I strongly believe America’s best chance to continue along its path of unentitled prosperity lies within the innovation of its entrepreneurs. Interesting books like The Entrepreneurial Imperative show this as the only way forward, but Jim Manzi’s latest article Keeping America’s Edge paints a more complicated picture that lays forth our current struggle - Innovation is necessary for economic growth, and less government interference is key for the type of innovation we need. However, with such innovation comes social upheaval and disruption that creates a different set of problems that could be just as bad for the US:

Our strategic situation is shaped by three inescapable realities. First is the inherent conflict between the creative destruction involved in free-market capitalism and the innate human propensity to avoid risk and change. Second is ever-increasing international competition. And third is the growing disparity in behavioral norms and social conditions between the upper and lower income strata of American society.

These realities combine to form a daunting problem. And the task of resolving it turns out not, by and large, to be a matter of foreign policy. Rather, it compels us to consider how we balance economic dynamism and growth against the unity and stability of our society. After all, we must have continuous, rapid technological and business-model innovation to grow our economy fast enough to avoid losing power to those who do not share America’s values — and this innovation requires increasingly deregulated markets and fewer restrictions on behavior. But such deregulation would cause significant displacement and disruption that could seriously undermine America’s social cohesion — which is not only essential to a decent and just society, but also to producing the kind of skilled and responsible citizens that free markets ultimately require. Moreover, preserving the integrity of our social fabric by minimizing the divisions that can rend society often requires government policies — to reduce inequality or ensure access to jobs, education, housing, or health care — that can in turn undercut growth and prosperity. Neither innovation nor cohesion can do without the other, but neither, it seems, can avoid undermining the other.

Basically, we’re handling a double edged sword. If you increase the speed of innovation, you also increase job losses at the lower end of the economy. On the other hand, if you work to protect the job losses due to innovation, you decrease the pace of innovation. In a global economy, that can lead to other problems which  could then result in serious problems for the economy (ie. job losses).

Increasing economic growth through innovation is vital to our economy, however it’s a foregone conclusion that doing just that will ultimately displace jobs. And those who lose their jobs, what will they do? They fight (as anyone would) to have the government protect those jobs. They become angry when the government fails to do so, which results in social unrest and creates populist political movements (ie. The Tea Party) that do more harm than good.

But what I really find disheartening, is that those movements are not necessarily driven by those same angry people who lost their jobs. In fact, many of those movements are often engineered by the individuals and companies who are seeking solely to have the government prop up their existing markets in the face of competition driven by innovation.

So what’s the answer? I have no idea. What I do know is that the two sides of this complex issue are inextricably intertwined. Yet, we let the debate be framed by those who reduce it to a shouting match, completely unaware that they need the other side just as much as they need them. All the while, the real profiteers lurk in the background, pulling the strings of the people to protect their entitled prosperity at any cost to their own country.