Over the last 50 years, the American economy has experienced several key changes that have impacted various economic indicators. This essay analyzes the effects of the changes on the American economy, focusing on supply and demand, production, unemployment, entrepreneurship, and other economic indicators. By examining the interconnectedness of different components of the economy, the impact of these changes over time can be understood. The cost margins in high-income nations have increased due to the expansion of economies of scale and globalization, leading to higher business expenses (Shapiro 75). It has resulted in businesses balancing the increased costs while still staying competitive. The three most impactful changes in the American economy in the last 50 years are the COVID crisis, technological advancements, and trade and globalization, affecting economic indicators like unemployment, with both positive and negative outcomes.
The COVID-19 pandemic has deeply impacted the American economy in several ways. The widespread lockdowns, business closures, and decline in consumer spending have caused a sudden and severe economic contraction. For example, the decrease in consumer spending has reduced the demand for transportation services, leading to job losses in various transport-related jobs such as driving. The outbreak of COVID-19 has rendered the closure of companies due to bankruptcy, whereas some companies are facing financial strain. Well-known US businesses like Hertz and Sears face severe financial challenges (Donthu and Gustafsson 285). The pandemic has disrupted the delicate balance between supply and demand, resulting in a decline in economic activity and unemployment. Small businesses have faced immense challenges; however, the pandemic has created new opportunities in the e-commerce and delivery sectors. Compensating factors like technological developments during the conflict may occasionally boost individual or national productivity (Hazlitt 17). Healthcare, pharmaceutical, herbal, and vitamin-related industries are among the others that are thriving (Donthu and Gustafsson 285). The shift towards e-commerce has become necessary for many retailers to remain operational, though this has unfortunately led to job losses in the retail industry.
The technologies that have significantly impacted the American economy over the past 50 years include smartphones, the internet, and digital platforms. Telephone technology, for example, performs tasks that direct human labor is completely incapable of (Hazlitt 45). The widespread adoption of smartphones and internet technologies has transformed how people communicate, work, and access information, creating new opportunities and industries in the digital economy. The growth of e-commerce, online services, and software development directly results from the increased availability of high-speed internet and mobile devices. The development of these technologies has also made it easier for entrepreneurs to start and grow businesses, providing them with new ways to connect with a global market. On the contrary, technological advancement has harmed certain segments of the workforce (Hazlitt 36). It contributed to job losses in certain industries as companies looked to reduce labor costs through outsourcing and automation. Nevertheless, the rise of online platforms has positively impacted the American economy by providing small businesses with new opportunities to connect with a global market and increase their chances for economic growth.
The increase in trade and globalization has significantly impacted the American economy over the last several decades. Henry Hazlitt’s economic views provide a deeper understanding of the complex interplay between different components of the economy and their impact over time (Hazlitt 3). The US dollar serving as the world’s reserve currency for a long period has made the US economy crucial to globalization. The increased trade has brought several benefits, including increased competition, lower prices, and easier access to a diverse range of goods and services. However, globalization has also resulted in job losses in certain industries, particularly manufacturing. Companies looking to reduce labor costs may consider outsourcing jobs to countries with lower labor costs, which can lead to decreased employment opportunities in the US. The decline in jobs in manufacturing has had a ripple effect on other industries, including transportation, retail, and hospitality. In addition, globalization has increased pressure on businesses to compete on price, leading to lower profit margins for many companies. It has also impacted entrepreneurship, as small businesses may need help to compete in a global market.
In conclusion, the American economy has undergone major changes over the past 50 years, each with its own positive and negative impacts. Several factors have influenced the rise of superstar firms in the American economy. These include economies of scale, increased globalization, advancements in information technology, and differences in firms’ capacities to adopt and adapt to new market conditions (Shapiro 75). These elements of the competitive process have allowed the most effective businesses to grow and profit above average. Another great change that has impacted the economy of America is the outbreak of COVID-19. Although these changes have negatively impacted the economy, the positive impacts outweigh the drawbacks. Therefore, stronger merger enforcement of globalization and technology could promote a healthy competitive process, leading to greater economic growth and stability. These changes highlight the importance of considering both short-term and long-term economic impacts and ensuring that the benefits of globalization are shared fairly across society.
Works Cited
Donthu, Naveen, and Anders Gustafsson. “Effects of COVID-19 on Business and Research.” Journal of Business Research, vol. 117, Elsevier BV, 2020, pp. 284–89. Web.
Hazlitt, Henry. “Economics in One Lesson.” Foundation for Economic Education, 2014. PDF download.
Shapiro, Carl. “Protecting Competition in the American Economy: Merger Control, Tech Titans, Labor Markets.” Journal of Economic Perspectives, vol. 33, no. 3, American Economic Association, 2019, pp. 69–93. Web.