The Work of Nations: Preparing Ourselves for 21st-Century Capitalism

Robert Reich has done a masterful job of analyzing the widening gap between the one-fifth of us who are riding the Web to unprecedented wealth; and the four-fifths of us who are falling farther and farther behind.I found his central thesis entirely credible: that the "symbolic analysts" of the world are seceding from the rest of the population into enclaves of privilege. His confession, as a Democrat, that his party has sold out to the same interests which used to be the sole property of Republicans helps explain why None of the Above won another presidential election this year.I can't fault Reich for not coming up with a brilliant solution to this trend--a renewed call to patriotism requires a great leader to issue the call, and he wasn't around on Election Day.

Many of us outside of the manufacturing sector have not yet seen the changes that the global economy has in store for us. In his economic model, Reich points out the "vestigial thought" of the American corporation -- which today consider themselves "global" with no ties to its home country. His point is that America as a nation should welcome foreign investment if it will provide jobs to Americans. The global economy, as he models, is comprised on global webs, with knowledge workers with ideas in the center, surrounded by support services that add global economic value and bring concepts and products to fruition.He also segments labor in the global economy into three catagories. Symbolic Analysts (or knowledge workers) who have the greatest chances for success, in-person services which are not readily suceptable to downward wage pressures, and routine producers which have already seen jobs shipped overseas to totalitarian areas with low wages. More important than his global economic model is the subtlties that lie deep within the text. At first glance these may be missed, but a careful study reaveals several important caveats.First that the global economy will likely mean less social mobility to the majority, with an ever increasing inequality in the distribution of wealth: Hence, the end of the middle class. This means that in a global economy, there may not be enough jobs paying living wages to support our already declining standards of living.Second, Reich points out the improbability of of everyone becoming sybolic analysts -- which is evidence on the growing population of people today who can not even perform basic skills. He refers to a study by William Julias Wilson, writen in "When Work Dissapears."Third, that as the rich get richer and further segment themselves from others, there will less of a connection between them and the poor -- a defacto end to the trickle-down economic theory. They also will continue having their own schools, private services etc, (their own private government) furthering the rift. He points out that the government has to take a careful approach to these people so as not to make them leave the U.S., taking with them the economy that revolves around them.Reich half-heartedly makes a few suggestions about investing in training, education, and healthcare as a means of giving all people an equal economic opportunity, but that also may be "vestigial thought."

This book is only slightly out of date in 1999. The analyses of the globalized economy are excellent. Especially insightful is the re-classification of all jobs into Symbolic Analysis, In-Person Services, and Routine Production. Where it fails is having enough faith in all peoples' ability to become Symbolic Analysts if they are given proper training. So the issue of organized labor should not be to retain its jobs, but to provide training to its members to transition into Symbolic Analysis jobs which are higher paying and are basic skills that will stay in demand no matter how much the economy changes.

The first half of "The Work of Nations" did a great job of explaining how the global economy really works. The second half of the book revealed Reich's ideas on how to improve the American labor force. I LOVED the first half but wasn't so thrilled with the second half. Free-traders (even the conservatives) will love the first half, and liberals will like the second half. I do understand that M.I.T. economist Paul Krugman takes issue with Reich in his book "Pop Internationalism," but even Krugman must like the first half of "The Work of Nations." The introduction alone makes this book a must read.

Probably one of the better books on the impending globalization of markets. It doesn't take the zero-sum look of Lester Thurow but is similarly written for the layman. Reich describes who will win in the market economy and provides plenty of material for Marxists, but he doesn't take a nationalistic view of globalization. People with little understanding of globalization should read this book as it tries to educate the common man about the problems with nationalistic trade regulations. Definitive reading for those who worry about NAFTA and the pending federalization of the EU