The Work of Nations, by Robert B. Reich
Frum, David
even years ago, Robert Reich—until 0 then an obscure young professor at Harvard's Kennedy School of Government—seized the attention of the Democratic party and the national media with The Next...
...0-86597-090-4 0-86597-091-2 LibertyPress, 1991 894 + xx pages...
...It is an indispensable sourcebook...
...One of those was Sophie, the comtesse d'Houdetot, with whom he promptly fell in love and would have seduced, no doubt, had she not been the lovesick mistress of Jean-Francois St-Lambert...
...We were both drunk with love, she for her lover, I for her...
...Or yet again, "subsidies might come from a common fund established jointly by all nations...
...This is a claim that is very hard to deny, although conservatives have spent almost a decade trying...
...Reich chided his fellow Democrats for their attachment to dying heavy industries like steel, coal, and rubber, and argued instead that what determines Americans' prosperity is not the nature of the products they make (steel rather than hamburgers, computers rather than rock videos) but what they do to—the value they add to—those products...
...On more than one occasion, this fact has surprised investors and strategic brokers who thought they had made a purchase only to have it disappear like cotton candy as soon as it touched their lips...
...Perhaps a "GATT for direct investment" will be entrusted with the task of "setting out the rules by which nations could bid for high-value-added investments by global corporations...
...politics—whether they are thinkers or actors, whether they accept the discipline of the contemplative life or the equally necessary discipline of ideology...
...Rousseau comes across as sentimental and gushing, yet rude, suspicious, and hypochondriacal—above all, he was un homme de sensibilite...
...One was the flattening of the income curve, as the labor of skilled artisans was devalued and that of the unskilled men who worked the line became more productive, and as the children of what had been the small-town big-shot class were transformed from owners of mines and mills into managers of companies owned by vast numbers of anonymous shareholders...
...They must be shielded from foreign competition, protected from the rough-and-tumble of the market for corporate control, pampered with special tax breaks like rapid depreciation schedules and investment tax credits, have the burden of high medical insurance costs lifted from their shoulders and placed onto those of the general public, and—above all—be praised and admired as symbols of the American identity...
...THE AMERICAN SPECTATOR OCTOBER 1991 39 was worldwide overcapacity...
...Reich is forgetting his earlier strictures against the free movement of the most important of all factors of production—labor...
...And the participants in the high-value enterprise—particularly the most valuable participants—are now strewn all over the surface of the planet: Precision ice hockey equipment is designed in Sweden, financed in Canada, and assembled in Cleveland and Denmark for distribution in North America and Europe respectively, out of alloys whose molecular structure was researched and patented in Delaware and fabricated in Japan...
...Or maybe "subsidies would be pooled and parceled out to where they could do the most good, as the European Community has begun to do regionally...
...His proposals are as drab and unimaginative as his analysis was livelyand bold: after trying to liberate liberals from Big Business Liberalism, Reich wants to tether them to European-style social democracy, packaged as "economic nationalism" in order to appeal to the patriotic instincts of the American voter: Positive economic nationalism . . . would encourage public spending within each nation in any manner that enhanced the capacities of its citizens to lead full and productive lives—including pre- and postnatal care, childcare and preschool preparation, excellent primary and secondary education, access to college regardless of financial condition, training and retraining, and good infrastructure...
...In The Work of Nations, he chides his fellow Democrats for their attachment to "partnerships" between government and big business, arguing instead that large corporations should be perceived as nationless entities whose interests differ significantly from those of the American public...
...dollars...
...Routine functions are, increasingly, contracted out...
...Cranston's biography is based on a new and thorough investigation of the letters, journals, and memoirs of Rousseau and those who knew him...
...On the strength of this analysis, Reich calls for . . . more money for the schools lobby, more subsidies to selected industries, and more taxes on large incomes...
...Global subsidies and central planning conducted with all the rationality and cool disregard of political pressure we see in the European Community —this is the sort of neoliberalism that makes Taft conservatism look futuristic in comparison...
...In 1986, General Electric assumed that it had "acquired" Kidder, Peabody, the financial services house...
...A jet airplane is designed in the state of Washington and in Japan, and assembled in Seattle, with tail cones from Canada, special tail sections from China and Italy, and engines from Britain...
...Foreword, editor's note...
...Marriage, Rousseau felt, is to be postponed until the youth has learned the true power relation between men and women: women are predominant in society because, concealing their voracious sexual appetites through modesty and reserve, they civilize young men into learning the arts that please them...
