The Work of Nations

(Literary Masterpieces, Critical Compilation)

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...

(The entire section is 1939 words.)