innovation.

We are actually in the middle of two struggles right now. One is against Islamist terrorists in Iraq and elsewhere, and the other is a competitiveness and innovation struggle against India, China, Japan and their neighbors. And while we are all fixated on the former (I’ve been no exception), we are completely ignoring the latter. We have got to get our focus back in balance, not to mention our budget. We can’t wage war on income taxes and terrorism and a war for innovation at the same time.

And what is the Bush strategy? Let’s go to Mars. Hello? Right now we should have a Manhattan Project to develop a hydrogen-based energy economy — it’s within reach and would serve our economy, our environment and our foreign policy by diminishing our dependence on foreign oil. Instead, the Bush team says let’s go to Mars. Where is Congress? Out to lunch — or, worse, obsessed with trying to keep Susie Smith’s job at the local pillow factory that is moving to the Caribbean — without thinking about a national competitiveness strategy. And where is Wall Street? So many of the plutocrats there know that the Bush fiscal policy is a long-term disaster. They know it — but they won’t say a word because they are too greedy or too gutless.

Everyone is right about the environment

The environmentalists are correct: Population growth that causes people to level forests and overgraze lands exacerbates poverty.

The socialists are correct: The helplessness of poverty creates the motivation for parents to have many children, as their only hope of providing for themselves.

The free-marketers are right: Economic development can bring down birthrates.

The optimists are right: Development schemes work, but not when they are imposed by large bureaucratic institutions such as the World Bank.

Capital can be the scarcest factor of production at some times and places, labor at other times and places, materials and energy and pollution-absorption capacity at still others. The limits the environmentalists point out really are there. So are the injustices that anger the socialists. So are the market and technical responses the free-marketers have faith in. And so is the wisdom of the people that the optimists respect.

From Natural Capitalism

All Along the Watchtower

This description of the song written by Bob Dylan, as recorded by Jimi Hendrix, comes from the great Reason To Rock website. Reason To Rock, a Web Book by Herb Bowie, is subtitled Rock Music As Art Form. Herb Bowie, who writes with style and insight, shares his love for his favorite rock recordings through a series of essays on artists, albums, and tracks. Below he analyzes the synergy of a master song writer and a musical genius embodied in four minutes of amazing music.

Let’s start by looking at the lyrics. This song came off of Bob Dylan’s John Wesley Harding album, which marked a radical departure from his previous recordings. His older compositions often had many more than the standard three verses of popular songs — “Positively Fourth Street” boasted twelve. His lyrics had often been pointed and sharply critical. His use of language was unusual, and called attention to itself by juxtaposing words and images not usually associated with each other.

In contrast, “All Along The Watchtower” is spare and restrained. The song consists of only three verses, with no chorus. The language is simple. Yet the three verses are packed with meaning and drama. Let’s see how it starts. continued…

Arbor Added to Garden Entrance

GardenArborSouthViewWebWe built a copper arbor for the entrance to Ann’s garden last weekend. I constructed it out of half-inch copper pipe with Tee and 45 degree angle joints from the local Home Depot.

Here’s a photo of the new copper arbor. Soon it will be covered with climbing vines.

National Leadership and Short-Sightedness

Two examples of leadership without vision from Jared Diamond, author of the book Guns, Germs, and Steel: the Fates of Human Societies.

Japan:
Guns arrived in Japan around 1543 with two Portuguese adventurers who stepped ashore, pulled out a gun, and shot a duck on the wings. A Japanese nobleman happened to be there, was very impressed, bought these two guns for $10,000, and had his sword-maker imitate them. Within a decade, Japan had more guns per capita than any other country in the world, and by the year 1600 Japan had the best guns of any country in the world. And then, over the course of the next century, Japan gradually abandoned guns.

What happened was that the Samurai, the warrior class in Japan, had been used to fighting by standing up in front of their armies and making a graceful speech, the other opposing Samurai made an answering graceful speech, and then they had one-on-one combat. The Samurai discovered that the peasants with their guns would shoot the Samurai while the Samurai were making their graceful speeches. So the Samurai realized that guns were a danger because they were such an equalizer. The Samurai first restricted the licensing of gun factories to a hundred factories, and then they licensed fewer factories, and then they said that only three factories could repair guns, and then they said that those three factories could make only a hundred guns a year, then ten guns a year, then three guns a year, until by the 1840s when Commodore Perry came to Japan, Japan no longer had any guns.

China: China led the world in innovation and technology in the early Renaissance. Chinese inventions include canal lock gates, cast iron, compasses, deep drilling, gun powder, kites, paper, porcelain, printing, stern-post rudders, and wheelbarrows — all of those innovations are Chinese innovations. So the real question is, why did Renaissance China lose its enormous technological lead to late-starter Europe?

