Friday, November 17, 2006

New World Order: things that will effect its outcome

I was reading people's opinions on Slashdot this morning about Microsoft's indirect attack on Linux through Novell and saw an example of the New World Order at work: an entrenched corporation fighting against a distributed movement for free and open source software. If you enjoy history, then you know that the rich and powerful have always bought and influenced governments but I believe that the New World Order of Corporate Power is something different:
  • More transparent: with the Internet, it is too difficult to contain information and free speech - a good push-back against corporate consolidation and control of news media for their own interests. With more transparency, it is possible for people to be more aware of corruption and control.
  • The world is even less of a "zero sum game". When Spain recovered huge deposits of gold, emeralds, etc. in the New World, they increased the money supply (gold) but also spurred other European nations to other areas of technological inferiority that had valuable resources. Although slowed down by energy costs, we now see opportunities around the world open up - someone winning does not always mean that someone has to lose. (In the context of this blog: I see a win-win situation between proprietary software and with free and open source software, with competition between the two approaches as a good thing.)
  • Countries/corporations that move early to alternative energy sources will have a large long term advantage as the price of oil increases
  • Real value vs. vapor: with the fiat U.S. currency (I have seen estimates that the privately owned Federal Reserve has increased the supply of dollars by about 20% so far this year - the cost of printing money is much less than the current "value" of money!) common people do not own much real equity value: any money they hold has dubious value when a private group of individuals has control over inflation, etc.; people tend to not have much real equity anymore in their homes and are at extreme economic risk when inevitable real estate value crashes occur (they always occur - it is just difficult to say when they might occur). Real value is in industrial production capability, education that enables "high up the food chain" employment and entrepreneur-ship, intellectual property, trade and business partnerships, etc. It is not difficult to see that except for high valued education/job skills and the entrepreneurial success stories, that most real value lies in the control of large corporations and the individuals who have capital and ownership of these corporations.
  • Formally third world countries are enjoying a major upswing in the percentage of middle class workers while established industrial nations are seeing a greater separation between the very rich and a shrinking middle class and the poor. This is natural: areas of very low cost of living that can supply well educated and motivated workers draw in business development, research and development, manufacturing infrastructure.
I think that as much as the world looks more "global", that we will see a huge difference in economic success between countries (and trading blocks that share laws affecting business and trade) that either:
  • Allow corporations to do business but do impose minimal laws to encourage business growth at all levels. Or:
  • Allow corporations to do business and through corruption or other processes discourage business growth and development for all but the largest corporations.
Minimal government is best but some government and fairness in laws and enforcement of laws is required to maximize economic growth and the general good.

I believe that in the future talented people will naturally migrate to countries that provide minimal but fair government and give people good value for their (hopefully small) taxes. Countries like the USA (my country) where a very large fraction of people's federal income taxes goes to pay interest (on previous government expense overruns) to the private individuals who own the Federal Reserve will be at a competitive disadvantage as taxes have to keep rising to pay off previous debts. In a very real sense, government spending overruns enrich the most wealthy people. Small surprise.

What can people do to build more value instead of vapor? A few things come to mind:
  • If possible prefer to reside in regions of low tax and high economic growth.
  • Prefer more education to less. Prefer training in high skilled jobs that must be performed "on site" and can not be done remotely.
  • Prefer investment in corporations with real production value, real property, scarce resources, etc. Prefer to not take out a second loan on your home to buy a new SUV that is better than the one your brother in law bought last week.
The great thing is that we all have control over our decisions in life. While external events can affect the results of our decisions, we still get to decide how to allocate our personal resources and how to live our lives. Self Responsibility = Self Empowerment.

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