Pie in the Sky Thinking Diverts Us from Confronting the Nation’s Economic Problems Effectively — Influential New York Times Columnist Thomas Friedman’s Idea that “Average Is Over” Is Wrong in Principle and Implied Plan

27 January 2012

Shallow thinking is one of the United States’ major economic and political problems — but thoughtlessness is often not obvious, and its resulting brainlessness creeps harmfully into our policies

Here, I criticize Thomas Friedman’s idea (about overcoming economic “averageness”) to demonstrate how shallow thinking leads to self-destructive American economic and social policies.

I pick on Mr. Friedman because he is generally smart, persuasive, and influential. When he occasionally displays clay feet, the rest of us need to pay attention to our own such. A bunch of clay-footed leaders is not what the United States needs today.

What follows is an exercise in analytical thinking. Some will enjoy it. Others not. But the reasoning matters.

Do people really get paid to write this kind of economic nonsense?

Thomas Friedman’s abundant enthusiasm sometimes results in subtly silly ideas that emphatically should not be the basis for economic policy.

Here is an example:

In the past, workers with average skills, doing an average job, could earn an average lifestyle. But, today, average is officially over.

Being average just won’t earn you what it used to. It can’t when so many more employers have so much more access to so much more above average cheap foreign labor, cheap robotics, cheap software, cheap automation and cheap genius.

Therefore, everyone needs to find their extra — their unique value contribution that makes them stand out in whatever is their field of employment. Average is over.

“So what’s wrong with Tom’s idea, Pete? — It seems accurate and inspirational to me”

Two comments:

Friedman’s description of the impact of globalization is correct.

His solution for Americans is unworkable, even silly — though the reason for that mistake is not at all obvious, and that is why I’m writing about it.

Mathematical reality refutes Mr. Friedman’s statement that “average is over.”

This is easiest to see graphically. Normal (also called Gaussian) distributions show how individuals (or events) within populations plot along an axis that describes a spectrum of whatever trait the graph-maker is examining.

For human populations, the graph is almost always bell-shaped, hence the expression, “bell-shaped curve.” This is because most examples of anything statistically fall around what we can loosely call an average. That average is (usually) going to fall inside the bulging high point of the curve’s bell shape.

So the reality is that most of us are average, or near-average, in most things.

Note

Notice the subtle effect of language here.

“Average” sounds humbling, when we’re talking about talent.

But “normal” sounds pretty good, when we’re thinking about most other human characteristics, especially health.

Society’s leaders need to recognize that economic policy has to address the fact that most of us are average.

Mr. Friedman’s statement hides this truth by implying that we can suddenly “un-average” ourselves by discovering some previously hidden, but economically valuable ability.

That’s certainly true for be a small minority of people. But the bell curve indicates that it is almost certainly not going to be true for the bulk of the rest of us. The bulk of the rest of us make up the majority of American society.

Therefore, if we intend to aim at creating an economically just society, we have to cope with the fact that the United States is comprised of mostly average people with mostly average economic abilities.

“Un-averaging” ourselves on an individual basis is not going to miraculously result in a suddenly competitive overall American economy. That’s pie in the sky thinking.

The problem with poorly chosen rhetorical flourishes? — They’re often believable, but damaging, when it comes to actually making policy

Stupidity is generally characterized by either (a) an inability to think analytically or (b) an inability to face facts.

Mr. Friedman’s statement about “average is over” exhibits both flaws.

Note

Of course, I know that Tom Friedman knows better than this. And I recognize that he chose his title and theme for its attention-getting rhetorical impact.

But these attention-getting shortcuts are exactly why I’m criticizing his approach. Reality-ignoring rhetoric has taken over American political and economic thinking. The balloon needs to be deflated.

We learn nothing and travel aimlessly, when we let absurdities define our choices.

Could Friedman’s idea work? — Not in the individually-focused way he thinks

Thomas Friedman seems to think that we can boost our economic performances by finding our individually unique (and superior) talent for doing something monetarily rewarding in the global context.

But that’s silly, when evaluated as a workable economic policy. How many people do you know, even when financially pressed, who have monetarily rewardable bits of genius lurking around in their psyche or their hands?

Individuals, left to their own devices, will continue to fall at the “norm,” when assessed for elements of talent and motivation.

Could we modify “Average Is Over,” so that it might work?