...But most of all it's a grim warning of where the intellectual in politics can end up when he takes his ideology into the library with him...
...de Luxembourg, a bewitching woman with the reputation of a grande horizontale, he was her slave...
...The relativereward for the jobs available to the least capable members of society has been declining...
...Thus, as Cranston shrewdly observes, it was easier for Rousseau to be "the friend of humanity" than the friend of individual men and women...
...A third was the enhancement of the power of trade unions, since the clear distinction between the jobs that operatives and management did—and the kinds of education they got—enhanced class consciousness, and the imperatives of the production line made labor disruption very costly...
...de Pompadour, and announced that he would henceforth support himself as a humble music copyist...
...As he said to Mme...
...What's good for General Motors is not necessarily good for America...
...Reich would finance his economic nationalism with more taxes upon higher incomes, and he would prevent businesses from eluding the cost of nationalism by curbing immigration, which, he fears, puts pressures on the wages of the least skilled...
...It is now published by the Intercollegiate Studies Institute...
...note, bibliography, ch Hardcover $38.00 Paperback $12.00 Also Available MODERN AGE: THE FIRST TWENTY-FIVE YEARS A Selection Edited by George A. Panichas A feast of profound, stimulating, and foundational essays—a brilliant contemporary introduction to great minds...
...Americans run no dangers when Sony buys CBS Records—CBS is simply an assemblage of a talented group of people, almost all of whom live in the United States, who need Sony considerably less than Sony needs them: Whether by domestic or foreign buyers, high-value enterprises can no more be acquired than can the skilled and talented individuals who comprise them...
...As one observer put it, his pride was "so adroit" that it knew "how to disguise itself under the name of elevated feelings...
...A sports car is fmanced in Japan, designed in Italy, and assembled in Indiana, Mexico, and France, using advanced electronic components invented in New Jersey and fabricated in Japan...
...Feel good about the victory in the Gulf...
...Free movement of all factors of production across national boundaries," he declares, "ultimately will improve every-ones lot...
...they have felt obliged to compromise neither their work nor their political commitments...
...It was during this time that he wrote Emile, a treatise on the education of children...
...Drawing heavily on the work of the business historian Alfred Chandler, he begins by describing a mass production—or, as he prefers to call it, a "high-volume production"—era that began about 1890 and culminated between 1940 and 1970...
...Each of America's giant corporations naturally came to be regarded as a "national champion...
...But now Reich's story darkens...
...Thus, in 1756 he moved in and established his reputation as the hermit of genius...
...Nor does anyone "own" it in the traditional sense...
...But "public subsidies to firms that undertook within the nation's borders high-value-added production...
...T his may or may not be a very seri- ' ous problem...
...But the evidence is accumulating that Reich is at least partly right: since 1973, all the industrialized countries have seen an increasing dispersion between the incomes of their richest and poorest citizens, a trend that can be seen most sharply when one compares the incomes of men in their 30s without a high-school diploma and men of the same age group with a college degree or better...
...At the same time, mounting competitive pressures have crippled the power of certain once-formidable constituencies—airline pilots, truckers, steelworkers—to use the political process to extract for themselves wages greater than their productivity would justify...
...More important, he was an intimate of Diderot, Duclos, Grimm, Voltaire, and d'Alembert, who had likewise undertaken to challenge all received tradition and authority...
...o long as he is describing the evolution of the big corporation and the world economy, Reich is convincing...
...Big Business Liberalism says that the best way to assist American workers is with special favors to American corporations, especially big American corporations...
...Department F120 7440 N. Shadeland Ave...
...When it comes time to write his conclusions, all of his own arduous research demonstrating the waning control of national governments upon economic and financial activity is forgotten, and the old dogmas flood back into his mind...
...deciding which industries' requests for "infrastructure" will be met and which won't...
...Foreword, acknowledgments, editor's ronology...
...Immigration restriction, taxes, a lavish welfare state—well, it would be a dull world if we all felt the same way about topics like these...
...Please send me a copy of your current catalogue...
...A space satellite designed in California, manufactured in France, and financed by Australians is launched from a rocket made in the Soviet Union...
...Buy a Chevy...
...What seems to have happened is that a more sophisticated economy is demanding better-educated workers—and finding that it has fewer and fewer things it is willing to pay large sums to have unskilled labor do...
...Michael Novak These seventy-eight essays characterize the richness and diversity of conservative scholarship...
