Do We Have What It Takes?

As we now know to our shame, the US, once the world’s prime industrial power, is now the largest debtor in international trade. Of the 110 countries listed in our published accounts, we ran a deficit with seventy-one of them. As the table on the facing page shows, in only three exchanges among our twenty top trading partners was the surplus on our side.

THE TOP TWENTY TRADING PARTNERS OF THE US

We import more than we sell to our neighbors, Canada and Mexico, and also to Germany, Italy, and Japan, nations we defeated in war. Similar shortfalls occur in our trade with Sri Lanka and Romania, Bangladesh and Burma, Tobago and the Ivory Coast.

True, many countries have borrowed heavily from the US, adding some black ink to our accounts. Still what troubles James Fallows and many others is that for every $100 in manufactured goods we import, we sell only $55 of our own manufactures abroad. Indeed, even the agricultural surplus is fading away: the grain and soybeans we export barely pay for the shrimps and coffee beans we are bringing in. None of this bodes well for our living standard or national autonomy. The longer the US is in the red, the more our creditors will exchange their IOUs for pieces of our economy. And that means decisions affecting us can and will be made in Tokyo and Toronto and Amsterdam.

The problem has two sides. On the one hand, Americans have become the world’s most voracious consumers, and other countries love to sell to us. The other is that we no longer produce much that other people want. Our only alternative, we are told, is to make America “competitive” again. Many books have been written advising American managers to emulate the Japanese, using such techniques as worker discussion circles and delivery of manufacturing parts just at the time they are needed—in order to avoid the large inventories. Here Fallows disagrees. Japan’s success, he maintains, springs from fusing modern capitalism with an ancient culture, emphasizing hierarchy and the obligations people have to the groups they belong to—family, company, country, and race. Their methods work because they build on social customs and traits of character.

If the United States is to revive its economy, it must also draw on its own strengths. Hence Fallows’s title: instead of trying to imitate others, we should, he argues, concentrate on skills and strategies that are “more like us.” Thus his central thesis: “Japan is strong because of its groups; America, because of its individuals.” His book urges Americans to have confidence in their individuality, which built a great economy and can bring it back again.

Americans perform best, Fallows says, “in situations where old rules and limits don’t apply,” since our society “has consistently set the balance in favor of economic adaptability, not tradition and order.” The book presents vignettes illustrating “the resilience that has always distinguished this country.” The author tells us about his father, newly out of the navy, who moved to California to set up a medical practice. We hear of an Indiana factory worker who journeys to Texas to begin a career as a skilled machinist. These studies illuminate “a saga of people moving from place to place geographically and from level to level socially.”

This stress on adaptability suggests that even in adverse circumstances, most Americans manage to come out rather well. However, the drive to become “competitive” involves more than personal success. The issue is whether, while they are bettering themselves, these resilient people will be producing things that the rest of the world wants. More Like Us never really addresses this question. Indeed, the book’s emphasis calls for further examination.

Certainly, something we can call individualism has figured in American rhetoric since colonial times. We take pleasure in believing that Americans are more independent and free-thinking than, say, the Swedes or Taiwanese. But is this really true? If the notion of individualism is to have serious meaning, we should be talking about something more substantial than a brashness of style or a bent for self-congratulation or even a willingness to move about. I find it hard to believe, as Fallows argues, that all that many Americans are notable for their initiative or creativity. Alexis de Tocqueville noted a century and a half ago that stridency in opinions can cover a longing to conform. To compensate, we celebrate rough diamonds—cowboys, capitalists, comedians—who put on a show of their own.¹

So, not surprisingly, Americans tend to overestimate the role of individualism in America’s economic past. Much of what passed for that trait consisted of getting what one could without paying the true cost. Our economy was built, as much as anything, on tremendous waste: no other people had a continent so ripe for looting. The Reagan years have shown that virtually every time we weaken regulations in the name of setting people free, another disaster ensues. Even now, the taxpayers are bailing out Sunbelt speculators who spread $100,000 accounts among shaky savings and loan associations. In the same vein, consumers will pay for the indebtedness that has been loaded onto what remains of our productive sector.

Fallows asks that we be true to ourselves, which is fair enough. In an introductory chapter, he develops the thesis that “a society’s strength depends on the way that ordinary people voluntarily behave.” Thus he argues that American workers object to formal structures and displays of authority. This may be true today, but it was not always so. During America’s great industrial age—essentially the century from 1860 to 1960—the economy was blessed with an unusual labor force. There were, of course, the immigrants, mainly of peasant origin and used to arduous work. They also hoped to better themselves and adapted to the factory system. In addition, young men and women were leaving farms for the cities, since fewer of them were needed after the mechanizing of agriculture. And during and after the First World War, blacks began to move north, where they too found industrial jobs. These workers were often poorly paid, exposed to unsafe conditions, and had small affection for their employers. Hence the advent of unions, frequently at a bloody price.

