Last Updated on June 19, 2019, by eNotes Editorial. Word Count: 207
The Work of Nations is an account of the modern economy and how technological advancements and globalization has influenced it. Information communication technology has made the world small, and nations dependent on one another. The author uses analogies to explain what would happen to a nation if it failed to...
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The Work of Nations is an account of the modern economy and how technological advancements and globalization has influenced it. Information communication technology has made the world small, and nations dependent on one another. The author uses analogies to explain what would happen to a nation if it failed to take care of all its citizens. Regardless of whether the citizens are rich or poor, if a government fails to implement policies that benefit everybody, the economy 'sinks' since everyone belongs to the same country. Although the author doesn't openly talk about solutions to certain economic problems, he offers his perspective on how things might improve if the government implements certain policies. For example, the author believes that if everybody receives the same quality of education, it would solve the unemployment problem. He also thinks that the government investing more in infrastructure projects could create much needed employment. The author also supports international trade and globalization and sees it as a way for investors to shield themselves from risks- having investments in multiple countries protects the investor; when one economy collapses, he or she can depend on another one. Generally, the book is educational and a great read for someone interested in understanding how modern capitalism works.
Last Updated on May 6, 2015, by eNotes Editorial. Word Count: 1939
In An Inquiry into the Nature and Causes of the Wealth of Nations (1776), Adam Smith argued that if a nation encourages a laissez-faire economic environment, individual self- interest will necessarily promote the common welfare. An eighteenth century materialist much influenced by the skepticism of Scottish philosopher David Hume, Smith developed the theory of division of labor and stipulated that value is an outgrowth of the labor expended in producing goods.
According to this economic scheme, productivity was emphasized, and those involved in the routine production of goods were significant actors in fulfilling that scheme. Smith’s resistance to free trade favored national economies at a time when transportation and communication were not highly enough developed to permit the sort of a global economy that has emerged in the age of supersonic aircraft and computerized communication.
Robert B. Reich’s The Work of Nations: Preparing Ourselves for 21st-Century Capitalism takes into account the economic implications of utopian technological advances that Smith could never have imagined. Reich uses the analogy of a boat to represent the way many people look at nations. The boat, one would assume, has a captain (in the United States, the president), a purser (in the United States, the chairperson of the Federal Reserve), an entrenched hierarchy of those who keep it afloat (in the United States, career bureaucrats), and all its passengers (in any country, the total citizenry).
Passengers on the boat live at various levels of luxury, some having suites on the top deck, others being crammed wholesale into stuffy quarters below the waterline. All, however, are attached to the same general entity. If the boat sinks, they all sink with it.
Examining the evidence before him, Reich concludes that his analogy of the boat is not valid for contemporary societies. A global economy, rather than discrete national economies, will dictate the economic future of civilization. Those who will profit most from rapidly emerging new economies Reich identifies as the “symbolic analysts.” If they find themselves on a sinking ship (analogically, in an economically foundering nation), they are in a position to helicopter off their ship and land near the luxury top-deck suite of another ship that is not sinking but is steaming on a direct course to some desirable port.
Because the helicopter lacks space for every passenger on the sinking ship, only a handful, all symbolic analysts—and only the best of them—escape. The lower-level symbolic analysts, along with two other classes of passengers, those Reich identifies as “routine producers” and “in-person servers,” go under when the ship (national economy) plunges into the deep. In his intimations, Reich sometimes sounds like a latter-day Charles Darwin, hinting darkly at natural selection and the survival of the fittest.
Reich’s hierarchy demonstrates the rapid pace of change in the late twentieth century. The routine producers were secure from Adam Smith’s time until well into the middle of the twentieth century. As increased and advanced mechanization reduced the importance of routine producers (assembly line and semi-skilled factory workers), the importance of the service occupations increased significantly.
That ascendancy, however, did not last for the approximately two centuries during which routine producers were indispensable linchpins in national economies. With the upsurge of computers and the technological advances they have made possible, the world has shrunk dramatically. The beginnings of twenty-first century capitalism started to emerge a whole decade before the new century officially arrived—some would say much sooner than that.
Reich, like such other writers who address contemporary economic matters as Alvin Toffler and Peter Drucker, acknowledges the absurdity of speaking of U.S. businesses. With the development of microchips, computers, lasers, and other recent technologies, nearly all industry has become transnational. Shoes made from Wyoming cowhide, for example, may begin their manufacturing journey—which will end in U.S. and other worldwide markets—in Brazil, where the leather is prepared and cut. The shells then might be sent to a Pacific Rim or African country for processing, assembly, and finishing, then be shipped to the countries where they will find their markets, possibly back to Wyoming, where their journey began months earlier.
Certainly, the automotive and electronic industries are similarly transnational, some of their transnationalism dictated by specific market and labor conditions, some dictated by political considerations related to fair-trade practices. One thing is undeniable: The manufactured products upon which contemporary humankind most depends for the operation of complex societies are seldom the products of single countries but are the products of half a dozen or more countries that have contributed notably in the process of adding value to the raw materials or partially finished products that reach their manufacturing plants.
To Reich, the economic welfare of a nation and of most of its people is inextricably linked to the corporate successes the industries in that country enjoy. Certainly, the citizens and leaders of Eastern European countries in the early 1990’s have come to realize this fact of life and must acknowledge it if they are ever to revitalize themselves. Indeed, Eastern Europe in many ways aptly illustrates much of what Reich purports.
