Capitalism is perfectly compatible with slavery, democracy not
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Lester C. Thurow sees five forces that will dominate the world economy after the fall of the Berlin Wall with the creation of a Second World (the old communist one) between the First and the Third ones.
forces
1. with the fall of the Berlin Wall, well-educated but cheap labor from the Second World will migrate to the First World putting wages in the First one under pressure;
2. a technological shift to an era of man-made brainpower industry and concomitantly the disappearance of Ricardo's competitive advantage;
3. considerable demographic changes: a big increase of older people (the financial enemy) in the First World and massive migration of unskilled labor from the Third World into the First one, putting again global average wages under pressure
4. a globalization of the world economy
5. an era without a dominant power which could function as an economic locomotive
capitalism on its own
Before the fall of the Berlin Wall, the capitalist world had been held together by the fear of communism. Now, capitalism, with at its heart `profit maximalization by minimizing costs and maximizing revenues', stands alone. It has only one adversary: democracy (politics).
capitalism v. democracy
Democracy believes in a completely equal distribution of political power (one man, one vote), while capitalism believes that it is the duty of the economically fit to drive the unfit into economic extinction, or, as Spencer said, to starve them to death. (`Contract for America': if faced with the reality of starvation, everyone will buckle down to work).
But, the survival-of-the-fittest version of capitalism doesn't work. E.g., a pure capitalistic system would do nothing against long-term environmental problems like global warming.
politics
The answer should come from the political sphere, from democratically elected governments (undemocratic governments will only serve special interests). Politicians need a vision of how to reduce inequalities and how to raise global average wages. Otherwise, any society will retreat to ethnicity.
But what do we see? Many governments have negative time horizons. They are borrowing (budget deficits) from the funds that should be used for investments for the future. In these circumstances, the intrinsic problems of capitalism visible at its birth (instability, rising inequality, an army of have-nots) can and will not be solved.
In this masterly analysis of the actual and future way of the world, Lester C. Thurow puts the democratically elected politicians before their responsibilities: To-morrow before Today, more equality and more democracy.
This book is a must read for all those who want to understand the world we live in and who are interested in the future of mankind.
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Packed With Knowledge!
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This is a particularly important book for two types of people to read: those who believe economic instability and inequality will lead capitalism to implode (they’re wrong); and those who believe the economic engine of capitalism is running just fine, especially in the United States, and simply needs to be left alone by meddling do-gooders, thank you (they are wrong too). Neither view is realistic. Lester C. Thurow is quite well suited to explain why. He is practically a brand name on national television, known for making more sense of the economy than anyone could possibly expect from a dean at MIT. Although Thurow wrote this book in 1996, the trade deficit, the skewed distribution of revenue and the disparity between rich and poor continue to demonstrate the validity of his conclusion that fewer and fewer can get more and more for only so long. We highly recommend his insightful analysis, wishing only that Thurow proposed deeper solutions for the problems he so ably diagnosed.
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Revealing commentary
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This book opened my eyes to a lot of the problems of our capitalistic society. Mr. Thurow is a bit apocalyptic at times, but many of the truths he examines prove that we are in a period of "punctuated equilibrium," with a rather uncertain future. You should read this book if you want to find out the real economic problems we will be forced to come to grips with very soon.
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Tough Read
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This book was not meant for rabble or light weights. Mr. Thurow is a serious scholar with a serious piece of work, though his explinations are questionable. How, after all, is the fall of communism going to force a 4 day work week? Does the information superhighway really mean fewer blue collar jobs? Japan as the next great trading bloc? I don't think so. While scholarly in parts, it's hokey in other parts, and by the end, loses all continuity. It seems as though Mr. Thurow relies more on his reputation as a heavyweight scholar then he does reliable scholarship in this book. It wouldn't surprise me if Mr. Thurow was one of the few leading academicians still clinging to Marxism, because that's what this tract amounts to. Don't waste your time; go watch a re-run of CHIPS or something.
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a lucid explanation of the forces shaping world ecomomies
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It's rare to find a book which is so insightful. As people and politicians around the world are reeling and reacting to the dramatic economic changes happening around them, Thurow is the scholarly observer who explains to us so clearly why these changes are taking place.
The author deepens our understanding of events by providing the historical context and presents us with our future dilemnas and challenges. Such as the widening gap between rich and poor.
This book will be a light and demystifier to your economic world view. As far as economics go, this book is straight talk, captivating and excellent.
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