That Used to Be Us: How America Fell Behind in the World It Invented and How We Can

by Thomas L. Friedman

  We have no doubt that Americans will sacrifice when summoned to do so by a leader with a credible plan that apportions the burdens equitably and that has as its goal not simply balancing the budget but sustaining American greatness.

  An independent presidential candidate who did all these things—describing, more vividly and accurately than the two major parties have yet done, the world in which its citizens are living and are destined to live in this century; prescribing the policies that will make it possible for Americans to thrive in that world and for America to exercise global influence in this century, as they did in the last one; and galvanizing the country to adopt these policies—could provide the shock therapy we need.

  It may be a long shot, but it’s the best shot we have. Sticking with the status quo, by contrast, is a sure thing—a sure pathway to decline.

  We fully understand the math working against any third party. We know that such a candidate is very unlikely to win. But we also know that the more honest, plausible, and inspiring he or she is, the better the Democratic and Republican candidates will have to be. And, at a minimum, if our kind of third-party candidate did well, he or she would do to the established candidates what Theodore Roosevelt, George Wallace, and Ross Perot did in 1912, 1968, and 1992—force them to adopt and implement parts of the third-party agenda. In that case, the independent candidate would have given the American political system what it so badly needs—a shock compelling serious attention to the issues on which the country’s future depends.

  Such a candidate would have the same impact as a philanthropist, improving the lives of other people after he or she is gone. Philanthropists’ bequests do change the world for the better, and an independent presidential candidacy can change America—and therefore the world—for the better as well.

  Of such a candidacy two things may be said with some confidence: First, it would not win the presidency. Second, over the long term it would probably have a greater impact on the course of American history than the person who did.

  SIXTEEN

  Rediscovering America

  But does it have a happy ending?”

  That is the question our friends asked us whenever we told them the title of the book we were writing. Our answer was always the same: We can write a happy ending, but it is up to the country—to all of us—to determine whether it is fiction or nonfiction.

  One thing we know for sure: The path to a happy ending begins with the awareness that something is wrong, that changes are necessary, and that we the people have to be the agents of those changes. At some level Americans do understand this. The anxiety about China’s rise is one sign of a justified and, if it can be channeled properly, ultimately healthy concern about the state of the nation. Here is another: In 2009 and 2010 President Obama’s Republican critics accused him of denying America’s history and status as an “exceptional” country. The charge stemmed from an overseas news conference in which, asked whether he believed in the concept, he replied, “I believe in American exceptionalism, just as I suspect the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism.” (He then went on to list some of the features that, in his view, make America exceptional.)

  The idea of exceptionalism, as used by scholars, refers to the ways that America has differed historically from the countries of Europe: the fact that it was founded on a set of ideas; that it lacked a hierarchical social order with a hereditary aristocracy at the top; that the Europeans who settled North America did so in a huge, sparsely populated territory; and that it attracted immigrants from all over the world. In political discourse the term has come to have a celebratory as well as an analytical meaning. It refers to what makes America special: its wealth, its power, the economic opportunity it has provided for its citizens, and the example of liberty and prosperity that it has set for the rest of the world.

  The fuss over exceptionalism was in one sense a normal episode in American politics, an effort by one party to portray the other as disconnected from basic American values and traditions, of the kind that began with the fierce political battles between Alexander Hamilton’s Federalists and Thomas Jefferson’s Democratic-Republicans. But it also tapped into the national undercurrent of unease about the country and its future, the concern that the American dream is slipping beyond the reach of the next generation. Alas, such fears are all too justified.

  The debate about exceptionalism reminds us of a story attributed to Abraham Lincoln. He asked, “If you call a horse’s tail a leg, how many legs does a horse have?” And he responded to his own question in this way: “The answer is four, because calling a horse’s tail a leg doesn’t make it one.”

  Similarly, declaring that America is exceptional—that is, special—doesn’t make it so. Exceptional, meaning exceptionally wealthy, powerful, and dynamic, is not a distinction that is bestowed and then lasts forever, like an honorary degree from a university. It has to be earned continually, like a baseball player’s batting average. Too often in recent years, though, we have treated “American exceptionalism” as just another entitlement—just another thing we get to enjoy without paying for. Those days are over. America’s exceptionalism is now in play. It is not an entitlement. It is not a defined benefit. To retain the exceptional status that Americans rightly value but wrongly assume is automatically ours, the country must respond effectively to its four great twenty-first-century challenges—the ones posed by globalization, the IT revolution, our large and growing deficits, and our pattern of energy consumption. Unfortunately, not enough Americans seem to understand the first two and too many want to deny the necessity of addressing the second two. The first two we need to look at so much more closely, and the other two we have to stop looking away from so insistently.

  The stakes are exceptionally high. For Americans, whether the United States masters these challenges will determine their country’s future rate of economic growth, on which will depend the continuation of the best features of their society: opportunity, mobility, and social harmony. These are now at risk, as a single, glaring, ominous statistic makes clear: In the first decade of the twenty-first century, the majority of American households made no economic gains at all.

