Realistic Future

Alan S. Blinder shook up the Economic community today, after an article was written in the WSJ about his article in Foreign Affairs. Alan Blinder records very real impacts which will alter the shape of the Economy, but exhibits too great a degree of fear. Offshoring is upon Us, and will cause great locations in the years ahead; but the impact overall may be no greater than a variety of other effectual causes. I have long doubted the total value of Trade, even admitting the correctness of Ricardo’s Comparative Advantage. Energy, and its pursuit, will dominate the future, and provide real drag to Trade in the long-run. Actual machine operation will eventually be transferred Off-Site, freeing trained labor from geographical site. The first Industrial Revolutions were all the Comparative Advantages of concentration of economic effort. The next Industrial Revolution will be one of dispersal and decentralization of economic production and effort. Offshoring is only a part of this Movement, and will actually become a shrinking segment of the total.

Many positive assurances of current Economists will fail in the years ahead. The percentage of labor engaged in Agriculture will increase in the years ahead in my estimation; this not meaning a degradation of technology in the agricultural sector, simply a massive switch to non-energy intensive technology. There will be assumption of greater acreage tilled, less intensity of Planting, markedly less use of artificial fertilizer, and the use of far more electrical equipment than the internal combustion engines of traditional use. Farm units will become much smaller on the Japanese model, more carefully tilled and cultivated, with much greater labor intensity though this may not be marked with greater physical labor. I fully expect Agriculture to employ 20% of total labor by the next turn of the Century.

Manufacturing will change almost as much. All Products of Plastic or ease of Parts Assembly will be manufactured by Regional businesses; I already mentioned my belief that large Car Dealerships will assume the responsibility for Vehicle assembly. Such will be the same for Agricultural Equipment, Electronic Equipment, Household Products, and a vast range of other Products. National and international Corporations will evolve into basically R&D establishments, organizing Parts manufacture for their Products, distribution of Parts upon the Invoice Orders of regional businesses, and Royalty right payments decreasing to the range of Rent payments. The future should not be thought to hold no Jobs and Starvation; it will not happen. What will happen is that the Economy will evolve into a sound Production matrix. lgl