Keeping America's Edge, Part I

That's the title of conservative writer Jim Manzi's latest piece in National Affairs, where he explores the "challenge of coming to terms with America's place in the global economic order."

It's a very long manifesto on how to reform conservatism, and I'm just getting started with it, but from what I've read so far, Manzi breaks the massive problem down into three realities: free-market capitalism vs. Americans' aversion to risk/change; dramatically increasing global competition; and a behavioral/social disparity between America's upper and lower income strata. He argues that we must have rapid innovations in business and technology in order to compete against "those who do not share America's values" (i.e., China), which requires us to have unfettered markets and "fewer restrictions on behavior." But, he also argues that this kind of pedal-to-the-metal thinking undermines the social cohesion needed to produce the kinds of people needed to manage the unfettered free markets we need. So, then, government needs to step in and regulate the free markets to create balance. The trick here is to acknowledge that both free and regulated markets are interdependent, and there's no avoiding the conflicts.

Still, as Thomas Frank and others who have profiled the deep divisions that exist in our society point out, these deep divisions are the great obstacle to a satisfactory solution. The conventional wisdom, not without some measure of accuracy, is that the conservatives favor innovation over social cohesion and liberals favor cohesion over innovation. Of course, politics ensures that there is spill over from both sides to the other. You won't find many Republican congressmen, for example, failing to argue for preserving jobs in their district that would be lost due to innovation or globalization. Similarly, Democrats would quickly help a corporation seeking to bring an innovative, technologically advanced operation to their districts if it meant new, sustainable employment for their voters.

It would be great if any federal regulation could moderate innovation while cushioning the blow of such innovation on middle- and lower-class Americans, who tend to bear the biggest burden from both innovation and stagnation. But we also have to consider the global market and rapidly developing economies like China and India, so we can't be soft on growth if we want to keep up.

Now, Jonathan Chait over at The New Republic pokes big holes in Manzi's piece, which has been getting a lot of praise. In fact, rather than champion the Reagan-era style of conservatism, Manzi seems to support the opposite: social democracy, most successfully exemplified in western Europe. Using some updated statistics, Chait points out that per-capita GDP in the US and western Europe are at near parity since 1980. Chait notes that an email he received from Kevin Drum at Mother Jones argues that Europe's social democracies rank higher than the U.S. in GDP per hour worked. Given the fact that western European workers are afforded shorter work weeks, longer vacations, paid parental leaves, and single-payer healthcare, they actually achieve their success with happier, less stressed out workers (although Americans generally have more opportunities for work and get paid more).

More later as I dive deeper into Manzi's piece.