The New Grand Strategy: Restoring America’s Prosperity, Security, and Sustainability in the 21st Century by Mark Mykleby, Patrick Doherty, Joel Makower
Things were different half a century ago. Many people saw the world much like a game with two teams. The US and its allies were on one side; the USSR and its allies were on the other. In this situation, the goal of the US was clear and easily understood—stop the other side from taking over more of the board.
The end of the Cold War has changed the game, though, and the US has yet to adapt. It lacks a long-term strategic goal that reflects this new reality. Without a clear purpose to unite political parties, national policies have been directionless. Lacking a common enemy, the parties have turned on one another. Their goal is no longer to make America stronger in order to defeat ‘communism’, it is to stop the other party from gaining influence. They’re playing the same game from the Cold War but with a different opponent. With this kind of divisiveness, little can be accomplished in Washington. Even when individual politicians from the two major parties largely agree on a specific policy, it will meet strong opposition from the party not currently in power for fear that the one occupying the White House will get credit for it. (We saw a lot of this during the Obama administration.) Washington has become dysfunctional.
During the same time, ill-conceived trickle-down economic theories and the deregulation of the financial sector have led to several issues including crippling debt, wage stagnation, a shrinking middle class, and the increasing concentration of wealth in the hands of very few. These conditions and their ancillary effects, along with uncertainty about national politics, have made businesses reluctant to commit to long-term strategic capital investment. Quarterly profits, stock valuation, and dividends have become the sole measures of business success and therefore the only responsibilities of savvy business leaders. They act as if the effects of their business practices on the environment, the nation, and humanity in general can be ignored. They may fear a backlash from investors if they don’t ignore them.
Today, the US, along with the rest of the world, is facing serious challenges. We are depleting unrenewable resources; we are changing the global climate; we use too much and waste too much; we rely on intensive farming that requires large amounts of pesticides, fertilizers, and irrigation for our food; and then there are the economic issues of wealth and income disparity along with the dissatisfaction and the resulting societal unrest it brings. This situation is not sustainable. We need to be more efficient, more responsible, and more cognizant of the long-term effects of what we are doing.
The New Grand Strategy tends to be repetitive about these problems, but you’ll get no argument from me about their existence. However, I do question the viability of the solutions the authors offer. They say, “America must lead the global transition to sustainability,” which “describes a broad range of economic, security, social, and environmental concerns expressed throughout society.” (pg. 39) At first, this sounds like generic pie-in-the-sky stuff, or high-word-count and low-content mumbo-jumbo. As they unpack it, though, there are some good ideas here. They claim that unfilled demand exists for walkable communities (no car required to get from home to shops and such); regenerative agriculture (basically, this sounds like more small, regional growers, greater crop diversity, and the use of natural/organic farming methods); and resource productivity (more efficient manufacturing processes and better high-tech materials). They say these three things represent business opportunities that could be profitably pursued.
They may be right in that there is a need for such things. Their recommendations, if realized, could improve the lives of people, the environment, and even the economy. But a need is not a demand. Starving people need food. Homeless people need shelter. But these needs don’t represent economic demands unless the people with needs have the means to satisfy them. In our society, that essentially means the money to buy them.
That’s where I think the Catch-22 of the authors’ recommendations comes into play. Since this review is already far too long, let’s take just one example. Whereas people may wish to move into more walkable communities, they may not have the means to do so. Housing is expensive, wages for working class people are stagnant, and consumer debt is high. There may be a need, but is there a demand? I’m not sure, but I rather doubt it’s high enough to encourage a great deal of new investment in walkable communities. Investors and for-profit businesses are looking for quick, sure profits, not speculative endeavors aimed and improving people’s lives. Ah, but if all the recommendations the authors propose are pursued, then employment and wages will increase. After all, someone needs to design and build these new communities. That means jobs, and jobs mean income. This will create the demand we need.
But what comes first? Investors won’t risk the money needed to build walkable communities unless there is a demand for them, and there will be no demand unless real estate and construction companies provide the jobs to build them. This, I think, is one of the fundamental reasons why trickle-down economics doesn’t work. Lowering taxes to increase business profits doesn’t lead to new jobs. Businesses employ only enough people to produce things they can profitably sell, things for which they feel there is an existing demand. They don’t put people to work hoping a market will emerge as a result of increasing their employment.
During the Great Depression, the Roosevelt administration pumped up the economy through government spending. They employed people, from conservation workers to soldiers, paid them, and thus created demand where before there was only need. This trickled up to improve the overall economy. But we can’t rely on the federal government this time. As previously stated, Washington, mired in a Cold War mentality, is politically constipated and dysfunctional. Large corporations are unlikely to step up to the challenge. They’ve made big money ignoring externalities like the environment, the overall economy, and human wellbeing. I doubt they’ll be motivated. Those CEOs who might take the risk will have to consider the possibility that they will be outcompeted and consumed by their more ruthless and less responsible peers. So who is going to get the ball rolling this time?
The authors suggest that much can be accomplished locally, or at least things can start there. They are correct when they say, “innovative things are happening across America.” (pg. 213) Individual cities, towns, and smaller communities, private organizations and local businesses willing to take a risk, can and do make real differences in their communities. But can their individual and uncoordinated efforts have a significant impact on the nation?
Possibly, but there are obstacles. Many local governments are also in debt or strapped for cash. Citizens struggling to make ends meet are unlikely to approve tax increases needed to fund very many civic improvements, even if these promise eventual payouts in terms of jobs and quality of life. Taking on additional local government debt may be an option, but this is also problematic. Local businesses in competition with large corporations probably won’t be funding many of these improvements either. They have neither the incentive nor the resources. Those businesses that are doing well might help, but when innovative start-ups show promise, they are often hunted and procured by large corporations or financial predators.
But let us assume these obstacles are overcome. Imagine a nation in which several local communities somehow managed to find the resources for civic improvements, where small businesses and entrepreneurs somehow risked their time and their capital. Let’s even speculate that these are local success stories. There have been some already, after all. How does this turn into a national movement? Where will the plans needed to integrate and extend these efforts originate? With Washington dysfunctional, will there be national policies that support these local achievements and protect them from being stalled by vested interests?
I don’t know. Washington may be dysfunctional, but national policies matter. We can’t simply ignore them and get on with things, as the authors seem to suggest. Corporations and ‘special interest’ groups know this, which is why they spend so much on lobbying. Local efforts are important, but so is Washington. We need it to function properly. With political parties dependent on funding from large donors, and inflexibly partisan politicians proposing policies tailored to their needs, it’s not.
I expect that many of the things the authors suggest may happen, though. As they say, these will probably start with local efforts, or perhaps with visionary entrepreneurs. Unfortunately, I don’t see them happening soon enough or extending broadly enough to prevent the national and global problems that they’ve mentioned from getting worse. When it comes to the economy and the environment (and other issues dividing the nation), we’re still collectively hitting the snooze button. When the alarm becomes too loud to ignore, we’ll wake up and do something. Most of what we attempt, I suspect, will be inappropriate and ineffective, but perhaps some local achievements will provide good examples for solutions that can be extended to the rest of the nation. Even then, I fear we may not have the will, the leadership, or the funding to make it happen. We may have won the Cold War, but our inability to leave it behind us may prevent us from successfully addressing today’s challenges.