As I read the economic data for the four year period beginning with the first day of this new millennium, I am struck by the similarity to the 1960s.
The 1960s were when America ended its domestic monopoly in retail pricing (courts ruled against factory enforced retail prices) and the domestic market began to open up to imports.
In the 1960s, Canon and Nikon replaced Kodak cameras, and Fuji did the same to Kodak film, Marimeko fabrics replaced Fruit of the Loom, VW and Toyota filled in for Jeep, Studebaker and American Motors, Yamaha and Honda replaced Harley-Davidson, and Sony and Panasonic displaced Motorola and RCA.
The economic measures(pdf file) show strong growth in the 1960s. The GDP grew 50% in real dollars from 1960 to1970 and per capita income increased 32%. In the following decades, including the1990 to 2000 boom years, GDP grew a total 37% in ten years and per capita income 9%.
The US economy became international in the 1960s decade and Americans benefited. It was horizontal expansion. By 1970, the top 100 U.S. corporations were getting 50% of their profit from overseas.
I believe we are in another such horizontal expansion today. I think the horizontal phenomenon is made up of so many multiple positive forces that I can’t list most of them.
The visible forces are I can see and list are cheap, reliable and excellent air freight, nearly free voice and data communication, legal and accounting standardization, expansion of low tariff free markets, easy capital movement, global economic stability and excellent business travel accommodations (including good phone service).
There is much more that I can’t see, but I can see the extraordinary rate of international expansion. In a recent meeting I dealt with a woman who takes any product she finds in the market and contacts the maker to offer to make the product in China with her company providing a written guarantee of the quality including the design and packaging elements. Another friend has seen the falling dollar expand his export sales all based on Internet orders. A realtor reports that most of the San Francisco Peninsula high priced houses are selling to Chinese.
We appear to be in a new global horizontal economic expansion.