Why I’m More Optimistic Than Ever about America’s Future

Let’s start with the obvious: Being optimistic about America these days isn’t fashionable. With good reason: America’s political arena is toxic. Our standing in the world has diminished. Our economy is chugging along but in transition, leaving too many on the sidelines. We’re not the best America we can be.

One big problem is that there’s simply no collective vision of what America stands for, beyond sweeping aspirations like “freedom” and “liberty.” There’s no shared idea of who we want to be in the world, how we want to be seen, and how we want to see ourselves.

On the other hand, we know pretty well what we’re against: Terrorists and taxes. Big Brother and big government. Endless wars and election campaigns. High-priced gas. High-priced anything.

But what are we for? There’s no good answer.

And during an election year when we should be discussing and debating our collective future, there’s no adult conversation taking place about a common vision or purpose that sets us apart, that makes us “the greatest country in the world!” as politicians like to exclaim. We desperately want to believe that it’s true, but it’s not always clear that it is. We seem stuck between a nostalgically glorious past and a despairingly uncertain future. We know we can’t turn back the clock, yet moving forward is proving difficult.

It’s not just us, of course. Around the world, three billion people are pounding on the gates of the global economy. Climate change and ecosystem depletion are degrading Earth’s carrying capacity and disrupting human communities, with the high potential for much greater disruption to come. Most of the world’s economies, including ours, is propped up by monetary policy, not consumer demand. Global infrastructure, systems, and supply chains are fragile, prone to shock and disruption.

As we ricochet from crisis to crisis, the international order is unwinding and Americans are getting increasingly concerned, impatient, and angry.

As we ricochet from crisis to crisis, the international order is unwinding and Americans are getting increasingly concerned, impatient, and angry.

So, why am I more optimistic than ever about America’s future?

Over the past two years, along with retired Marine colonel Mark “Puck” Mykleby and macroeconomic expert Patrick Doherty, I’ve co-authored a book, The New Grand Strategy: Restoring America’s Prosperity, Security and Sustainability in the 21st Century, that’s just been published. It describes a new economic plan for America, born at the Pentagon, that embeds sustainability as a national strategic imperative.

It tells the story of how Americans have leaned on something called “grand strategy” throughout our history to take on the big challenges of the day, leveraging our economy to address our most pressing political, economic, social, and environmental challenges. The book, as the title suggests, lays out a plan for a new grand strategy for the 21st century.

I’ve never been more inspired about what America is capable of, and about what’s possible when Americans hold an optimistic and opportunity-centric view of the future and come together to bring it to reality.

A Path Forward

Such patriotic optimism doesn’t come naturally to me. Indeed, my path has been twisted and torturous: a Vietnam-era antiwar protestor and a registered conscientious objector to the draft; a Berkeley-educated journalist trained to look askance at most things and never to take what I see or hear at face value; and for nearly 30 years, a writer and speaker on the world’s most pressing social and environmental issues, particularly as they relate to business and technology.

Pollyannish, I’m not.

But I see a path forward, one that combines the best of both the political Left and Right, that aligns sustainability with America’s enduring interests of prosperity and security, and that creates a vast new opportunity space, leveraging market forces to reinvigorate our nation, from our infrastructure to our political engagement to the next iteration of the American Dream.

Grand strategy involves aligning our economy with our foreign policy and governance structures to take on big, existential threats of the day. We’ve used it effectively over the past century to fight fascism during World War II, then to contain the Soviet Union during the Cold War, then to — well, what?

The fact is, we haven’t had a new strategy since they lowered the hammer-and-sickle on the Kremlin for the last time on Christmas Day 1991. Harnessing a strategy of “containment” dating to Dwight Eisenhower and adopted by every subsequent president through George H.W. Bush, we defeated the Soviets in a contest of economic and political systems while actively containing their moves on the global chessboard. The better we lived the American dream and the greater the contrast with the underperforming Soviet economy, the more resources — money, allies, goodwill — we had to stop its international advances. The Soviet empire ultimately crumbled — a real, not manufactured, “Mission Accomplished” moment.

Arguably, we got through the last century because we knew how to do grand strategy, and do it well. And our past leaders made global decisions without the benefit of computers or the Internet, or really much data at all, compared to the rich insights we can draw on today.

We long ago stopped thinking strategically. We’re still operating off the same economic playbook that helped us vanquish the Soviet Union 25 years ago.

We long ago stopped thinking strategically. We’re still operating off the same economic playbook that helped us vanquish the Soviet Union 25 years ago. It’s a threat-centric view of the world — not the Land of Opportunity we've long thought ourselves to be.

