The Work Of Nations by Robert B Reich

The Work Of Nations by Robert B Reich was published in 1991, written, therefore, prior to that year. In the book, the author describes the role of the business enterprise, with specific reference to what we used to call companies or corporations, in what was already by then an established process we now call globalization. At the time, the significance of the term and its reality was only just dawning within the popular imagination. 

But this is a book that goes beyond mere description of the functions of the global economic system. Via its analysis of national economies, and how they interlink, The Work Of Nations also deals with concepts such as national identity, the potential for political action and, fundamentally, how economic classes are formed, how people identify with them and their inter-relationships.

It is worth pausing again to place Robert Reich’s book in context. In 1991 the world had just seen the end of the Soviet Union, but there was no real indication of what might emerge from the debris. The Internet did not emerge until a couple of years later. China’s emergence as a global economic power was underway, but Japan was still by far the biggest economy in Asia. Put simply, after thirty years of an emerging and wholly new world, The Work Of Nations ought to be thoroughly out of date. It isn’t. And the fact that it still has much to offer in the analysis of our contemporary societies is testament to the quality of the author’s vision, which is inspired as well as enduring.

At the heart of the book’s analysis are two fundamental concepts. One is that the old model of the corporation, which implies a vertically integrated organization that brings a product to market via a workforce employed directly by the company and in competition with other similar corporations, is long dead. Secondly, this changed economic structure of developed societies has resulted in a fundamental change to social class formation. Gone is any assumption that masses of nationally resident blue-collar workers are automatically created by pyramids of employment and inverted pyramids of earnings.

In 1991, The Work Of Nations was already describing corporations that cooperated across national borders, shared investment and risk, and moved production or even registration as circumstances provided opportunity. Crucially, Robert Reich was already describing the existence of an international class already formed, comprising professionals, problem solvers and solution identifiers whose status and earnings were determined by their education, their skills and their performance. Over forty years earlier, Michael Young’s The Rise Of The Meritocracy described a world where the benefits accruing to such a class would result in deep social divisions, to the extent that allegiances would become primarily determined by class rather than nationality.

In the 2020s we can see the results of this ideological realignment in the way groups of electors in democracies coalesce around certain types of policy, such as the overtly nationalistic, the anti-immigrant, and, on the other side, liberalism and internationalism.

Does, for instance, this passage remind anyone of more recent preoccupations in American politics? “In the life of a nation, few ideas are more dangerous than good solutions to the wrong problems. Proposals for improving the profitability of American corporations are now legion, as are more general panaceas for what ails American industry. Politicians and pundits talk loosely of ‘restoring’ or ‘restarting’ American business, as if it were a stalled, broken-down jalopy in need of a thorough tune-up. Others offer plans for regaining America’s competitive edge and revitalizing the American economy. Many of these ideas a sound. Some are silly. But all form vestigial thinking about exactly what it is that must be restored, restarted, regained, or revitalized. They assume as their subject in American economy centered upon core American corporations and comprising major American industries - in other words, the American economy of midcentury, which easily dominated what limited world commerce there was. But as we have seen, this image bears only the faintest resemblance to the global economy at the end of the century, in which money and information move almost effortlessly through global webs of enterprise. There is coming to be no such thing as an American corporation or an American industry. The American economy is but a region of the global economy - albeit still a relatively wealthy region. In this light, then, it becomes apparent that all of the entities one might wish revitalize are quickly ceasing to exist.”

And precisely who benefits from the neoliberal economics that rollback the state? “While average working Americans may just feel that they have been surrendering a larger percentage of their earnings in taxes … tax burdens on Americans overall have not increased since the mid-1960s. Total tax receipts amounted to 31.1 per cent of gross national product in 1969, 31.1 per cent in 1979, and 32 per cent in 1989. It is just that the burden has been shifted from relatively wealthy Americans to relatively poor Americans.”

More recently, Thomas Picketty has analyzed inequality as reflected in asset and income distribution. He has identified, even within traditionally entrenched ownership relations, an emerging class of people who, by virtue of their education and skills, command significant earnings. Even in 1991, Robert Reich saw them as an emerging social class.

Robert Reich’s The Work Of Nations is not only still worth reading: it ought to be an essential text. It still has much to say that still needs to be said about the disorganization of national economies in our own time.