> OP-ED COLUMNIST > Editorial Desk; SECTA > The Cognitive Age > By DAVID BROOKS > 2 May 2008 > The New York Times <javascript:void(0)> > If you go into a good library, you will find thousands of books on > globalization. Some will laud it. Some will warn about its dangers. > But they'll agree that globalization is the chief process driving our > age. Our lives are being transformed by the increasing movement of > goods, people and capital across borders. > The globalization paradigm has led, in the political arena, to a > certain historical narrative: There were once nation-states like the > U.S. and the European powers, whose economies could be secured within > borders. But now capital flows freely. Technology has leveled the > playing field. Competition is global and fierce. > New dynamos like India and China threaten American dominance thanks to > their cheap labor and manipulated currencies. Now, everything is made > abroad. American manufacturing is in decline. The rest of the economy > is threatened. > Hillary Clinton summarized the narrative this week: ''They came for > the steel companies and nobody said anything. They came for the auto > companies and nobody said anything. They came for the office > companies, people who did white-collar service jobs, and no one said > anything. And they came for the professional jobs that could be > outsourced, and nobody said anything.'' > The globalization paradigm has turned out to be very convenient for > politicians. It allows them to blame foreigners for economic woes. It > allows them to pretend that by rewriting trade deals, they can assuage > economic anxiety. It allows them to treat economic and social change > as a great mercantilist competition, with various teams competing for > global supremacy, and with politicians starring as the commanding > generals. > But there's a problem with the way the globalization paradigm has > evolved. It doesn't really explain most of what is happening in the > world. > Globalization is real and important. It's just not the central force > driving economic change. Some Americans have seen their jobs shipped > overseas, but global competition has accounted for a small share of > job creation and destruction over the past few decades. Capital does > indeed flow around the world. But as Pankaj Ghemawat of the Harvard > Business School has observed, 90 percent of fixed investment around > the world is domestic. Companies open plants overseas, but that's > mainly so their production facilities can be close to local markets. > Nor is the globalization paradigm even accurate when applied to > manufacturing. Instead of fleeing to Asia, U.S. manufacturing output > is up over recent decades. As Thomas Duesterberg of Manufacturers > Alliance/MAPI, a research firm, has pointed out, the U.S.'s share of > global manufacturing output has actually increased slightly since > 1980. > The chief force reshaping manufacturing is technological change > (hastened by competition with other companies in Canada, Germany or > down the street). Thanks to innovation, manufacturing productivity has > doubled over two decades. Employers now require fewer but more highly > skilled workers. Technological change affects China just as it does > the America. William Overholt of the RAND Corporation > <javscript:void(0)> has noted that between 1994 and 2004 the Chinese > shed 25 million manufacturing jobs, 10 times more than the U.S. > The central process driving this is not globalization. It's the skills > revolution. We're moving into a more demanding cognitive age. In order > to thrive, people are compelled to become better at absorbing, > processing and combining information. This is happening in localized > and globalized sectors, and it would be happening even if you tore up > every free trade deal ever inked. > The globalization paradigm emphasizes the fact that information can > now travel 15,000 miles in an instant. But the most important part of > information's journey is the last few inches -- the space between a > person's eyes or ears and the various regions of the brain. Does the > individual have the capacity to understand the information? Does he or > she have the training to exploit it? Are there cultural assumptions > that distort the way it is perceived? > The globalization paradigm leads people to see economic development as > a form of foreign policy, as a grand competition between nations and > civilizations. These abstractions, called ''the Chinese'' or ''the > Indians,'' are doing this or that. But the cognitive age paradigm > emphasizes psychology, culture and pedagogy -- the specific processes > that foster learning. It emphasizes that different societies are being > stressed in similar ways by increased demands on human capital. If you > understand that you are living at the beginning of a cognitive age, > you're focusing on the real source of prosperity and understand that > your anxiety is not being caused by a foreigner. > It's not that globalization and the skills revolution are > contradictory processes. But which paradigm you embrace determines > which facts and remedies you emphasize. Politicians, especially > Democratic ones, have fallen in love with the globalization paradigm. > It's time to move beyond it. > ====================================
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