Many years ago, it was popular for economic futurists to conjecture that national economies would merge; the vision was based on natural geographic boundaries. For example, Europe would become one common economy; Canada, Mexico and the United States would become one common economy; China and its bordering Far East neighbors would become one economy and so forth.
The demise of colonialism and two world wars later, history has thrown a lot of curve balls. A significant one was that nations were not merger-minded. Rather, a model of have and have not countries, commonly called “super powers,” “developed nations,” and “third world nations” emerged. The cold war between Russia and the United States started a forty year monopoly game to see which of the two nations could politically control the most countries, thereby solidifying their super power position among nations.
Today, nationalism is as strong as ever. Even the land of the free abhors anyone who thinks they can just walk across an imaginary line and become a resident in the United States. The Arab nations are way behind the western world in social graces but the Middle East is such a war zone that hundreds of thousands of refugees move across borders without even a green card. Thank goodness for oceans!
While Russia and the United States were playing monopoly, Europe was in the middle. Europe already had democracy and didn’t want communism but Europe didn’t have a lot of natural resources either and depended on military support and trade from the United States. European nations had to come up with something that would expand their authority on the world stage. It took a while before they made a move toward a geographic economy predicted those many years ago: a common dollar called the Euro. Still, though, every nation kept its national borders and an independent national government.
The Euro and the bitcoin (artificial “money” traded on the Internet) are very similar. Neither has a basis for value. European nations don’t run their basic economies with Euros; bitcoins have value only to those who think they can be used like monopoly money. The Euro and derivatives are very similar. Both are a bundled value. The Euro is like a lot of things – anything but money.
Now about the future. There has to be a way to do away with nationalism when it comes to economics. The way is called the global marketplace. Markets don’t care if one is Chinese, American, Jewish or Baptist. Corporate business already has been taking advantage of opportunities in many countries simultaneously to increase product sales and minimize costs. Corporations operate in a manner similar to FOREX, the exchange for money trading. In other words, there are places where labor is less expensive than other places, or natural resources are less expensive, or places where regulations are less burdensome. Corporations leverage these differences just like money traders leverage differences in kinds of monies – even Euros.
This corporate model will undergo an explosive change in the next decade.
Do you know about the World Speed Golf Championship? Your score is an aggregation of your stroke score and the amount of time it takes you to play eighteen holes. No carts allowed; one must run and carry a minimum number of clubs to keep the bag light for running. What Speed Golf has done to the normal golf game is what will happen to international corporations. Another way to put it is to note that it took a month for England to deliver manufactured goods to a new America. In the next decade, that same trip will take virtually seconds to minutes.
What has been missing until now is the Internet, supergiant data bases, rapid search engines and the electronics to leverage the Internet. These are now in place.
The current business model is linear – each step in product development uses a different set of knowledge and must move people and resources from place to place. The new business model will be simultaneous and worldwide at the same time. The trillions and trillions and gazillions of data transactions flowing across the Internet will provide enough marketplace information that corporations can shift from making red widgets in Mongolia to making green widgets in Australia with just a few of those trillions of data transactions. This is the global marketplace. The growth in jobs, locations and options will energize the global economy. No longer will corporations leverage differences as FOREX does; corporations will carry light bags as in Speed Golf and time spent delivering to the customer is the biggest cost.