Introduction: John Edwards Had It Slightly Wrong: Not Two Americas, Two Economies

In his campaign for U. S. President, John Edwards, (D), of North Carolina, relied on a southern populist appeal that there were "two Americas."

One of the Americas was populated, according to Edwards, by the downtrodden, the hard-done-by and the people with many, many grievances. For this part of America, Edwards proposed more government protection and aid.

The other, and much smaller population of Americans, in his telling of the narrative, were the wealthy, the well-born, and the privileged political insiders who made rules up for others to follow that they did not apply to themselves. For this part of America, Edwards proposed more taxes and greater regulation.

The term used to describe the two America’s in the South during the early twentieth century was:

Mint Juleps for the few and pellagra for the crew. Pellagra is a vitamin deficiency disease caused by dietary lack of niacin (B3) and protein, especially proteins containing the essential amino acid tryptophan.Pellagra infected many of the white, southern workers in the neo-slavery system textile industry in the South, implemented by the Few, after their great economic idea about the one-crop cotton system collapsed. Its economic replacement, the merchant debt lien system, removed the whites from ownership of their small land holdings through the debt-lien laws.

The whites had to do something with their free time, now that they could not farm, so the Few dreamed up the textile system, supplemented in later years through industrial recruitment, by furniture and auto plants. The new slavery system included all members of the white family, including children as young as four, but, sadly, did not include the benefit of wages sufficient to buy food.

Many southern white families got pellagra from eating dirt, the red clay variety prevalent throughout the South. The pellagra turned their skins even whiter, but the red clay gave them a rosy red hue.

Black people did not have to worry too much about getting pellagra because the neo-slavery textile system was designed to segregate white workers from black workers in the South. In grateful exchange for their textile jobs, protected from black competition, the whites would vote exclusively for the Democratic Party, a good thing, because in the South, there was just one political party.

That part about the Democrat’s role in creating the two Americas is one that Edwards’ never mentioned, being a Democrat, and all that goes with that. The other part of his narrative that he got wrong was the economic part.

There are not two Americas, there are two economies, a global economy, comprised of large global corporations, and the domestic economy, that is not linked to the global economy, but that mostly operates in distinct metro regions.

The growing gap in wealth in America is between firms and workers who are linked to the global economy through the multi-national corporations, and the workers who are not linked to the global economy.

This part of the two Americas story may have been difficult and embarrassing for Edwards, (D), of North Carolina, to mention, since the gap was inspired and implemented by the Democrats. The open-border free trade Democratic legislation, just like the debt-lien legislation a century before that took away the land of the farmers, were products of the Democratic Party, signed into law by a Democrat president.

With the passage of the legislation, America traded away its technological innovation capacity in exchange for cheap goods. In the economic aggregate, which is how the elites keep score, this exchange made sense, primarily for the global corporations.

From the financial perspective of the great majority of American citizens, this has been a disastrous economic bargain.

In an odd, and slightly ironic twist of history, the solution to the erosion of America’s technological innovation capacity is to link the economic revival of metro regional economies to the technological innovation capacity of multi-national corporations.

This solution is problematical though, for two reasons. Whereas corporations have "absorptive capacity" to absorb new knowledge and turn it into new products, most metro regional business and political leaders are dumber than a stump about technological innovation.

Secondly, the same intellectual capacity that provides technological absorptive capacity in the large corporation also provides keen, some may even say, shrewd, political insights on how to game the American political system. Why would large corporations engage in a strategy that may tend to erode their own technological competency and competitive global advantage?

Replicating the MNC Absorptive Capacity

Part of the economic revival in America depends on a strategy that metro regions can implement to "absorb" new knowledge.