Yet throughout that century, workers accepted industrial discipline, and maintained standards of quality and craft. They may have been under pressure to perform, but they also took pride in what they produced. Witness the acerbic comments of older workers on the habits and attitudes of the current generation. Here, too, the economy understood the importance of engineering. The Morrill Act of 1862 enabled thousands of young men to study “the mechanic arts” at public universities. While seldom glamorous, chemistry and metallurgy became honorable callings, offering entry to the middle class. The post–Civil War period also saw the rise of the corporation. As Alfred Chandler documented in The Visible Hand, this brought the need for a managerial order based on organization, co-operation, and written rules.²

Today, we have a rather different work force. For one thing, people go to school longer, which means not that they are more highly skilled but that they begin to look askance at certain kinds of work. In 1950, for example, 13 percent of the nation’s college graduates were in engineering programs. By 1975, that ratio had fallen to 4 percent. (It has recently risen again, largely because of the enrollment of women, foreign students, and Americans of Asian origin.) Instead, Americans prefer occupations in which they will not get their hands dirty. Thus we have more managers and professionals per capita than any other economy in the world, and we pay them higher salaries than their counterparts elsewhere. Since 1950, the ratio of administrators to rank-and-file workers has expanded by 50 percent. This means more layers of executives, who spend much of their time at meetings or preparing for them. It has yet to be shown just what all these presumed professionals contribute to the national product, apart, of course, from paper and print-out. Even so, the view has taken hold that five- and six-figure salaries are a legitimate reward. By my calculations, during the last twenty years, the number of tax returns reporting incomes of $1 million or more have increased tenfold, factoring in inflation and population growth. Much the same has happened in the $200,000 and $500,000 brackets. It would be hard to show that such salaries are being earned, let alone in productive ways.

So I find bemusing Fallows’s praise for what he calls America’s “talent for disorder,” since it so often shows itself in a stolid unconcern for the consequences of American conduct. The economic activity we now perform best is that of consumers—a talent our overseas suppliers are more than willing to satisfy. But to revert to Fallows’s original problem, what can we give them in return? Ours is now chiefly a “service” economy, which means production of experiences rather than tangible things. While there may be a large domestic market for interior decoration and psychotherapy, I doubt that they will figure heavily as exports.

Some of our products sell themselves: notably soft drinks, fast foods, and action movies. But on the whole, Americans are not very good at peddling what they make abroad. Not long ago, I was at a restaurant in Athens and happened to be seated near a table of businessmen, several of whom were Japanese. What impressed me was that they were, albeit haltingly, conversing with the others in Greek. It is easy to lament that languages are not being taught or learned in our schools. Even more revealing is that American companies do not demand such skills of executives charged with selling American products abroad. Nor will it suffice to say that everyone else knows English, or that interpreters are available. Sales get made or lost in nuances you have to understand yourself. Here, as elsewhere, Americans are adept at devising ways to avoid daunting assignments. Right now, a party of Koreans is chugging up Angola’s Cuanza River ready to negotiate, in Portuguese, the opening of a Hyundai agency in Malanje. I find it hard to visualize a group of Americans on a similar mission.

As it happens, a more auspicious beginning has been made by hourly paid workers employed in Japanese-owned plants right in this country. They have shown themselves willing not only to wear company coveralls, but to cut absenteeism, and raise quality and productivity well beyond the levels common in American firms. True, these companies have tended to select sites in semirural areas where there is little sympathy for unions and the labor pool is largely white. However, similar results have been achieved in a joint General Motors–Toyota venture south of San Francisco, with strong UAW support, which hired from the same interracial work force that had performed lackadaisically in its GM days. Even assembly-line workers can take pride in turning out a good product, especially when management makes a point of respecting employee suggestions. If American corporations did the same things they would probably get similar results. I am not sure that it helps much to muse over whether such methods enhance or diminish people’s “individualism” or “individuality.”

Moreover, the “us” in Fallows’s title refers to Americans who have been here for several generations. Yet each year, this group accounts for a smaller share of the population, as immigrants pour into the country. In fact, Fallows ends his book with a discussion of them. In his view, those currently arriving are “disproportionately entrepreneurial, determined, and adaptable,” and augment the wealth of the economy. Vietnamese pack chickens in Maryland and run Gulf Coast fishing boats. Chinese and Hispanic firms comprise the only growth sectors in our garment industry. Thanks to the presence of Koreans, New York has more fruit and vegetable stores than ever before. Asian Indians have revived neighborhood newsstands, and manage motels in scores of smaller cities. And Japanese restaurants have excited a taste for raw fish in Dallas and Denver.

