The Art of Economic Warfare (Part 6): The Knowledge Economy Isn’t Very Knowledgeable

By | 2017-06-02T18:30:05+00:00 December 13, 2016|
Print Friendly, PDF & Email

download

Americans have been sold a bill of goods. Coastal elites keep telling them that they must abandon the blue collar jobs that created modern America and turn, instead, toward education, just as so many farmers of yesteryear abandoned the fields in favor of manufacturing jobs. (Although given all of the subsidies the United States government pays out to farmers, it’s not clear that the farmers who moved on to the city made the wise choice.)

But this is not an apples to apples comparison. Regardless of how potent the knowledge-based economy may become, the fact remains that even products created in a futuristic economy require someone to manufacture them. For example, what good is the Internet without a device with which to access it?

While the proponents of “free trade” are more than happy to accept that physical manufacturing will not go away, they are not so apt to admit that many things can be made in America. This is why, for instance, companies such as Apple design their amazing new gadgets in the United States, but outsource the manufacturing and production to China. We are told this is because Americans can no longer do efficiently the work that the Chinese can do.

If that were so, why did Apple CEO Tim Cook suddenly declare that he’s going to move some production away from China and back into the United States—something that the global free traders claimed was simply impossible? Because Donald Trump said he would impose costs on Apple (or any company) for abandoning America.

The orthodox free trade supporters insist that inventions such as 3D printers will further remove the need for manufacturing jobs. This may be true on some level. But who will build those 3D printers? What’s more, the technology they are speaking of is in its infancy with likely many more years—if not decades—of research and development ahead of it before these devices could completely replace what human workers can produce.

Also, this supposed knowledge-based economy has yet to come fully into fruition. Rather than shedding supposedly antiquated manufacturing jobs in favor of higher paying, more creative, “knowledge” jobs, what the majority of Americans got instead was a massive service economy.

Yet again, a handful of educated, bi-coastal elites were taking part in this exclusive global knowledge-based economy and benefited disproportionately from it. The rest of the country, meanwhile, either toils in the slums of those coastal metropolises, or they get along in the small towns across America, doing their best to keep a small business above water as the towns that once supported thriving communities slowly evaporate.

In many cases, those toiling away in the service sector were doing so just to pay for one semester of college—after all, how else could average Americans hope to have a shot at the endless opportunities of this exclusive knowledge economy without an overpriced degree?

But how can America transition from a mostly manufacturing economy to a “knowledge-based” one when America’s production of knowledge is so weak? Does anyone really think that America’s educational system is producing the kinds of innovators and thinkers necessary to maintain America’s economic dominance in this future knowledge-based global economy? Are we suddenly overrun with Steve Jobs clones?

No.

In fact, we’re being smothered by thoughtless social justice warriors who spent their time and money specializing in gender neutrality studies or some such. These people prove very useful in a globally competitive, “knowledge” economy, don’t they? I’m sure the Chinese and Indians are quaking in their boots at having to compete in the global marketplace against the greatly feared American SJWs!

It’s not that I oppose the creation of a knowledge economy, either. It’s that I don’t see any real commitment to creating the infrastructure necessary to building, maintaining, and expanding such an economy in the United States. What’s more, I am dubious of the concept that every American must or even can become a formally educated expert. Historically, a healthy society has a mixture of workers with varying types and degrees of skills.

The only thing that could make America the hub of a knowledge-based global economy would be true school reform; not “reform” of the kind that Leftists and the Democratic Party try to shove down America’s throat under the guise of school reform. I’m talking wholesale reform. But, even if such reform were a real political possibility, it could not come fast enough to provide alternatives for those affected by the jobs losses savaging the heartland of our country.

How many Americans have been told that they have to go to college? How many of those who do, end up with staggering debt and without employment that compensates at a rate high enough to cover their loan payments in addition to living expenses? Too many. Things will not change any time soon, either—not as long as the Left continues to enjoy its vice-grip on America’s education system.

The nomination of Betsy DeVos as education secretary is a great first step toward real reform, but I am dubious of the kinds of changes that she and President-elect Trump will be able to implement in four years (or even eight, for that matter). As Barry Rubin documents in his excellent book, The Silent Revolution: How the Left Rose to Political Power and Cultural Dominance, the Left has had almost 50 years to consolidate control over the nation’s education system. Leftists are highly entrenched and are usually protected by unflappable unions and cushy tenure.

Besides, how is it that states like China and India, who are making themselves more competitive in this new global economy, retain not only their knowledge base, but also their manufacturing base? Why can’t the United States do the same?

The argument that America must shed its manufacturing jobs with due haste, in order for more people to enjoy the fruits of the burgeoning knowledge economy is a sick joke perpetrated upon us by a global elite, which is merely seeking to justify poor public policy choices.

