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Wednesday, February 6, 2013

More Thoughts on a Defensive Mindset

My op-ed in the Washington Post on 3 Feb was generally very well received. It has now been reprinted in multiple papers in multiple countries including my own hometown of Cleveland, the Stars and Stripes, as well as places as far-flung as Japan, Malaysia, and Qatar. Crafting an argument in under 800 words is no small task and given some of the commentary I've clearly left some ambiguity in what I meant. That being said, this was hopefully more of a conversation-starter piece than a solution to all that ills us.
Critically, I was not arguing–as some have interpreted–about the opportunity costs of defense spending nor arguing that defense spending is crowding out other sectors to make for a serious drain on our economy. While I do believe that we could spend less, more intelligently, and find greater return on investment, I don’t believe that a reduction in defense spending is the key issue.
Instead, I’m arguing that a defensive mindset has permeated our culture and discourse. As such, instead of leading and taking advantage of change, we are afraid of it. What is more, this mindset makes us paranoid and pessimistic, impairing the sort of bold investments and initiatives that make business and society great. We complain of short term outlooks in our corporations, for example. Part of this is due to the tyranny of the investors in public corporations and the concomitant short term outlook based on quarterly statements, but part of it also is due to pessimism and fear of change.
Infrastructure and educational spending is not a panacea. I’m not arguing for a massive state-led focus on projects such as high-speed rail, but many of our cities and the businesses and workers therein are facing real losses due to poor and underprovided infrastructure. Likewise, while we are pumping out college graduates, for example, these graduates are not necessarily suited to the jobs that are available. Same for high school and technical school grads. Businesses again are facing real losses due to the mismatch of educational programs to skills required and the dearth of specifically skilled workers. We need to revamp these institutions. And while I said "invest" in them, I more properly should have said "invest rationally" in them. We spend a great deal on education (as an aside, we also spend a great deal on healthcare) and we do not get the return on investment we should in either field. We need to reexamine the distortions in our markets and continue to invest, but invest smartly.
Many of our illogical and inefficient investments come because specific interests have distorted markets. A pessimistic and defensive outlook prohibits the consensus and cooperation needed to provide the public goods that underpin our economy. You need to believe in a better future to invest in it, whether in public goods or in specific corporate projects. If you don't believe in a better future, it makes more sense to ensure that investment disproportionately benefits your interests. While human nature tends to make people want to profit ahead of others, this is especially the case when we don't believe a more general investment will pay off. 
I am arguing that our last decade of war, coupled with the economic crisis which I couldn’t discuss in a short op-ed, has made us incredibly defensive and pessimistic and that we absolutely have to change that mindset if we are to lead again, invest in our future, and ensure that the bases of our liberal state and capitalist economy are properly tended. I argue this at much greater length and nuance in my new book, War, Welfare & Democracy: Rethinking America’s Quest for the End of History.
I hope this helped to flesh out my argument a bit and I hope people can find something to build on in it.

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