Global Unsustainability

So, what is today’s big, existential threat? We believe it’s “global unsustainability.” Specifically, the combination of four strategic antagonists:

• Rapid economic inclusion. The great global project of the 21st century is to accommodate 3 billion additional middle-class aspirants in two short decades without provoking resource wars, insurgencies, and the collapse of our planet’s ecosystems. Those 3 billion people are expected to increase their per-capita consumption by 300 percent, driving resource competition to the brink, with the potential for great power conflict over access to food, water, and other resources. That’s on top of having to solve the growing issue of income equality here at home.
• Ecosystem depletion. Climate change is outpacing scientific models while natural-capital stocks — topsoil, wetlands, fisheries, aquifers — are being depleted below levels necessary to maintain essential ecosystem services. With no further changes in policy, we could see warming of 6 degrees Celsius by the end of the century, with potentially ruinous impacts. Well before midcentury, we are likely to face widespread food insecurity, economic disruption, mass human migration, and regional conflicts as these critical systems degrade further.
• Contained depression. The intervention by the Federal Reserve Bank, European Central Bank and other such institutions around the world has failed to address the fact that central banks alone cannot revive aggregate consumer demand for housing and other goods and services. Congress can’t either, as pumping more stimulus dollars into an old economic engine won’t do the trick. Consumer preferences have shifted such that simply forcing more money into the system, even directly into citizens’ bank accounts, will have little lasting effect beyond propping up an unsustainable economy and adding to deficits.
• Resilience Deficit. The supply chains and infrastructure that undergird our cities and markets are brittle and prone to disruption. Today’s corporate value chains are designed to increase efficiency but have little redundancy or resilience. Infrastructure arrears in the United States alone stand at $3.6 trillion to get the bridges, roads, railways, schools, ports, and airports that we need to bring the Cold War–era economic engine up to today’s standards. Without rethinking and rebuilding these systems, we’ll be forced to react to their breakdowns, sometimes with tragic consequences.

Taken together, these four fused and interlocking issues compose the global challenge of our time. It will require focused and determined leadership — and new forms of partnership — if we are to survive and thrive. To solve one requires solving the entire set.

Three Pools of Demand

In our new book, we lay out a plan — a grand strategy for the 21st century — that can address these challenges and, in the process, lift America’s economy and its standing in the world. By making ourselves stronger and more resilient at home, we can utilize smart power abroad more effectively.

But this grand strategy doesn’t come from Washington, and it need not require acts of Congress, the federal budget, or even the president (though political leadership and some federal funding would certainly help). Rather, it comes from cities, states, and regions, in partnership with the private sector — companies big and small, global and local — a bottom-up approach to solving problems that so many Americans seem to be craving.

This grand strategy doesn’t come from Washington, and it need not require acts of Congress, the federal budget, or even the president.

American business, not politicians, would do the heavy lifting.

How? By aiming our economy to tap three massive pools of demand: for walkable communities, regenerative agriculture, and resource productivity.

Walkable communities. Between now and 2030, Baby Boomers and their children, the Millennials, will converge in the housing marketplace, seeking smaller homes in “new urban” communities. In its 2013 consumer preference survey, the National Association of Realtors found that 60 percent of homebuyers want their next home purchase to have the attributes of what is commonly referred to as “smart growth.” That is, they want right-sized homes in a broader range of housing types (single-family, townhouse, live-work, condo, apartment) and they want them in walkable, service-rich, transit-oriented, mixed-use, opportunity-dense neighborhoods.

That represents roughly three times the demand for housing after World War II — a demand signal that was a primary driver of our economy until the 1970s. Today’s demand for smart growth is of truly historic proportions.

The demand exists across the country. Boomers are downsizing and working longer, and they fear their car keys will be taken away as old age creeps in, leaving them stranded in the car-dependent suburbs, eventually to be housed away in a nursing home or retirement community. Millennials were raised in the isolated suburbs of the 1980s and 1990s, and 77 percent say they don’t want to go back there.

Prices have already flipped, with exurban property values dropping and those in walkable neighborhoods rising. Yet legacy federal policies — from transportation funding to housing subsidies — remain geared toward the Cold War imperative of population dispersion and exploitation of the housing shortage, and they are stifling that demand. Only a fraction of housing starts have the attributes of smart growth, and new homes represent only 1 percent of the residential real estate market.

Regenerative agriculture. America cannot become sustainable, nor can it support global sustainability, without addressing agriculture. To meet rising population and income levels, the world needs to increase global food production by 60 percent by 2050, according to the Organization for Economic Cooperation and Development, and 100 percent of that will need to use farming techniques that restore soils, sequester carbon, and cleanse waterways.