Spain and many other “forward-thinking” Western countries have tried to embrace such a New Age model. Look where it got them. When Spain embraced an education-heavy, “green jobs” economy, unemployment went through the roof and did not come back down until the government collapsed a few months back.

Moreover, Spanish entrepreneurial activity plummeted as more people sought safe (but highly competitive) government jobs. Not only were education and unemployment levels high, but so too were burdensome regulations. This, in turn, led to low economic activity which dragged the country down for years.

Throughout Europe and large parts of the United States, the knowledge economy has yet to come to fruition. What has happened has been the rise of a handful of elites getting wealthier as the world is made smaller, while the rest of us toil in multiple, low-paying service jobs.

Let’s bring America’s jobs back. Let’s protect the livelihood of many Americans and let’s rebuild America. Donald Trump’s economic policies will do just that. This is the Art of Economic Warfare, according to Donald Trump. It’s also how most other countries—even within the EU—conduct their economic policies.

About the Author:

Brandon J. Weichert
Brandon J. Weichert is a contributing editor to American Greatness. A former Republican Congressional staffer and national security expert, he also runs The Weichert Report, www.theweichertreport.com, an online journal of geopolitics. He holds Master's degree in Statecraft & National Security from the Institute of World Politics in Washington, D.C. He is also an Associate Member of New College at Oxford University and holds a B.A. in Political Science from DePaul University. He is currently completing a book on national security space policy due out next year.
  • Alpha

    The reality is that there will be excellent jobs for the highly educated but the proportion of the population who can succeed in those jobs is limited. It is limited not just because the US K-12 education system is an incredibly expensive failure full of feather-bedding and inefficiency, not just because our colleges are getting filled with less rigorous SJW ideologues incapable of doing basic office work let along creating the technology of the future but also because of the simple facts of human intellect. One might thing of IQ as a pretty appropriate estimate of the kind of linear logical, mathematical-symbolic intelligence needed to do technical work. The average IQ is about 100 for men and women. For the most part people with an IQ less than 115 do not do well in college at all. That is 85% of the population. The 15% with an IQ >115 at least have the basic mental tools to succeed. The idea that we will somehow have the other 85% suddenly doing college work is just impractical. So we need to have jobs that they can do, earn a living at, and have an independent life. The beauty of manufacturing is that because it is capital-intensive, one worker can generate a lot of product and is a small part of the cost of the manufacturing. Moreover manufacturing is highly focused work that people in that 85% who pay attention can master over time. It is a route to creating jobs that give that portion of the population a chance to live real and productive work lives. Right now US regulations are so over-the-top that they add $18,000 in regulatory compliance costs PER EMPLOYEE on average. This is nuts. Talk about a self-inflicted wound forcing manufacturing overseas.

    So while reform of K-12 and college education to increase their effectiveness in producing smart people capable of doing inpactful, intellectually challenging work is important – it is also important that we stop killing our domestic manufacturing companies and driving them overseas with excessive regulation, taxation etc. Domestic manufacture also has a multiplier effect creating jobs in shipping, warehousing, ports, drivers etc. Trump nailed this issue correctly.

    • The problem still will remain – no matter how good our ed system is, no matter how much mfg we return to the US, as we continue our progress, the problem will continue to increase: What do we do with those unable to compete in an information economy? What do we do with the dumb people?

      • Brandon Weichert

        I can tell you where Elon Musk stands: he wants universal, Basic Wage for the majority of people who are not capable of partaking in the glories of the Knowledge Econ. We are truly creating a world of few haves and many have-nots. This is not what America was supposed to be about.

        • Everett

          Elon Musk stands where the Government is handing out other people’s money. He is the master at positioning himself/his company in front of the spigot with his slimy hand out. If the government didn’t unwisely subsidize some things over others, Elon Musk would be washing dogs or cars for a living.

      • Alpha

        The first thing to note that people can be low IQ but have other skills. One thinks of the entertainers, models, athletes, fashion designers, artsy types, the people who are able to learn a trade and do lots of small businesses and keep themselves employed. Often the things require skills or physical abilities that have nothing to do with brains. I may be five standard deviations above my plumber in IQ but he knows more about plumbing than I do, has the interest in and aptitude for applied mechanical engineering and makes a nice living doing so. I think back to when I was doing a pretty sophisticated intellectual task and at the time moonlighting getting $30 an hour – which was good money in those days – and paying my foreign car mechanic $75 an hour to work on my pet sports car.

        The second thing is that lower IQ does not mean people cannot think, it means they take a longer time and often need more concrete explanation to get to understand a concept that a smarter person would get more quickly. But once you know 2+2 = 4 you know it as well as someone who got it immediately. I think there is a lot that can be done to develop computerized software

        The third thing is that there are all sorts of human services that take time that people whose capacities make their time more valuable can hire people to do for them – everything from nail salons to personal shoppers to masseurs or a thousand other type skills.

