His [Cowen's] work leaves the impression that there are two interrelated American economies. On the one hand, there is the globalized tradable sector — companies that have to compete with everybody everywhere. These companies, with the sword of foreign competition hanging over them, have become relentlessly dynamic and very (sometimes brutally) efficient.
On the other hand, there is a large sector of the economy that does not face this global competition — health care, education and government. Leaders in this economy try to improve productivity and use new technologies, but they are not compelled by do-or-die pressure, and their pace of change is slower.
A rift is opening up. The first, globalized sector is producing a lot of the productivity gains, but it is not producing a lot of the jobs. The second more protected sector is producing more jobs, but not as many productivity gains. The hypercompetitive globalized economy generates enormous profits, while the second, less tradable economy is where more Americans actually live.
In politics, we are beginning to see conflicts between those who live in Economy I and those who live in Economy II. Republicans often live in and love the efficient globalized sector and believe it should be a model for the entire society. They want to use private health care markets and choice-oriented education reforms to make society as dynamic, creative and efficient as Economy I.
Democrats are more likely to live in and respect the values of the second sector. They emphasize the destructive side of Economy I streamlining — the huge profits at the top and the stagnant wages at the middle. They want to tamp down some of the streamlining in the global economy sector and protect health care, education and government from its remorseless logic.First of all, I'm not really interested in exploring the elephant-vs-donkey aspect of Brooks' column.
But I'm really struck by how this explains many of the great divisions within the American Chemical Society and its members. The big issues (open-access, #chemjobs, immigration lobbying, climate change and the leadership of ACS and the editorial direction of its flagship newsweekly (C&EN)) can all be seen as proxy wars between ACS' Economy I and Economy II members. Of course, there are battles within the Economy I and II sectors as well -- the management class (non-bench workers, PhDs, seemingly protected from the greatest pressures) versus the bench chemists, etc., etc.
An example of the irritation that can be engendered by Economy I and II debates is the battle between industry hiring managers and academics over training of young chemists. When industrial chemists say things like "academia needs to do a better job of training", academics tend to hear "you tenure-protected Economy II members have no idea what it's like over here in Economy I, and I'd like you to do for free what I used to pay for." When government and academic scientists (and the editor-in-chief of C&EN!) talk about the perils of climate change, industrial chemists hear "you Economy I people are making our way of life worse, and I'd like to change that by raising your costs and making it harder for you to do business." Even as both of these comments are obvious caricatures, I'll bet they sound familiar, at least.
I doubt the ACS can manage to solve these differences; they're with us and they always will be. But I think that Brooks is right -- the Two Economies are growing apart, and the split within ACS along that rift will only grow wider.