Diary

The Frontier Within

The notion being entertained in some circles of punditry that America will soon be overtaken by China as the world’s top economic power gives me a sense of deja vu. All during the 1980’s proponents of collective central planning were hyperventilating about the supposed overtaking of America by Japan as the world’s top economic power. We were constantly bombarded with articles claiming that America’s freer more individualistic approach to economic planning could not compete with the efficiency of the new Japanese approach to central planning. Of course, some free market economists predicted that the Japanese “economic miracle” was not on as solid ground as it appeared to be. To the dismay of the proponents of central planning, those economists were right. The “bubble economy” popped in the 1990’s and Japan has been trying to pull itself out of an economic slump every since.

It seems that the Japanese government has learned some pretty interesting lessons and has prepared a report on what it will take to prosper in the 21st Century Information Age global economy. The report is entitled “The Frontier Within”. http://www.kantei.go.jp/jp/21century/report/htmls/index.html In the report, they note the advantages America has in the “Information Age” global economy.

“Some judge globalization to be no more than Americanization or to mean the unilateral imposition of American standards. It is true that the United States currently enjoys an overwhelming advantage in the multiple processes of globalization.”

It goes on to describe those “multiple processes”:

“At the same time there has been movement toward integration driven by the emergence of English as the international lingua franca and the overwhelmingly superior position of those who control information and IT. We also see a trend toward what we might call realignment-the challenging of established industries by new industrial players, the loss of state control, and the growth of individuals’ say, accompanied by a regrouping of winners and losers based on a widening of the gap between the information “haves” and “have-nots.” Meanwhile, the construction of multiple networks has broadened the opportunities for women and members of other traditionally disadvantaged groups to participate more fully in society and has provided a path for the sudden opening up of individual options and opportunities for self-realization.”

It goes on to highlight the essential theme of the 21st Century:

“If the twentieth century was the century of the organization, the twenty-first century will be the century of the individual. … Individual freedom and empowerment, so far enjoyed by only a handful of people, will be within reach of the great majority. If so, it is all the more important that each and every person firmly establish his or her individuality.”

The obstacle that Japan must overcome is their relatively “collectivist” culture that frowns on individual achievement;

“To cultivate these qualities, society needs a firmly established ethos and systems that welcome and give full rein to excellence. Unfortunately, Japanese society still tends to frown on displays of individual excellence. This is closely bound up with an ingrained egalitarianism. The Japanese are preoccupied with equal outcomes, and in a vertically segmented, horizontally egalitarian society the nail that sticks out is hammered down. The relentless demand for equal outcomes has led to unequal opportunities. “

Obviously, America is seen as having the advantage in the global economy of the 21st Century because of our encouragement of creative individualism. The problem is that the American tradition of responsible individualism is being challenged by the collectivist egalitarian mentality that came with the bureaucratic welfare state.

This is true not only of economic hurdles erected in front of the successful, but even in the discouragement of any form of competition among our young in the school system. Self-esteem is now more highly regarded than actual achievement. The end result is to raise a generation that has high self-esteem, but is ill prepared to compete in the global economy.

Contrary to the fantasies of the central planners, the American tradition of responsible individualism is a very important key to prosperity in the 21st Century global economy. Our individualism and its encouragement of individual excellence is what gave us a significant head start. Are we going to throw that advantage away by humoring our utopian welfare state central planners and their collectivist egalitarian vision? The actions of our political class since the 2008 elections have raised the spectre of an America succumbing to European style rule by bureaucratic decree. Throwing a monkey wrench in the midst of their central planning schemes was the rise of the Tea Party movement in 2010. China, on the other hand is still wedded to a collectivist vision dominated by central planning and some free market thinkers are predicting the eventual popping of their own “bubble economy”. Perhaps we may keep our advantage in the global economic arena after all.