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logo    America on the Dulling Edge

France has just unveiled a new AGV (Automotrice Grande Vitesse) train which will travel at speeds of up to 224mph. A Japanese train that runs suspended over the tracks by magnetic levitation is even faster more than 360 miles an hour. Our fastest trains run at the rate of 54mph, still being propelled by diesel-electric engines that were developed in the 1940s.

The Organization for Economic Co-operation and Development (OECD) report says 60% of its member countries net users are now on broadband. The report said countries that have switched to fiber networks have the best speeds at the lowest prices. In Japan net users have 100Mbps lines and upload at the same speed they download, which is not possible with ADSL (broadband over a telephone line) and most cable subscriptions. Sweden, Korea and Finland also offer 100Mbps net connections. Additionally, Japan's price per Mbit/s is the lowest in the OECD at $22.00 per month.

Americans like to believe that American companies are on the cutting edge of technology, but they are not. In fact American companies have a history of falling behind, even with technologies introduced in America, such as the Internet. 

Robert H. Goddard, an American, launched a liquid-propellant rocket in 1926. The Germans were bombarding England with intercontinental ballistic missiles in the 1940. But when the Russians launched the first satellite into space, and America went into crisis mode to respond, we watched attempted rocket launch after attempted rocket launch explode on launching pads. It was only after we gave U.S. citizenship to a group of World-war II German war criminals that we managed to learn how rocketry worked. Between 1926 and the launching of John Glenn into orbit, no American company had any interest in rocketry.

Again during World-war II, American industrial might could not build small arms, tanks, or airplanes that matched the quality of those built by the Germans and those backward Russians.  American M4 Sherman tanks were no match for the  German VI Tiger or even the Russian T-series tanks. And it was only after Americans got to reverse engineer captured German jet fighters after the war ended that we learned how to build jet airplanes.

The American steel industry collapsed in the face of imports of steel from Japan, whose steelmakers were using newer technology which was available to but never utilized by American steelmakers. American healthcare suffers when compared to the healthcare people in other industrial countries receive, something so well known that no further comment is required.

So why do Americans experience lower quality products and services than the citizens of other industrial countries? The only possible reason is that American companies do not want to provide them. Those running our railroads don't want to build and run high-speed trains, and American telephone and cable isps don't want to provide Americans with 100Mb service. The American steel industry did not want to invest in newer technology; it chose, instead, to go out of business. And the American automotive industry seems to be headed to extinction too. Americans like to think of America as the great arena of competition, but in too many cases, American companies choose not to compete at all.

The question is why?

The answer lies in a difficult to draw, subtle distinction between companies that provide products and services to be in business, and companies that are in business to provide products and services. Many would ask, what's the difference?

Those that provide products and services to be in business, have their eyes on the bottom line while those that are in business to provide products and services, have their eyes on the assembly line. The former companies are characterized by one fewer olive in each jar to provide a greater return. Shoppers find companies like these every day while shopping in grocery stores; companies that reduce the quantity inside the box without reducing the size of the box or the price.

Many American companies do not even attempt to provide high-quality products. Consider the huge nutritional supplements industry. It would be neither difficult nor expensive to subject the many vitamins, minerals, and herbal concoctions marketed to double-blind testing. But the nutritional supplements industry does not want to do that, because it doesn't care whether its products are effective or not. The quality of products is not the industry's concern; only the bottom line is. The American fast-food industry doesnt care whether its products are nutritious or even conducive to their customers health. What it cares about is the bottom line. And if its products contribute to the ill health of Americans, well, that's just too bad, but of no concern to the industry.

Americans hold absolutely ludicrous ideas about the nature of business. It is said, for instance, that the only stake-holders a company is responsible to are its shareholders, even though companies often appear to be operated for the benefit of their officers. Yet a business is a social entity, created in accordance with the laws of the society it exists in, and as such, has the same social responsibilities that all citizens have. To hold otherwise can have disastrous national consequences, for if a company's only responsibility is to make money for its stockholders, even profitable, treasonous acts would be permissible. If China or Russia or any other nation is willing to pay enormously high amounts for military secrets, how can a company be prohibited from selling them if the company's only responsibility is to its shareholders who would be made wealthy by the sale?

The absurd idea that businesses exist only to make money for their owners is why Americans do not enjoy the quality of products and services that are available to citizens of other industrialized nations. Implementing newer technology costs money, which at least temporarily reduces the return to owners.

America will not be a nation that operates on the cutting edge until everyone realizes that companies, just as individual citizens, have responsibilities not only to their shareholders, but to their employees, their suppliers, their customers, to society in general, and to the nation which enables them to operate. Nations that fail to enforce these responsibilities are doomed to mediocrity if not complete failure. (2/15/2008)