Reading :: The Work of Nations

The Work of Nations: Preparing Ourselves for 21st Century Capitalism
By Robert B. Reich

So I've been meaning to read this book for over ten years, ever since Johndan Johnson-Eilola first started referring to it. Published in 1991, this book is written for a general audience and attempts to explain "a transformation that will rearrange the politics and economics of the coming century. There will be no national products or technologies, no national corporations, no national industries. There will no longer be national economies, at least as we have come to understand that concept. All that will remain rooted within national borders are the people who comprise a nation" (p.3). That is, Reich is addressing the issue of globalization, of hollow nation-states (Castells et al), of post-capitalist society (Drucker), of the support economy (Zuboff and Maxmin), of the market-state (Bobbitt), of power shifts (Toffler), of asymmetry (Arquilla and Ronfeldt), of creatives (Florida).

If I had read this book in 1991, it would have been a revelation (although admittedly it would be less of a revelation if I had read Toffler's books up to that point). Reading it now, though, I find few additional insights that haven't been covered by the books above, and the book is more popularly written than even Toffler's books.

On the other hand, Reich's evaluation is different from those of the other authors. Reich concludes that the US' real challenge is "to increase the potential value of what its citizens can add to the global economy, by enhancing their skills and capabilities and by improving their means of linking those skills and capacities to the world market" (p.8). In doing so, Reich wonders less about the US economy than its society, and he wonders, "are we still a society, even if we are no longer an economy?" (p.9). Can we rescue the nation-state?

For Bobbitt, the answer was no, and that was fine because other state configurations wait in the wings. For Reich, the answer is yes, partially (I think) because he doesn't envision a state that's not a nation-state. To answer this question affirmatively, Reich takes us through an accessible history of the 20th century, focusing on the tacit bargain that the US struck with its national champions, the corporations. Yet as corporations became more internationally connected, began outsourcing to take advantage of cheap labor and localized competencies, and began taking advantages of differences in local economic and regulatory conditions, that bargain fell apart; corporations "are ceasing to exist in any form that can meaningfully be distinguished from the rest of the global economy" (p.77); and the standard of living for any country's citizens suddenly depends, not on the success of core corporations and industries, but on "the worldwide demand for [citizens'] skills and insights" (p.77).

Like Castells and Drucker, Reich sees corporations turning to "serving the unique needs of particular customers" (p.82), achieving high-value as well as high-volume production. Such high-value businesses focus on three skills: problem-solving skills, skills to help customers understand needs, and skills that link problem-solvers and problem-identifiers (p.84). The distinction between goods and services means less and less (p.85). And given this shift, bureaucracies make less and less sense (pp.87-88; cf. Toffler's adhocracies). Reich describes the new enterprise as a "web" (looking more like Burt's brokered "neighbor networks" than all-channel networks; p.89). Non-core standardized pieces, including temporary labor, are acquired as needed (p.90; cf. Toffler's adhocracies, but also Castells' generic labor). And because enterprises are arranged in this way, Reich argues, official statistics aree hard to interpret (p.94). For instance, we've seen a rise in self-employment figures, but Reich argues that these self-employed people are generally not taking replacement jobs, they're becoming autonomous nodes in enterprise webs (p.95). "There is no 'inside' or 'outside' the corporation, but only different distances from its strategic center," Reich states, offering the example of a deregulated AT&T (p.96).

Given these changes, Reich argues that "The key assets of high-value enterprise are not tangible things, but the skills involved in linking solutions to particular needs, and the reputations that come from having done so successfully in the past" (p.98). Ownership and power are diffused (p.98). Creatives can't be bought or acquired, only enticed (p.103; cf. Florida).

Globally, high-value enterprises resist top-down control and centralized ownership (p.110). The many digital and telecommunications technologies constitute the "threads" that make up the "global web" and make national control over information flows futile (p.111). Increasingly, the "global web" carries most of what is traded between nations: problem-solving, problem-identifying, brokerage between these, and routine components and services (p.113).

Later in the book, Reich breaks down the "three jobs of the future": routine production services, in-person services, and symbolic-analytic work (p.174). The first are routine, step-by-step, repeatable (p.174); Castells terms these "generic labor." Those who perform these jobs are in competition with workers and automated labor globally; their wages will fall. The second set are marginally more protected, since in-person services can't be outsourced, but their wages are also sinking. The third, according to Reich, are the truly competitive jobs, and their wages will rise. Symbolic-analytic workers work alone or in small teams; teamwork is crucial; they must have frequent and informal conversations; they are partners and associates rather than under bosses or supervisors (pp.178-179). They comprised only 8% of the workforce in the 1950s, but 20% in the 1990s (p.179). In the new economy, their job is not to know things, but to use that knowledge (p.182). Fortunately for us (the US), Reich says, no nation educates its symbolic-analytic workers as well as the US (p.225), and nowhere else is there such an agglomeration of them (p.226).

But, and this brings us back to Reich's question at the beginning of the book, can we save US society? After all, he says, symbolic-analytic workers are seceding from society (Ch.20-21). Alas, Reich ends with hope of a solution rather than an actual solution.

So was The Work of Nations worth it for me? I think it was. Although other readings cover almost all of this ground, and in frequently more sophisticated ways, Reich's piece is relatively early and provides a panoramic view of the shift toward a knowledge society. If that sounds interesting to you, pick it up.

n.b., When I refer to other books I've reviewed on this blog, I usually insert links. Today, that seems like too much work. But don't hesitate to search for any of the names above if the books sound intriguing.