Omar Azam
Globalization of American Society
1992
What to do with the two
Contrary to popular opinion, Selling Our Security is not a paranoid cry of xenophobia, nor is it a work whose precepts are destined to clash with the ideologies and theories presented by Robert Reich in The Work of Nations. Albeit each work has its own tone, its dissimilar authors, and its varied approach, they both tend to agree on the fundamental concept that there has evolved a new global economy which does not favor the U.S. over other countries. Both also believe that the trend has gone unnoticed by the American public and the government, the two groups who have been losing the most ground. After a careful analysis of these, and other shared concepts, it becomes evident that although these two analyses approach the economy from different vantage points, their endpoints are much the same.
Reich bases his book on the premise that the economics of the 1950's have ceased to have relevance in today's new global system. More specifically, the high-volume, big business, national champions of mid-century have given way to small, high-value firms with operations in many countries. This has been due in large part to the communications and transportation revolution, which have made it possible for information, services, goods, and people to travel through countries and across the world with little regard to national borders. Information and services, for example, can be exchanged through microwaves and telephone lines, making it hard for national authorities to limit or tax such transactions. And the people who are coming to defy nationality are "symbolic analysts," whose skills are so internationally marketable that they are accepted at high levels in all countries. Since national borders no longer completely separate countries, protectionism has become obsolete, and along with it the national champions of high volume. Reich goes on to say that skills are internationally recognized currency, so it is not which nation's citizens own what, but "which nation's citizens learn how to do what." (Reich 137) Due to this growing international acceptance of talent, says Reich, corporate nationality is becoming irrelevant; he cites the case of Sony, a Japanese company that acquired "all-American" Columbia, and later, CBS. The public thought of this "Hollywood takeover" as a symbol of a larger sale of American assets to the foreign world. In reality, a client like Bruce Springsteen, a symbolic analyst whose skills used to be marketed and distributed by Columbia Records, had simply linked up with a different strategic broker, namely, Akio Morita (Sony's chairman). Reich's theory, that corporate nationality ("who owns what") is unimportant compared to "who knows what," applies to all facets of commerce. He even includes technology in this scheme, and describes the rapid loss of American technological supremacy to foreign corporations as a simple change in funding sources: "The only thing that has changed is that most of the money they [American symbolic analysts] need...now comes from West Germany and Japan instead of the United States."
The Tolchins begin their examination of the American dilemma with this issue, the loss of American technology. The Tolchins are more astute in recognizing technology as not just another commodity, but as the definitive asset that nations need in order to survive in today's world. Whereas in the past, people and societies could shelter themselves from the rest of the world, technology in the twentieth century has made this impossible. Technology not only spawns great commercial products, but its owners, more importantly, decide the fate of the rest of the world.
The Tolchins recognize technology's vast importance as an economic and social commodity, and the fact that America has been losing much technological ground is one of the premises of their book. But after this concrete starting point, Selling Our Security offers so many different angles to the technology debate that it is hard to point the finger of blame to one guilty party or economic entity. This is what keeps the book from being a closed-minded attack on foreign investment.
In part IV of the book, the Tolchins explore the FSX deal between the Japanese and the U.S. The whole FSX drama is not a cut-and-dried problem; not only is there the Japanese side of the story and its American counterpart, but the White House and Congress have their legitimate arguments, as do DoD and Commerce. While the Tolchins convey the sense of confusion and lack of cooperation that exists among American politicians, they stress Japan's political system, which is superior because of its cooperating departments, and its self-centered mentality.
The Tolchin's examination of the FSX affair brings to light the existence of many issues that are hard to resolve, or even agree upon, such as: when does free trade endanger national security; when is an economic threat a security threat; what is the role of the government in economics; and what is the role of domestic corporations in national security. However much their examination may be an inspiration for the United States to start protecting its critical technologies, the Tolchins attack the situation with the wrong strategy.
The Tolchin's constant stress on American corporations and American firms is a perfect example of the outmoded thinking that Reich attacks. Whereas the Tolchins gripe over the loss of hundreds of firms that did business with DoD, they do little to emphasize exactly how foreign these firms really are. They even point out that Texas Instruments moved its production facilities to Japan, but instead of focusing on this adjustment as a financial decision, they take it as an example of a U.S. firm "orphaned" by its government. But this is not to say that they condone companies that make a living out of contracting with DoD. On the contrary, they criticize many firms for not capitalizing upon technological developments in the marketplace, the way that Japanese companies do.