  For the rest of the world, the stakes are just as high, perhaps even higher. Consider a list of some of the major events in world affairs at the end of 2010 and the beginning of 2011. In November 2010, a website called WikiLeaks began releasing more than 250,000 classified diplomatic cables of the American government, some of them embarrassing to it and to the governments of other countries, cables that had apparently been supplied by a single low-ranking member of the American armed forces who had obtained access to them.

  In December 2010, China went to extraordinary lengths to disrupt the Nobel Peace Prize ceremony for one of its citizens, Liu Xiaobo, a democracy advocate serving an eleven-year prison sentence for “inciting subversion of state power.” Under pressure from Beijing, eighteen countries boycotted the event. In the first months of 2011, pro-freedom uprisings erupted around the Arab and Muslim world—in Tunisia, Egypt, Bahrain, Libya, Yemen, and Syria. In March 2011, the largest earthquake in the recorded history of Japan set off a tsunami that killed more than 22,000 people and devastated entire towns in the northeast part of the country. The tremor and the floods that followed led to dangerous breakdowns in nuclear reactors in the path of the tsunami.

  There is an acronym that business consultants use to describe moments like these: VUCA, meaning “volatility, unpredictability, complexity, and ambiguity.” We are going through a period of history with a very high VUCA rating. The world is turbulent because it has multiple sources of turbulence: bullying governments, such as China’s; repressed and angry societies, such as those in the Arab world; the forces of nature, which are, as ever, powerful and unpredictable, as the devastation in Japan reminded us; and lone individuals, such as the source of the WikiLeaks cables, empowered—indeed super-empowered—by two of the defining trends of our era: globalizat
ion and the IT revolution.

  In this unstable world, the United States stands out as both a beacon and a supplier of stability. Americans sometimes underestimate the importance, and the value, of American power for other countries. (It doesn’t help that other countries are not routinely lavish, or even public, in their appreciation for what the United States does in the world, even when they do appreciate it.)

  Americans also sometimes misunderstand their country’s power. Those on the left often do not fully understand its constructive uses, concentrating instead on the occasional abuses that always attend the exercise of power. Those on the right often do not fully understand its sources—that American power is not simply a matter of will but of means, and those means need to be constantly renewed and refreshed, which depends on our successfully meeting the country’s major domestic challenges. The world we grew up in was a world in which America had a lot of leverage. Indeed, it was a world shaped a certain way because we had the leverage to shape it that way. That is precisely what we are losing. We cannot make ourselves safer abroad unless we change our behavior at home. But our politics rarely connects those two dots anymore. If we want to shape the world, we have to be serious about American strength, and if we want to be serious about American strength, we need to be serious about the sources of American strength—our formula for greatness.

  On this matter, we mince no words: A world shaped by a strong America—strong enough to provide political, economic, and moral leadership—will never be a perfect world, but it will be a better world than any alternative we can envision.

  In fact, the United States provides to the world many of the services that governments furnish to the societies they govern. With a weakened America, one that has failed to rise to the challenges it confronts and has therefore become less wealthy and less confident, the world will likely enjoy less governance, which will make it more disorderly and less prosperous. In that case, everyone, not just Americans, will suffer.

  Will the United States meet its major challenges and thus sustain the American dream for future generations and preserve the country’s large and constructive global role? Again, we are ultimately optimistic in our response to this question.

  For one thing, whatever the pathologies of the American political system, American society retains the characteristics that made the United States exceptional among the countries of the world; the country remains full of people who have not gotten the word. In general, if you were to design a country ideally suited to flourish in the world we are living in, it would look more like the United States than any other. In a world in which individual creativity is becoming ever more important, America supports individual achievement and celebrates the quirky. In a world in which technological change and creative destruction take place at warp speed, requiring maximal economic flexibility, the American economy is as flexible as any on the planet. In a world in which transparent, reliable institutions, and especially the rule of law, are more important than ever for risk-taking and innovation, the United States has an outstanding legal environment. In an age in which even the cleverest inventors and entrepreneurs have to try and fail, sometimes repeatedly, before finding the business equivalent of a mother lode, the American business culture understands that failure is often the necessary condition for success.

  The other reason for our optimism about America’s future is that over the course of its history the United States has rarely failed to meet major challenges. It is in fact our failure to meet major challenges that is unusual—or, one might say, “exceptional.” When tested, from the days of the revolution in the eighteenth century to the drawn-out Cold War struggle in the twentieth, America and Americans have found ways to excel. The country’s past supplies fertile grounds for optimism about its future. That is one reason that we have given a book about that future a backward-looking title. A country that steps up to the challenges that it faces and masters them is the country that used to be us.

