Our ties are weak for global economic structural reasons--not something we're going to fix with a bit more inspiration. We sit near the top of the production chain, the Gap sits at the bottom. In global economics, you tend to produce for yourself and a couple of steps below yourself, but you don't go back to the economics of your youth. There's simply no logic for it. Indeed, all the logic of wealth creation and technology creation say, go ever more upward.
So, in general, our economic links to the Gap remain weak, as in narrow, as in limited, as in centered on commodities. We can't sell a lot of our stuff there due to lack of income and inability to absorb within infrastructure-hostile environments.
Countering that reality is the fortune at the bottom of the pyramid argument, which we must and will pursue in order to boost exports. But will we outperform the mid-range players in the production chain in this regard? Economic logic and history say no: we'll make most of our money off the rising tide right behind us (the BRICs, next tier), while it will be largely those tiers that makes money inside the Gap as it comes online, primarily through the New Core's resource requirements--the most dominant networking function going on right now. That's the role we played once upon a time but are not slated to play this time, unless it becomes our dream to slow down and return to our economic past, which I find an inadvisable course of action. I don't want to own the bottom of the pyramid as a market, I'd rather see China and India and Brazil and others get rich(er) doing that, otherwise, I don't see how the hundreds of millions of poor people still living within their countries are going to improve their lives. Our job requirements, compared to theirs, are downright minuscule--insignificant even (as in, their high-end hundreds of millions figure compared to our low-end double-digit millions figure).
So do I want to focus all my attention on "beating" New Core pillars like India and China "to the Gap" and its rising lower-middle-class markets? Not really. In the end, I still want to push America into the next big, higher technology markets, the ones that will command the greatest shares of disposable income in the future, so I would emphasize bio, nano and genetic (plus medical and improved food production) and let the Chinese sell lower-to-middle level consumer goods.
Another way to tell this story: let's start with the undeniable observation (in my mind) that what defines the Gap is its relative lack of connectivity to the global economy. Tons of theories exploring how that came about, but my vision simply starts with this reality and eschews a white man's guilt trip (indeed, I see America's primary historical role as spreader of globalization for reasons of--first--our continued wealth-creation [same logic as the Marshall Plan: namely, I can't be rich all by myself with nobody to trade with] and second, our growing sense of what constitutes global security in a connected age). So we start with the notion that everybody's economic links are weak with the Gap, including Gap nations themselves.
But then we move to a secondary realization, created primarily in the past decade (my WPR column next Monday), that the Gap's economic linkages with the Core are growing magnificently in recent years. But with which part of the Core? Primarily the New Core players, who, by virtue of their rise from the lower levels of the global production chain to higher ones (at great speed), are both tapping the Gap extensively for raw materials (as manufacturers are wont to do) and increasingly viewing it as cheap labor for slotting in--behind their positions--lower ranks of buyer/producer chains (just like we did to Asia in the past and Europe did to us across the 19th century).
Do I, the Old Core, wish to reverse this process of rising New Core-Gap connectivity? Absolutely not. My long effort at official developmental aid has been horrifically ineffective, whereas China's networking of the past decade, while down and dirty in a pol-mil sense (does not boost human rights, enviro concerns, etc) still beats our collective efforts (which sucked both in a pol-mil and in an economic sense). So no, I have no desire to piss into this mighty wind. I want to encourage it all the more, but to temper it as well.
Now, there's always going to be the competing vision that says, "Can't we all just get along in the Gap and pool our collective resources to push these poor economies into "sustainable" wealth creation that maintains their culture pristinely, etc.?"
My sense there remains that there is no shortcut on development, only the capacity to speed it up. Social revolution necessarily ensues, if for no other reason than women are liberated in traditional societies (hence the friction we call global terror, as regressive elements within societies prefer a disconnection from an "evil world"). By encouraging the New Core down this path, we make them complicit in the natural and necessary social change (what I call progress, unless you call short lifespans and unrelenting poverty a cultural heritage worth preserving), and thus pull them into a natural role as globalization's guarantor and protector.