        Milton Friedman, many years ago, proposed a different solution called the negative income tax. The idea was to eliminate all the public programs – welfare, food stamps, all the give aways and with their elimination remove the enormous bureaucracies that administered them – and to replace them through the most efficient (satire) organ of government, the IRS, and to just set a minimum income for each American at some rational sum – say $30K/year. The idea is that if you earned less than that the feds would support you up to $30K. If you earned more you paid little taxes until you hit the median income then the taxes gradually escalated to some reasonable rate (since you did not want to discourage work). If push comes to shove, while I dislike the concept of people living off the work of others, this could be an easy solution. Obviously there could be bells and whistles – e.g. for the basic money you had to do some work assigned to you but in general this would require a bureaucracy to administer and would probably not be worth it.

      • Gassius Maximus

        Scipio, I think you would do well to listen to Trump on this kind of issue. He has said many times that America’s workers, and he doesn’t call them “dumb” have skills, lots of skills and many of them unique skills especially as they are lost and not replaced. By having vocational training, master craftsman, etc. who can bring along younger people and teach them the ropes (this was what the unions should have been doing instead of feathering “their” nests), America would have the ability to meet any need in the future.

        One thing that has corrupted American thinking is “Cheap.” To many think cheap is good and are not willing to buy quality. Americans can make the best products in the world and I see it around the world. Other countries make talk the talk, but the truth is in the pudding. Their quality sucks. Their take on capitalism sucks. They, like China, have taken some Capitalist ideas and perverted them in ways only communists could while claiming to have adopted free trade. Ha!

        So in answer to your question “What do we do with the dumb people?” like yourself? I say, slap them upside the head and knock some sense into them.

        Don’t be so damn elitist in your opinions just because you went to college or you have an IQ higher than 115. Don’t wave that around like some kind of trophy. Use it to do some good. Be a leader like Trump.

  • “When I was a kid…” back in 1966-1969 I attended Jr High in Pasadena, CA. In 7th Grade all the boys took “Shop.” A quarter each of Wood shop, Metal shop, Drafting and Graphic Arts. All the girls took Home Ec. Then Women’s Lib hit and it was sexist to have this division. Rather than making both (there are only two) genders take HomeEc and Shop, they cancelled all the shop and HomeEc courses. Now few can run a saw or a soldering iron, or run the updated version of Graphic Arts (Photoshop or AutoCAD, etc), and no one is taught how to make healthy meals based on nutrition guidelines, shop for food inexpensively, etc. And – we’re all worried about obesity.. Hmmm… In ALL of my school years, from K-12, we had “Gym.” In gym in secondary school (7-12), we had to dress-out, compete, and shower. Does anyone shower in gym anymore? Nope. Do you think adolescents trying to learn to pickup girls, or be picked up by boys, will exercise hard enough to sweat if they aren’t planning to / forced to shower? Nope….. and – we’re all worried about obesity.

    Essentially, the counter-culture Left destroyed Shop, HomeEc and Gym – and is surprised by the results. I’m not – are you?

  • Everett

    The Globalists have almost pulled of a grand deception: that because advancing technology reduces some types of jobs, or changes what jobs need to be done–that some jobs (tech or white collar) should stay in the USA, while other jobs should be done (less expensively) elsewhere. This is unnecessary and unwise as well as being not true. All the jobs can be done here in the USA. All the jobs can be done in India. All the jobs can be done in Mexico. Etc. The Value or Cost of Capital to produce anything (including the Capital Labor, the Capital Dollars, the Capital raw materials, doesn’t change due to geography, it changes due to management or allocation of the Capital. It costs just as much or just as little Labor Capital to install a widget in Podunk as it does in WangTang.

  • Alpha

    The irony is that prospering in “the knowledge economy” requires people who are educated, smart, hard-working, creative people. But what does it take to be educated, smart, hard-working and creative. We have demonstrated that tripling expenditures in real time per capital in the schools has done NOTHING to improve performance – so it is not about money. We know that the public school systems, consumed by bureaucracy, protection of incompetence, and unionization has some examples of performance – almost all resulting from charismatic leaders driven to excellence – and a norm of poor performance and that private schools have in general better performance but also quite inconsistent. What we know best is that people coming from intact homes conveying strong education oriented values, a focus on performance and excellence, of self-discipline, with strong parental support generally do well educationally pretty much regardless of the strengths or weaknesses of the school system. If we actually want to remedy the problem while fixing the bureaucracy, featherbedding and protection of incompetence in the school systems and making them accountable is necessary, it is not sufficient to actually fix the problem. What we need is to upgrade the quality of parenting and the values of performance, self-discipline, excellence and parental support. Yet as the culture itself disintegrates into very high rates of unwed Motherhoods, Fatherless families, and a celebration of feelings without thought or knowledge we are moving the opposite of what we need to do to actually prosper in the knowledge economy. Until this is fixed, the whole idea of a nation prospering solely on a knowledge economy is an illusion.