The Big 10
It's no exaggeration to say that the 1980s were dominated by economics. The politics and psychology of these 10 years have swirled around the central issue of how nations enhance their wealth. Ronald Reagan's economic policies undergirded his popularity. Communism's economic failure triggered political upheavals in the Soviet Bloc and China. Japan's emergence as a great power primarily reflects its stunning economic success.</br></br>Greedy is the glib label stuck onto the '80s. How silly. Greed had never disappeared; it merely became more conspicuous. The decade's significance lies elsewhere. We rediscovered some old truths about economics. Competition works. It generates economic growth by fostering efficiency and innovation. In the '80s, U.S. living standards and productivity rose. But competition can be rough, and the decade seems baffling precisely because its gains often emerged from disruptive changes.</br></br>We endured fierce foreign competition and the worst recession since World War II. Corporate America was no longer invincible. It faced hostile takeovers as well as rising imports. Companies were forced to become more efficient and to hold down costs and prices. But their responses-layoffs, plant shutdowns and streamlining-were often hurtful and unsettling.</br></br>It's been that kind of confusing decade. Looking back, I'd cite 10 major economic trends that will affect the '90s.</br></br>1) The Triumph of Free Markets: Faith in competition replaced the view that government spending and low interest rates spur economic growth. The result has been stingier government, higher "real" (after-inflation) interest rates and more emphasis on free markets. The change is global. From Mexico to France, state-owned companies have been sold ("privatized"). Poland, Hungary, the Soviet Union and China are trying market policies.