Economic predictions are always a farce, (Long, boring and glum)

[necso]

because all sorts of changes occur in the economy; and because what are perceived as patterns are really only trends in a greater pattern; and because what are held up as economic "laws" speak more to a person's beliefs than anything happening in the marketplace.

But if the current trends of the "free market" in America continue, one can make some useful projections.

In the future, big businesses will increasingly turn to the cheapest source for any resource. Of course, there will be misfires and misjudgments and reverses, but this is where the marketplace as a whole will move.

This means that increasingly, jobs will move overseas and our already impossible-to-sustain trade imbalance will grow. And since cheap immigrant labor is one of the resources that businesses desire (for jobs that can't be offshored), we can expect to see more of it.

These trends will put great pressure on the American standard of living. Debt will rise, and more people will simply fail in their economic lives and declare bankruptcy, further straining the already strained financial fabric (and mess). Weird artifacts of our current economic situation, like grossly inflated housing prices, will come to some unseemly end and this will further churn the mix.

In this environment, big businesses will be even more favored by the marketplace than they are now, and little businesses will find it much harder to enter and compete in the marketplace.

But there is also a countervailing trend.

Many big business have high(er) costs associated with pensions, health insurance, higher than market wages and benefits and other financial impediments due to their age or their desire to benefit their employees (or the fact that unions once had a powerful role). These sorts of business will find it increasingly hard to compete against companies that do not have, and will pick not up, these burdens.

This presents a grim picture for the employee. The very worst sort of companies from an employee's (or a concerned citizen's) point of view are almost certainly those that will win out in the marketplace, unless this trend is reversed.

But there is another side to this, that demonstrates why the "free market" cannot work without external interference. Many big companies are not efficient from a work-process point of work, due to historical reasons or from size considerations or from over-diversification. Sure, bigger businesses can get their widgets cheaper from their suppliers, but in big business, bureaucracies grow, and work gets structured and split up in so many ways that it becomes inherently inefficient. (This is in no small part due to the failure of "scientific management" and other theories having been applied to circumstances that render them nonsense, along with assorted other failings of American management, like their obsession with the short term.) There are just too many fingers in the big business pie, all of which are trying to make their "mark" or take their "taste" and there are simply too many levels, layers and kinds of bullshit.

In "free market" theory, this situation should be self correcting and new, more work-efficient businesses should arise to bring these "dinosaurs" down. But where the cost of entering the marketplace is high, and where there will be long years encumbered by the relative disadvantages of being new and (generally) small, entry to the marketplace will be an option for only a few players. And of these players, those that can start big or get big quickly will dominate.

And, sadly, it will again be the very worst sort of big businesses that will do the best "riding" this second, countervailing "wave".

So where might other market players come from to compete with the American MonopolyMarts?

These businesses will arise in countries that place the smallest burden of employee benefits on their businesses. These countries may not provide for these benefits at all (a "free" marketer's dream) or they may provide them efficiently at some higher level.

These businesses will arise in countries that support lifetime education, lifetime work-related technical training, pure research, development and manufacturing research and who encourage entries into the marketplace in the form of government protections and aid. They will arise in countries that actively support business development and that interfere thoughtfully in the marketplace to try to acheive outcomes good for their businesses, their people, their national interest and for the operation of the marketplace itself. (For if the "free market" doesn't work well, sooner or later, people will move against it --- and most likely not in a thoughtful manner.)

These business will arise in countries that prepare their workers and their businesses for, and support and defend them in, the battle of the marketplace. (Provided of course that the "free" trade component of the "free" market is not simply eliminated or drastically constrained on the basis of that trade itself.)

With a lot of luck and hard work, these new "winner" businesses could arise in countries where the citizens are happy and prosperous. And, although the marketplace often talks about it, but in practise scorns it, these businesses might be of that magical character that, using the full human potential of their employees, can create a work environment where happy and prosperous freemen can outcompete the miserable, impoverished wage slave.

This could even happen here.

But the marketplace left to itself will never get us there, and I hold out no hope of this happening in our nation, since we cannot even begin to hold the discussion about what this might take... So see above!

[idlisambar]

1. For the good scenario to come to pass...

...the spirit of Laissez-Faire must be slayed, and in its place must emerge a return to industrial planning based on economic realism and common sense.

I don't agree that it is a matter of luck. It's a matter of doing what it takes to get the right result, to hell with whether the approach is in some ridiculous economics textbook.

[TrogL]

2. Communist!

:evilgrin:

[idlisambar]

3. Ha Ha

Far from it. :)

The "invisible hand" is a false god, but the market deserves a lot of respect as an effective economic tool.