Hypothetically, one could move part of the bell curve’s bulge (our U.S. average) upward, as compared to other nations, by:

(a) emphasizing group and community economic efforts,

as opposed to

(b) the almost purely individual and entrepreneurial emphasis that we so thoughtlessly indulge today.

In this shift, our emphasis would be on:

(1) choosing a wisely winnowed set of economic sectors (a) in which we wish to compete or (b) that are necessary to our national security;

(2) selecting a range of corresponding skills and abilities that will nurture success in these chosen economic sectors;

and

(3) incentivizing and/or subsidizing this industrial core, and its workers’ training, so as to achieve our social and economic goals.

Recognize this “moving the average” idea? — It’s Germany’s paradigm

Germany has consistently emphasized the need to keep its skilled (and well-paid) manufacturing sector alive, even in the face of competition from much lower wage-paying nations.

Germany focuses on beneficial community, rather than on unrestrained individualism. It modifies the unregulated free and chaotic market approach — which favors the Plutocrats, who are sending American jobs and economic worth overseas — to one that involves consensual planning and community efforts that benefit Germany and its citizens.

The German model treats capital, labor, and government as equally important economic contributors. And it emphasizes the social responsibilities that economics should partially serve.

All of this is in dramatic contrast to America’s chaotic “everybody for himself” philosophy.

Note

You might notice, if you think about it, that the two economic models that are kicking America’s economic “behind” today are both significantly more community oriented than the United States — Germany and China.

Because one is democratic and wealthy and the other authoritarian and poor, we can hypothesize that it is the shared community focus that accounts for at least part of these nations’ economic success.

Another subtle and damaging flaw in Mr. Friedman’s idea — haphazardness

Economic power comes from the interrelationship of contributing manufacturing streams. It does not come from random individuals haphazardly discovering their “above average,” but un-integratable talents.

Because the United States is constantly losing its manufacturing base, Friedman’s emphasis on individuals bettering themselves by finding salable unique-nesses misses the primary economic point. The infrastructure that could use these skills, whatever they might be, is fading or already gone.

And that, instead, is where our focus should be. We need to rebuild the United States’ industrial base.

Two premises — industrial clustering builds synergy and innovation

A handful of experts are beginning to rediscover that:

(1) Viable industry depends on the synergies created by the geographic adjacency of clusters of complementing and mutually supporting businesses.

(2) Remunerative innovation depends on the same thing.

With the alluring advent of globalization, neither proposition was theoretically obvious.

But facts, as they often do, are clarifying the geographic and cultural realities that these premises point toward.

Premise 1 — the economic importance of industrial clustering

Economist Paul Krugma recently said, “Prosperity depends on the synergy between companies, on the cluster, not the individual entrepreneur.”

Apple manufacturers in China in large part because its supply chain is there and it exists in geographically clustered proximity:

[T]he advantages of industrial clusters — in which producers, specialized suppliers, and workers huddle together to their mutual benefit — have been a running theme since the 19th century.

Germany remains a highly successful exporter even with workers who cost, on average, $44 an hour — much more than the average cost of American workers. And this success has a lot to do with the support its small and medium-sized companies — the famed Mittelstand — provide to each other via shared suppliers and the maintenance of a skilled work force.

In this regard, telling individuals to take responsibility for being “above average” — as Friedman does — is not going to address the problem of how to integrate their miraculously discovered individual excellences into domestic American industrial clusters that have vanished.

Premise 2 — successful innovation depends on the manufacturing base that uses and refines it

I addressed the impossibility of wide-spread innovation, without a diverse manufacturing base to support and drive it, here.

In sum, American economic policy (or lack of it) damages our ability to carry out both premises

America’s unconstrained free market/rampant individualism approach has badly damaged (a) our ability to innovate and (b) our ability to manufacture what we still are able to innovate.

Thomas Friedman’s “move your personal average upward” does nothing to fix this. I may move my average all I want, but unless there is an industry to recognize and use my skills, the effort will benefit neither the nation nor me.

The moral? — Thomas Friedman’s “Average is Over” is wrong in principle and implied plan

Thoughtless pie-n-the-sky rhetoric gets us nowhere.

PeteFree.com

Pie in the Sky Thinking Diverts Us from Confronting the Nation’s Economic Problems Effectively — Influential New York Times Columnist Thomas Friedman’s Idea that “Average Is Over” Is Wrong in Principle and Implied Plan