Innovation Ethic in Chapter 4 Of Perils Essay

Innovation Ethic

In Chapter 4 of Perils of Prosperity, John Sarno argues that American industry does not really have an innovation ethic, and as a result it has been very badly damaged by the system of global capitalism and free trade that the U.S. government created after World War II. They were not prepared for the intense foreign competition that began to hit them full force in the 1970s and 1980s. As a result, the social and economic conditions of most American workers have deteriorated over the last thirty years, and this was already clear before the latest recession. As Thomas Jefferson had always feared, the great barons of American industry had turned the country into a nation of employees, and had trained and educated many of them to be dependents and conformists rather than innovators, independent thinkers and creators. Knowledge-based forms now contribute 20% of overall GNP and 40% of real economic growth, and knowledge workers earn 40% more, but most American employees do not fall into this category (Sarno 123). Today and for the foreseeable future "occupations that increasingly require cognitive complexity will continue to pay the biggest rewards as other occupations will pay increasingly less," and the effects of this can be seen everywhere in the global economy (124).

In 1979-84, nearly eleven million manufacturing jobs were lost to foreign competition in the U.S. And these did not return but rather left large parts of the old manufacturing regions as a Rust Belt. Most of those who were made redundant did not find comparable work again, but ended up in the service sector or as freelancers and independent contractors. They do not have pensions or job security and half lack any type of health insurance. New developments in technology also made middle management redundant, leading to a 21% reduction in corporate officers in 2002-07 (125). For the 70% of U.S. workers who have less than a college education, wages and living standards have stagnated or declined over the last thirty years.Even for the educated, jobs are being outsourced to China and India, including research and development work that can be performed at lower cost in Asia. These countries also spend more proportionately on basic research than the U.S., which is lagging behind in many key areas (126). In short, the American economy that emerged from World War II, dominated by giant global corporations, was totally unprepared to compete in this New World Order.

In American manufacturing, most of the jobs were based on the Scientific Management of Frederick Taylor, which was very efficient and productive, but also created millions of dull, robot-like jobs. Under Fordism, managers expected "little in the way of creativity from rand and file employees," while most union members were content with job security and lifetime employment (130). In American history, the debate over how large-scale industry would affect democracy, independence and individual liberty went back to the 18th Century debates between Thomas Jefferson and Alexander Hamilton. George Washington privately opposed slavery and endorsed Hamilton's plans to industrialize the country, which both believed would gradually make slavery extinct and obsolete. Southerners believed this as well, which is why they formed their own party against the Federalists, and later their Whig and Republican successors, who kept attempting to pass the same plans whenever they controlled the White House. Since the majority of the population consisted of small farmers who had been hostile to the Constitution, Hamilton opposed democracy and would have preferred a Senate and President elected for life. He was hostile to the French Revolution, and always looked to Britain as an economic model and trading partner. As Treasury Secretary, he had the federal government assume all debts from the Revolutionary War, which he argued would promote trade and manufacturing, called for a protective tariff for industry and a new Bank of the United States modeled on the Bank of England.

Thomas Jefferson was completely opposed to all these plans until the day he died on July 4, 1826, and stated.....