The shape of things to come: National Review asked five distinguished conservatives to muse about what the future may hold - politically, socially, economically, technologically - as we approach the end of a century and a millennium

National Review, July 8, 1991 by Irwin M. Stelzer, George Gilder, Norman Macrae, Jude Wanniski, Charles Murray

AMERICANS appear to have made two fundamental decisions about their future. One should depress conservatives, the other cheer them.

We seem to have ignored conservative wisdom and, instead, left social policy to the bad guys. Welfare schemes that guarantee a permanently dependent underclass are now thoroughly embedded in our political and social life. Neither the intellect of Charles Murray nor the energy of Jack Kemp can cope with the grim determination of ghetto politicians to hold their constituents in thrall by denying them incentives to work and to establish normal family lives; by insulating them from pressures to use our language and otherwise enter the American mainstream; and by blaming the lethal nature of street life on the police rather than on the dealers and muggers.

These malignancies, and others Uke them, might, of course, be excised from the body politic. But that would mean enduring short-term pain in exchange for long-term gain-something our political system is not organized to do. There is simply no constituency for it. The apparent beneficiaries of the welfare system (in fact, its victims) can't do without their transfer-payment "fix"; the dispensers of the welfare narcotic, fearing redundancy if those clients kick the habit, dole out enough money to retain control; the great majority crinkles up its nose, moves to the suburbs, and contents itself with a tax revolt that is negated by huge budget deficits.

The good news is that a country as vast and diverse as ours takes a lot of killing. And, because of another, happier choice, it is likely to thrive, although the benefits of that prosperity may be denied to a minority by that group's putative benefactors.

This happy choice has been to stick with a free-market economy, to reject the Reich-Kuttner-Dukakis plea for a centrally managed economy, the Gephardt drive for a gutting of the world's free trading system, and the populist move (lately abetted by Treasury Secretary Nicholas Brady) to turn the Federal Reserve system into an engine of permanent inflation. True, we do not always walk the straight and narrow: we protect this or that industry, subsidize mostly rich farmers at the expense of consumers, bail out Chrysler, and institutionalize sloth by refusing to privatize the postal system. But basically we hold to the notion that markets provide surer and more enduring cures for our ills than do bureaucrats. As a result, the crises of the late 1980s and early 1990s will soon be dim memories.

Consider, first, the so-called Third World debt crisis and the talk of the collapse of Latin American economies. Fortunately, the U.S. banks were unable to persuade a market-oriented Reagan Administration to bail them and their debtors out. The result in Latin America has been privatization to relieve the drain on resources created by overmanned state monopolies, removal of trade barriers so that imports can compete with overpriced domestic goods, and a generation of politicians beginning to see that markets, not ministers, can deliver prosperity. It all bodes well.

Then there is the related banking crisis. Billions in loans to Third World countries, and a wave of lending to energy companies prospecting for $100-a-barrel oil and real-estate companies eager to build empty office buildings and shopping malls, laid the banks low. Write-offs soared and profits plunged.

Again, we had a Reagan policy of, Don't do something, just stand there," to thank for a solution. Banks wrote down loans. Shareholders lost money. Prices of bank stocks fell-until they reached a level that attracted new capital into the system. And bureaucracies were reduced, to the point where 87 per cent of America's 12,340 commercial banks turned a profit last year.

So, too, with the trade deficit. Freely fluctuating exchange rates, the bane of economic planners, brought the dollar to levels that contributed to an export boom. The trade deficit-centrists' standard excuse for subsidizing some industries and technologies, and protecting others-is withering away.

That should put paid to the argument that America is becoming non-competitive, a manufacturing giant shriveling into a nation of hamburger flippers. In fact, the nation's factories now account for 23.2 per cent of America's GNP, up from the 20 per cent postwar low in 1982 and equal to the level of output in the 1960s when American industrial prowess was taken for granted.

Since most people are more pragmatic than ideological, and since conservative economic policies work, they should continue to sweep the field.

George Gilder

In Recent months, conservatives have been celebrating the feats of computer technology in war. In coming years, however, we will be able to use computer technology to blow away our enemies in the media and the schools as effectively as in the Persian Gulf. A cautious projection of current trends suggests that, within a decade or so, many of the multi-million-dollar computer powers displayed in the war will be available in home appliances costing a few hundred dollars. Compounding this gain in computers, the movement of fiber optics into homes and offices will bring a similar millionfold advance in communications.