A couple of announcements caught my attention recently. One was that Tom Freidman of the NY Times and “the earth is flat” fame will be releasing an update of his popular book in August; the other was that widely-followed economist and advisor to Democratic presidential candidates Alan Blinder, who has been one of the more influential free trade enthusiasts, has changed his message somewhat and is now suggesting that the downside impact of unfettered economic globalization will be deeper than we have imagined.
Why did these notices catch my attention? First, they are a continuing manifestation of the phenomena outlined by Alvin Toffler over 25 years ago in his landmark book, The Third Wave, the key message of which is that we are now living in the middle of the third great transformation of the organization of work and society in world history, and there is no escape from it. Second, as will reportedly be well noted in the revised edition of Freidman’s book, while seemingly 90% of our focus is on public policy, that’s not where the action is at all. In fact, public policy is the “brain dead” arena for dealing with this transformation, to wit: there is enormous innovation underway in this country, which is adding unprecedented value and wealth, but none of it is originating in Washington, D. C. and precious little in state capitals. Third, I share Blinder’s concern that the impact of this transformation and the allocation of pain now reaching the affluent white collar sector will produce heightened political action to mitigate the transition costs.
These observations taken together suggest to me that we will need enormous vision and courage in our leadership to avoid short-sighted strategies more directed toward pain protection than the urgently needed market-driven systemic reform in education rigor and delivery, health care finance and delivery, and the re-structuring of retirement finance. Clearly, we won’t get it from the Lou Dobbs wing of the Democratic Party, including House Ways and Means Chairman Charles Rangel, which will use Blinder’s recent notes of caution to further their demagoguery against free trade. Nor will it come from Chuck Schumer and his allies in the Senate, who believe that the principles of comparative advantage among trading nations no longer apply in a globalized world. No, this leadership role can only be filled by our next President.