[Infowarrior] - Inovation: Keeping America's Edge

[Richard Forno]

Keeping America's Edge
JIM MANZI

The United States is in a tough spot. As we dig ourselves out from a  
serious financial crisis and a deep recession, our very efforts to  
recover are exacerbating much more fundamental problems that our  
country has let fester for too long. Beyond our short-term worries,  
and behind many of today's political debates, lurks the deeper  
challenge of coming to terms with America's place in the global  
economic order.

Our strategic situation is shaped by three inescapable realities.  
First is the inherent conflict between the creative destruction  
involved in free-market capitalism and the innate human propensity to  
avoid risk and change. Second is ever-increasing international  
competition. And third is the growing disparity in behavioral norms  
and social conditions between the upper and lower income strata of  
American society.

These realities combine to form a daunting problem. And the task of  
resolving it turns out not, by and large, to be a matter of foreign  
policy. Rather, it compels us to consider how we balance economic  
dynamism and growth against the unity and stability of our society.  
After all, we must have continuous, rapid technological and business- 
model innovation to grow our economy fast enough to avoid losing power  
to those who do not share America's values — and this innovation  
requires increasingly deregulated markets and fewer restrictions on  
behavior. But such deregulation would cause significant displacement  
and disruption that could seriously undermine America's social  
cohesion — which is not only essential to a decent and just society,  
but also to producing the kind of skilled and responsible citizens  
that free markets ultimately require. Moreover, preserving the  
integrity of our social fabric by minimizing the divisions that can  
rend society often requires government policies — to reduce inequality  
or ensure access to jobs, education, housing, or health care — that  
can in turn undercut growth and prosperity. Neither innovation nor  
cohesion can do without the other, but neither, it seems, can avoid  
undermining the other.

Reconciling these competing forces is America's great challenge in the  
decades ahead, but will be made far more difficult by the growing  
bifurcation of American society. Of course, this is not a new dilemma:  
It has actually undergirded most of the key political-economy debates  
of the past 30 years. But a dysfunctional political dynamic has  
prevented the nation from addressing it well, and has instead given us  
the worst of both worlds: a ballooning welfare state that threatens  
future growth, along with growing socioeconomic disparities...

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http://www.nationalaffairs.com/publications/detail/keeping-americas-edge