The long days of summer have prompted me to
think big thoughts. Where are the US and the world headed?
There is a tendency for people to believe
that our country, not to mention the entire planet, is going to
hell in a hand basket. The media exacerbates this tendency to
think the worst, as they report on the most extreme events, and
then draw conclusions about our entire society based on those
Many believe that the social and cultural
decline in the US is irreversible. I can understand why some
take this position, although I do not subscribe to it.
Statistics on crime rates, out of wedlock births and other
social indicators show a more positive though mixed picture. But
from an economic perspective, the future looks incredibly
bright. Moreover, future growth comes with the opportunity for
deep poverty around the world and social pathologies at home to
be addressed and markedly diminished.
The current deflationary
troubling, and our economy may not return to the soaring heights
of the late ‘90s for at least a year. Still, the productivity
gains during the latter 1990s were real, and the Internet
revolution is only half-done at the most, in its infancy at
best. Most major companies have not fully integrated readily
available technology into their operations yet, and the enormous
capital investment means more impressive innovations are bound
George Gilder, founder of the Gilder
Technology Report and the current owner of The American
Spectator, recently made a similar diagnosis about long-term
prospects. "The collapse of 2000 and 2001 will seem a mere
blip in a long-run bonanza….Combining all the (financial and
technological) indices of the vitality of the innovative
process, a reasonable guess is that the opportunities of the
next decade are roughly ten times more promising than the
opportunities opening in the mid 1980s multi-trillion-dollar
Future opportunities for enormous growth are
not limited to the Internet alone, although computing power
surely will aid in numerous scientific breakthroughs.
Developments in biotechnology and medical devices in the next
forty years should be astounding. Manufacturing industries will
benefit from new technologies and the growth fueled by other
sectors. But the most impressive developments may be in the
Honda already has produced and put on the
market a hybrid car: half-gas, half-electric. Sooner rather than
later, this technology will become standard in all cars, and
will cut consumption for oil in half while increasing the
quality of cars and trucks and reducing pollution costs. This
trend alone will spark its own boom. Moreover, developments in
"micro-grids", solar, wind, nuclear fusion, and
geothermal energy are all occurring rapidly and at the same
time. While it is hard to say which technology will become
predominant first, all of them have a strong possibility of
becoming far cheaper sources of energy in the next 30-40 years,
in some cases later, but in other cases much sooner.
Globalization is the overarching trend in the
world today, and while its ramifications may cause disruptions
in certain societies, its benefits will be on balance very
positive. Communication and transportation links between
countries will deepen while trade barriers will continue to
shrink. Even more promising is the rejection of statist ideas in
favor of free minds and free markets.
The nations of Europe will wean themselves
away from top-down control from Brussels as it proves to be
ineffective. Meanwhile, a common currency could prove to be
extremely beneficial to the continent, provided that the US
dollar, the current monetary standard of the planet, finds a
degree of stability. Japan’s long decade of economic
stagnation will come to an end when Japanese politicians abandon
the current modus operendi in favor of pro-growth policies.
China’s leadership has embraced a growth
model since 1978, which accounts for its rapid progress. While
change in China has been a story of one step forward, two steps
back, the ruling class opened up in greater degrees over time.
China will not turn back to old ways, but evolve into a more
free society open to investment coupled with religious and
political pluralism. Thirty years from now, China will not be a
democracy in the Western sense, and they will remain a strategic
competitor to the US. But more importantly, their common
interests with the US will ensure that they will not be a
threat, provided the US does not make them one.
Vladimir Putin is the best thing to happen to
Russia for at least a century, if not longer. He has drawn the
line with the oligarchs who ran the country under Yeltsin, and
has informed them that a common set of standards will be applied
to everyone. He has also enacted a 13% flat tax, which will not
only discourage the black market, but also make Russia, with its
educated population and limitless natural resources, the next
Ireland on a far larger scale.
India has begun to experience strong growth
after fifty years of failed socialist
and the rest of the developing world may and should follow their
example. The good news is that the 20th century has
proven what works and what does not, and every country has the
opportunity to create a policy framework that maximizes both
growth and common provision.
All of the examples and possibilities
presented here are not flights of fancy, but a sincere effort to
appraise just why our future as Americans and human beings is
far brighter than normally assumed. Optimism is one of the
greatest gifts anyone can possess, because it turns dreams into
reality. Sometimes it is even warranted, and it is now. Nothing
is guaranteed, but there are many reasons for hope.
deepest thanks to The Long Boom web site for their inspiration
and insights, which informed parts of this column. They can be
found at http://www.thelongboom.org
and the book by Peter Leyden, Peter Schwartz and Joel Hyatt can
be purchased here.
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