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Waving The Hope Flag, Vainly

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Read this book to learn how citizens of countries at the top think about others and of themselves. Intel's former CEO Andy Grove had famously said, "Only the paranoid survive." And Thomas Friedman and Michael Mandelbaum induce a strong dose of paranoia in That Used To Be US.

There is an old Navajo saying that if we do not turn around now, we just might get where we are going. And Friedman and Mandelbaum want you to get where America is going. They invest three-fourths of the book to show America and Americans face dire situations today. Globalisation and the rapid technology changes have meant that, according to the book, the world has changed forever for America.

Japan and Europe are not competitors anymore, but the growing economies of China and India are. For the first time, the US has to deal with 'cheap genius' at an unprecedented scale; a nice way to highlight that being smart is no longer the prerogative of Americans. They were busy fighting the Cold War and, later, the "losers" in the flat world — Al Qaida, Afghanistan, Iraq, Iran and Pakistan. They are now blindsided by the Category 5 hurricane, China, which has also been "feeding" the American hunger to borrow and spend by buying dollars. All these facts are known in bits and pieces, but the book presents a collective impact that could befall America if it does not consciously fight challenges such as spiraling deficits and political gridlocks.

The Problems
Friedman and Mandelbaum also feel global warming and climate change could be a big game-changer of the next century just as information technology was in the past one. They say the US should lead the move to clean fuels to regain its glory days, for ET (energy technology) will be the next IT. This seems far-fetched, given that China is already leaping forward in solar and wind energy. One wonders if the US can hope to have a monopoly over this sector by betting billions of dollars. That, too, when its economy is in the doldrums. Also, its capabilities are in doubt. For instance, Solyndra, the solar cell plant in which President Barack Obama pumped in $535 million, with much fanfare, closed down within a year in August 2011.

The book should be an eye-opener for Indian readers. It has citizens of the largest economy with the best infrastructure, renowned educational institutions and unrivalled entrepreneurial community lament about losing their pre-eminent position in the global pecking order. If we had one-tenth of what the US has, we would be busy beating our chest about our greatness. It is hard to appreciate what the book touts as problems for the US — lack of good, inspired teachers, "run down" infrastructure and reduced public investment in basic research. The surprising part is the similarity in issues between the US and India when it comes to politics — lobbyist and special interest groups hold the country to ransom there too. Perhaps, the perils of democracy are something that both the countries have to contend with unlike China or Singapore (which Friedman seems to admire).

The Wishlist
The authors are on the mark on what America should aspire to be in the new world. They want America to be the place to dream something, design something, start something, collaborate with others on something, and manufacture something. Smart thinking, as it plays to their core strength of creating high value and intellectual property. But will this lead to enough jobs or will it lead to more polarisation between the rich and the poor? Ultimately, it is going to be hard to build a country of only smart people and push out the "not so smart" to the margins. Can the US create an equivalent of outsourcing and offshoring for its average and below workforce given the book's contention that there is no room in the economy for "average" anymore?

Interestingly, the authors are convinced that America in trouble is not good for the world at large. They somehow believe naively that America deserves the most credit for the global spread of all that is good — democratic politics and free-market economy. They also state that the US has set up, policed and maintained international institutions, which have benefited all the countries. So it is imperative that US maintain its numero uno status. This could not be further from truth as we are still reeling under the effects of the financial crisis thanks to Wall Street. Not to mention the US-sponsored wars.

The Strategy
The authors call themselves frustrated optimists and try to wave the 'hope' flag in the last quarter of the book. The Americans, they say, just have to rediscover their mojo — start working hard, push children to do science and engineering, become more ethical and, while they are at it, build a new third front in politics. This is easier said than done. Generations of prosperity have altered lifestyles and expectations of Americans. And the sacrifices that the book talks about — paying higher taxes, giving up on social security and medicare — is not going to happen until the country gets a real shock, like what India got in 1991 when we had to pledge our gold to pay bills.

What the authors must learn is the fact that, historically, no country has been unbeatable forever and neither would be the US. It is but natural that it would vacate the throne for, say, a China and, perhaps, this is the welcome shock therapy for the once-mighty power.

Authors' Details:
Thomas L. Friedman is a three-time recipient of the Pulitzer Prize. His books include From Beirut To Jerusalem (2006) and The World Is Flat (2007). Michael Mandelbaum is director of the American Foreign Policy program at Johns Hopkins and the author of The Frugal Superpower (2011).

Parthasarathy is CEO, Global Executive Talent

(This story was published in Businessworld Issue Dated 19-12-2011)