At *Foreign Affairs*, [Amy Zegart](https://www.hoover.org/profiles/amy-zegart) argues that the sources of power in modern geopolitics have shifted from tangible to intangible resources — not least, software, brainpower, and artificial intelligence. As she writes:
>These assets are difficult for governments to control once they are “in the wild” because of their intangible nature and the ease with which they spread across sectors and countries. U.S. officials, for example, cannot insist that an adversary return an algorithm to the United States the way the [George W. Bush administration](https://www.foreignaffairs.com/topics/gw-bush-administration) demanded the return of a U.S. spy plane that crash-landed on Hainan Island after a Chinese pilot collided with it in 2001. Nor can they ask a Chinese bioengineer to give back the knowledge gained from postdoctoral research in the United States. Knowledge is the ultimate portable weapon.
Against this backdrop, Zegart argues that “many of the U.S. government’s capabilities are deteriorating. Its traditional foreign policy tools have withered: confirming presidential appointments has become so fraught that at least a quarter of key foreign policy positions sat vacant halfway through the first terms of the last three U.S. presidents.”
Overall Zegart stresses the importance of education and innovation in maintaining American power.
She also suggests that, “The gravitational pull of the private sector is bolstering short-term innovation and economic benefits, but it is also draining the sources of future innovation.”
Do you agree with this claim about the opportunity cost (to the country) of private sector work? Why or why not?
I just finished an old book by a man named Clyde Prestowitz called *Three Billion New Capitalists*. It was written in 2006, one year after Thomas Friedman’s *The World is Flat*. The best books are old books, because you get to judge them for what they got right and what they got wrong. Prestowitz felt that world wasn’t so much flat as it was tilted, and unfortunately it wasn’t tilted in America’s favor.
Clyde Prestowitz helped negotiate the Plaza Accords with Japan for America. He begins the book narrating a firsthand account of landing in Beijing and negotiating with Deng Xiaoping to open up China’s economy. He then relays an anecdote of traveling to an Intel facility in Bangalore, India in the early 00s and stepping into an office of 1,800 Indian PhDs in Electrical Engineering all helping to design the latest cutting edge semiconductors of the time. He notes that Intel’s management at the time was complaining that America simply didn’t produce enough talent in this sector for the work to be done domestically.
Prestowitz’s point in the book was that between 1978 and 1991 with the collapse of the Soviet Union, 3 billion new workers entered the global economy at the same time when previously the global economy was largely only made up of America, Western Europe, and Japan.
He felt that the entrance of both China and India was particularly important because even though maybe only 1% of their population was as educated and skilled as the West’s high end workers, in aggregate that 1% was enough to compete with entire first world nations. This, combined with both countries’ huge pools of cheap labor meant that for international conglomerates the temptation to outsource production and labor to these countries was irresistible. Either they did so or they fell behind.
The subtitle to his book was *The Great Shift of Wealth and Power to the East*. By the middle of the 21st Century, China and India would emerge as two of the largest economies on earth because of this phenomenon. Prestowitz argues that Americans are largely complacent about their central role in the global economy and that they aren’t as ‘hungry’ as the Chinese or the Indians, both of whom revere education a great deal more than the Americans do. Instead, America’s economy is constructed around consuming things the rest of the world makes while exporting dollars. Eventually this would become unsustainable.
My point is: nothing in this article is new. It’s a truth that is as old as the Iraq War. Yet nothing has been done about it.
2 comments
At *Foreign Affairs*, [Amy Zegart](https://www.hoover.org/profiles/amy-zegart) argues that the sources of power in modern geopolitics have shifted from tangible to intangible resources — not least, software, brainpower, and artificial intelligence. As she writes:
>These assets are difficult for governments to control once they are “in the wild” because of their intangible nature and the ease with which they spread across sectors and countries. U.S. officials, for example, cannot insist that an adversary return an algorithm to the United States the way the [George W. Bush administration](https://www.foreignaffairs.com/topics/gw-bush-administration) demanded the return of a U.S. spy plane that crash-landed on Hainan Island after a Chinese pilot collided with it in 2001. Nor can they ask a Chinese bioengineer to give back the knowledge gained from postdoctoral research in the United States. Knowledge is the ultimate portable weapon.
Against this backdrop, Zegart argues that “many of the U.S. government’s capabilities are deteriorating. Its traditional foreign policy tools have withered: confirming presidential appointments has become so fraught that at least a quarter of key foreign policy positions sat vacant halfway through the first terms of the last three U.S. presidents.”
Overall Zegart stresses the importance of education and innovation in maintaining American power.
She also suggests that, “The gravitational pull of the private sector is bolstering short-term innovation and economic benefits, but it is also draining the sources of future innovation.”
Do you agree with this claim about the opportunity cost (to the country) of private sector work? Why or why not?
I just finished an old book by a man named Clyde Prestowitz called *Three Billion New Capitalists*. It was written in 2006, one year after Thomas Friedman’s *The World is Flat*. The best books are old books, because you get to judge them for what they got right and what they got wrong. Prestowitz felt that world wasn’t so much flat as it was tilted, and unfortunately it wasn’t tilted in America’s favor.
Clyde Prestowitz helped negotiate the Plaza Accords with Japan for America. He begins the book narrating a firsthand account of landing in Beijing and negotiating with Deng Xiaoping to open up China’s economy. He then relays an anecdote of traveling to an Intel facility in Bangalore, India in the early 00s and stepping into an office of 1,800 Indian PhDs in Electrical Engineering all helping to design the latest cutting edge semiconductors of the time. He notes that Intel’s management at the time was complaining that America simply didn’t produce enough talent in this sector for the work to be done domestically.
Prestowitz’s point in the book was that between 1978 and 1991 with the collapse of the Soviet Union, 3 billion new workers entered the global economy at the same time when previously the global economy was largely only made up of America, Western Europe, and Japan.
He felt that the entrance of both China and India was particularly important because even though maybe only 1% of their population was as educated and skilled as the West’s high end workers, in aggregate that 1% was enough to compete with entire first world nations. This, combined with both countries’ huge pools of cheap labor meant that for international conglomerates the temptation to outsource production and labor to these countries was irresistible. Either they did so or they fell behind.
The subtitle to his book was *The Great Shift of Wealth and Power to the East*. By the middle of the 21st Century, China and India would emerge as two of the largest economies on earth because of this phenomenon. Prestowitz argues that Americans are largely complacent about their central role in the global economy and that they aren’t as ‘hungry’ as the Chinese or the Indians, both of whom revere education a great deal more than the Americans do. Instead, America’s economy is constructed around consuming things the rest of the world makes while exporting dollars. Eventually this would become unsustainable.
My point is: nothing in this article is new. It’s a truth that is as old as the Iraq War. Yet nothing has been done about it.