Courtesy Reuters

A Glass Half Full? Thurow Dissects the Third Industrial Revolution

In This Review

Building Wealth: The New Rules for Individuals, Companies, and Nations

By Lester C. Thurow
HarperBusiness, 1999
288 pp. $27.50
Purchase

For almost two decades, Lester C. Thurow has been one of the most widely read economists in the United States. His Zero Sum Society (1981) is in its 19th printing. Four of his books have made The New York Times bestseller list -- and understandably so. Throughout the Reagan-Bush-Clinton years, Thurow has had his thumb on the pulse of the public agenda, commenting on budget deficits, trade battles, income inequalities, sagging productivity, public and private investment, education, and technological change. Amid a plethora of new economic theories and management fads, he has always focused on long-term fundamentals. Most impressive, he has been a leading interpreter of modern capitalism itself, skillfully blending economics, psychology, politics, and history.

Thurow is also a master at breaking down complex subjects into digestible bites while never losing perspective. He understands the power of good stories and anecdotes better than most academics; economics for Thurow is not just theories of impersonal forces but the impact of those forces on people's lives. To the extent he can be criticized, it is because his ideas are often very broad and sometimes lack analytical substantiation, and he is consistently too pessimistic, especially about the United States. His predictions can be wrong, too. A good example is his 1992 conclusion in Head to Head: The Coming Economic Battle among Japan, Europe, and America that Europe would be the most competitive entity in the world. But then again, who with the guts to publicly express views about global economics and politics has consistently gotten it right?

Building Wealth is vintage Thurow, for both good and ill. Its focus is the third industrial revolution, the first having revolved around the invention of the steam engine in the eighteenth century, the second around electrification and systematic research and development at the end of the nineteenth century. All revolutions are both caused by technological discontinuities and create new ones, he writes. This makes old formulas for creating wealth obsolete. So what must countries do to create wealth

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