  In fact, the key to a successful future is to draw on features of American history that made the country successful in the past: understanding, as we have before, the world in which we are living; renovating our traditional public-private formula to spur economic growth; and removing, perhaps through a method that has worked in the past, the political obstacles that stand in the way of the collective efforts the country needs.

  Alexis de Tocqueville originated the idea of American exceptionalism in Democracy in America. What he found exceptional was precisely Americans’ concentration on the here and now, on their actual circumstances, rather than on abstract or theoretical considerations. “A thousand special causes,” he wrote, “have singularly concurred to fix the mind of the American upon purely practical objects. His passions, his wants, his education, and everything about him seem to unite in drawing the native of the United States earthward.”

  Over the last two decades, this changed. As a country, and as a political system, we lost our characteristic focus on the world we are living in. We misinterpreted the end of the Cold War, failing to recognize that it was not only a great global victory but also the beginning of a great global transformation, one that made the world in some ways more demanding for Americans than it had been during the decades of conflict with communism. We missed the very turn that we, more than any other nation, helped to bring about.

  It is hard not to see a parallel between America and IBM, one of the country’s iconic companies, which is celebrating its centennial in 2011. America’s history has been one of continual reinvention—and so has IBM’s. It started out making clocks, scales, cheese slicers, and the like. After generations leading the market in punch-card tabulators, in the early 1960s its boss bet the company on the mainframe computer, and wound up dominating that business. Then, twenty years later, IBM essentially invented the personal computer.

  Nevertheless, despite this history of embracing the future and shucking the past, IBM didn’t understand the implications of its own creation. It invested too much for too long in the mainframe. Its financial and management models were based on things remaining as they had been, not as they were becoming. It treated the PC as a niche product. And those mistakes nearly brought down the whole company.

  How did IBM lose sight of the world it invented? Listen carefully to the answer of Samuel Palmisano, IBM’s current chairman and CEO, when we asked him that question: “You spend more time arguing amongst yourselves over a shrinking pie than looking to the future,” said Palmisano, and so “you miss the big turn” that you have entered, even a turn that your own company invented. “We missed the PC. It isn’t like we didn’t have the technology,” he explained. “We invented the PC, but we missed what it really was. At the time, everybody [at IBM] thought it was just kind of a neat little personal productivity tool. But instead it became a new platform. And we missed it.”

  When you start thinking of other departments and colleagues in your own company as the opposition—instead of focusing on the other companies against which you must compete—you have lost touch with the world in which you are living. When you come to see your exceptionalism as permanent, you set yourself up to wind up less than exceptional. This can be lethal for a company—and a country. America’s political parties today strayed, said Palmisano, “because they have focused on themselves” more than on the priorities of the country as a whole.

  Under the leadership first of Louis Gerstner and then of Palmisano, IBM got back on track by relentlessly scrutinizing itself and the world in which it was operating. By doing so, it mastered the next big change in technology, which was networking—the hyper-connecting of the world in which the principal platform is no longer the PC but rather billions of interconnected smartphones, sensors, computers, and servers. IBM bet that in such a world the most lucrative business would involve sifting and analyzing all the data being generated and using all that information to advise customers on how to get the most out of their individual businesses. IBM found a new core competency and scaled it. In the p
rocess, it reconnected with its history of continual reinvention.

  The same can be true of America. It is obvious now what our core competency is. We have greater potential than any other country to thrive in the future by becoming the world’s most attractive launching pad—the place where everyone wants to come to work, invent, collaborate, or start something new in order to get the most out of the new hyper-connected world.

  America, of course, not only underappreciated the world it invented, it also overinterpreted the events of September 11, 2001. It devoted more attention, political capital, and resources than were warranted to the threat of terrorism, serious though it was and is. While pursuing the worthy but not vital goals of nation-building in Afghanistan and Iraq, we recklessly pumped up our annual deficits and cumulative national debt to new and dangerous heights, and pumped out more and more greenhouse gases, heedless of the potentially devastating consequences.

  The first task for Americans, with the Terrible Twos behind us, is to focus on the nature of the world in which we are living and the most important challenges it presents to us. Unless we do this, we will adapt no better to the new era that began with the end of the Cold War than the dinosaurs did in adapting to the world that sudden changes in the environment created for them.

  As we have argued, the key to doing so is updating—renovating—America’s traditional, and historically successful, formula for enlisting the government in selected ways to help foster a dynamic private sector. Of the five parts of that formula—education, infrastructure, immigration, research and development, and regulation—we have devoted the most attention in the preceding pages to education. In this century, education is the foundation of economic strength and American economic strength is the foundation of the country’s vital, indispensable role in the world. The Duke of Wellington, the conqueror of Napoleon, once asserted that the Battle of Waterloo—the decisive engagement with the French leader, fought in 1815—was won “on the playing fields of Eton,” an exclusive British private school in which the nation’s elite was trained. In the same spirit, one could argue that the stability and prosperity of the twenty-first-century international order will be maintained—or lost—in the classrooms of America’s public schools.