...There was equal love on both sides, even if it was not reciprocal...
...Reich cites the cigarette-making process developed in 1881 by James Duke's tobacco company, which could satisfy the entire demand of the United States with just fifteen machines...
...Mandarins in the central government will supervise and scrutinize companies, selecting those to be rewarded because they add enough value and those to be eased into death because they don't...
...film footage for it is shot in Canada, dubbed in Britain, and edited in New York...
...Positive economic nationalism also would tolerate—even invite—public subsidies to firms that undertook within the nation's borders high value-added production...
...d'Epinay, who generously offered Rousseau the Hermitage, a cottage on her estate...
...32.50 James W. Tuttleton 40 THE AMERICAN SPECTATOR OCTOBER 1991...
...She bore him five children—all of whom he consigned in turn to a foundling hospital...
...Two-and-a-half hundred pages of denunciations of "vestigial thinking" in order to arrive at this the sort of policies that have made New Brunswick and Calabria what they are today...
...With Voltaire he quarreled over Genevan politics...
...Subsidies, tax breaks, protection from competition or takeover—these, he bravely maintains, do very little to promote the public interest...
...Convinced by his own theories about inequality, the self-styled moralist retired to the country, distanced himself from the skepticism of the encyclopidistes, renounced the dissipations of fashionable life at the court of Louis XV and Mme...
...Liberals should devote their energy instead to using government to improve the quality of—and rewards to—American labor...
...This might take the form of severance payments, relocation assistance, extra training grants, extra unemployment insurance, regional economic aid, and funds for retooling or upgrading machinery toward higher-value-added production...
...investors supply some of the money needed to fmance its activities, for which they will be rewarded, like many other participants, with a portion of the profits...
...de Crequi, "Where luxury is universal, it is by simplicity that a man distinguishes himself...
...0 would have been possible had it not been for the radical chic of the wealthy Mme...
...Rousseau became an odd celebrity among fashionable parisiennes, who indulgently pampered his genius...
...On the strength of this analysis, Reich called for more money for the schools lobby, more subsidies to selected industries, and more taxes on large incomes...
...The transition from the pathbreaking to the pedestrian in Reich's new book can be marked with a pencil: page 245, end of the second paragraph...
...It's as if Reich did his analysis and his recommending with two different lobes of his brain—one acute, undogmatic, and empirical...
...And their readers are left to wonder what they could have written had they permitted themselves the freedom of not worrying about what their friends and colleagues might say about them...
...Corporations are no longer vertically integrated mass producers...
...The high-production economy is as dead as the clipper ship...
...1598 + xxxviii pages...
...GE was left with little more than Kidder, Peabody's good, but fading, reputation...
...Oddly, the very things for which we would now most strenuously criticize the high-volume economy of 1940-70 seem to appeal most to Reich: its uncompetitiveness (which Reich ascribes entirely to oligipolistic collusion, fastidiously ignoring the pervasive federal regulation of the period and the "predatory pricing" antitrust policies that brought the full force of federal power upon the neck of any large company that undercut its competitors' prices), its indifference to the variety of consumer wants, and its elevation of the powers of corporate managers over those of shareholders...
...There is no space here to discuss The Social Contract (1762), his last important work of the period, which begins with the ringing declaration: "Man is born free...
...There are exceptions, of course: the politics of James Q. Wilson and Charles Murray (on the right) and Nicholas Lemann and Lawrence Summers (on the left), for example, have flowed naturally from their scholarship...
...As for myself, I protest that if sometimes I was misled by my senses and tried to make her unfaithful, I loved her too much to wish to possess her...
...rri his is the second of a three-volume 1 life of Rousseau by Maurice Cranston, professor of political science at the London School of Economics...
...with Diderot the rupture involved the arid rationalism of the Encyclopedie...
...In the 1980s, while manufacturing rose as a percentage of U.S...
...Rousseau's withdrawal to a life of ascetic simplicity makes for a biography without much compelling dramatic action, but Cranston compensates with a generous presentation of fact and quotation that illuminates Rousseau's inner life and his relations with the illustrious of Paris, whom he had ostensibly spurned...
...It is at this point that Professor Cranston's superb second volume picks up...
...Funds for retooling or upgrading machinery...
...But when GE tried to exert control over its new acquisition—imposing stricter reporting requirements and tighter cost accounting—many of Kidder, Peabody's most skilled personnel departed for more congenial surroundings...
