That Used to Be Us: How America Fell Behind in the World It Invented and How We Can

by Thomas L. Friedman

  Sixty-five million years ago, scientists believe, a large meteor or a series of them struck the Earth, igniting firestorms and shrouding the planet in a cloud of dust. This caused the extinction of three-quarters of all then existing species, including the creatures that at the time dominated the Earth, the dinosaurs.

  The end of the Cold War and the challenges that followed brought on a fundamental change in our environment. Only the individuals, the companies, and the nations that adapt to the new global environment will thrive in the coming decades. The end of the Cold War should have been an occasion not for relaxation and self-congratulation but for collective efforts to adapt to the new world that we invented.

  We thought of ourselves as the lion that, having just vanquished the leader of the competing pride of lions on the savanna, reigns as the undisputed king of all he surveys. Instead we were, and are, running the risk of becoming dinosaurs.

  The analogy between the effects of evolution on particular species and the impact of social, economic, and political change on sovereign states breaks down in a couple of crucial ways, though. For one, adaptation in biology takes place across hundreds of generations, while the adaptation we are talking about will have to happen within a few years. And whether or not a species is well adapted to its environment is the product of uncontrollable genetic coding. Individuals, groups, and nations, by contrast, can understand their circumstances and deliberately make the adjustments necessary to flourish in them. The dinosaurs could do nothing to avoid extinction. The United States can choose to meet the challenges it faces and adopt the appropriate policies for doing so.

  The country is not facing extinction, but the stakes involved are very high indeed.

  The Stakes

  Our success in meeting the four challenges will determine the rate and the shape of U.S. economic growth, and how widely the benefits of such growth are shared. For most of its history the United States achieved impressive annual increases in GDP, which lifted the incomes of most of its citizens. That economic growth served as the foundation for almost everything we associate with America: its politics, its social life, its role in the world, and its national character. Fifty-five years ago the historian David Potter, in People of Plenty, argued that affluence has shaped the American character. The performance of the U.S. economy has generally made it possible for most Americans who worked hard to enjoy at least a modest rise in their material circumstances during their lifetimes—and enabled them to be confident that their children would do the same. Economic growth created opportunity for each generation of Americans, and over time most Americans came to expect that the future would be better than the past, that hard work would be rewarded, and that each generation would be wealthier than the previous one. That expectation came to have a name: “the American dream.” The American dream depends on sustained, robust economic growth, which now depends on the country meeting the four major challenges it faces.

  As Senator Lindsey Graham, a South Carolina Republican, put it to us: “America needs to think long term just at a time when long-term thinking has never been more difficult to achieve. I hope it is just more difficult, not impossible.” He added: “Those who do not think the American dream is being jeopardized are living in a dark corner somewhere … It is my hope that the Tea Party, Wall Street, labor unions, and soccer moms will all rally around the idea that ‘I don’t want to lose the American dream on my watch.’”

  More and more Americans, though, fear that the American dream is slipping away. A poll published by Rasmussen Reports (November 19, 2010) found that while 37 percent of the Americans polled believed that the country’s best days lay ahead, many more, 47 percent of those polled, thought that the country’s best days had already passed. Failing to take collective action to solve the problems that globalization, IT, debt, and energy and global warming have created risks proving the pessimists right.

  “Lots of things in life are more important than money,” goes the old saying, “and they all cost money.” In his 2005 book, The Moral Consequences of Economic Growth, the Harvard economist Benjamin M. Friedman shows how periods of economic prosperity were also periods of social, political, and religious tolerance that saw the expansion of rights and liberties and were marked by broad social harmony. By contrast, when the American economy did poorly, as after the crash of 1929, conflict of all kinds increased. The American dream is the glue that has held together a diverse, highly competitive, and often fractious society.

  The manager of the Liverpool, England, soccer team once observed of his sport, which everyone except Americans calls football: “Some people say that football is a matter of life and death. They are wrong. It’s much more important than that.” Similarly, while America’s success or failure in mastering the challenges of globalization, IT, debt, energy, and global warming will define the country’s future, more than the American future is at stake. Because America plays such a vital role in world affairs, the way things turn out in the United States will have effects on the people of the next generations all over the world.

  As Michael argued in his 2006 book, The Case for Goliath: How America Acts as the World’s Government in the Twenty-first Century, since 1945, and especially since the end of the Cold War, the United States has provided to the world many of the services that governments generally furnish to the societies they govern. World leaders appreciate this role even when they do not publicly acknowledge it. America has acted as the architect, policeman, and banker of the international institutions and practices it established after World War II and in which the whole world now participates. While maintaining the world’s major currency, the dollar, it has served as a market for the exports that have fueled remarkable economic growth in Asia and elsewhere. America’s navy safeguards the sea-lanes along which much of the world’s trade passes, and its military deployments in Europe and East Asia underwrite security in those regions. Our military also guarantees the world’s access to the oil of the Persian Gulf, on which so much of the global economy depends. American intelligence assets, diplomatic muscle, and occasionally military force do most to resist the most dangerous trend in modern international politics—the proliferation of nuclear weapons.

