James A. Field, Jr., is quoted as saying that generals are always preparing to fight the last war. That's true not only of military battles, though, but of economic ones, and not just of generals, but all organization leaders.

Back in the 1940s, a photographer didn't buy film. Instead, he coated the photographic emulsion on glass plates. He produced proofs for customers for a penny a shot, plus some elbow grease, and produced enlargements which were colorized with transparent oils, again consuming skilled labor but no significant cash output.

Making Our Craftsmen Obsolete

By the 1980s, a photographer was spending $1 every time he pressed the shutter, just to produce a proof for customers to choose from. Enlargements were expensive, but took very little of the photographer's time. For every 100 photographers and colorists in 1940, there would be perhaps 10 in 1985, but many specialists in factories nad photolabs backing him up.

Similarly, in 1860, a weekly newspaper used hand-set type, which took a lot of labor to set, and once used, to clean and sort back into the job cases. By 1930, he'd invested in an expensive linotype, which could cast type faster than real type could be set, and instead of cleaning and sorting the type afterwards, the slugs of type were simply tossed into the lead pot to be re-melted. It still took a lot of labor, and what's more, printing the week's newspaper on the flat-bed press took a lot of manpower to collate and fold. By 1980, that newspaper had converted to offset, printed at a central office. It cost a lot of money for the photographic paper used to set type, and it cost a lot of money to have that remote press print his paper for him, but it meant a lot less labor would be required.

If you look at various industries, you'll find that most of them followed similar patterns in the 20th century. The individual businesses used a lot less labor by using goods and services from a centralized provider of generic services.

And Then Things Changed

In the last couple of decades, though, the pendulum has started to swing the other direction. Local newspapers first stopped buying photographic paper, and are now starting to publish on the web. Photographers are proofing their digital images on monitors instead of printing the images out prior to sale.

And it's happening in other industries as well. Restaurants switched to portion-control meats and cleaned salad greens, but in the past couple of decades, have been seeking to produce foods that are unique, special, and local. Instead of buying a cheap generic product from the huge factory, many people are choosing to buy a product that meets their needs better, and small manufacturers are able to provide it economically because factories no longer require 1000 or more single-purpose machines to be efficient; a computer-controlled machine can produce custom parts instead.

And yet American businesses are still preparing to fight the last war. They are scheming to cut costs in order to produce the cheapest possible product, not realizing that it's more important to produce the right product, than to produce the wrong product inexpensively.

Politicians Don't Get It

Politicians are trying to compete in attracting huge factories, with taxes as their tool to do so. In fact, most jobs are created by small business, not by big companies, and tax breaks aren't of much value to hungry young companies growing like crazy. What they need is a good infrastructure that only a solid stream of tax revenue can finance.

Other politicians are trying to generally stimulate the economy, not realizing that with so much international trade, that's like trying to heat a house that has all the doors and windows wide open. You can do it - but you're going to have a horrid heating bill. Thus, instead of giving consumers $3,000 each, which will quickly be spent on Korean television sets, it makes more sense to build a system of bullet trains that would replace today's highly inefficient air transport, because not only does it produce American jobs to construct the new welded rail system, and manufacture the rolling stock for the bullet trains, it will lower operating costs for most other American businesses.

How do you deal with the new economy? You don't do it by going to college for "credentials". The new model of the successful business isn't the 3000-employee factory, but the small factory in a converted barn or garage, perhaps 30 employees, tops. You're gonna be noticed by the boss, and he's not going to care whether you look educated, but whether you seem to be doing your job well. If an education helps you perform your job, such as an engineering degree, or certain science degrees, it may pay off. A liberal arts education probably will not.

What You Need To Succeed

What you'll need to succeed in this new world is a very small team of people with complementary skills. If you haven't got an essential skill right now, I recommend you become a millwright. They already were in much demand in the old economy, and they'll be even more important in the new one. But look around for the right people to associate yourself with. You need associates that are honest and forthright, ones that are driven to provide the consumer with the best possible product, rather than the cheapest one. People generally treat their partners and their employees like they treat their consumers - and it's critically important that you maintain a good relationship with your potential consumers.

Choose carefully. You'll be spending a lot of time in your future.

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craftsman - economy - mass production - photography - preparation - printing - the last war