Creative Class

I had a great chat with Dan Gross, one of my favorite economics correspondents, last week about resets and American adaptive capabilities. Dan wrote a terrific Newsweek story and we got to team up for a nice segment on Newsweek Radio 9.

“We are the most adaptive, inventive nation, and have proven quite resilient,” says Richard Florida, sociologist and author of The Great Reset: How New Ways of Living and Working Drive Post-Crash Prosperity. If these impulses are embraced more systematically and wholeheartedly, the U.S. can remain an economic superpower well into the current century.

One thing that struck me was how my working-class father instinctively understood the power of America’s capacity to rebound and reset its economy and society. Here is how I described his words in my book Flight of the Creative Class:

As a young teenager he went to work to help his family during the Great Depression, an infantry solider who enlisted in the Army the day after Pearl Harbor, landed on Normandy, and fought in all the major battles of World War II, and a man who spent his life in manufacturing, he would always say: “Richard, no one should ever – never, never – count this country out.  When I enlisted in the Army, we had nothing. They gave us doughboy hats and old uniforms, our boots often did not fit. There weren’t enough guns to go around in training, so we used wooden facsimiles.  But, boy, did we gear up.  I saw it as soon as I got over there.”  My father who was always afraid of the water would often interject his own personal D-Day story. “Richard,” he would say, “the Germans didn’t scare me, the water did, so I made the ship-to-shore boat driver pull up right on the beach to let me out.”

He would continue, the pride of a D-Day veteran in his eyes: “We all had heard about the technological prowess of the Germans. Their guns were incredible – the Lugers, the machine guns, their fighter planes and tanks – works of technology and of art.”  But, he continued, “You should have seen how we mobilized. Our guns might not have been so state-of-the-art and fancy, a little bit clunky. But they worked and there were lots of them.  Whoever we could get to take over the factories – old people, women, whoever – we kept churning out what was necessary. Guns, ammunition, planes, tanks, support trucks – we never ran out of anything. We turned this country on a dime and built an incredible production machine. That’s why we won.” And he would end, “I think when the Germans—their soldiers and the officers—saw this stuff coming and coming and coming, on and on, without end, they just got demoralized.”

I recalled his words often in the late 1980s, when, as a young professor, I would visit Japan to discuss the manufacturing competition then bracing the world economy.  At the time, I was the studying the increasing prowess of the Japanese manufacturing system and its apparent ability to be transplanted in the United States and around the world – the gleaming new automotive assembly plants and steel rolling mils that were revitalizing our American Midwest. My Japanese hosts, ever polite, would always interject at the end of my remarks.

“Professor Florida,” they would say, “isn’t it so sad what has happened to your country? You were once the envy of the manufacturing world, with your great automotive assembly in Detroit and the towering steel mills of Pittsburgh. We made pilgrimages there to study and learn from you. We studied at the feet of your quality guru, Edward Deming, and others.  But now your factories are falling apart—the technology is low, their productivity poor, and quality truly suffers. We want to help you now. We are building new plants and restoring old ones in your country, to give back to you, the country that taught us so much.”

I would recall my father’s pride and struggle to hold back my own emotion, retorting as politely as possible: “I think it would be a mistake to write the United States off.  We’ve had some tough times, yes.  Your manufacturing system and great factories are now the envy of the world.  But my father, a veteran and a manufacturing expert, always reminded me of America’s skill at bouncing back – it’s amazing ability to transform itself and to turn on a dime. Remember how we rebuilt our economy after the Great Depression. Remember how quickly we mobilized for war.  Never, ever count this country out.  It’s most impressive and constant trait is its willingness to remake itself for new times.”  Sure enough, the 1990s witnessed the high-tech boom and the amazing recovery of the U.S. economy; even as this happened, the Japanese economy mired in recession.

Can we do it again? I agree with Dan that this kind of adapabiity and resilience is a fundamental American advantage. But the time scale is longer than most of us would like to think. Looking back at the previous two economic crises – the Long Depression of the late 19th century and the Great Depression of the 1930s in The Great Reset - I note that the time scale for this kind of resetting process is roughly two to three decades… the better part of a generation. We certainly have better technologies and tools of economic management today, so perhaps we can reduce the adjustment period to a decade or so. Still this strikes me as longer than most people think. Resets don’t happen all at once. They are the products of thousands upon thousands of individual adjustments by firms, governments, and individuals.

This entry was posted on Monday, April 12th, 2010 at 9:00 am and is filed under The Great Reset. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.