  Over and above all of this, there is America’s visible demonstration of the connections between freedom, economic growth, and human fulfillment. The power of example is a hugely potent social force, and the American example, with its remarkable record of economic success, has had a particularly strong global impact. Of course, other countries are democratic, prosperous, powerful, and influential. The political and economic principles on which the United States is based originated in the British Isles. After the collapse of communism, the countries of Central and Eastern Europe were inspired to follow the capitalist and democratic paths by the democratic, capitalist example of Western Europe. The increasingly prosperous countries of Asia adopted their versions of free-market economies from Japan.

  Still, it was the United States that helped to establish and protect democracy and free-market economies in Western Europe and Japan after World War II, and it is the United States that has been, over the past hundred years, the most consistently democratic, prosperous, and powerful—and therefore the most influential—country in the world. It is the American example that deserves the most credit for the global spread of democratic politics and free-market economies. In this sense, too, the world of today is a world that we invented.

  Alas, no country is prepared to step in to replace the United States as the world’s government, the way we stepped in when Great Britain went into decline. Nor will our economically pressed allies in Europe and Asia shoulder the costs of these global services. Therefore, a weaker America would leave the world a nastier, poorer, more dangerous place.

  In sum, America’s future—and the future of the world beyond America—depends on how well we deal with all four of our challenges. Because they are so important to the United States, and because the United States is so important to the rest
of the world, it is not an exaggeration to say that the course of the rest of the century depends on how we respond collectively to them.

  There is every reason to think that the United States can rise to meet them. Our optimism rests on our country’s history of rising to great challenges. America is a nation that won its independence through a daring, violent break with the richest country and the greatest maritime power in the world. Americans then settled a vast and wild continent and waged a bloody civil war from which they recovered so rapidly that they built the largest economy on the planet within a few decades. Our armed forces tipped the balance in Europe in the first great war of the twentieth century; and our tanks, ships, and airplanes, as well as the efforts of our fighting men and women, were central to the defeat of Germany and Japan in the second one.

  Winston Churchill once said to his British compatriots that “we have not journeyed across the centuries, across the oceans, across the mountains, across the prairies, because we are made of sugar candy.” The same could be said of Americans. Yet faced with era-defining challenges, the country has responded with all the vigor and determination of a lollipop. It has no concerted, serious, well-designed, and broadly supported policies to prepare Americans for the jobs of the future, or to put the nation’s fiscal affairs in order, or to hedge against dangerous changes in the planet’s climate. How to explain our failure of will? Our political system has gone awry, and so cannot produce the big, ambitious policies the country needs. And the American people have not demanded that our leaders tackle the challenges we face because they still have not fully understood the world we are living in.

  What world are we living in? What do we need to do to thrive in this world? Do we have the requisite policies and are we carrying them out effectively? How do we adjust them to work better?

  In Singapore, the political and business leaders ask these questions obsessively, as Tom saw during a visit to the country in the winter of 2011. The Singaporean economist Tan Kong Yam pinpointed the reason: Because of its small size and big neighbors, Singapore, he said, is “like someone living in a hut without any insulation. We feel every change in the wind or the temperature and have to adapt. You Americans are still living in a brick house with central heating and don’t have to be so responsive.”

  Tom saw the result of Singapore’s obsessive attention to what it must do in order to thrive when he visited a fifth-grade science class in an elementary school in a middle-class neighborhood. All the eleven-year-old boys and girls were wearing white lab coats with their names monogrammed on them. Outside in the hall, yellow police tape had blocked off a “crime scene.” Lying on a floor, bloodied, was a fake body that had been “murdered.” The class was learning about DNA through the use of fingerprints and evidence-collecting, and their science teacher had turned each one into a junior CSI investigator. All of them had to collect fingerprints and other evidence from the scene and then analyze them. Asked whether this was part of the national curriculum, the school’s principal said that it was not. But she had a very capable science teacher interested in DNA, the principal explained, and the principal was also aware that Singapore was making a big push to expand its biotech industries, so she thought it would be a good idea to expose her students to the subject.

  A couple of them took Tom’s fingerprints. He was innocent—but impressed.

  Curtis Carlson, the CEO of SRI International, a Silicon Valley innovation laboratory, has worked with both General Motors and Singapore’s government, and he had this to say: “Being inside General Motors, this huge company, it felt a lot like being inside America today. Adaptation is the key to survival, and the people and companies who adapt the best, survive the best. When you are the biggest company in the world, you become arrogant, and your mind-set is such that no one can convince you that Toyota has anything to teach you. You are focused inward and not outward; you are focused on the politics inside your company rather than on the outside and what your competition is doing. If you become arrogant, you become blind. That was General Motors, and that is, unfortunately, America today … You cannot adapt unless you are constantly monitoring what is happening in your environment. Countries that do that well, such as Singapore, are all about looking out.”

