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The Engine of America's Future

by Steve Forbes
May 1997
Foreword to The Meaning of the Microcosm

It was only a couple of years ago that a lot of people -- and a lot of so-called experts -- would have us believe that everyone else was pulling ahead of America, not only in manufacturing, but even in high technology. The headlines went something like "U.S. Lagging in Key Industries; Semiconductor Industry Moving Off Shore."

Yet as we all know now, such predictions were absolutely false. The blunt fact is that, fundamentally, the United States is today the strongest economy in the world. Even the popular press is now full of stories about the troubles of Germany and Japan. But our position of relative strength does not come about because of the relative weakness of Germany and Japan. In absolute terms, the United States has never been stronger than it is today.

In the popular media all we read about, in terms of manufacturing, is the turbulence and turmoil in areas such as Detroit. But all the turbulence and turmoil of the past 15 years has made possible one of the most remarkable transformations in economic history. Today, American manufacturing as a whole is the most cost efficient in the industrial world, including Germany and Japan.

Even more heartening is what's happening on the technology front, which is creating a new economy that will fundamentally alter the way we live and the way we work. Today, the Internet and its multi-media component, the World Wide Web, are the current American goldrush. The technology ushering in this extraordinary new age is symbolized by the microchip. George Gilder explains to us how the microchip is extending the reach of the human brain the same way machines extended the reach of human muscle in the last century.

Of course, if you mention the microchip to many people you can watch their eyes glaze over. Yet this story - the story of invention and discovery that built Silicon Valley - is one that every school child in America (let alone every policy maker) should know well. If you want to understand the Industrial Revolution, you learn about the engine, the railroads, the assembly line and Henry Ford. If you want to learn about the Digital Revolution, you need to learn about transistors, chips and computers - and the entrepreneurs behind them.

In Meaning of the Microcosm George Gilder introduces us to some of the inventors and their innovations that are building America's future in the Digital Age. Gilder brings to life in an easy to understand way often complex technologies. He explains what is driving the fundamental change in the way we live and the way we work.

We see that change in fiber optics. By the turn of the century the typical strand will have 100,000 times the capacity that it does today; one strand of fiber will be able to handle all of the telephone calls in the world each day.

In terms of digital technology, we know it is obliterating the traditional differences between TVs, telephones and computers. Formerly different industries are converging so that you can place phone calls over the Internet using your computer, or use your television as an interactive shopping tool.

In terms of virtual reality, it will not be too many years before we'll be able to have concerts in our own home. If you have a pianist in New York who is playing in a concert and you have a piano in your own home, technology will be able to almost literally bring the figure of the pianist into your own home where you can watch the concert as if you were in a concert hall many thousands of miles away.

This will mean, of course, as Gilder has pointed out elsewhere, the end of what we know as network TV. The problem with TV is that it has to appeal to the lowest common denominator. Just think of the difference between the way you read a newspaper and the way you look at television. With television, you sit on your couch and take what's served up. And the TV programmers know that if they spend too much time on a topic they may lose part of the audience. If a newspaper has a story you don't like, you simply flip the page to another story. You can read it your own way. Thanks to the newspaper of the future, which will combine the screen and the printed word, you'll be able to do both, get illustrations as well as words. That's just a little bit of what lies ahead in terms of technology.

We all know from history that the greatest library in the ancient world was in Alexandria. The Greeks tried to store all of the great manuscripts of the world in Alexandria. Right now we're in a process where billions of households in the world will have all the Alexandrias of the world right in their own homes. This is bad news for tyrants. When Alexandria's Great Library was burned, the manuscripts kept the steam baths going for 18 days and those manuscripts were lost, destroyed. There's no way a tyrant can do that anymore, simply because hundreds of millions of people have their own disks, and despite what some of us klutzes do at the computer, enough disks will survive to undermine tyrants.

The implications of this, of course, are profound and unpredictable. All you have to do is look at the invention, say, of the telephone back in the 1870s. A noted Englishman said that the telephone would work in the United States but not in Britain. Why would it work in the United States? Because the United States was an underpopulated continental nation and therefore suffered a shortage of messenger boys. Whereas in Britain, this fellow said, there was no shortage of messenger boys, telephones wouldn't be needed to pass on messages.

Today, we are just as unable to forecast the impact of digital inventions on our future. We all sense that the industrial world in which we were raised will soon seem as foreign to us as when 90 percent of Americans lived on farms. While the shape of our new world is unclear, in order to arrive there as quickly, painlessly and productively as possible we must understand many of the technologies driving the change.

By focusing on the individuals and their inventions, George Gilder reminds us that in a truly free country, seemingly common people can do uncommonly great things. That has been the history of this country, and it can be our future as well.

When historians look back on this period, I am convinced they will conclude that despite the turbulence and turmoil, the periods of uncertainty and occasional setbacks, the United States, once more, confounded its critics, skeptics and crepe-hangers, and with confidence and renewed faith resumed its place as the leader and the inspiration of the world.

The Meaning of the Microcosm is available for $9.95. YOu can order this publication online here, or by contacting us at 202-289-8928.



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