THE FUTURE OF CAPITALISM: How Today's Economic Forces Shape Tomorrow's World

On the evidence of the text at hand, cynics could be excused for suspecting MIT economist Thurow (Head to Head, 1992, etc.) has produced an election-year version of the liberal agenda rather than a systematic inquiry into free enterprise's prospects in a volatile post-Cold War era. Borrowing from the languages of both evolutionary biology and seismology, the author asserts that, in a history of ""punctuated equilibrium,"" the Global Village is muddling through a period of notable for the threat of convulsive change. He attributes this incipient instability to the simultaneous movement of five so-called tectonic plates: the passing of Communism; a shift to brainpower industries; a mobile, aging population; the globalization of business and trade; and the emergence of a brave new multipolar world without a dominant power. Thurow argues that these forces have already produced unfortunate outcomes, including lower wages, slower growth rates, and wrongheaded central banking policies that place a premium on containing inflation. Having set a somber scene, the author (who is forthright about his distrust of the market) offers a wealth of fundamentally statist proposals for saving US capitalism from the perceived problems of rampant inequality. Cases in point include massive government""investments"" in education, infrastructure, and R&D and incentives to encourage savings (at the expense of consumption). In offering his critical assessment of free enterprise's future, however, Thurow fails to address the reality that domestic venture capitalists have been funding record numbers of start-up firms while investors snapped up hundreds of initial public offerings, and corporate America became demonstrably more competitive in world markets. Nor does he take into account pension funds, the prime movers in global securities markets; the irony is that these institutions are managing retirement monies on behalf of the hired hands whose economic lot so concerns the author. A lively but partisan tract which fails to tell the whole story of what lies ahead for capitalism in the US and elsewhere.