In response to my post taking issue with hints of economic nationalism in Obama’s speech, Quincy Adams rightly notes that Obama’s points make a lot of sense if treated a bit metaphorically. Taxes, regulation, education, R & D and other policies “make a real difference in the competitive position of various industries” and play a key role in “establishing conditions where effective competition can occur.” This must be right.
But note who’s doing the competing in this story: industries (or, implicitly, individual companies, or workers). Quincy cites Michael Porter’s Competitive Advantage of Nations, but that book’s title–not the book itself, which as far as I could tell was very good–was taken to task at the time for its hidden assumption that a nation can have such a thing as competitive advantage. One worker can out-compete another for a job; one company can out-compete another by selling goods or services more profitably. Whole countries don’t compete as such. They don’t face unemployment; they don’t declare bankruptcy; they don’t have stock splits.
The distinction may seem purely verbal, but with political rhetoric, as with other coordination games, pure verbiage matters. I have no doubt, or not much, that Obama sees his goal as improving the wealth and security of American individuals (with, by the way, no necessary disadvantage to the rest of the world: this isn’t a zero-sum game). But my worry is that too many Americans, thinking less clearly than Quincy, will take home the message that nations are in a game to produce the most “made by us” stickers, and that the country that ends up with the most gleaming factories, wins. And I would be less worried if I didn’t believe that deliberately confusing the two things were a winning political strategy.