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American Competitiveness: The Moral Dimension
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# : |
19641 |
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Section : |
MODERN THOUGHT
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| Issue
Date : |
10 / 1991 |
3,567 Words |
| Author
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Amitai Etzioni
Amitai Etzioni is the author of The Moral Dimension (Free
Press, 1988), editor of The Responsive Community, and
University Professor at George Washington University. |
At first glance, America's loss of competitiveness seems a simple matter. The litany is all too familiar: We are doing less well economically than we used to; we are falling behind Germany and Japan and quite a few other countries; we are unable to pay for our worldwide military and other commitments (the so-called "Paul Kennedy thesis"). Single-cause explanations are readily offered: The deficit of the federal government is too high; we do not save enough, and hence costs of capital in the United States are higher than in Japan; our schools produce an inferior labor force; and so on.
Actually, the situation is much more complex. By several measures we are doing quite well indeed, as recent books by Joseph Nye and Henry Nau have stressed. By many criteria, we are much better off than Americans were a generation ago. There is little doubt that our children will have a significantly higher standard of living than we had (something few in the postcommunist world and in Third World countries can be sure of). Desert Storm has shown that we can keep up a very impressive military might, using a relatively small proportion of the GNP. (Defense expenditures accounted for 5.7 percent of the GNP in 1989 as compared with 7.8 percent in 1970). Our universities are a mecca for the rest of the world. True, some other countries are moving forward faster by several measures, but they started from a much lower point. Anyhow, it seems unreasonable to expect that we can, or should aspire to maintain the unique powerful status we had at the end of World War II, when Germany and Japan had destroyed much of the other industrial nations (from the UK and France to the USSR) and we destroyed them, leaving us the only major economic power in the world. We deliberately (and, it seems, wisely) saw to it that the others got back on their feet.
And yet our inner sense tells us, correctly, that something is amiss. Before going any further, a more precise characterization of the issues at hands is needed. In narrow economic terms one matter that concerns us, as it ought, is the slowing of the GNP growth rate. During the Kennedy administration, the American economy grew more than 6 percent a year without overheating, with inflation around the one point mark. In the eighties, the rate of inflation hovered around the 4 percent mark, and the annual growth rate around 3 percent. These days our economy seems like an old locomotive: if it runs faster than about 2.5 percent of GNP growth the economy overheats, the Federal Reserve used recessionary brakes to cool it off by slowing it down. Low growth rates mean that we have relatively few new resources for all the additional goals we wish to advance, which makes us feel boxed in. When we see other
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