Monday, September 25, 2006

Dueling Worldviews

Tomorrow I'll be traveling to attend J.S. Herold's annual "Pacesetters Energy Conference," at which I'm moderating a panel on alternative energy. My postings this week may be more sporadic than usual, but I should return with some new insights. Speaking of insights, this weekend as I caught up on recent op-eds from the New York Times, it seemed as if my two favorite columnists, Tom Friedman and David Brooks, were engaging in an open debate about the future. While the radically divergent worldviews they described suggest very different versions of the years ahead, they are equally challenging for business-as-usual, in energy and everything else.

In an anecdote (Times Select required) reminiscent of his most recent book, "The World Is Flat," Mr. Friedman described how local entrepreneurs in Uruguay have partnered with India's leading technology company, Tata, to create a Western Hemisphere hub of outsourcing activity that peaks when India sleeps. As he explains it, universal access to connectivity and customers creates a dilemma for every business, "Will it be done by you, or to you?" Note how remote this view of the developing world seems from Hugo Chavez's channeled rage of the downtrodden masses: here one third-world country reaches out to lift up another, which possesses the right mix of education and laws to make this possible.

If that's the optimistic view, Mr. Brooks acts as the pessimist foil. His Thursday column provided a stark indictment of the UN and enumerated the risks of the emerging US strategy of containment--rather than confrontation--of Iran and other potential adversaries. He describes a world in which we may be unsure who is fighting against us on a given day. Lacking the means of comprehending their motivations, we attempt to fit them into inapt historical or sociological analogies. It's not hard to extrapolate from this to a long stretch of half-hearted conflict, until some mega-9/11 locks us into the rigid "us vs. them" mindset that has been a vital ingredient in all successful American wars.

These are widely divergent views of the future , with very different consequences for our economy and for energy. The Friedman world is incredibly challenging to American business, or at least to the competitiveness of American employment and wages. At the same time, the application of these ideas to conventional and alternative energy could knock down many current barriers and create a more sustainable energy foundation for global growth. It would also be tough on resource-producing countries that haven't invested enough in their social and physical infrastructure.

The Brooks world looks like 2006 on steroids: an endless sequence of confrontations, terror plots, threats and counter-threats, with energy prices riding the amplified waves of all these signals. America might remain the key global actor here, but it would also still be the central target and easy scapegoat. It's a great scenario for alternative energy as national savior, if investors are prepared to weather the inevitable dips. But it's a really unappealing, stressful ride, reminiscent of the ugly stretches when it appeared we were losing the Cold War.

However interesting these columnists' perspectives might be, reality is rarely so neat, more often yielding a mishmash of events and trends. But what if Friedman and Brooks were both right? Could we end up with the US locked in a long struggle with the various branches of Islamic extremism, while the rest of the world capitalizes on our pre-occupation by building a new global economy from the ground up? Even if we win the War on Terror, our chances of capitalizing on victory in the way we did after 1945, or thought we might after 1991, could be quite small. Transforming our economy--including energy--looks no less urgent than bolstering our security.

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