Education Provides the Infrastructure of Tomorrow

After the American Century              

For decades, the United States had a Department of Health, Education, and Welfare, and while these are no longer joined administratively, politicians all too often seem to think that these three things belong together. They do not. 

Education is part of the fundamental infrastructure a nation needs for the economy to work. Nineteenth-century manufacturers understood this, and supported compulsory education beyond primary school. They did so because numeracy and literary are essential for an industrial economy. And when the US Congress created the Homestead Act of 1862, which sold land very cheaply to settlers willing to take a chance and go West, they also passed a law that gave some of the proceeds from selling that land for the purpose of creating universities. Today, some of these land-grant institutions are among the best in the world. These nineteenth century politicians understood that to develop the economy, the citizens had to be educated. 

In both the United States and Denmark recent studies have underlined the centrality of education and research to a strong economy. A US report warns that in the last decade the nation has not kept pace with others in science and technology education. A Danish study shows that people with higher educations rapidly pay so much in taxes that within just two years society has gotten back its investment in them - this in a society where there is no tuition and the state therefore knows with some precision just how much it costs to educate each student. Even humanities students, whom politicians often disparage as pursuing useless knowledge, turn out to repay the cost of their education after working for just two years, almost as quickly as the scientists and doctors, who, of course, cost more to train. 

Education is the heart of tomorrow's infrastructure. It has the power to transform people's lives, to assist people who otherwise might be helpless to make vital contributions. A blind person with a good education can work and contribute to society in many ways. I went to college with a blind man who now is a judge in the United States. Without an education, he would likely have been a lifelong recipient of welfare.

Welfare rescues people in need. Welfare may help a child to greater success later in life or help a struggling parent who later becomes self-sufficient again. But welfare is not, on the whole, an activity that can or should be justified because it is profitable. Education is another matter. A good educational system will make society more entrepreneurial, richer, more agile, more adaptable, or in short, more able to meet the challenges of the future. 

Unhappily, politicians keep forgetting this fact. The response to the world economic crisis of 2008-2009 in all too many places was to cut back on education. In 2010 California imposed severe cutbacks on its schools and universities, which already had had their spending slashed in earlier years. A state which was once a model for others, with a powerful educational sector driving economic growth, seems to have lost its way. In many schools 30% of the staff have been fired, libraries closed, and class sizes increased by 25 percent or more. At universities, required courses are not always available, and some students will not graduate on time because they literally cannot get into a course they need. And those who do get registered may not get a seat, as the classrooms often are not large enough to hold the expanded sections. 

The failure to fund education adequately is hurting the Californian economy both short- and long-term. When people do not graduate on time, they to not repay the cost of their education as quickly. And when fewer people get an education at all and more people get a compromised education, the economy will be hurt for the entire lifetime of that generation. For a state, this is not just stupid, but self-destructive. In Denmark, national and local authorities have slashed budgets, closed schools, and created a high unemployment rate among newly trained teachers. The actual number of teachers has declined by 8% in primary school, which is a sign of very real political stupidity. At universities, there is almost no hiring, and those retired are often not replaced. A generation is being thrown away, or rather being driven away.

For people with skills are mobile. A survey found that half of all Danish workers find the idea of taking their skills elsewhere in Europe attractive. In the United States, people have always been quick to pull up stakes and try their luck in another part of the country. In 2008 135,000 more people left California than moved in, a trend that is accelerating. Often those who leave are among the most talented, such as a student who gets a scholarship, or the newly graduated student. The young often vote with their feet. The old fashioned kind of infrastructure like roads and bridges stays put. But a world-class scientist can be lured away, and an unemployed PhD will not usually linger where no one wants her, and a newly trained teacher or nurse who cannot get a job may go abroad. Thousands od the best trained Greeks and Spaniards are leaving for work elsewhere, and quite possibly they will never come back.

If education is infrastructure, it is mobile infrastructure. A society that cuts education will lose not only the skills of (and the higher taxes that would have been paid by) those it never trained - it will also lose some of the best new people it has most recently trained. Imagine that one country invests millions in a new highly mobile bridge, but then decides not to use it. Instead, another country imports this mobile bridge without paying anything for it, puts it into use and immediately begins to profit from the tolls (income taxes), and from the improved efficiency in transport that the bridge provides. Education is that kind of infrastructure. Denmark and California (and many others) have built and abandoned the infrastructure of tomorrow.