  Singapore has no natural resources, and even has to import sand for building. But today its per capita income is just below U.S. levels, built entirely with advanced manufacturing, services, and exports. The country’s economy grew in 2010 at 14.7 percent, led by exports of pharmaceuticals and biomedical equipment. The United States is not Singapore, and it is certainly not about to adopt the more authoritarian features of Singapore’s political system. Nor, like Singapore, are we likely to link the pay of high-level bureaucrats and cabinet ministers to the top private-sector wages (all top government officials in Singapore make more than $1 million a year) or give them annual bonuses tied to the country’s annual GDP growth rate. But we do have something to learn from the seriousness and creativity the Singaporeans bring to elementary education and economic development, and from their attention to the requirements for success in the post–Cold War world. Carlson told us he once met with a senior Singaporean economic minister whom he complimented on the country’s educational and economic achievements. Carlson said the minister “would not accept the compliment.” “Rather, he said, ‘We are not good enough. We must never think we are good enough. We must continuously improve.’ Exactly right—there is no alternative: adapt or die.”

  To be sure, countries don’t compete directly with one another in economic terms. When Singapore or China gets richer, America does not become poorer. To the contrary, Asia’s surging economic growth has made Americans better off. But individuals do compete against one another for good jobs, and those with the best skills will get the highestpaying ones. In today’s world, more and more people around the world are able to compete with Americans in this way.

  Another reason that Americans have not recognized the magnitude of the challenges they face is that these challenges are all the products of American success. For years, the United States was the world’s most vigorous champion of free trade and investment—the essence of globalization. Globalization spread due to the remarkable productivity of the free-market economies of the West, which traded and invested heavily among themselves. By contrast, the communist countries were discredited by their dismal record in achieving economic growth. So they embraced free markets and globalization.

  Likewise, the IT revolution was started in the United States. The transistor, communications satellites, the personal computer, the cell phone, and the Internet, not to mention the PalmPilot, the iPad, the iPhone, and the Kindle, were all invented in the United States and then were brought to the world market by American-based companies. That gave more people than ever the tool kit to compete with us and remove the barriers erected by their own governments.

  Similarly, the American government has been able to borrow several trillion dollars because of confidence, both at home and abroad, in the American economy and because of the special international role of the dollar, which dates from the days of American global economic supremacy. And the global population uses so much fossil fuel that it threatens to disrupt the climate precisely because economic growth, which is expanding rapidly, goes hand in hand with a rise in fuel consumption. The surge in growth over the last two decades has come about because of the expansion of American-sponsored globalization and the adoption, especially in Asia, of the American and Western system of free-market economics.

  In sum, the world to which the United States must adapt is, to a very great extent, “Made in America.” But in this case familiarity and pride of authorship have bred complacency. We are dangerously complacent about this new world precisely because it is a world that we invented.

  Another feature of the four challenges America confronts is the fact that they will require sacrifice, which makes generating collective action much more difficult. This is most obvious in the case of the federal defic
its. Americans will have to pay more in taxes and accept less in benefits. Paying more for less is the reverse of what most people want out of life, so it is no wonder that deficits have grown so large. Similarly, Americans won’t begin to use less fossil fuel and industry won’t invest in nonfossil sources of energy unless the prices of coal, oil, and natural gas rise significantly to reflect the true cost to society of our use of them. Higher American fuel bills will ultimately be good for the country and for the planet because they will stimulate the development of renewable energy sources, but they will be hard on household budgets in the short term. To meet the challenge of globalization and the IT revolution and to achieve the steadily rising standard of living U.S. citizens have come to expect, Americans will have to save more, consume less, study longer, and work harder than they have become accustomed to doing in recent decades.

  Ours is “no longer a question of sacrificing or not sacrificing—we gave up that choice a long time ago,” notes Michael Maniates, a professor of political science and environmental science at Allegheny College in Pennsylvania, who writes on this theme. We cannot choose whether or not Americans will sacrifice, but only who will bear the brunt of it. The more the present generation shrinks from the nation’s challenges now, the longer sacrifice is deferred, the higher will be the cost to the next generation of the decline in America’s power and Americans’ wealth.

  Fifty years ago, at his inauguration, John F. Kennedy urged his fellow citizens, “Ask not what your country can do for you. Ask what you can do for your country.” That idea resonated with most of the Americans to whom he spoke because they had personal memories of an era of supreme and successful sacrifice, which earned them the name “the Greatest Generation.”