For American farmers, the increase in demand for food is already translating to record prices, but the heartland is held back from capturing additional gains from regenerative methods — which provide up to three times the profits per acre and 30 percent higher yields during drought — because of federal policies set during the Nixon administration.

It is time to restore America’s heartland and breadbasket. Instead of depleting soils, emitting carbon, and polluting rivers, American farming must adopt modern methods that bring more land into cultivation, keep families on the land, provide employment to a new generation of American farmers, and build regional food systems that keep more money circulating locally, all while helping to feed the world.

Resource productivity. To bring 3 billion new middle-class aspirants into the global economy requires a revolution in resource allocation. Energy and material intensity per person will need to drop dramatically while simultaneously delivering the higher income and lifestyle expectations that come with global connectivity.

We’re already seeing the resource revolution taking shape in the form of the clean-energy economy, the zero-waste economy, the circular economy, the bio-based economy, the sharing economy, and more.

We’re already seeing the resource revolution taking shape in the form of the clean-energy economy, the zero-waste economy, the circular economy, the bio-based economy, the sharing economy, and more. But it’s time to step it up, to fully seize the opportunities before us.

The resource revolution will provide the logic to power innovation in material sciences, engineering, advanced manufacturing, and energy production, distribution, and consumption. In the United States, the high-wage, high-skill jobs emerging from this revolution will restore and strengthen America’s middle class and national competitiveness for decades to come. In the end, America will learn how to “make things” again.

A New Growth Scenario

Put it all together and, by our calculations, we have a game-changing, $1.3 trillion annual opportunity for America’s economy.

The demand and opportunity are there: Americans overwhelmingly want a new American Dream that could put people and capital back to work. Cities and suburbs are rethinking what constitutes “the good life” and are building walkable communities to help strengthen their social fabric. America’s farmers have the opportunity to restore the health of the planet’s life-support system, and get paid better to boot. We are witnessing the beginning of a revolution in resource productivity that can rebuild middle-class lives and wages.

How do we pay for it? There are trillions of dollars of liquidity sitting on the sidelines of the productive economy: $3.5 trillion in corporate cash, plus another $10 trillion in private equity and hedge-fund cash. Plus, $30 trillion of Baby Boomer wealth that is in the process of being transferred to Millennials (that’s on top of the $17 trillion still changing hands between the Greatest Generation and their Boomer offspring).

Many of these players are looking for a new investment hypothesis for America that can put their money to good use over the medium to long term while providing a reasonable return. This opportunity could be compelling.

What about the trillions of dollars in oil and gas reserves currently on companies’ books — stranded assets that we cannot burn and stay within the limits of a livable planet? We believe it is time to solve the “unburnable carbon” issue by executing a feedstock shift, moving oil and gas out of combustion and into advanced materials, where they actually can reduce greenhouse gas emissions by substituting for more carbon-intensive materials. We don't need to “keep it in the ground,” but we won't be able to burn it, either. In the book, we explain how to do this.

Simultaneously, new pools of demand, vast stores of pent-up capital, and a workable set of stranded-asset challenges are aligning with the four strategic antagonists of the coming decades.

It all adds up to a new growth scenario. Simultaneously, new pools of demand, vast stores of pent-up capital and a workable set of stranded-asset challenges are aligning with the four strategic antagonists of the coming decades.

Is any of this possible in an era of political gridlock? Our grand strategy, rooted in a powerful demand-plus-capital business case rather than a threat-plus-regulation policy framework, can be implemented under current policy by private businesses and producing at the speed of commerce to harness the best of the private sector’s efficiency.

We just need to get started.

It’s a truly exciting time. Yes, the challenges are historic and America is late to the party. But it’s a party we can’t afford to miss. The opportunities are simply too massive to ignore, and we can now see a viable course of action that is scaled to the challenges we face but also, more important, to the opportunities that are available.

It will be a marathon, not a sprint, but it will feel good to get our endurance back so that we can go the distance, mostly because we can do the quintessentially American thing of doing well while doing good.

By strengthening our strategic muscles we will once again be able to think at the scale of our problems and build and test new solutions, and in so doing, turn crises into opportunities. Just what you’d expect from the Land of Opportunity.

And here’s the best part: We know how to do this. We’ve done it all before.

That's why I couldn’t be more optimistic about what lies ahead.

Joel Makower is chairman and executive editor of GreenBiz Group, and co-author, with Mark Mykleby and Patrick Doherty, of THE NEW GRAND STRATEGY: Restoring America's Prosperity, Security, and Sustainability in the 21st Century (St. Martin's Press).