Economists Lead Lives of Bad Prognostication There is a lot of historical data, and many different ways of analyzing that data. Economists question how each others' account of historical changes, so at least to my mind, little reason not to questions any predictions. The crystal ball gets cloudier the further we try to see into the future.
I think we are in a period of structural change in the world economy, which has gone on for decades.
Thoughts:
1) We are now in a world market, which is primarily capitalistic. It's consumer driven and consumers typically choose products that work well based on what they cost. If corporation can mfg cheaper products in Mexico, such as cars, they move their facilities there. Same for vehicle parts...some where close to 50% of the parts in our cars are from some other country. Free trade competition is good.
If an industry can't produce a competitive product, then it ought to be replaced. It means that people will be displaced, I know, I have been. Workers need to be trained to fill jobs that society needs. Many difficult issues here.
2) Corporations have grown in size, to my mind beyond what is reasonable. The 'economies of scale' enable these gorgons to reduce much of the supporting layers needed by multiple companies...extra labor, facilities, are unnecessary.
The problem here, I think, is that these huge companies, hit the wall in terms of these economies of scale after a few years. Their only route for continued growth becomes the acquisition of other smaller companies, which are absorbed, and used to add growth.
There are a couple of major problems with monopolistic companies, that I can think of:
a) There is a cyclic component to monopolistic growth. The AT&Ts of this world watch what Verizon and other competitors are doing. An acquisition by one competitor is viewed as a challenge, and it too makes a similar acquisition and so on...
b) Monopolies are not driven by innovation, they don't have to innovate, they can buy.
3) Our investment in infrastructure is minuscule compared to our historic investment in railroads, transportation, and other basic industries.
Not all industries have had such productivity declines, technology and medical sciences productivity lead all other industry sectors. Frontier industries in general have out performed all other industries. They are currently the most resilient parts of the economy, and they are still vibrant and growing. Plums for gorgons :-|
Future growth...get my crystal ball!