The future of capitalism: How today's economic forces shape tomorrow's world - Thurow,LC

Newsweek economics writer Marc Levinson reviews Lester C. Thurow's book The Future of Capitalism: How Today's Economic Forces Shape Tomorrow's World and takes the author to task for once again using a U.S, presidential election as the occasion for making dire economic predictions. But although he thinks Thurow's gloom is unwarranted, he credits him with asking the right question: How do you confront the widening inequality of incomes and opportunities that intense competition brings? Thurow has adapted the theory of punctuated equilibrium in evolutionary biology to describe how a relatively stable economic environment can be disrupted overnight by a chaotic transformation. He points to today's global shift from the age of mass production to the age of brainpower and warns that, as the resulting gap between rich and poor widens, frustration will tax the resilience of democracy. Levinson adds that although economists still cannot pin down the major causes of rising inequality, the state is not impotent. Anti-big-government lobbies may overlook the long-term economic costs of dislocation (workers' diminished motivation and companies' systematic underinvestment in the training of workers who won't be around tomorrow). But such lobbies are myopic. Government does need to address the costs of today's broad economic anxiety. Levinson offers some thoughtful solutions that he says Thurow might dismiss as nothing more than tinkering, He adds that there are signs that the changes Thurow calls for are already under way. Those signs show that even the most die-hard capitalists are beginning to realize that capitalism will survive only with a safety net.