BRIC Nations Driving Global Warming

After the American Century

I recently spent two days at the University of Michigan, attending a conference dealing with sustainability and the US / China relationship. My brief was to deliver a plenary lecture on the history of US energy use, and what that history suggests about the future.

The background for this discussion is the major shift in the sources of pollution that has taken place during the previous five years. In c. 2006 the United States released more CO2 into the atmosphere than any other country. Since then the US has reduced its carbon footprint, and at the same time its total energy use has stopped growing. In contrast, China's economy has been growing at a rate of 9 or 10% every year, and its energy use has shot well beyond the US level. In fact, China alone released more CO2 last year than the United States, Germany, and the UK combined.

When one adds the CO2 from Brazil, Russia, and India, the other "BRIC" nations, the pollution balance shifts even more dramatically. These four emerging economies taken together are demanding more and more energy and they are satisfying this demand mostly through the older polluting technologies. Alternative energies receive lip service. Indeed, the many Chinese delegates to the meeting in Michigan kept repeating that the pollution was created to manufacture things for the West, and therefore the CO2 releases should not be counted against China. 

This is a curious argument. Chinese factories choose to be highly polluting of their own water and soil in order to keep prices down, a subject that was dealt with at the conference. These factories also choose to pay workers poorly in order to keep prices down, a topic that however was scarcely mentioned. Exploiting their own land, air, people, and energy resources in a short-sighted manner, the Chinese are making  a good deal of money. But the CO2 somehow, they think, is not their responsibility.

In contrast, almost all the large western economies have managed to reduce their CO2 levels in the last decade. One must admit that they start from an entirely different position. Per capita, Americans, Germans, and Brits all use far more energy than the average Chinese and enormously more than the average Indian. Starting from a position of excessive energy use, the West can cut back largely by adopting new technologies that are more efficient and less polluting. 

The overall trend is worrisome. The BRIC national economies are growing rapidly, and their CO2 emissions are keeping pace. This is not a sustainable situation. Nor is it a necessary situation.

I explained why in my lecture. Drawing on my  Consuming Power, I briefly summarized the previous American energy regimes from colonial times to the present: muscle power, water power, steam power, electrical power, gas and oil, and the never entirely realized nuclear regime. 

I then drew several conclusions. 

First, that the US has had little or no historical experience with shortages. Shifts in energy use were driven by consumer demands for more rather than the need to replace disappearing sources. 

Second, that since c. 1820 there have been new energy regimes roughly every 40 years. This strongly suggests that the shift to alternative energies will also take four decades, and that it will not entirely replace but rather supplement previous energy sources. 

Third, statistics show that since c. 1940 the largest growth in energy use in the US has been in the consumer sector. Industry has been much better at curbing its appetites. The good news is, that, based on studies of best practices - i.e. using existing technologies - the US could cut its total energy use by 50%. This would not entail any hardships or major changes in lifestyle. Rather, this would mean that per capita US energy use fell to the level of Germany or Denmark. The existing technologies include improved housing insulation and heat exchangers, already in use in Germany, that come close to eliminating the need for most domestic heating or cooling. Heat pumps, passive solar, solar panels, geothermal, burning waste, and wind power together provide a good mix of alternatives. Utilized together with pumped storage of hydro power, they eliminate the bogus argument raised by the oil, gas, and coal companies, who claim that alternative energies cannot provide energy around the clock, because the sun does not always shine and the wind does not always blow.

Fourth, half of the reduced US energy demand could be met though a mix of alternative energies, including far more than wind and solar power. Again, new technologies are not necessary. What we already have is sufficient to achieve this result. But note that the cost of solar power has been steadily falling, at a rate that economist Paul Krugman estimates to be 7% every year.

