Page 267 - The Drucker Lectures

248 [ The Drucker Lectures

world economy. And we don’t understand it yet, and we surely
have no economic theory of it. All that we know is that the blocs
are free trade internally but highly protectionist externally. We
are arriving at a new mercantilist era, with each bloc pushing
exports and trying to curtail imports. And we know this policy
can’t work. But each bloc is trying it and doing it, especially in
the areas in which great social transformations are occurring.
And the reason for this is that the fewer farmers there are,
the more protection they get in every country. It’s almost a per-
fect negative correlation between the number of farmers and
the amount of subsidy. The greatest display of this is in France,
where for every drop of 1 percent in the farm population, farm
subsidies go up. In this country it is 4 percent. In Germany it’s
about the same. In Japan, things are not quite that clear; nobody
beats the Japanese at playing with numbers—not even Enron.
The Japanese subsidize the farm sector by building roads, which
nobody uses, and the government money that goes into con-
struction somehow filters down.
If you look at what has been the single most important eco-
nomic phenomenon of the last 50 years it is the fact that agricul-
ture production all over the world has grown roughly threefold
while agricultural employment has gone down 97 percent.
We are also witnessing a worldwide change in manufactur-
ing, which is very similar to the farm work revolution from 1950
on. In the Eisenhower years, 35 percent of the American popu-
lation consisted of blue-collar factory worker. Today, that blue-
collar population is down to around 13 percent. And yet manu-
facturing production is now almost three times what it was in
the Eisenhower years. Mr. Bush, as you know, has announced a
manufacturing policy. Really, this is a policy is for manufactur-
ing workers. Manufacturing production doesn’t need any pro-
tection; it’s doing incredibly well. But like farming, it’s doing so
with fewer and fewer workers.