Oh my, The US economy. Is it really that bad?

John F. Opie takes apart a Drucker column

Well, actually I will, but without the quoting. The errors that Drucker makes are multifold: he fails to understand how countries can act to protect their economies against mercantilistic policies, such as the French have towards Africa, without abandoning free trade. Much of his critique centers on this misunderstanding and places the onus on both parties, where in reality it is mostly the EU with its desperate attempts to retain colonial dominance in the Third World that has led it to adopt frankly mercantilistic policies.

And his “warnings” are, frankly, rather jongoistic and simplistic. The US may be facing increased competition, but also has an outstanding track record of reinventing the US economy and creating new industries out of scratch. Information technology is just one small aspect of these developments, and indeed his implied solution – that the US had better get serious about protecting its markets – is the exact opposite of what needs to be done. The US has the most flexible of all the world’s economies, able to react to changes relatively quickly and without major make-or-break government intervention into markets, and to reduce this flexibility by protecting those markets and removing the need to remain flexible would be a major disservice to the US economy, if not the world economy.

What needs to be done is to increase pressure on the EU to drop its subsidies and protectionism: but the idea that their economies need to be flexible and capable of handling massive changes in operating environments is a severe anethema to the technocrats running the EU. That’s got to be the challenge.

Perhaps Drucker should stick with management rather than economics?

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