In other words, rather than set a goal of unchanged total use, of which 25% is to be alternative energy, I firmly believe that the US goal should be to reduce its energy consumption by half and satisfy the  remaining energy demand by using alternative energies. Moreover, the BRIC nations could do the same thing. Rather than adopt old-fashioned technologies, such as coal-fired electrical plants, they could move directly toward the sustainable goal. Their models should be Denmark and Germany. They should not measure themselves against the US, whose energy use is indefensible and unsustainable. Indeed, there is some evidence that the Chinese have begun to understand this more quickly than the US itself. Certainly China has moved to be a global leader in solar energy.

The fundamental problem of excessive energy use is not technological, but social and political.

Republicans Divided Against Themselves

After the American Century

It was the great Republican President Abraham Lincoln who famously declared that a house divided against itself could not stand. On September 29, 2008 the House of Representatives showed that it was so divided that it could not come together to back a bailout plan to save the banking system. One hopes that some new compromise will emerge, but the House has already negotiated for days with the spotlight of the world press upon it. During these negotiations banks were failing all over the world. Both candidates for the presidency as well as the incumbent agreed that the bill ought to be passed, and still a majority of the House did not vote for it. The defeat demonstrates a comprehensive collapse of leadership.

Speaker Pelosi could not get her Democrats to vote for it in sufficient numbers, though a considerable majority did favor it. George Bush, as a lame duck president in the final days of his failed presidency, could not muster the needed support. Nor could John McCain. A shocking two-thirds of the Republican minority failed to vote for it. The 122 Republican votes against the President's bailout package is the core of the problem. The Republicans bear a special responsibility for the mess the banks are in, because they insisted on deregulating the banking system a decade ago, just as they also insisted on deregulating the energy business a few years earlier.

The Bush II era began with massive fraud and corporate failure, most famously the Enron debacle. The public has not entirely forgotten. Now the Bush II era is ending with massive bank failures. These are two examples of deregulation to the point of lax oversight and sloppy governance. Yet in the midst of a collapsing economy, the Republicans have learned nothing, it seems, and cry "socialism" when their own president tries to stop the financial bloodbath before it is too late. It seems the misguided Republican members of the House cannot give up their true religion, which is deregulation.

Understandably, the Democrats are not willing to bail out Bush, and then take the blame for the massive cost. They rightly want this to be a bi-partisan effort. More than 60% of them did vote for it, even so. The Republicans are now damned if they do and damned if they don't. If they continue to play hardball and refuse to vote for a compromise bill, then they will be blamed for all the evil that follows. And if they grudgingly give in during the next few days, the voters will not forget that they put ideology before necessity, and played politics with their future.

As for John McCain, these events have shown he cannot lead the Republicans. It was his chance to rally them into unity, and show he deserves to be president. But he did not unite them. He failed miserably, and not even one representative from his home state of Arizona voted for the bill. The Republicans are divided against themselves. Such a party cannot lead the country, much less anyone else. It cannot even follow. If Lincoln is out there in the great beyond, he must be deeply disturbed to see his party so split and so lacking in leadership.

The world was expecting to see a rabbit come out of the financial hat. Instead, it got instability, uncertainty, incredulity, and knee jerk ideology. Surely some will take what is left of their investments elsewhere, if they can find safer havens less devastated by these developments. This past week has been a sad spectacle fraught with danger. Quite possibly the worst is yet to come - depending on whether this crisis can be resolved. But a recovery bill delayed may turn into a recovery denied.

The Forgotten Issues

After the American Century

The endless Obama-Clinton duel has now devolved into a contest of errors. Hillary made a huge one recently, by talking about the assassination of Robert Kennedy in 1968 as an example of how campaigns may be decided in June. Was she saying, stay in the race, because your opponent might get whacked? Surely not, everyone agreed, after she apologized, saying she "misspoke." Perhaps the worst part of such episodes is that they take attention away from the issues. Why talk about the people dying in Iraq or the soaring price of gasoline or the thousands of foreclosures, when you can discuss pratfalls and stupid remarks?

There are real issues in this campaign, however, even if the media often reduce it to a popularity contest that focuses on who is the best bowler or who said something idiotic last week.

Will the US stay in Iraq until at least 2013 (McCain's plan) or for as short a time as possible (Obama's plan)?

