Friedman's thesis is that China's figured this out and is out to "clean America's clock" in the field of Environmental Technology (E.T.), while we are still dithering about whether to put up windmills at Cape Cod, or allow solar panels in historical landmark sites.
Yes, you might think that China is only interested in polluting its way to prosperity. That was once true, but it isn’t anymore. China is increasingly finding that it has to go green out of necessity because in too many places, its people can’t breathe, fish, swim, drive or even see because of pollution and climate change. Well, there is one thing we know about necessity: it is the mother of invention.Personally I almost don't care if China "beats us" in the E.T. business. They have a lot of reasons to do so - growing economy that needs energy, for one thing. If they can do this cleanly, then more power to them. I don't think saving the world should be a cause for competition. We're all in this together, and either we all win, or we all lose.
And that is what China is doing, innovating more and more energy efficiency and clean power systems. And when China starts to do that in a big way — when it starts to develop solar, wind, batteries, nuclear and energy efficiency technologies on its low-cost platform — watch out. You won’t just be buying your toys from China. You’ll be buying your energy future from China.
Nevertheless, I don't think we should be skurking in the shadows, arguing the small stuff, while they are leading the way. For one thing, if we made our own panels, then China could use the ones they produce in China to help cut back thei need for coal. And we have a lot of people looking for jobs who might as well be creating E.T. - People who have lost jobs in the old economy need jobs in the E.T. economy.
As Friedman writes,
And this is why I disagree with President Obama when he signals that he has to focus on extending health care and put the energy/climate bill — now in the Senate — on the backburner.Again, I disagree with the need to "dominate," because there is room for every bit of E.T. any one can produce, but obviously health care is linked to the environment in more ways than economics.
Health care and the energy/climate bill go together. We need both now. Imagine how poor we would be today if U.S. firms did not dominate the top 10 Internet companies. Well, if we don’t dominate the top 10 E.T. rankings, there is no way we are going to be able to afford decent health care for every American. No way.
I'm catching up on a big pile of magazines. I just read a column in last week's Time Magazine by Justin Fox, called Let Someone Else Buy. He thinks we should worry if what he calls the "BIC" nations (leaving Russia out of the usual BRIC acronym for Brazil, Russia, India and China) take up the slack while we learn to live within our means and they grow to meet us.
In fact, the U.S. might turn out to be more competitive. American dominance has in recent years been a mixed blessing. Many countries got addicted to selling to American consumers and poured capital into the U.S. to keep the buying going. These inflows kept the dollar strong, making life tough for U.S. exporters; they also saddled Americans with the unsustainable debt loads that led to the financial crisis. Now no one abroad is willing to lend to deadbeat American households, and the U.S. government has temporarily taken over as the world's chief borrower and spender. But as we've just learned from the example of the American consumer, one can't borrow and spend forever.I don't think Fox sees things as dire as Friedman. We have to let others come to the trough - as long as they clean up after themselves!
Sometime in the near future, then, the U.S. will have to start living within its means — or at least a lot closer to them than it currently does. To keep this new American frugality from battering the global economy even more than it's been battered, somebody has to pick up the resulting slack in demand. Europe and Japan have been hit harder by the downturn than the U.S. has, and they have aging, slow-growing populations unlikely to ignite consumer booms. That leaves the BICs as pretty much the only remaining candidates. These economies are still too small to take up all the slack: together their GDP amounts to less than half that of the U.S. But they are expanding rapidly. Yes, their ascent spells relative economic decline for the U.S. The faster it happens, though, the sooner a durable global economic recovery will get under way. Go BICs!