Three drawbacks of postindustrialism- an unbalanced mix of jobs, slow income growth, poor export prospects.

Most of the jobs in the New Economy require considerably higher then average intelligence if one was to get a high paying job: financial engineering, legal services, computer software, Web site building, healthcare, broadcasting, database management, consulting, scientific research, or telecommunications, tourism- typically peoples whose IQs rank in the top twenty percent on IQ tests.

As estimated by the postindustrial economic commentator Michael Rothschild, up to twenty percent of the American workforce will be marginalized by the move to an information- based economy.

Marginalized-selling goods at a price that just equals the additional cost of producing the last unit supplied.

That the drift in the United States into postindustrialism results in weak income growth is one of the most serious, albeit one of the least recognized, drawbacks of the new economy.

The ultimate authority on this is OECD in figures, a yearbook published by the Paris- based Organization for Economic Cooperation and Development.

It shows that, with a per capita income at last count of just $27,821 a year, the United States trailed no fewer then eight other nations. These include Japan, Denmark, Sweden, Germany, and Austria, all of which devote a larger share of their labour force to manufacturing than the United States.

Most telling of all is the performance of Switzerland, a manufacturing- oriented economy whose per capita income of $41,411 is the highest of any OECD nation.

With almost no exceptions, manufacturing oriented economies have outpaced the United States in income growth.

Between 1980-1996, the United States boosted its per capita income at current prices- that is, before adjustment for inflation- by a total of 134 percent. This growth may seem impressive, however it was bested by no less then twelve OECD nations. In order of growth income these were South Korea, Japan, Portugal, Ireland Luxemburg, Austria, Italy, Spain, Denmark, New Zealand, Germany, and Switzerland.

Given the strength of the statistical evidence to the contrary, why did the postindustrialists ever consider the information economy a superior formula for income growth in the first place?  It appears they have been blindsided by a subtle fallacy. This fallacy is clearly apparent in the views of John Naisbitt, author of Megatrends, and one of the earliest cheerleaders for postindustrialism.

The high wages paid in typical postindustrial businesses, such as software, merely reflect the fact that such businesses generally recruit exceptionally intelligent and capable workers, in essence workers who could expect to earn superior wages in almost any field they chose to enter.

Nevertheless, many postindustrialists cling doggedly to their faith in the New Economy's superior income performance.

South Korea-in sixteen years to 1996, its cumulative income growth was a stunning 564 percent. By comparison with this performance, the subsequent strains suffered by the nation have been mere speed bumps. In fact, it is likely when all figures are available, we will find that South Korea remains far and away the league leader in income growth for the entire period between 1980-1998.

Japan-the strains suffered in 1997 and 1998 were nowhere near so serious as to wipe out the superiority of its record in the previous sixteen years.

Postindustrialism weakens a nations prowess in overseas trade.  Virtually all postindustrial activities are handicapped in export markets by fundamental cultural differences (Due largely to language).  Many kinds of information are inherently local in appeal and therefore generate minimal exports. Information on traffic conditions in Vermont, for instance, is likely to be of little value in Virginia, let alone in Vietnam. Similarly, a database on Nebraskan car insurance rates has little value in North Carolina, let alone in the Netherlands or Nepal.

Culture is also a barrier to exports in many other highly paid information based professions.  In non-English speaking markets, such as Japan or Germany, British advertising firms must rely almost entirely on locally recruited professionals to serve clients in those countries.

Another key impediment to trade in postindustrial services is regulation in foreign markets, which is generally a much bigger problem for exporters of services than for exporters of manufactured goods.

As if America's poor prospects for exports were not bad enough, there is another problem with the trade side of postindustrialism- rising imports.

There is little evidence that simply by dint of their nationality that Americans are more creative then other people- and certainly there is no reason to hope, as the postindustrialists do, that a purported edge in creativity will render the United States invulnerable to foreign competition in the postindustrial era.

Certainly the inconvertible facts of the industry give the lie to the idea that Americans have a special lock on software writing skills. Many other nations, including the world's poorest, have demonstrated that they have what it takes to compete in the industry.

The Know How to enter the software business is amazingly easy for developing nations to acquire, which opens up the possibility that American software workers will increasingly be undercut by low wageworkers abroad.

The conclusion, therefore, is that, from the point of view of the American balance of payments, the shift to postindustrialism is double trouble. First, it weakens the nations import strength. Second, it exposes the United States to the prospect of rapidly increasing imports. That said, many Americans find it easy to overlook the fact that postindustrial businesses do not do much for the balance of payments. After all, the huge U.S. current account deficits do not currently effect the quality of life within the nation-at least not in the short run. But in the long run, trade matters-and matters fundamentally. A nation that allows its trade position to deteriorate too far for too long cannot expect to remain the world's leading economy indefinitely.