Under collectivism, the best of the symbolic analysts usually had the flexibility to move because they had abilities they could use to flourish in contexts outside their individual communities or nations. A Vladimir Posner, an Andrey Sakharov, an Aleksandr Solzhenitsyn, a Martina Navratilova, or an Ivan Lendl could leave home with impunity, although not all of them chose to do so.
The routine producers in Eastern European countries—industrial workers, menial workers, assembly-line crews—were not only boxed in, but their lives within their small culture boxes were also rapidly becoming more difficult and more hopeless than they were before a global, transnational economy changed world conditions. Because they lacked the high- level skills that the global society was willing to vie for, that the global economy could benefit from, they had nowhere to go.
In a slightly better situation than the routine producers in Eastern European countries were the in-person servers, a group that included a broad range of workers from maintenance people, barbers, and truck drivers to teachers, physicians, and engineers. The service occupations are usually in some demand regardless of economic conditions: the sick must be cared for, bridges must be repaired, goods must be delivered. In most developed countries, the occupations of the routine producers, however, were being bypassed more each year by mechanization.
Although Reich does not have pat answers to nagging questions about how to deal with productivity and unemployment problems in the new global economy, his book is not devoid of recommendations for the United States and other nations as they work toward dealing with the problems the global economy poses. Clearly, education is one key to advancement within Reich’s brave new world. The symbolic analysts, whose chief function is to find lurking problems and work toward their solutions, are essentially well-educated people.
Although more-equal educational opportunities will solve the unemployment problems of some people, a society with too many well-educated people creates its own problems. The number of high-level jobs is more limited than the supply of people to fill them. A well-educated, unemployed populace can turn into a time bomb as its collective frustration pushes it closer and closer to explosion.
Reich’s suggestion that nations—particularly the United States—make the rebuilding of their infrastructures a top priority will serve the dual function of strengthening nations internally and of offering employment for those who might otherwise not be able to find work. The rub here is that, with advanced technology, even such jobs as resurfacing roads and rebuilding deteriorating bridges can be done much more efficiently—and with less manpower—than ever before.
Many Americans are concerned about the amount of foreign investment in the United States. Reich views foreign investment as an encouraging sign that should be welcomed rather than scorned. Of necessity, laws in the United States that govern foreign ownership of corporations are under constant scrutiny. Several months after the publication of The Work of Nations, for example, legislation was approved permitting up to 49% foreign ownership of commercial airlines in the United States. The legislation brought an immediate infusion of capital into the nation’s transportation system.
An inevitable concomitant of the global economy seems to be sustained trade deficits for some countries. Reich considers it shortsighted to worry about such problems, although he offers no clear-cut solutions to them. His seventy-page section entitled “The Global Web” leaves one with the impression that things will work out, but the means by which they will work out are not articulated in detail.
In some vague way, Reich seems to be suggesting that the United States will muster its entrepreneurial skills to maintain its position as a significant economic force in the world. Yet his book does not suggest how to deal with the all-important question of productivity. His suggestions about moving from high volume to high value do nothing to solve the problems of unemployment that inevitably occur when the demand for goods and services is less than the number of workers wishing to provide them.
In this sort of situation—even if the economic welfare of all citizens is assured—the unemployed will suffer from the lack of satisfaction people derive from working. Our large cities are microcosms of what vast reaches of the nation could become. Homeless and hopeless people, third- and fourth- generation welfare recipients, and others who have never been able to cope with the societies in which they find themselves or to contribute to those societies in self-satisfying ways already represent a large segment of society. Reich suggests only obliquely how to overcome this situation.
One pervasive problem the book identifies is that the most successful symbolic analysts gain increasing flexibility in where and how they live. The implication is that such people will identify with their jobs more than with their own countries. They might essentially lose their national identities and loyalties as they move from assignment to assignment.
As the gap between rich and poor, gainfully employed and perpetually unemployed widens, large numbers of those in top jobs will predictably find it more comfortable to function as citizens of the world without narrow national affiliations than to live in social milieus that become increasingly threatening and distasteful to them. They may find it attractive to become detached internationalists, an economic, well-educated elite with greater loyalties to their professions and corporations than to their native lands. The children and grandchildren of such internationalists may live in virtual ignorance of their own national origins, so their loyalties will not be to a nation.
Those who look askance at Reich’s theories point out that the problem in the United States is less that of not knowing how to deal with an economy that is fast becoming global than it is a problem of low growth in productivity. Because U.S. industry pays its routine producers some of the highest wages in the world, and because these workers are less productive per capita than their counterparts in other countries, foreign competition has hobbled the U.S. economy, resulting in a negative trade balance for the nation and in the highest national debt the country has ever experienced.
Sources for Further Study
Chicago Tribune. March 10, 1991, XIV, p. 3.
The Economist. CCCXVIII, March 23, 1991, p. 95.
Los Angeles Times Book Review. April 21, 1991, p. 2.
The New York Times Book Review. XCVI, March 10, 1991, p. 3.
The New Yorker. LXVII, April 15, 1991, p. 104.
Publishers Weekly. CCXXXVIII, January 18, 1991, p. 48.
Time. CXXXVII, March 4, 1991, p. 78.
The Times Literary Supplement. May 31, 1991, p. 10.
The Wall Street Journal. March 20, 1991, p. A20.
The Washington Post Book World. XXI, March 3, 1991, p. 1.