In hardly any of these cases, as Fallows observes, can it be said that immigrants have taken jobs from native Americans. In many cases, the payrolls they created did not exist before. An apt case in point are the new Korean manicure salons in New York and West Coast cities. In the best enterpreneurial tradition, the Koreans sensed that there was a need which was not being met. In other instances, immigrants take jobs Americans refuse to do. Hispanics not only harvest crops, but also collect and wash the dishes in countless restaurants. Since so few Americans wish to become nurses, hospitals rely heavily on replacements from the Philippines. Or, to cite one more New York example, some middle-class couples could not maintain dual careers without their West Indian nannies. After several centuries of domestic service and servitude, native black women no longer feel like working in white households. Nor do they enjoy hearing, at this late date, that they should emulate newcomers just off the boat.

Unfortunately, Fallows’s stress on the energy of immigrants leads him to cast them, too, in the mold of individualism. Thus he complains that while there are a lot of ambitious people waiting to come in, quotas are being clogged with “parents, minor children, and spouses.” Yet in fact all those relatives are what make immigrant enterprises work. Nephews and cousins readily put in fourteen-hour days in family enterprises. Even the elderly take a vital part in the domestic economy. If you walk along the streets of Queens, now New York City’s Asian hub, you will see grandmothers with strollers and shopping bags, freeing the children’s mothers for a full workday. Immigrants have always been exemplars of family capitalism, and relatives have been a major part of the equity. And as for those “minor children,” they will soon be studying engineering at MIT.

In a chapter called “Confucianism Comes to America,” Fallows deplores our emphasis on college degrees, professional credentials, and multiple-choice tests. We are creating a mandarin class, he says, chosen more on its academic records than on the skills our nation needs. This is hardly a new charge, but it deserves to be renewed. Fallows reminds us that when first coined the term “meritocracy” was intended to be ironic, spoofing the absurdity of hiring and promoting people by pencil-and-paper scores. In this vein, he urges that to improve education in the US we should “hire people who know their subjects and seem promising as teachers, whether or not they’ve been to education school.” He cites a neighbor of his, a distinguished astronomer, who cannot enter a classroom because he lacks the statutory credits.

This seems a sensible enough view, and certainly such people as his friend should be made welcome in the schools. Still, as a classroom practitioner, I feel entitled to wonder how many distinguished astronomers could explain their subject to thirteen-year-olds without at least some training. Teaching involves more than standing up in front of youngsters and telling what you know. While education schools make easy targets, they require a semester or more of practice teaching, during which instructors observe the student teachers in the classroom and draw their attention to where intentions go amiss. (Let me add, very few university professors offer such aid to their graduate assistants.) Perhaps some experts are “born teachers” who can dispense with an apprenticeship; but I wouldn’t count on it. It is well to remember that we have three million teaching posts to fill; in view of the recruits we’re going to get, we should think twice before abandoning training in technique.

If a case is to be made for people having credentials, it should not put its emphasis on the content of courses or tests, which bear minimal relation to how people will perform on a job. The point, rather, is that preparing for these hurdles has enabled millions of Americans to achieve a more comfortable life. Doing well on tests is what got Jews into medical schools and the Irish into the police force. (We say we want police who are at home on the street; but writing up what you found at a murder scene calls for a measure of literacy.) Right now, youngsters from Asian families are mastering the rules and rituals of the Scholastic Aptitude Test. And at colleges that rely strongly on scores, they are displacing native whites.

Fallows subtitles his book “Making America Great Again.” Yet I wonder if this is what he really wants. An epithet like greatness should be used with some care. It does not refer to a prospering economy or a cultural renaissance. Were that the case, Switzerland or Canada could qualify for the title. Successful trading states—Venice, Holland, now Japan—gain stature in the world; but their political aims are relatively modest. Their citizens work hard, savor competition, stimulated by their comforts at home and the esteem they evoke abroad. Instead of trying to shape the world, they provide what the world wants.

The nations we call “great” are those that seek to impose their imprint across the globe. They aspire to international influence, backed by political and military power. The United States entered that arena in 1945, when its leaders decided they wanted to lead half the world. So we have tried greatness for almost half a century, not a short span considering how modern time flies. There are signs that we are ready to curtail our commitments, notably on the military side. Like the Soviet Union, we are acknowledging that greatness is a costly enterprise, if not a road to bankruptcy.

It remains to be seen whether the Bush years bring a serious rethinking of our uses of power. One way to begin is by viewing ourselves in a less illustrious light. As other societies have shown, it is possible to lead a kinder and gentler life without presumptions of grandeur.