Tuesday, February 28, 2006

A Tale of Two American Ideas

A Tale of Two American Ideas

My country 'tis of thee
Sweet land of liberty (and big business)
Of thee I sing

This slight modification to the lyrics of America by Samuel F. Smith ruins the rhyme and the tune, but achieves greater accuracy. The United States has thrived on the confluence of the two grand ideas of capitalism and individual liberty throughout its history. We cannot accurately speak of one without acknowledging the impact of the other.

I like to anthropomorphize these ideas, as it aids the memory and fosters understanding. Please allow me to introduce to you two American heroes, Orville Redenbacher and Robert Heinlein.

Orville Redenbacher was famous for passing on his key to success in business, "Do one thing and do it better than anyone else." He set out to create the world's best popcorn by creating his own corn hybrid and ended up with the best selling popcorn brand in the U.S. Orville represents the power of focused greed, success by entrepreneurship and enterprising use of capitalist opportunities. Orville works the market.

Robert Heinlein was a disabled veteran of the U.S. Navy who became famous as a science fiction writer. He was a libertarian, a thoughtful man and one who believed in maximizing the growth of the individual. Heinlein is widely quoted on a range of topics, but the one I like to use to illustrate his core beliefs is this one:
"A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects."

What a difference! Orville counseled specialization and Robert vehemently denigrated it. Could these two ever learn to live together?

They did, of course. Even in the days leading up to the American Revolution, it was easy to find both forces at work. Jefferson, student of the enlightenment, promoted the concept of individual liberty, including religious tolerance. Businessman Washington, it is rumored, promoted military resistance to Britain partly to avoid financial ruin. The British were blocking the Westward expansion upon which he bet heavily.

The interplay between commerce and philosophy built America and made it fundamentally different from our English-speaking friends. Without America's abundant natural resources and the mercantile mindset we borrowed from the Dutch at New York, the American economy would surely have failed to achieve world dominance. Our drive toward liberty also played a crucial role. England was determined to suppress troublesome American colonists by restricting economic growth, including Westward expansion. Canadians and Australians remained primary industry producers for the crown while America industrialized, a factor as important for their late arrival to economic success as their relative lack of resources.

Clearly, America the pastoralist could not have driven the railroad West to the Pacific Ocean. Orville's friends drove the railroad to the sea while Robert's sought to make a better life for their children and themselves. The West was settled because it was in the best interest of both Orville and Robert to go there. There was no stopping our heroes when their interests were aligned.

World War II provided America an opportunity to demonstrate the power of this alliance to the world. American industrial might out-produced all other players, while American servicemen fought totalitarianism on all fronts. Dictators were brought low and America became a global power in a few short years, all because Orville and Robert were fighting on the same team.

Most of American history may be seen as an interplay of these ideas. Which dominated? Which was suppressed? They have played off of one another, sometimes complimentary, sometimes in conflict. And that brings me to globalization.

Globalization makes Orville happy, nay, ecstatic. He can find cheaper labor to produce his products. Even factoring in additional transportation costs result in savings that he can apply directly to the bottom line. What does Robert get from globalization? As far as I can tell, globalization just makes Robert nervous.

The political storm recently unleashed by the intended purchase of London-based Peninsular and Oriental Steam Navigation Company (P&O) by Dubai Ports World, a multinational corporation owned by the government of the United Arab Emirates, highlights the differences between Orville and Robert. Orville can't think of a reason to say "no". Robert can and the answer is "security".

In other words, Robert was happy to put up with globalization because he thought it didn't concern him. Now he is becoming aware that it does. National strategic interests, such as the manufacturing capability necessary to maintain the world's strongest military (once dictated by law to require U.S.-based sourcing) and the control of the country's borders, are now recognized to be in jeopardy. They have been for some time, of course. Robert just didn't notice until recently.

Orville can justify the operation of U.S. ports by foreign terminal operators because it is good business. It does not make for good security. As George Orwell pointed out so neatly in 1984, today's political ally often becomes tomorrow's enemy. Globalized business dependencies simply last longer than political alliances.

Robert has noticed the way in which we treat China as a trading partner instead of the largest single threat to U.S. interests worldwide. China's rising oil consumption and its territorial aspirations, coupled with our reliance on its manufacturing infrastructure may make bin Laden's Al Qaeda look like the mosquito it is. The Soviet Union, in contrast, was defeated by a policy of isolation, not an intimate tying of economies.

Perhaps Orville can justify our Chinese dependence by looking at the European model. After all, the first step toward the European Union was the European Coal and Steel Community, a way to grow the economies of post-War France and Germany without allowing either country to use their economic might to start another war. Surely, globalization will have a similar effect on U.S.-China relations? Sadly that is just not so.

European states have committed themselves to an "ever closer union", and have consistently, if slowly, given up sovereignty to do so. The U.S. and China rely on a laissez faire nearly-free market approach which does nothing to bind the warfighting abilities of the other. To think otherwise is naive in the extreme.

America's dependence on foreign oil is causing a similar split. Orville will adjust to market conditions. Robert feels exposed.

Robert's followers often come from the political right. And left. So do Orville's. The forces of capitalism and liberty cross party lines. They swing voters in the middle. When aligned, they can create the most powerful political, industrial and military juggernaut in the world. When they are opposed, they can rip our Congress and our foreign policy in two.

The solution to our current problem is simple. Let's get Orville and Robert on speaking terms. Fast. To do that, international business interests need to be tempered in the interests of national security and national security needs to be tempered in the interests of individual liberty.

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