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09 February 2009

Idea: What if America never was?

1. In normal times, change is almost impossible. Everybody continues in the same mental and physical rut or groove of daily grind. In severe crises like this one threatening the very existence of America, everything is changeable and everything is being rethinked. So this may be a good time to consider what is right and wrong with America so the good can be retained while the bad discarded or modified.

2. The usual, understood, disclaimers of me being a non-expert in everything, apply. Everything I write is only for further thought and discussion and, of course, the usual intellectual entertainment which seems to be my biggest contribution to the human race -- I am essentially a blogger, albeit with a big readership.

3. We roughly know what the world is today. Suppose America never existed, or were vanquished by the Germans in WW2.

4. It is likely then, that today, I would not be able to Google Earth to see the rooftop of my maid's home in Purwerkerto, Java. Indeed, I would probably not have a pc at all. Or the Internet. Of course, there would be computers, but only a few expensive big ones owned by govts, militaries and big business.

5. There would be satellites, but fewer, and again, owned and operated by the same. Maybe some satellite tv but much, much, smaller in scale. I would not have GPS on my cellphone; indeed, I would not have a cellphone at all.

6. In short, a far poorer world.

7. America can be credited with much of modern life. All those things mentioned above that exist now, exist thanks to America. But why?

8. Firstly, America is very rich, with all its advantages. This comes partly by having the sole right to issue the world's reserve currency after the WW2 Bretton Woods agreement, so it can print unlimited dollars to pay for whatever it wants. But more importantly, it is capitalist.

9. Being capitalist, the economy is organised around companies that are owned and funded by selling shares to many, while management is by professional managers. There is fierce competition among companies, and all strive for profits and growth in order to reward the shareholders so they continue to hold shares and others buy more. The legislative and legal systems enforce fair competition and this rule of law ensures an orderly practice of commerce and dispute resolutions. The legal system is so well established generally, that even a citizen or group can take out class action lawsuits against even the govt or big business, which hardly happens elsewhere.

10. It is this combination of happy circumstances that I get my Google Earth, internet, cellphone and GPS, etc. Since in this capitalist system, big business is more important than the govt, and the govt does not set directions or force directions onto the economy, which thus can go in a million different directions as long as they lead to profit and shareholders approval. This system is so fertile to new ideas, concepts, projects, processes and R&D of products and services that America is singlehandedly responsible for much of the world's modern life and way of living, from skyscrapers, surburbia life, shopping malls, jumbo jets, nuclear power plants, tv and all its myriad shows, news gathering and propagation, PCs and internet -- a plethora of inventions in itself, cellphones and their rapid developments -- almost everything modern. Future historians studying the fossil record of our last few decades would probably describe this era as an 'explosion' of innovations, inventions and creativity never before seen in human history. It is this capacity for innovation and ferment of creativity that will pull America out of crisis, if nothing else will.

11. It is because business is more important than the govt in America that even its military gets its toys from private companies contracting for profit, whether battle tanks, missiles, ICBMs, radars, nuclear bombs, or military satellites and space shuttles. And because big business invents and develops all these, much of these technologies leak into civilian use, to the benefit of the world, like GPS, which started as a military tech. The openness and transparency of America helps leak these military tech into civilian tech. So, today, you can buy a walky-talky good enough for military use. Or a ham radio to listen in on even police communications. Or a satellite phone useable deep in Amazonian jungle, first developed for military use.

12. Thus, this investors-company profit-based relationship created enormous innovations and inventions, which free and open competition between companies sharpened and made much more efficient, widespread and cheap enough for everybody to own and use. This kind of drive is what made America great and put it forefront in almost every modern development. There is only 1 drawback, chasing profits does not always result in the best products and services for America or the world. So we have Botox injections and breast implants while malaria and cholera still remain. We give Nobel Prizes for fluorescent mice while our energy needs remain dire and pollution threatens to poison our Earth and us.

13. Could we have just a little more directed R&D? Like the military specifying what kind of missiles it wants? The military always gets what it wants by contracting private firms so if America could define and contract for green energy or whatever, it should get them too, given the genius of the American systems, and the whole world would be grateful. It may be profitable, too, although it must be remembered that often, the govt [military] has to fund projects that fail and are eventually scrapped at great loss. So the profit motive may not be enough to get green energy or any other worthwhile tech. Knowing this weakness in the capitalist American system can mean that the contracts and the firms be chosen such that the full energies of the American systems can be unleashed to solve all the world's problems. I think it is a matter of setting directions, funding, and ensuring a good profit during and after successful developments.

