The arrival of the new millennium offers us an opportunity to consider matters from a longer term point of view. While it is impossible to predict the events of the coming 1,000 years -- pause to consider that of today's seven leading industrialized coun- tries, only Japan, France and Britain existed 1,000 years ago -- one is able to ponder what the coming 100 years has in store.

In economics, we should consider desirable policy aims, measures that can be recommended to realize those aims and, indeed, economic theories which befit the new environments in which we are to live.

Among other things, we will see a shift in the emphasis of our values. We may be talking more about culture, philosophy, history and politics -- at least in Japan -- and less about economics and business. Conservation and the environment will become popular subjects for the young as well as the young at heart.

This shift may be partly because an excessive swing to one extreme will normally make its way back in the opposite direction. But it may also be partly because the world economy, when viewed as a whole, has reached a stage where a thorough review is not only a must but also highly warranted.

First, we are approaching the economic stage, at least in industrialized nations, where the amount of production, or the rate of growth, is not hugely important. Although people around the world, wherever they live, are still keen to see growth, it is time we reconsidered whether this obsession is justifiable.

Today, countries set a target growth rate each year, and neighboring countries urge their allies to retain accomo-dative monetary policies and expansionary budgetary measures to hit the mark. But we now live in a world of goods and services, the supply of which, in part, may be unnecessary. Our priority should shift to distribution and away from production.

In the new age, we must ensure that resources are distributed in such a way as to best meet the needs of society, that income is distributed properly among the people and that factors of production, be they natural resources or human work forces, are optimally distributed.

Second, we may begin to feel constraints imposed by the fact that the resources available to us are limited. As the population rises and, hence, the production required to feed them, we consume vast amounts of water, trees, fossil fuels and other natural resources.

The loss of these precious gifts from the Earth has literally become more visible each year. If we are to maximize the welfare of the human race over millennia, we must remember that the more we consume now, the less is left for future generations. To exaggerate slightly, the more comfortable our lives are today, the less pleasant our descendents' lives will be, disregarding the benefits of technical progress and innovation.

These considerations point to a need to construct a new economic theory. Important elements of that theory are, in my view, as follows.

First, it should aim to maximize the welfare of the people over generations. Present economic theories only aim to maximize the welfare of those living right now. Second, we have to incorporate the philosophy of increased cost in production. Today's economics texts preach the production function which states that the more that is produced, the cheaper goods become. The present system as a whole, based on that theory, gives incentives for increased production and hence, for the greater consumption of resources. This is a mistake. The new theory should embody the idea of increased cost in one form or another.

I have to admit that incorporation of these two elements into economic theory is a formidable task. But so what? We have to think in terms of millennia.