...And so they are tempted to shirk their obligations to one master or the other, either by slanting their work or by forgetting their beliefs...
...It has been replaced by a form of production that Reich characterizes as "high value," in which the old distinctions between goods and services, management and labor, have been swept away by a cataract of technological and organizational change...
...Robert Middlekauff, The Huntington Library The political culture of this country was formed, refined, and transmitted by the political sermon—the "pulpit of the American Revolution...
...and everywhere he is in chains...
...economic sacrifice and restraint exercised within a nation's borders is less likely to come full circle than it was in a more closed economy...
...Now, fifty-five of the most revealing political sermons have been made available in modernized and newly typeset form...
...They will have considerable discretion over what they do and how they do it...
...There can thus be no question that Mme...
...He is able constantly to document the discrepancies between what Rousseauactually said and did and the (unacknowledged) mendacities of the Confessions...
...The first, The Early Life and Work of Jean-Jacques Rousseau, covered the years 1712-54, during which the engraver's apprentice grew up in Geneva as a Protestant and ran away at sixteen to become a wandering footman, an interpreter, a tutor, the kept lover of several women, a Catholic convert, and finally the common-law husband of an illiterate domestic, Th6rese Levasseur...
...Regional economic aid...
...Rousseau of course insulted her for undertaking to put him into her debt...
...He threatened his publishers, accusing them of injustices where none existed and airing imaginary grievances to friends and acquaintances...
...In 1759, despite his avowed asceti- cism, Rousseau accepted the invitation of the marechal-duc de Luxembourg to live on his estate at the chateau of Montmorency—largely because, he notes in the Confessions, the moment he saw Mme...
...Name Address City State/Zip Mail to: LIBERTY FUND, INC...
...Reich likes them, I don't...
...But others—and here Reich is a sad example—are less successful in preserving the balance between research and commitment...
...Nor is there any more reason to fear foreign imports—especially when supposedly alien products so often turn out largely to be made here, and when supposedly domestic products are so often foreign goods with an American comTHE WORK OF NATIONS: PREPARING OURSELVES FOR 21st-CENTURY CAPITALISM Robert B. Reich/Alfred A. Knopf/320 pp...
...Reich's book is a protest against this infatuation with big business...
...Please allow approximately 4 weeks for delivery...
...T rue, Reich does hastily remind I himself of his own observation that we now live in a global, not a national, economy: As the borders of cities, states, and even nations no longer come to signify special domains of economic interdependence...
...Indianapolis, IN 46250 Please send me: Qnuativ Ordered Title Edition Price Amount Hardcover Paperback $38.00 $12.00 Political Sermons Hardcover Paperback $33.00 $11.00 Modern Age Subtotal Indiana residents add 5% sales tax Prepayment required on all orders not for resale...
...And it's an awfully sharp turn away from the realism and unsentimentality of Reich's analysis of the world economy...
...setting the level at which the necessary rewards for hard work cross the line into unconscionable wealth that must be taxed away...
...Reich is hardly unique in this unfortunate mental division of labor: policy intellectuals of both left and right often have trouble deciding whether they owe their first loyalty to scholarship or to David Frum is an assistant features editor at the Wall Street Journal...
...Rousseau attained fame by attacking the rich in his Discourse on the Origin of Inequality Among Men (1754), which took Paris by storm...
...An American company was headquartered in America, did its work in America, bought most of its materials in America, and paid its dividends to Americans...
...The consequence that Reich is most interested in, however, is that high-volume production created an identity of interest between the big corporation and the country in which it did the bulk of its business...
...His sole reservation about the economy of the period is—the man lives in Cambridge, Massachusetts, after all —that it discriminated against minorities and women...
...Cranston is properly critical of Rousseau's endorsing the tutor's use of deceit and humiliation on the grounds that, if the student has suffered, he will be more likely to sympathize with the sufferings of others...
...A microprocessor is designed in California and fmanced in America and West Germany, containing dynamic random-access memories fabricated in South Korea...
...The book was endorsed by Walter Mondale...
...Where others have seen corporate complacency and governmental folly in the policies of the postwar years, Reich sees social consensus and even solidarity...
...As it was, he was reduced to a platonic affair which he idealizes in the Confessions: I am wrong to speak of an unrequited love—mine was in a way returned...
...All orders from outside the United States mat be prepaid in U.S...
