Each Labor Day brings the usual editorials on the concerns of organized labor and the threats of globalization of world markets, and this one was no exception. David Broder currently laments the “wasting of the manufacturing sector”, and suggests it is a problem far too important to be ignored by the political class in pursuit of “some economic theory”, namely, that of free trade. The classic was the line in the communiqué issued by The Berlin Conference three years ago, that globalization “should not just be allowed to happen”. When I see this kind of nonsense, I often turn to Peter Drucker and his The New Realities for a refresher. Here are some excerpts: “the transnational economy is shaped mainly by money (capital investment) rather than by trade in goods and services……in which the traditional factors of production, land and labor, increasingly become secondary”; “manufacturing is becoming uncoupled from labor”; and the new economic policy “implies increasingly neither free trade nor protectionism, but reciprocity between regions”. In this environment, he submits, management is the decisive factor of production on which competitive position must be based. Clearly, in the world of Drucker’s realities, no sovereign political power, with its top-down, command-and-control compliance mandates, can dictate the investment flows that drive economic success. The challenge for us “haves” in the West is to lead the rest of the world into a system in which all the world’s “have nots” can gain access to the dynamics of free trade and open markets.
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