• Strategy
  • The Economist

Survey: The Near Future

Peter Drucker explains how it will differ from today, and what needs to be done to prepare for it.

Smaller Numbers, Bigger Clout

Politically, too, manufacturing is becoming more influential the fewer manufacturing workers there are, especially in America. In last year’s presidential election the labour vote was more important than it had been 40 or 50 years earlier, precisely because the number of trade-union members has become so much smaller as a percentage of the voting population. Feeling endangered, they have closed ranks. A few decades ago, a substantial minority of American union members voted Republican, but in last year’s election more than 90% of union members are thought to have voted Democrat (though their candidate still lost).

For over 100 years, America’s trade unions have been strong supporters of free trade, at least in their rhetoric, but in the past few years they have become staunchly protectionist and declared enemies of “globalisation”. No matter that the real threat to manufacturing jobs is not competition from abroad, but the rapid decline of manufacturing as a creator of work: it is simply incomprehensible that manufacturing production can go up while manufacturing jobs go down, and not only to trade unionists but also to politicians, journalists, economists and the public at large. Most people continue to believe that when manufacturing jobs decline, the country’s manufacturing base is threatened and has to be protected. They have great difficulty in accepting that, for the first time in history, society and economy are no longer dominated by manual work, and a country can feed, house and clothe itself with only a small minority of its population engaged in such work.

The new protectionism is driven as much by nostalgia and deep-seated emotion as by economic self-interest and political power. Yet it will achieve nothing, because “protecting” ageing industries does not work. That is the clear lesson of 70 years of farm subsidies. The old crops — corn (maize), wheat, cotton — into which America has pumped countless billions since the 1930s — have all done poorly, whereas unprotected and unsubsidised new crops — such as soya beans — have flourished. The lesson is clear: policies that pay old industries to hold on to redundant people can only do harm. Whatever money is being spent should instead go on subsidising older laid-off workers, and retraining and redeploying younger ones.

Will the Corporation Survive?

Yes, but not as we know it

For most of the time since the corporation was invented around 1870, the following five basic points have been assumed to apply:

• The corporation is the “master”, the employee is the “servant”. Because the corporation owns the means of production without which the employee could not make a living, the employee needs the corporation more than vice versa.

• The great majority of employees work full-time for the corporation. The pay they get for the job is their only income and provides their livelihood.

• The most efficient way to produce anything is to bring together under one management as many as possible of the activities needed to turn out the product.

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