...d'Houdetot was the model for Julie in La Nouvelle Helorse (1761), an exaltation of swooning romantic love that contradicted all of Rousseau's avowed philosophical principles, as well as his prejudices about the corrupting effect of fiction on virginal innocence...
...Yet none of his simplicity of life James W. Tirttleton is professor of English at New York University...
...Seven years later, Reich—now a regular guest on public affairs television shows and a munificently paid lecturer to corporate America—is again challenging traditional liberal thinking about the economy...
...what should concern the nation is whether its people are prospering...
...The world economy was then dominated by giant enterprises that produced identical products in vast numbers from just a few locations...
...GNP from 20 percent to 23 percent, manufacturing employment as a percentage of all employment fell from more than 22 percent to little better than 17 percent...
...The book has been endorsed by George Mitchell...
...Hardcover $33.00 0-86597-061-0 Paperback $11.00 00-86597-062-9 LibertyPress, 1988 ^ Enclosed is my check or money order made payable to Liberty Fund, Inc...
...Reich feels that it is serious, and he addresses it in the final quarter of his book—the empty quarter...
...These sources had been widely neglected and were largely inaccessible...
...Another was that employees and executives all the way up to the most senior levels of the corporationwere rewarded for obedience rather than flexibility or innovation, because, in Reich's words, the high-volume production corporation's mission was "the efficient implementation of preconceived plans...
...Indeed, it is remarkable how many of the rich and famous took the long and inconvenient ride out to the Hermitage to see him...
...24 David Frum 38 THE AMERICAN SPECTATOR OCTOBER 1991 pany's name stuck on them, and when, above all, any product of any sophistication is a crazy assemblage of bits and pieces from all over the world...
...eich's purpose is to attack a heresy ni„ that he fears is gaining ground within the Democratic party: call it, for lack of a better term, Big Business Liberalism...
...From this it follows that the "nationality" of the corporations that employ its people shouldn't concern a country very much...
...Executives coordinate and broker...
...our sighs, our sweet tears mingled . . . yet even at the height of our dangerous intoxication, she never forgot herself for a moment...
...As he put it in the Discourse on Inequality, "The duty of your sex will always be to govern ours...
...Positive economic nationalism also would ease the transition of a work force out of older industries and technologies in which there NEW FROM LIBERTY FUND POLITICAL SERMONS OF THE AMERICAN FOUNDING ERA: 1730-1805 Edited by Ellis Sandoz "Professor Sandoz has provided a superb collection of sermons bearing on the politics of the era of the American Revolution and the early Republic...
...The most skilled and talented problem-solvers and -identifiers, on which [sic] so much depends, also are likely to receive a share of the profits...
...Instead, they are complex "global webs" of what Reich terms "problem-solvers, problem-identifiers and strategic brokers": No single group or participant "controls" this enterprise as the high-volume enterprise was controlled...
...Total We pay book rate postage on prepaid orders...
...But nobody can complain that Reich's positions on them contradict any of his other premises...
...An advertising campaign is conceived in Britain...
...even years ago, Robert Reich—until 0 then an obscure young professor at Harvard's Kennedy School of Government—seized the attention of the Democratic party and the national media with The Next American Frontier...
...Social consequences followed from high-volume production...
...Emile assumed that, since the mind of a child is a Lockean tabula rasa, the innocent should be given an education in the senses, free from the corruptions of society...
...To read these sermons is to grasp the intelligence and spiritual depth of generations of Americans who understood the close connections between spiritual, intellectual, political, and economic liberty...
...Modern Age was founded in 1957 by Russel Kirk, with Henry Regnery and David S. Collier...
...Petulant and egotistical, he continually made life difficult for those who tried to befriend him...
...There, with a nasty grinding, Reich shifts gears from thinking for himself to repeating the dismal formulas of the past thirty years of liberal politics...
...Reich is attached to central planning and state direction of industry as to a religion learned in childhood...
...the other, dull, orthodox, and inflexible...
...All in all, this is one of the most useful collections of sources available for the study of the young United States...
...And so, perhaps, the mandarins won't be working for the government of the United States, but for some supranational body...
...The social contract is to be understood as a "form of association which will defend and protect with the THE NOBLE SAVAGE: JEAN-JACQUES ROUSSEAU, 1754-1762 Maurice Cranston/University of Chicago Press/424 pp...
...This task is especially urgent, Reich thinks, because of the growing inequality between skilled and unskilled workers...
Vol. 24 • October 1991 • No. 10
