O Brave New Global Economy

...witness Europe, hurtling toward economic union...

...Nor can political and economic autonomy be readily separated: As economic strength is a key element in national security, so it is vital to the endurance of national principles and values...

...Indeed, it seems too early to bury the nation state, and it is by no means clear that we should be keen to do so...

...Reich's discussion of "work in America" affords particular pleasure...

...Yet if, as Reich foresees, power in the new world will come to depend more on economic than military strength, we must be on our guard against reverting to subtle forms of imperialism...

...Or is it rather stumbling, quarreling, lurching in that direction...

...I must admit that many of the concepts I held when I first dipped into this book are becoming meaningless, though some of my ideas are changing faster and more profoundly than others, and some will probably not change at all, or not significantly, in the coming century...

...On the other hand, he has a lot to say about education, which he sees as critical to the nation's ability to compete in the global economy...

...They do not have the welcome mat out, either, for the Soviet Union, now tottering between the chaos of halfbaked economic reform and a reversion to Stalinist-style central planning and bureaucratic control...

...Moreover, the war in the Persian Gulf has made members of the European Community appear more nationalistic than ever...

...He submits that what Tocqueville called the American religion of "self-interest rightly understood" remains a sound basis for a liberal trade policy predicated on an international division of labor...

...The passage, like so much futurist writing (including that of the newsweeklies, those spotters of a trend a week), is full of bold assertions mixed with fudging terms: "more reflective," "almost every," "emerging," "being shaped," "becoming meaningless," "notions of," "some faster and more profoundly than others...

...In fact, the whole of The Work of Nationsis enjoyable, quite readable and stimulating...

...Generally, Reich'sprescription for increasing American competitiveness calls for a rejection of what he terms Strategy I (protectionism, including tariffs and so-called "voluntary" trade restraints forced on other countries), Strategy II (cutting domestic wages to the bone, laying off surplus American workers, building new factories abroad), and Strategy III (generating profits from financial manipulation, first through conglomeration and then through disgorgement...

...Reich's faith in the emerging global economy moves him to reject the snare of protectionism, whether in the oldfashioned form of high tariffs or in the more modern guise of highly aggressive "market-opening" trade policies...

...The Smithian lesson still needs to be preached to the world, especially to Japan, and it is good to see an influential latter-day liberal and Democrat promulgating it...

...Though Reich may err in understating the continued importance of preserving a substantial domain for national economic decision-making in a world that is unquestionably becoming more interdependent, he is surely right to condemn nationalism in its imperialist form...

...Were I to employ the style myself, I might say the following: "My criticism of Professor Reich is more reflective of my desire to recognize his contribution than to condemn his effort to sizzle, as is no doubt true of almost every critic seduced by his bright prose and good heart...

...This remains a life-or-death issue for nations that feel their identity is threatened by neighbors whose philosophy or power they cannot accept—as we saw in 1989 in Poland, Czechoslovakia and other states under the Soviet boot, and are currently witnessing in the Baltic States, the Ukraine, Israel, Hong Kong, and Tibet...

...The quest for resources (like oil) as well as for contracts (say, to rebuild Kuwait) can lead national governments to run interference for corporations actually or symbolically bearing their flag...

...Half a century ago, Hannah Arendt made a strong case for nationalism as crucial to safeguarding not only the physical survival of a people but also its deepest ideals and right of self-determination...

...A similar transformation is affecting every other nation, some faster andmoreprofoundly than others...

...A healthy world economy would be one in which international law puts an end to the arms trade, just as a healthy domestic society would be one in which gun traffickers are put out of business...

...It gives us some no vel ideas to grapple with, and revalidates some old ones —which may be just as important...

...Hobson's observation may not apply so clearly to the present, but the surge in international arms sales, notably to the Middle East, suggests that his concept of imperialism still has some validity...

...Instead of focusing on High Volume, he says, we should aim for High Value, with the stress on science and technology, customized goods and services, and a highly skilled labor force...

...Even if the 12 member nations of the European Community could be said to be hurtling toward economic union, they are not eager to take in their NATO ally Turkey or the tangled ex-Communist economies of Eastern and Central Europe...

...Reviewed by Leonard Silk Economics columnist, the New York "Times" Robert Reich, a professor at Harvard's Kennedy School of Government and chairman of the editorial board of the liberal journal the American Prospect, has written a zinger of a book...

...brave new world with such transnational corporations and monsters in it...

...But about some other contemporary issues—for instance, oil, energy and the environment—Reich has curiously little to say...

...His ideas should provoke fresh thinking (and not only among liberals) about the direction public policy should take here and abroad in the coming century— when, he asserts, the concept of a national economy will utterly vanish...

...His aim, he tells us, is "to paint a new picture, one more reflective of the realities of the emerging global economy and of the societies that are being shaped as a consequence...

...It is no accident that Reich's title echoes Adam Smith's The Wealth of Nations, the work that spelled out this idea so brilliantly and everlastingly...

...As almost every factor of production—money, technology, factories, and equipment—moves effortlessly across borders, the very idea of an American economy is becoming meaningless, as are the notions of an American corporation, American capital, American products and American technology...

...David Baltimore, the faculties of both the Kennedy School and the Harvard Business School, plus about one-third of the American labor and management force...

...Reich cites John A. Hobson, the turnof-the-century British political economist, as an authority for the doctrine that imperialism is linked to war because businessmen seek profits abroad when they have exhausted their home markets...

...The president of the German Bundesbank, Karl Otto Pohl, thinks the extreme difficulty of uniting the West and East German monetary systems demonstrates that plans for European monetary integration are premature, and perhaps entirely misguided—something that Margaret Thatcher has believed all along...

...To be more specific, is Europe really "hurtling" toward economic union...

...In the days of the Cold War (a misnomer, except as applied to the Soviet Union) this may have been understandable...

...economy...

...This is easy to do in the historical British, German or Soviet cases, but we tend to be loath to reject imperialism—or even identify it as such—in its more recent American manifestations in Vietnam, Central America and the Middle East...

...Whatever its drawbacks, nationhood still offers the possibility of protecting the freedom and human rights of a people within secure borders...

...This is not to suggest that Reich's book is satisfactory in every respect...

...Reich also neglects to address the matter of health care and the extraordinarily heavy costs it imposes on the U.S...

...Crucial to his vision are what he calls "symbolic analysts," a category that embraces such diverse producers as Steven Jobs, Madonna, Dr...

...The corporations that broke the United Nations embargo against Iraq and, especially in the case of many German companies, sought to keep selling Saddam Hussein chemical, biological and potentially nuclear weapons, look less like citizens of a world economy than like old-fashioned merchants of death...

...For one thing, it is replete with commodious, even baggy generalizations that manage to accommodate all sorts of facts, down to some that seem to contradict his central thesis...

...He is, after all, writing about a world economy that is still emerging, not fully formed but in the process of being shaped by forces that are in some degree already present...

...One looks in vain for proposals similar to those contained in the latest "State of the World" report by Lester R. Brown and his associates at the World Watch Institute, who argue that saving the world environment may now depend on partially replacing income taxes with environmental taxes to discourage air and water pollution and the destruction of the ozone layer...