(This article was originally published in The Huffington Post)
By Jay Pelosky and Bruce W. Jentleson
We're the Bi-Sectoralists. One from the private sector world of global finance and markets, one from the public sector world of foreign policy in Washington and academia. We're tired of the "you're the problem — no, you are" finger pointing between the public and private sectors. Both are. Both sectors need to get their own acts together, and to work better together if we're going to have any chance of revitalizing domestically and competing globally.
As a starting point, we offer five guiding principles:
Strength from Within: Two things are certain about the 21st century world. It is a disorderly place. Not a Hobbesian jungle, but also not some new world order in the offing. It also is a highly competitive place. More players are in the game, more arenas are being contested. From natural resource acquisition to corporate takeovers, from IPOs to green tech, the opportunities and challenges are great. Different political systems boast different strengths of governance capacities. Distinct cultures emanate their own allures. In such a world traditional foreign policy and military power are not enough. Global influence and economic security also require "strength from within." Mustering that strength from within is less about what we do to others than what we do for ourselves. It is about playing both offense and defense.
Policy and Markets: The policy vs. markets debate makes for good rhetoric but lousy results. A successful future requires both, working together. The reality is that policy makers and investors are joined at the hip and will be for years to come. Governments need capital and capital needs to understand how and why governments will intervene in markets. A non-mythical look at our own economic history, from the homestead movement to the Internet, shows how key government support has been to economic progress and technological innovation. Today, we need both public and private sector involvement in casting a new model. Public-private infrastructure on a grand scale to create jobs and rebuild our physical plant could be the test bed for that new model.
Less Short Term-ism: It'd be naïve to preach to politicians and investors to never think short-term. The technology of today doesn't help, creating endless noise and often a sense of urgency even when none exists. But it's even more unrealistic to accept pervasive short term-ism as a given when it is so antithetical to being strategic. It is a macro world, a world in flux where the big problems — debt deleveraging, job creation, political cohesion, balancing our interests and ideals globally — demand long-term strategic thinking in both the both public and private sectors. Daily talking points don't add up to coherent policy. Flash trading doesn't develop technologies of the future.
It's the Economy Stupid II: It's not just debt and it's not just jobs. It's both. Today's bifurcation between rising corporate profits and weak wage and employment growth was last seen in the 1950s. Shareholders benefit from the rise of the emerging world consumer while the two domestic job growth engines of the past decade, services and government, are downsized. What replaces them? Manufacturing is likely to boom in the US but it will not be enough to employ all those who seek a job. Jobs are not just a matter of income, they're integral to identity. They're not just about paying this month's bills, they're about hope in the future. No society can maintain cohesion and stability with pervasive structural unemployment. We need government policies that create jobs on a sustainable basis, and company strategies that bring jobs not just investor profits.
Recalibrating America's Global Role: The scope and pace of global change makes thinking through America's global role hard enough. Doing so requires thinking both onshore and off. Here too our politics have been making it even harder. Those who recognize that we are not as powerful as before are branded declinists. But it's the denialists whose ideology blinds them to the realities of today's world, and gets in the way of strategizing for it, who are the true declinists. Geopolitically, not all best ideas are made in Washington. Economically, the rise of the emerging world consumer can be a boon to the US. In these and other ways, if we play our cards right the US can be a big winner from the rise of the rest.
We'll have more to say building on these bi-sectoral principles and focusing in on specific issues. The private sector is not just part of an economy, it's part of society. Politicians are not just part of a party, they are part of a republic. While not a matter of law, there is a fiduciary responsibility to our broader society for each within its own sector and the two working together if we are to revitalize at home and compete globally.
To continue reading the series on bi-sectoralism, click here: Part II, Part III, Part IV, Part V.
Jay Pelosky is the founder of J2Z Advisory LLC, an investment strategy consultancy, and a board member of the World Policy Institute.
Bruce W. Jentleson is a professor at Duke University Sanford School of Public Business. He is the author of the book The End of Arrogance: America in the Global Competition of Ideas, with Steven Weber.
[Photo courtesy of Flickr user Beverly & Pack]