But Reich also seems to miss the point in regards to corporate nationality. Although American workers may be benefiting from the work that Japanese strategic brokers give them, they do not have the possession of the technology that is so crucial to developing even newer ones. The legal rights to the technological innovations they take part in producing belong to the corporate heads, and the successive technological secrets are usually kept within the files of the corporate headquarters. So in effect, the workers really have no independence of their own; their goals are dictated by headquarters, and their secrets are always shipped back to the corporate CEO's. Although this does not imply that corporations will favor their country over others, the trend of Japanese firms is toward favoring their own countrymen, and if needs be, upholding Japanese national policy against their own interests.
Military power is a major theme that the Tolchins analyze in their work. The U.S., at present, faces a dilemma that it has never had the chance of addressing before. Since the 1920's, the U.S. has been the preeminent world power, and has been surpassed by few in technological breakthroughs. Throughout the 1980's, and now, other countries have been narrowing that lead. It has become evident that billions of dollars donÕt amount to much in military spending if they are being used in the production of old-technology machinery. I f the U.S. maintains its military lead at the expense of the national economy, the U.S. will be a neo-Sparta with a military and no economic power. If the U.S. chooses to augment this military hegemony with an equally assertive economic policy (what is lacking), the nation will be much more secure and effective. And if the nation completely sacrifices the military for a strong economy (not likely), then the result will be a Japan of the '80's, rich but always vulnerable to military threat.
Reich has good reason in downplaying the military in his work. Because of our growing "interconnectedness", military threats will come to harm the aggressor as much as the victims. It is true that the fruit of one country is the food of another, and this relationship will prevent much senseless destruction. But it is more true that defense technology is becoming more of a deterrent than it was in the past; with advancement in conventional warfare, there has also come advancement in guerrila warfare and stealth attack. The recent bombing of the World Trade Center is proof that anyone with access to an explosive can do indelible damage against the most powerful nation on earth. But even with the threat of sabotage, conventional weapons and armies are far from being obsolete, and the failure of Reich in incorporating military power into his political-economic scheme reduces his accuracy.
The final difference between the two books is the viewpoint from which they are delivered. Reich looks at the changing face of the United Stated from a more socio-economic point of view. Instead of just looking at how businesses have been faring, he probes the lifestyles and the education of the people who are involved with the American system. Unlike Tolchin, who sees the loss of American critical technology, Reich sees a changing "American citizen," disparities in our economic classes, and new attitudes in our society. Reich grasps the new U.S. economy from an individual point of view.
The Tolchins stick to bread-and-butter economics, researching typical market facts such as market shares, interest rates, and the national deficit. They take more of a corporate approach to the American economic problem. Whereas the legitimacy of this debate is hampered by the problem in distinguishing the nationality of a corporation (ReichÕs point), the technological debate that the Tolchins bring up is important since technology is tied into business to such an extent today, and since technology is such a guiding force in the modern world.
In part V, the Tolchins criticize the government's inefficient handling of technology loss, and according to them, the answer lies in increased government involvement in the economy. Although the Tolchins do not have a clear-cut policy in mind, they are aware that since the 1980's the government has not been paying enough attention to the issue of technology loss. And although the destiny of U.S. trade policy is not clear, government research must be done, and "lists must be made." In essence, government must get involved in helping America's economy. Laissez Faire is not the key; investment is. The importance of education and investment are the only major points that the Tolchins and Reich agree upon, but they are the most important ones. These shared opinions have their distinctions, too. Reich believes in educating the public and America's youth. If this is done successfully, America will produce the necessary symbolic analysts. The Tolchins think that education should be taking places at the higher level s of society; government and big business should be researching trends and acting upon them. As to investment, Reich thinks that American tax money should be put toward social infrastructure; if this is carried out properly, the nationÕs economy will almost take care of itself. Tolchin thinks investment should take place, once again, at the higher levels of the system. American corporations should be given monetary support from the government if they need it.
If a policymaker were to try and incorporate the teachings of Reich and the Tolchins, it would seem hard; the differences discussed earlier seem to drive a wedge between the two philosophies. But after realizing that Reich and the Tolchins have faith in education and investment, it becomes evident that the two philosophies can be taken together and worked around these two central ideologies quite successfully. Technology, for example, would be nurtured in future generations by a more advanced education policy (Reich's education policy). The resultant technology-specializing symbolic analysts would be better served by a good infrastructure (Reich's investment policy). And once corporations were formed by American technology-experts, they would be funded by an American government who would be interested in their projects (Tolchins' investment policy), and would be well-informed enough to select the best companies for the assistance (Tolchins' education policy). The same sort of collaboration on the other main issue, the military, would result in a more complete policy that would overcome the shortcomings of each author(s). In the end, it becomes clear that these two philosophies are quite compatible when examined in the right context.
Copyright 2003 Omar Azam