Reprinted with permission of the publisher, John Wiley & Sons, Inc., from Make It In America by Andrew N. Liveris. Copyright (c) 2011 John Wiley & Sons. All rights reserved.
By Andrew N. Liveris This isn't just an uncertain world. It's a volatile one. For years, the United States has been in transition from a manufacturing-based economy to a service-based economy. For years, we entrusted our growth to borrowing and consumerism. For years, we fueled our growth with debt, and with the idea that everything would be just fine. As we now know, it wasn't. Too many of us in business and government didn't see it coming. Even if we had concerns -- as I did and sometimes shared -- none of us imagined just how far, and how fast, we were about to fall. The financial crisis, the housing market collapse, the ensuing recession and credit crunch -- all these have caused no end of pain for individuals and businesses alike. But they aren't the fundamental problem. They're symptoms. The troubles of recent years have unmasked a reality that spent years lying dormant, hidden from public view: The United States no longer has an economic model that's sustainable. How can this be? Are things really that serious? After all, we are still the largest economy in the world. We still have a larger gross domestic product (GDP) than any country, and higher productivity than any country. And yet, as we reflect on these first decades of globalization, on what they have meant for the United States, we are left with the uneasy notion that we are losing ground we can't gain back. Our old sense of confidence, of certainty, is at low ebb. That's because we now understand that the free flow of capital in financial markets may create certain benefits, but also produces extraordinary volatility -- in raw materials, in final products -- requiring American businesses operating globally to contend with challenges on a scale unheard of before, and mostly unacknowledged in America's national conversation. This volatility has driven entire industries to relocate to the opposite side of the world. It is preventing companies from investing in the United States right when our economy most needs that investment. Recent policy decisions have eased some of the pain, mitigated some of the damage, but it seems no one's talking about a fundamental fix. Globalization has changed just about everything. In many places it has been a force for progress, but by its very nature, it is also a force of destabilization. It creates opportunities and, at the same time, considerable risk. It gives nations -- both developed countries and emerging economies -- the ability to prosper in ways we never could have imagined, but also creates new obstacles to growth. Here and elsewhere, globalization has upended old economic models, creating imbalance where order once reigned.