Lester Thurow Lecture Essay, Research Paper

The Economic Game of Our Era: U.S. Dominance

Approaching to the 21st century, world economy becomes more and more global.

In today?s life, several parts of an item can be made in different countries and unified to produce an output. Realize a laptop whose processor is made in U.S, by Intel, whose screen is coming from Japan, Toshiba, and whose other various parts are coming either from Taiwan or from Korea. Lester C. Thurow, a professor of economics and management at the M.I.T, and the writer of the book ?Building Wealth?, considers this era as being the third industrial revolution. He claims that this one differs from the former two industrial revolutions, in a way that the first two revolutions were based on the capital and land. However, the third revolution is based on the technological improvements such as computers, robots etc., and knowledge. In the second revolution that created national economy, the main idea was the ?German Systematic Industrial Research?, research of land and capital. On the other hand, electricity that was invented during this era, created the modern life. The third one has created global economy. In each industrial revolution there had been a dominant country that leaded to the world economy. In the first revolution, the British leaded to that era. In the second one, the dominant country had been Germany above the British. And finally, in the late 20th century, U.S. emerged as a world power in the last industrial revolution. The questions to be asked are: How did U.S become the best in the industrial world and what are the evidences of this strong dominance? .

The success of U.S. in the industrial world originates from country?s generic structure and ability to balance control and chaos side. To begin with, America is making the entrepreneurial jobs very well and this aspect allows U.S to play ?the game of shutting-down and opening new ones? successfully. For instance, in 1981 AT&T was nearly breaking and in the 1984, the company fired more than five hundred thousand people in order to cut its excessive money flow. However, entering 21st century, AT&T became one of the most strong telephone companies in the world. Even if the company didn?t shutdown during 1980?s, they showed a significant improvement in the industry. Additionally, when it comes to playing in a knowledge-based economy, U.S. leads the industrial world. For instance, in Nevada gold production has doubled in the recent years. Of course, the reason is not a new-discovered gold reserve but the technological improvements. Nevada became the place where 10% of world gold production takes place. Not only did those two generic structure of the country made U.S. a leader in the world economy but also its ability to balance control and chaos sides served America considerably. Regarding Lester Thurow, balancing those two things are considerably important. Because, in order to put the creativity in economic use, a country should balance both chaos and control side. For instance, the most creative country in the second half of 20th century was probably Russia. Authors like Tolstoy, Dostoyevsky, and Pushkin, artists such as Kandinsky, Tchaikovsky, and scientists like Pavlov, Mendeleev were grown up during this era. But everything was so chaotic and they couldn?t put this creativity in economic use. They could not balance the line between the productivity and order. And they had lost the game of technology. However, U.S. technology was not suppressed by order. Because country?s productivity can supply the willing of society.

As a consequence, U.S.?s dominance on the world economy has been a result of its generic structure like entrepreneurship and knowledge-based economy, and of its right balance between chaos and control side.

The evidences of this dominance become more clear after playing the game better than others.

For example, the wealthiest man in the world, Bill Gates, is from U.S. Today?s seven of the twenty-five biggest U.S. companies didn?t exist in the 1960?s but all of twenty-five biggest companies in Europe did exist at these times. Another example, while there were only two American firms among the world?s ten largest in 1990, nine of those firms were American in 1998. Similarly in finance, in the 1990, none of the American banks was among the world?s biggest fifteen, but at the 1998, nine of those were American. The last but not least, as Lester C. Thurow indicates, during the decade of 1990?s $2 trillion will be added to the U.S. Gross domestic product (GDP). This amount is larger than GDP?s of all the countries in the world except Japan. So, it?s obvious that U.S. dominated world economy a little bit!

Today, the name of the world power is America. Its economic dominance on the world is obviously the reason of this power. In a knowledge-based economy, U.S. plays the game exactly as it should be. And as Lester C. Thurow mentions, the gap between U.S. and the other countries becomes larger and larger.