14. This direction into new techs may be strategically sound, too, given that the Japanese, Koreans, even Chinese, are fast undercutting older techs such as car making. The new techs such as pc, internet, cellphones, gps and their related techs such as broadband and wireless are clearly dominated by American companies with the rest of the world trailing far behind. So it makes sense to do what you do best rather than compete in what you cannot do well or cheaper. However, it is too early to give up jumbo jets even as Airbus is proving such a strong competitor. Is there a contract for new jets for the military that could become civilian or dual-use?

15. Thus, an economic strategy for the OBAMA administration could be the setting of directions for certain new techs such as green energy. First, Pres OBAMA and govt could set the direction, then talk up the interest in these directions through speeches, papers and seminars, among academics, PhD students, researchers, companies and investors. All these to reduce govt spending and to set the herd stampeding in the chosen direction. Then, the govt could fund some key projects just like its military fund projects to ensure that key projects get done. This may result in new techs even as the US loses in older tech. Generally, it is unwise to set too many directions lest the economy becomes a command or guided economy, all of which have proven inefficient and wasteful. Going off in a million different directions chasing profits is still the best economic system. But setting and pushing in just a few key directions would be legitimate and unharmful like Pres KENNEDY's goal to put a man on the moon. He made great speeches, fired up the imaginations and efforts of his country and organised and funded the key projects and the result was success, new techs and a man on the moon.

16. While the capitalist system, as practised by America, underpinned by its freedoms, openness and transparency, and buttressed by its rule of law and orderly developments, all have resulted in unprecedented progress, all along, there have been poor and homeless people. Even as a small minority, they blight America's achievements and undermine its human rights record. Here, more must be done even if it means welfare cheques leading to higher taxes. Socialism or whatever it is called is just a label, a term. So is capitalism just a label or term. Pres OBAMA has the opportunity to define a new label or term and reconstruct an economy and a society that is fairer to all, put a roof over every head, food on every table, medical care for every sick, schooling for every child, care for every aged and handicapped. This will need great speeches, leadership, clear directions, unwavering commitment, sense of purpose, but even if only half could be achieved, Pres OBAMA will earn a high place in American history. There needs to be a Martin Luther KING and Pres Abe LINCOLN campaign for the poor, who no less deserve this drive than negro slaves deserved to be emancipated. A new Abolitionist effort is needed, an effort to abolish poverty. The Chinese word for "Crisis" is made up of "Danger" and "Opportunity". Pres OBAMA has an Opportunity like never before.


"AMERICA is an economic system,
organised around companies that are owned and funded by selling shares to many, while management is by professional managers, with fierce competition at every level among companies all striving for profits and growth in order to reward the shareholders so they continue to hold shares and others buy more,
underpinned by legislative and legal systems that enforce fair competition,
upon a bedrock of a rule of law, freedoms, openness and transparency that ensures an orderly practice of commerce and dispute resolutions,
such that this investors-company profit-based relationship has created much of the world we know, especially the recent world."

If the above quote is correct, and it is a fundamental truth that every American instinctively knows even if he cannot articulate it, then this may explain why the instinctive, immediate response to the developing crisis by both the BUSH and OBAMA administrations is to bail out banks and other companies. Not just because they are 'too big to fail' but more because THEY ARE THE HEART OF THE ENTIRE AMERICA. This owning of companies by many shareholders capitalising these professionally managed companies for dividends and share price growth, IS America. Economists have offered very different remedies to the crisis but this is not just an economic crisis. It is THE crisis of America -- the way it works, has always worked, its most basic assumptions, and its long success and triumphs, all define America so much so that no politician or President can act otherwise. Pres OBAMA may or may not succeed with the Stimulus, but he is as much trapped by the need to save something so fundamental that it is beyond politics, beyond everything else, as evidenced also by the behaviour of BUSH or any other member of Congress. Thus, the bailouts and the stimulus are an instinct, a reflex, and about as right or wrong as instinctive reflexes can be. If this is understood, then all debates within or across the aisles can then be more intelligent, because a better understanding of what is at stake, and what is really being proposed, for what is the real crisis, can then happen.