Wednesday, June 29, 2005

The Chief Manifesto

Since I have been posting on economic issues lately, I figured I would discuss some of my basic economic theories in more depth. So here is my list of principles, in the proud tradition of Adam Smith, John Maynard Keynes, Milton Friedman and Karl Marx… OK, scratch that last guy.

1. Globalization is good… and inevitable. Like it or not the world is getting smaller (I will avoid using the term flatter as Thomas Friedman has already beaten that analogy to death). While this obviously causes a lot of dislocation in the workplace, it is a net good, both for providing cheaper goods and services to Americans, and spreading the benefits of both the industrial and post-industrial economy to the world. What this means in the short term for Americans is keep on your toes. I would aim for either a high end job, such as a doctor, lawyer, manager, something that is so indispensable that it can’t be outsourced, or some type of skilled laborer such as a carpenter or a plumber. Someone in Bangalore can’t fix your toilet. Whether you like it or not, there is no future in American industry putting together widgets for $5.25 an hour.

2. Corporations will profit. With globalization, efficiencies of scale and increasing productivity due to technology, large corporations will largely benefit. Yes, consumers will also benefit, but not as much as those who control the means of production (how Marxist of me). But this leads into point #3.

3. Capital is becoming democratized. One of the main flaws in Marxist theory is the assumption that classes are immutable, the bourgeoisie and proletariat will never meet. The fact is, in this day and age, the working class and investing class are becoming one and the same. At least they should be. Everyone now has access to cheap home financing (a very beneficial investment for most people), 401(K)’s, on-line brokerages, and mutual funds. The only things keeping them from engaging in these investment activities are education and foresight. As I mentioned previously, the corporations are going to be making more money, the best way for the average person to keep up is to become stockholders in these very corporations. The ultimate Marxist revenge if you ask me.

4. Government will get bigger. Be as libertarian as you like, but with increasing urbanization and population growth, the size of the government will inevitably get bigger. Who else is going to manage our increasingly complex infrastructure? It is up to us to put a check on this, to ensure it grows in the most efficient manner, and with the least intrusion into our rights as possible.

5. Natural resources will get more expensive. I am not one of those pessimists who are saying that in 20 years we will be out of oil in some sort of Mad Max post-apocalyptic wasteland, but the fact is this is the only planet we have. The allocation, use, and conservation of natural resources will become increasingly more important. We will only succeed through increasing innovation in applying knowledge, rather than the brute force of resources to the problem. Also included in this is real estate. They aren’t creating any more land. If you want a 4 bedroom house on a half acre within easy commuting distance of downtown, it is going to cost you, and keep costing you more. Deal with it.

More later, as flashes of brilliance hit me...