Will the Bush tax cuts for the rich become permanent (McCain's plan), or will the US return to something like the tax arrangements of the 1990s? To put this another way, will the US again start to pay off its national debt, or will it assume it can keep borrowing money from foreign creditors forever? Also indirectly involved in this issue is whether the dollar will be backed by a government that lives within its means and that can protect the dollar from falling further?

Huge balance of payment problems are not a good long-term economic policy, either. Will the US continue its massive oil imports, or will government force automakers to produce more fuel efficient cars? Students have built experimental cars that can run an astonishing 300 kilometers to a single liter, roughly 600 miles to a gallon! But neither the American SUV mad consumer nor Detroit is going to get there without some leadership. The Republicans have had eight years to provide it and failed.

Will the next appointments to the Supreme Court further tip the balance in a conservative direction? McCain is now on record as being a firm opponent of all forms of abortion, and if elected would likely be able to tip the balance on this issue.

Will the US really embrace efforts to curb global warming? McCain is better on this issue that Bush, rhetorically, but the Republican Party is not. The only real chance for the US to take a responsible role on this issue is if there is a Democratic Congress and President.

Will the next president be beholden to lobbyists who have donated to his campaign (McCain) or will he only have received support from ordinary voters (Obama)? This has implications on a host of issues.

Will the next president try to solve world problems by using the military (McCain) or by "soft-power" and diplomacy (Obama)? McCain evidently agrees with Bush that negotiating with an enemy is a bad thing, a sign of weakness. Obama does not want to be another cowboy president.

Finally, McCain now backs the use of some forms of torture, which is quite astonishing in his case, because he was tortured himself while held as a prisoner of war in Vietnam. Obama unequivocably rejects the use of torture. This is a serious issue, because recent news reports indicate that the use of waterboarding and other forms of torture have been more widespread that previously disclosed. The American military appears to be infected with this undemocratic practice, which is appropriate for sixtenth century witchhunts but not for any civilized nation today. McCain's treason to his own earlier convictions on this issue makes him a deeply problematic candidate. If he can reverse himself on torture, one can only ask, does he believe in anything?

Of course, none of this is as much fun as hearing about a tactical mistake or silly remark made by a candidate. But these and other issues are what the campaign should be about. Looking at these contrasts between McCain and Obama, I find no reason to support the Senator from Arizona. I am not aware of a single issue where his positions appear to be the wise choice. On the contrary, McCain's election could easily be a disaster even greater than the Bush Presidency. It may be hard to believe that something worse is possible. But it is.

The Real Campaign Issues I: Oil

All the candidates are talking about change. One area that screams out for change is US oil policy. The United States is the world's largest oil consumer and polluter per capita, and yet it has resisted the Kyoto Accords. Rather than offering leadership, the US has been a stumbling block. This is not in its own national interest, and it is economically wrong-headed, as well as contributing to environmental degradation. 

The US spends billions of dollars a year on imported oil, and yet its cars are far less efficient than they might be. Indeed, while some mild requirements for miles per gallon have been imposed on automobiles, the gas-guzzling SUVs and small trucks driven by millions of Americans are exempt from controls. I even know one 80 year-old woman who drives a Humvee to the supermarket, getting about 4 miles to the gallon. This is in rural Connecticut, where the need for an armored car is minimal. Gas mileage for cars in the US is roughly the same now as it was thirty years ago, and it was better in 1988 than in 2008!  Could there be any connection between this policy fiasco and the fact that former oil executives, i.e. members of the Bush family, have been running the country for 12 of those 20 years? I am not suggesting a conspiracy, just inability to see that the world has changed. Only as his presidency has drifted toward its end has George W. Bush admitted that, in his words, the nation is "addicted to oil." But after making that admission in a State of the Union message, little has changed. Except the price of oil. It has kept going up. 

The US today could drive just as much and use less than half the oil it does today, if only it made a real effort. American cars today average less than 25 mpg. The Toyota Prius gets 55 mpg. The Honda Insight got 70 mpg. Detroit did not build these cars, and has consistently fought for lower standards, and that means more imported oil, primarily from the Middle East. Detroit has not shown any leadership, and it has backed candidates with a similar (lack of) ideas, notably George Bush and another former oil executive, Dick Cheney.

