2030: Frictionless Markets

Abstract

In the twentieth century, supply chains were relatively simple, as is shown in Fig. 7.1 below: the original equipment manufacturer, or OEM, was at the epicenter of the process, such as Ford and GM in the twentieth century. Production held sway over the process, and OEMs used their muscle both upstream and downstream of its process in order to achieve growth. This led to a model of unprecedented economic growth and prosperity for all, as the structured supply chain relationships were kept together by the frictions of transaction costs, and the lack of any substantive competitive overseas enabled U.S. companies to use their capital for higher wages more so than capital improvements, which enabled the multipler effect: workers were paid well that led to more consumption, and more consumption led to greater production.