Dear Commons Community,
Coming on the heels of several books exploring America’s descent or ascent as a world economic power, David Brooks takes a look at Tyler Cowen’s article in The American Interest called “What Export-Oriented America Means.” American exports are surging. Cowen argues that America’s export strength will only build in the years ahead. He points to three trends that will boost the nation’s economic performance.
“First, smart machines. China and other low-wage countries have a huge advantage when factory floors are crowded with workers. But we are moving to an age of quiet factories, with more robots and better software. That reduces the importance of wage rates. It boosts American companies that make software and smart machines.
[Second] then there is the shale oil and gas revolution. In the past year, fracking, a technology pioneered in the United States, has given us access to vast amounts of U.S. energy that can be sold abroad. Europe and Asian nations have much less capacity. As long as fracking can be done responsibly, U.S. exports should surge.
Finally, there is the growth of the global middle class. When China, India and such places were first climbing the income ladder, they imported a lot of raw materials from places like Canada, Australia and Chile to fuel the early stages of their economic growth. But, in the coming decades, as their consumers get richer, they will be importing more pharmaceuticals, semiconductors, planes and entertainment, important American products.”
Worth the read!