Will these states naturally adhere to all our thinking in this evolution? Hardly. They will offer competing definitions of progress, stability, human rights--the whole shebang. This conflict between competing rule sets will be beneficial to both sides: elevating the New Core's sights and tempering some of our unrealistic demands (we will always push for democracy, for example, and be impatient in this regard, but that impatience is not a bad thing so long as it does not rule our entire show).
So, in this explanation, I'm arguing that not only do we want to take advantage of the New Core's natural function--at this point in history--as frontier integrators, but we also need the competition and influence of their differing rules--even as we don't always like their source (e.g., the single-party states such as China and Russia). Then again, we lived with such situations in South Korea and Japan for decades, so I think we can stomach it for quite a while longer in these new pillars (you know my thinking there on the 5-decade stretch of single-party rule that typically follows the great revolution/opening-up to the larger world). Am I worried that our vision and ideals will falter relative to China's? Absolutely not. Get your FDR on, I say! Stuff a little Reagan in your backbone and summon up your inner TR! Realize we've never had a shortage of Nixons and buck up, buddy!
[And please, avoid extreme wobbliness over some peon power getting a nuclear weapon, cause it ain't the end of the world.]
What people often find very frustrating about my thinking is the apparent inflexibility it displays on the course of globalization (I have the strong tendency to want to ride the big waves of globalization's expansion, choosing, as much as possible, to avoid trying to stem them--because I see it as a fool's errand.) Also, I have the habit of discounting people's first instinctive desire to have America step in and do it better than the potential partners are currently doing it--like China. That unilateral, almost parental instinct is deep within our system after almost seven decades of "leading the Free World."
But indulging it in the days and years and decades ahead would be a big mistake, in my mind--a refusal to admit our successes in expanding globalization and to realize that the total package we've got spinning now is beyond our comprehensive control. We'd do better mentoring the rising crew and seeing them fulfill their economic destiny (and enrich their remaining impoverished and remain stable) than trying to run the entire show ourselves--or even trying to outdo them on most things.
So no, I don't advocate putting our economy on a trajectory that would see us out-duel China and India and Turkey and Brazil as primary developers of the bottom-of-the-pyramid/Gap/emerging global middle class. I think there's great room for our improvement in that sphere (indeed, it's long been an argument of mine that many U.S. companies will earn huge growth opportunities by partnering with rising New Core corporations in these environments), but I see our economic future in higher technology realms, because that path makes us wealthier, does not deny the obvious economic wealth-creation opportunities to the New Core pillars (which, in turn, makes us wealthier--as in, we all make more money when there's more money in play), plays to our strengths (innovation, entrepreneurship, financial risk-taking, educational system), and lets us continue to ply our comparative pol-mil advantage (Leviathan, emerging SysAdmin leadership) very long in the making.
Indulging in the pursuit of perceived short-cuts (energy autarky, subbing global warming for a struggle against radical extremism, deciding we'll focus heavily on soft power or economics) will always remain a deep attraction, but it denies our role in history up to this point and raises a very troubling--and inevitable, in my mind--scenario of NOBODY stepping into our shoes and fulfilling that pol-mil leadership role, meaning a surrender to the logic of great-power competition and ultimately conflict across the Gap. I find that path such a huge waste of blood and treasure as to remain inconceivable as a strategic choice, so I do not embrace the prioritization Gilbert's comment may suggest.
I believe it's the role of grand strategy to elucidate the "inevitabilities" and contextualize them for decision-makers. I think it inevitable that we'll need to help rising New Core players step into much bigger Gap nation-building/policing roles commensurate with their rising economic interests there, just like the Brits wisely did with us a century ago. To deny that difficult grand strategic task is to invite the dissolution of our greatest gift to humanity--the stunning prosperity and peace associated with this international liberal trade order-cum-globalization of our making.
In this sense, I inevitably sound like a persistent nag, refusing the allure of apparent--and seemingly easier--alternatives.
But I don't see the role of grand strategist as being one of telling Americans what they'd like to hear at any one point. We have a small universe of political pundits and op-ed columnists ready to do that.
Our thanks to Gilbert for his triggering comment.
Sunday, January 3, 2010 at 10:49PM 