This is the old story. Do any of the candidates in this election want to champion a new story? The Democratic candidates seem to want a new policy for gas mileage, but the American public has generally resisted any forced changes in the automotive lifestyle. Obama has proposed to help Detroit make the transition to hybrid cars by having the Federal Government pick up some of the health-care costs the car industry has. As he points out, health care now adds $1500 to the cost of every car, which is more than the cost of the steel. In short, Obama has moved beyond mere rhetoric to look for a solution and a partnership. He argues that Ford, GM, and Chrysler really have no choice. If they want to stop losing market share, then they will have to begin making more fuel efficient cars.  Obama also champions substituting home-grown biofuels for oil, reducing the costly dependence on foreign oils. Obama has also said that he would appoint a Secretary of Energy Security, in order to keep focused on the problem.

Hillary Clinton has some of the same ideas. More efficient cars, bio-fuel, more solar and wind power. She introduced legislation in 2006 for a "strategic energy fund" that would put $9 billion over a five year period into energy research, and and she suggested taxing the oil companies to help pay for it. Clinton has noted that ExxonMobil made the highest corporate profits in history, and together with the five other large oil companies had profits of $113 billion in 2005. A tax of less than 10% on their profits from one year would be enough to pay for the research into alternative energies. 

In short, both Obama and Clinton see the importance of new energy policies. Both see the dangers of relying on foreign oil, the dangers of global warming, and the need to rescue Detroit from its own backward looking executives. Either, if elected, would push the US in the right direction. But how hard would they push? Jimmy Carter was educated as an engineer, and he understands thermodynamics. Unfortunately, he did not find a way to get the public to accept his energy plans. Instead, Ronald Reagan told the electorate what they wanted to hear, that the shortages were artificial results of red-tape and environmentalists tampering with the free market. Never overestimate the American voter when it comes to oil. Convenience and the cost at the pump may matter more than global warming or national security or preserving what is left of the automobile industry. But at least if either Clinton or Obama are elected, there is a chance that the US will have an intelligent policy.

Anyone interested in the story of how the US became the world's largest consumer of energy might want to go to the library and borrow my Consuming Power: A Social History of American Energies (MIT Press).

A blog on Electricity will follow next month.

Problems with maintaining American Hegemony

The phrase "The American Century" accurately suggests the rise to dominance of the United States between 1900 and 2000. It is unlikely that this dominance can continue long into the new century, however. There are two sets of arguments to support this prediction: those that have to do with foreign affairs and those which are domestic.

The United States was the world's greatest military power at the dawn of the new millennium and the predominance of English as the language of science, the Internet, and business, ensures a central place to the United States in the new century. Yet, its economy no longer produces one third of the world's goods as it did in c. 1920. The greatest opportunities for growth lie in Asia, where China and India each have populations four times as large as the United States. Both are nuclear powers, and China has an ambitious space program with the goal of a manned mission to the moon. The "tiger" economies of nations such as South Korea, Taiwan, and Malaysia have already shown that Japan is by no means the only Asian nation capable of mastering advanced technologies and competing in the global marketplace. At the same time, the launch of the Euro currency and the expansion of the European Union to include new members has created a counterweight to the NAFTA free-trade zone of the U.S., Mexico, and Canada. (On the other hand, Europe's population is aging and shrinking, its labor markets are less flexible, and its taxes are higher.) The U.S. economy continues to grow, but as a percentage of the world economy it will become smaller.

Not only is the U.S. economy becoming a diminishing part of the world's economy, but also the globalization of business is eroding the centrality of the American market. In one sense, this globalization represents the triumph of American business values. Yet globalization also lessens the importance of nations, merging them into larger markets and into international organizations. Environmental problems such as global warming and energy shortages will almost certainly increase the pressure to think internationally, rather than in more narrow, national terms. Smaller countries have learned this lesson already, but it appears to be difficult for larger nations to recognize their interdependence, and hardest of all for the United States, as the last remaining superpower, to do so. Regrettably, Washington has not been a leader in reducing global air pollution, for example, and the 2000 election campaign did not result in an environmentally sensitive administration. Quite the contrary. President Bush, as a former (failed) oil entrepreneur, wanted to drill for more oil on public lands and nature reserves. His cabinet has many ties to the oil and automobile industries, but few ties to computer firms such as Microsoft or Intel. George Bush tried to think parochially in his first administration, but was forced to admit that global warming does exist halfway through his second administration.

