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Strategies & Market Trends : Currencies and the Global Capital Markets
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To: Henry Volquardsen who wrote (135)5/20/1998 10:47:00 AM
From: Chip McVickar  Read Replies (1) of 3536
 
Henry
I read an article in wsj at the beginning of April......

It essentially reviewed the work of Paul David a economic historian
of Stanford University. He has detailed the parallels between the electronic
motor revoultion of the 1890's (ie. Maytag factory productivity explosion)
and the desktop PC computer. They both decentralized production, gave
individual workers more autonomy and produced enormous effiency gains.
The small electric motor revolutionized american industry as was seen
in the Maytag washing machine....as well as table saws and millinmg machines.

Greenspan is on record as having found Mr. David's analogy persuasive
and has built his case for steady rates partialy on his expectations
that computers are about to deliver an upturn in productivity. I think
this is already underway and has been gainning significant ground over
the last 6 years.....but the roots go further back then many realize.
In 1987 an uncle of mine described the productivity changes that were
overtaking his company - Pittsburg Plate Glass #reply-4455629 (referance
reply) and believed that we had only just begun to see the beginnings
of these effiency changes through out american industry.....that was
summer of 1987. The link has a little more to add.

The Maytag worker in 1926 made 48% more washers then his counter part
did in 1923 and 32% more money.....corporate sales followed an even
steeper accent. By 1925 Ford was pushing a Model-T out the door every
30 seconds. (These figures are taken from the article)

Unfortunately the 1920's ended with the 1930's and this has a lot of
people looking back over their shoulders. Atleast we have history to
remind us.

I see no reason why the current economic productivity increases cannot
continue for many more years....as long as markets exist for our
products and nothing comes along to disrupt the flow of these goods.

The "downsizing" of american companies will continue to be a positive
influence as long as new jobs - job training and safty nets for the
displaced are focused on revitalizing their lives.
This maybe a "tall-order"....but very important.

There is a forthcoming book called "Prosperity: The Coming 20-Year Boom"
by Bob Davis and David Wessel......should be very interesting.

If international economic polices and currencies remain stable and wars
do not divert our economic energies...what we have seen over the last
8 years could theoretically continue for 50 years.
This may also be a "tall-order" and overly optimistic....

But it is possible and the next question....has to do with "natural
resources" - "global Polution" - and if the economic prosperity
of 20% of the world can raise the standards of the other 80%.
But that is another discussion.
Chip
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