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The Big Four

And that brings us to the core argument of this book. The end of the

Cold War, in fact, ushered in a new era that poses four major

challenges for America. These are: how to adapt to globalization,

how to adjust to

the information technology (IT) revolution, how to cope with the

large and soaring budget deficits stemming from the growing

demands on government at every level, and how to manage a world

of both rising energy consumption and rising climate threats. These

four challenges, and how we meet them, will define America’s

future.

The essence of globalization is the free movement of people,

goods, services, and capital across national borders. It expanded

dramatically because of the remarkable economic success of the

free-market economies of the West, states that traded and invested

heavily among themselves. Other countries, observing this success,

decided to follow the Western pattern. China, other countries in

East and Southeast Asia, India, Latin America, and formerly

communist Europe all entered the globalized economy. Americans

did not fully grasp the implications of globalization becoming—if

we can put it this way—even more global, in part because we

thought we had seen it all before.

All the talk about China is likely to give any American over the

age of forty a sense of déja vu. After all, we faced a similar challenge

from Japan in the 1980s. It ended with America still rising and

Japan declining. It is tempting to believe that China today is just a

big Japan.

Unfortunately for us, China and the expansion of globalization,

to which its remarkable growth is partly due, are far more

disruptive than that. Japan threatened one American city, Detroit,

and two American industries: cars and consumer electronics. China

—and globalization more broadly—challenges every town in

America and every industry. China, India, Brazil, Israel, Singapore,

Vietnam, Taiwan, Korea, Chile, and Switzerland (and the list could

go on and on) pose a huge challenge to America because of the

integration of computing, telecommunications, the World Wide

Web, and free markets.