Which brings us to some domestic reasons why the United States may slip a bit from its position of global hegemony. While the economy remains dynamic, the objects selected for development are not those best suited for the long term. The huge American investments in private automobiles and highways have created a rigid infrastructure that sprawls across a vast landscape, in contrast to other nations that have invested in high-speed trains and public transportation that concentrate the population and give them more transportation choices. In much of the United States, walking to the store is impossible. Consumers have no choice but to use their automobiles even to make the smallest purchase. Americans cannot easily change their consumption patterns to respond to rising energy costs. In the marketplaces for housing, transportation and conveniences, the majority of American consumers have ignored long-term environmental problems such as global warming, and thought too little about the energy needs of the rest of the world, while insisting on their consumption (and pollution) practices. If you want to see what the US might have done instead, visit a nation like Denmark or The Netherlands. They are also buying more cars than they used to, but in a pinch they can take public transport or bicycle. 

This Blog explores many topics, but the question of how the United States will adjust to a gradual decline of its hegemony remains a theme throughout. This is written without any pleasure at the changes described. I am, after all is said, an American, born in the middle of the American Century, witnessing the next act in the nation's history.

What was different at the end of the American Century?

The twentieth century, it is generally agreed, was the American Century. This webpage is dedicated to studying where the United States is headed in this new century, which cannot belong to the US to the same degree. It seems appropriate to reflect back over what changed between 1900 and 2000 in this first blog. For the nation changed stupendously in that time.

By 2006, the American population had grown to 300 million, four times that of 1900. The people were no longer concentrated in the Northeast, but had spread more evenly across the country. A rural nation had become urban and then suburban. A nation where only men over 21, and primarily white men, could vote, had expanded the franchise to all its citizens over 18. A nation that had banned African Americans from most public amusements and often denied them the vote had elected many Black men and women to the office of mayor, governor, and US Senator. In 2006 the public considered Barak Obama and Condoleezza Rice suitable for the presidency. A largely white nation had become a hub of multiculturalism.

A nation primarily of farmers and blue-collar workers had become a nation of office workers. A nation lighted mostly by gas and powered almost entirely by steam had electrified. A nation that once relied on horses and railroads had one car for every adult, plus an enormous airline industry. A few small companies making five-minute silent films had grown into the massive film industry. A nation devoted to the live entertainment of vaudeville, theaters, and other public places had largely privatized leisure by embracing the phonograph, radio, television, and Internet. A nation so uncertain about the value of its own literature that many still read British novels and poetry had both rediscovered the great writers of its first centuries and had produced a new pantheon of authors. A nation that once accepted the supremacy of European fine art had pioneered abstractionism and established New York as the world art capital. A nation bent on prohibiting alcohol had not only accepted its consumption but also fostered excellent vineyards and breweries.

There were more problematic developments, however. An isolationist nation with no standing army in peacetime had become the world's only superpower, capable of intervention anywhere. A nation that had identified itself with democracy had at times supported totalitarian regimes abroad. A nation proud of its Bill of Rights had imprisoned men for years on a military base at Guantanamo Bay, Cuba, without pressing charges against them or allowing them the rights normally granted to prisoners. A nation that had periodically been obsessed with "100% Americanism," the dangers of Catholicism, Fascism, and Bolshevism, found a new enemy, the religiously inspired terrorist. A nation that had prided itself on being the asylum of immigrants from around the world built an expensive wall across parts of the Mexican border, in an unsuccessful attempt to keep out illegal immigrants. A nation that had appeared to be shifting toward secularism in 1900 now seemed to welcome fundamentalism, and religious sectarianism not only flourished but gained increasing political influence.

How important were each of these various elements of the "American Century"? That is what this Blog seeks to understand.

If you want a more detailed retrospective, have a look at The American Century

[coauthored with Thomas Johansen], which is now available from SDU Forlag.