Sure Things II: Engines of Affluence

© Laurence B. Winn

May 1, 2001

Cultures grow or die. Some people - too many - believe that they can prosper by seeking an equilibrium with nature, free of any obligation to pioneer, to colonize, to expand the human range. That is a false hope. The first law of frontier theory is: Grow or die, and it applies to territory. Like the second law of thermodynamics, to which it is related, frontier theory's first law relies for proof on inductive reasoning supported by example. One form of proof is to make predictions based on the theory to see if they work out.

Here we assume that human beings will not break out of their enclosed state any time soon. (See "First Principles" for a definition of enclosure.) Certain events could mitigate enclosure's effects, which is what makes prediction tricky. A good pandemic could provide temporary relief, as one did in 1350, when the Black Death wiped out a quarter of the population of Europe. War works, as long as you don't lose. We make the assumption that any epidemiological influences are slow-moving enough to allow economic factors to drive near-term events. We also assume that global war is universally understood to be unwinnable because of the advent of nuclear weapons. As in past episodes of enclosure (see "A Christmas Carol"), we should look for concentration of wealth in the hands of a few with an accompanying decrease in the standard of living of most people.

This article seeks to identify the types of businesses most likely to succeed in an enclosed environment, where there are no physical frontiers. These will be the engines for concentrating wealth, engines of affluence.

With a couple of exceptions, the predicted engines of affluence can be characterized as services. That is because the production of goods for local consumption is a characteristic of a frontier economy. The test of whether manufactured goods are for local consumption is the question: can the majority of people who work in the factory afford them? If the answer is "no", the business probably fits our definition of an engine of affluence.

Medicine is already an engine of affluence in the U.S., and it will become more so. Even in the event of complete socialization, medical practice should remain a secure route to wealth. Taking full advantage of the life-or-death nature of this business for maximum profit will require the practitioner to ignore medicine's ethical dimensions ... risky if government is the chief customer. However, protecting wealth and power against death and disease will remain, as always, highly profitable and relatively risk-free.

Not much needs to be said about the law. Lawyers can protect wealth only in societies that style themselves as democracies, and democracy is a frontier ideal.

Local electric power generation will become an engine of affluence. As the cost of supporting an electrical power infrastructure escalates beyond the ability of most people to pay, making power at home will become an issue for the wealthy. Solar power and wind power are current options. However, the hardware is conspicuous and vulnerable to storms and vandals. Further, there is no good way to store power generated when the wind is blowing or the sun is shining. Fuel cells with multi-fuel capability appear to offer a good solution for secure power in the homes and businesses of the wealthy.

The manufacture of high-end consumer products will become an engine of affluence. If you buy houses or cars or gasoline or tires or light bulbs or candy bars, or just about anything else, you will encounter "value engineering", which is the art of discovering the value in a product and getting rid of it. In an effort to keep prices within the reach of consumers, manufacturers already combine parts, make them thinner "but just as strong", replace expensive materials with cheaper ones, reduce test time, eliminate some kinds of tests and lose components that only might contribute to safety. You could think of it as a hidden form of inflation. In order to obtain a useful and safe product, consumers will have to move up the scale, and the cheaper products will drop out of sight as people make do without them or focus on maintenance instead of buying new. Ultimately, the only market for most new consumer products will be rich people, and only manufacturers positioned to take advantage of that will survive.

Maintenance will become an engine of affluence. Outside the circles of the incredibly wealthy, the global standard of living will be a Third World standard. Today in Cairo, anyone who can fix an obsolete toilet without spare parts is in demand. Hire a small army of such resourceful technicians and you have an engine of affluence. Under our assumptions, frontier theory predicts that this opportunity will become more widespread.

Security services will become engines of affluence. Body guards, guard dogs, concertina wire, alarms, weapons - those are the most obvious elements of an emerging market for protective services for the very rich. Fear on the part of the affluent and envy on the part of the lower classes ensure good hunting for marketers of security services, which could include training in the martial arts, wilderness survival, criminal investigation and emergency driving skills.

High-speed communications will become an engine of affluence as business travel becomes too expensive, unpleasant and dangerous to support. Increasingly, businesses that can master the skills to exchange information electronically (or optically), with a global reach, will be able to take their current travel expenses to the bottom line. CEOs may still get around in private jets. Luxury air travel may continue, but business class, and with it all cheap air travel, will yield to telepresence, the illusion of being there.

Space tourism will become an engine of affluence. Its marketing will carry a subtle subtext for the rich, a way for the well-off to demonstrate their distinctiveness by doing something constructive, hazardous and admirable, a kind of noblesse oblige. And it will stand as a beacon of hope for those left behind, waiting for the gates of the high frontier to open wide.

Time frame? Less than twenty years.

These are not the only engines of affluence. Certainly they are not the final destination of those with superior ambition. Why? Because after money comes power.