We can get insight by seeing why China lost its lead in ocean-going ships. As of the year 1400, China had by far the best, the biggest, and the largest number of, ocean-going ships in the world. Between 1405 and 1432 the Chinese sent 7 ocean-going fleets, the so-called treasure fleets, out from China. Those fleets comprised hundreds of ships; they had total crews of 20,000 men; each of those ships dwarfed the tiny ships of Columbus; and those gigantic fleets sailed from China to Indonesia, to India, to Arabia, to the east coast of Africa, and down the east coast of Africa. It looked as if the Chinese were on the verge of rounding the Cape of Good Hope, coming up the west side of Africa, and colonizing Europe.

Well, China’s tremendous fleets came to an end through a typical episode of isolationism, such as one finds in the histories of many countries. There was a new emperor in China in 1432. In China there had been a Navy faction and an anti-Navy faction. In 1432, with the new emperor, the anti-Navy faction gained ascendancy. The new emperor decided that spending all this money on ships is a waste of money.

In the examples above, Japan and China became weak and vulnerable to attack due short-sighted leadership. Is the United States going to be weakened by failing to develop an alternative to oil for its huge appetite for energy? If terrorists are able to significantly reduce the flow of oil from Saudi Arabia and all the unstable oil-producing countries, we are going to find out.

Democracy Works When…

In the context of the debate Can democracy work in Iraq/Arab states/Islamic countries?, Atanu Dey offers some insights from India:

It is instructive to examine explore the two ideas of democracy and markets in the Indian context.

First, markets. One of the most important lessons mankind has learnt is that markets work. There are, however, very important pre-conditions for markets to work. When those pre-conditions are not met, markets fail. That means, the workings of markets in the presense of failures leads to socially sub-optimal, and even harmful, outcomes. Indeed, if the necessary conditions required for markets to function are not met, market fundamentalism can lead to positively disastrous results.

The important point is that markets work but only if certain necessary conditions are met. Consequently, imposing markets on a system which does not meet those often stringent conditions could result in unintended consequences.

Just as the market is a great organizing principle in the economic sphere, so also democracy is a great and noble organizing principle in the political sphere. Democracy works, provided its pre-conditions are met. The necessary conditions include at a minimum: full information, accountability, economic freedom, institutional memory, and so on. Democracy cannot work when the electorate is nearly totally uninformed, where there are strong vested interests, where the notion of accountability is non-existent, where voters can be intimidated and bribed, where the culture is steeped in feudalism, and where illiteracy, superstition and corruption is the norm.

Democracy does not work in India. That is not to say that the fault lies with the idea of democracy. As a system of governance, there are few alternatives, just as markets are the best way to organize economic activities. But markets are prone to failures if its pre-conditions are not met. So also, democracy does not work in India because its necessary conditions are not met.

It is a long and hard road to the place where democracy has any meaning. The first step along that road is undoubtedly universal primary education. Universal primary education is a prerequisite for universal adult franchise. Without primary education, you cannot have a literate and informed adult. Without an informed electorate, you cannot have a meaningful democracy. Perhaps that is the reason for the neglect of universal primary education — for that would down the road mean that the feudal lords of the ruling families will no longer be able to rule based simply on loyalty and may even have to work for a living.

Thomas Jefferson emphasized the role of an educated citizenry in a democracy more than two centuries ago:

“If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be.” (as cited in Padover, 1939, p. 89)

Every government degenerates when trusted to the rulers of the people alone. The people themselves are its only safe depositories. And to render even them safe, their minds must be improved to a certain degree. (as cited in Padover, 1939, p. 87)

“. . . whenever the people are well-informed, they can be trusted with their own government; that, whenever things get so far wrong as to attract their notice, they may be relied on to set them right.” (as cited in Padover, 1939, p. 88)

A Review of the Book Ishmael by Daniel Quinn

Below are some excerpts from a review by Reason Wilken of the book Ishmael by Daniel Quinn. I’ve read the book and it is troubling if you care about the earth.

Frankly, it is quite depressing to know that as you are just going about your life on this earth you are destroying it in the process.

Gradually, our culture is beginning to realize that we are flawed in some ways and we cannot sustain our current drain on natural resources indefinitely.

Through explaining human cultural evolution in the context of the rest of the community of life, Ishmael shows us how man fits in and motivates us to work with the rest of the species for the greater good. He explains that we do not have to become a hunter-gatherer society in order to live like we “belong to the world” (as opposed to living like the world belongs to us).

The last point summarizes the book’s thesis: we (humankind) need to live like we belong to the earth rather than acting like the earth belongs to us.