I just finished reading Robert Reich’s “The Work of Nations”; I’m
not familiar with the body of Mr. Reich’s work, but the first half of
the book interested me somewhat as I leafed through it in a used book store.
Besides, Wikipedia says that it is probably his most important work,
being translated into 22 languages. (The below page references are
from the paperback edition.)
The theme of the book is the dilution of national economic power in
an age of globalization. Mr. Reich compares the era of the 1950s and
1960s with the coming 1990s (the book was published in 1991). He
points out that in the former era, American corporations were largely
American-owned, and staffed by American workers in American
factories, workers that had been trained (for production work) in
American public schools, American workers that had been promised full
employment, etc. He compares that economic world with the “global
webs” of corporations today in which ideas, products, and money flow
across the globe in search of “high value.” He warns the reader to be
sure to adjust his or her thinking to the new era, not to fall into a
“vestigial trap” (p. 95), a “vestigial notion” (p. 100), “vestigial
concerns” (p. 118), a “vestigial view” (p. 148), or “vestigial thought”
(p. 154), … and I stopped counting his uses of the word “vestigial”
when he decides to write an entire chapter on vestigial thought.
Vestigial is the word of the week, isn’t it?
As I said, the first half of the book interested me: Mr. Reich
highlights the drastic differences between the two eras. I
really liked that he “gets” that economics today is about high value,
not high volume: he writes an entire chapter with that emphasis. Mr.
Reich also understands that the people with rising incomes today are
mostly what he calls “symbolic analysts” – those people whose
occupation is to manipulate symbols, be they financial, mathematical,
or otherwise. And a whole section of the book explores the “global
web” of today’s economy.
But then the book starts to slide into, yes, vestigial thought.
Sorry, Mr. Reich, but for the entire back half of your book you
relentlessly avoid your own advice.
His most basic vestigial thought is a throwback not to the 1950s, but the
1850s: he views the group of symbolic analysts as a class, as in class
warfare. Marx would have been proud. Of course, Mises (and others)
destroy the class myths, but it’s a good guess that the Kennedy School
of Government doesn’t study Mises.
Now I don’t mind his talking about symbolic analysts as a group –
this is not a formal treament in an economics text, I realize – but
when he starts talking about the symbolic analysts “seceding from the
Union,” wow, that’s 1850s with a vengeance. Twenty million workers up
and decide to leave the Union? Together? That’s rich. Right there in
chapter 24: “The Politics of Secession.” In the chapter, he states that the other “four-fifths” of the workers “could mandate that a larger proportion of the burgeoning incomes of symbolic analysts be taxed and transferred to them,” and posits reasons why that hasn’t happened.
Another vestigial thought is the classic government minister’s need
for control. From page 186: “As the world shrinks and the pace of
economic change quickens, such beneficial or harmful side effects loom
larger. A new vaccine can protect millions of children; a meltdown at
a nuclear power plant can poison the air for just as many. How do we
ensure that symbolic analysts apply their creative energies in the
right direction?” Besides your yearning for control, you have a
special way with your use of “we” and “their,” Mr. Reich. Great class
warfare thinking. (Not to mention the nuclear meltdown scaremongering … and wasn’t it the Soviet system that created the Chernobyl crisis?)
Yet another vestigial thought is the usual government minister’s
arrogance that he or she knows best what the customer needs. From page
195: “Anyone who believes that the American economy, or American
society generally, has nevertheless on balance benefited from the
surging number of lawyers and financiers that now engulf us must be
either a lawyer or a financier.” This single sentence contains errors
too numerous to count: the afore-mentioned arrogance, the
emotionally-charged use of “surging” and “engulf,” the disdain for
services that add high value – didn’t you just say the new economy is
all about high value?
And yet another vestigial thought: his chapter 16 on “American
Incomes” rehashes the old canards of rich and poor, etc., but the real fallacy is that he uses the 1950s and 1960s as his baseline for
comparison. Mr. Reich, I thought you warned us *against* thinking that
we are still in the 50s and 60s?
Of course, his first solution for keeping the nation together
economically is a “truly progressive income tax” (page 245): he reminds
us how high the income tax rates were in 1917 … 1917? Seriously?
The answer to the “problem” of income inequality is to go back to
The idea of keeping the nation together economically brings us full
circle to Mr. Reich’s “politics of secession.” And this is where Mr.
Reich’s mind gets truly vestigial – even primitive, as in
warmongering. The way he talks about secession makes me wonder if he
would not hesitate to use any of Mr. Lincoln’s methods to keep the nation together.
But the real reason that I mention warmongering is the horrific
suggestion in the epilogue – given the absence of Cold War threats,
Japan is an apt candidate for economic warfare! (If the book were
written today, I have no doubt that Mr. Reich would be begging for a
fight with China.) One must read his epilogue to receive the full
shock – it’s beyond belief. Here’s a (necessarily) long quote: “Given
these trends, without the external pressure of Soviet communism holding
us together, America may simply explode into a microcosm of the entire
world. It will contain some of the world’s richest people and some of
the world’s poorest, speaking innumerable languages, owing many
allegiances, celebrating many different ideals. These individuals will
be efficiently connected to the globe – both economically and
culturally – but not necessarily to each other. Our collective
identity will fade. There will be no national purpose, and no pretense
of one. Instead, each inhabitant of the United States can attend to
the great problems of mankind … This is not an altogether grim
picture. Some of libertarian bent might even find it attractive. In
contrast to most inhabitants of the planet, who still live in nations
that impose on them substantial responsibilities for the well-being of
their compatriots, the people who live within the borders of the United
States will inhabit a kind of free, universal zone, obligating them
only to refrain from causing one another bodily injury and stealing one
another’s property. … Yet there is also something terribly sad about
this fate … There is an alternative, of course. America may choose
another nemesis to replace the Soviet empire – a new external threat
that binds us together as Americans, and gives us a reason to be
responsible to one another. Japan comes immediately to mind. … the
British do not suffice to bring Americans together … No, we need a
more potent external force to hold us together in this post-Soviet
world – an external force so utterly different from us that, by dint of
contrast, it will continuously remind us of who “us” is. Japan is an
My mind boggles at the Orwellian suggestion, from a man soon to be a
cabinet minister, of pitting the “symbolic analyst” “class” against the
scary, “different” foreign nation. In the name of national unity.
George Orwell would have not been surprised. This is vestigial
thinking at its very best. Mr. Reich gets it right that nations are
formed from common struggle – the modern states of Europe were created
in the crucible of the religious wars of the Reformation. But his mind
is totally primitive if he seeks war, even economic war, just to
preserve some form of national patriotism. Mr. Reich, you are welcome
to the sixteenth century – please let the rest of us join the