Capitalism

In The Future of Capitalism, respected MIT Professor of Management and Economics, Lester C. Thurow, warns that capitalism is experiencing an era of “punctuated equilibrium” (326). He uses an extended metaphor of the shifting plates of the earth’s surface to chronicle the major changes that have dramatically changed the world and its economy. While his assessment is apocalyptic at times, it is also filled with optimism because Thurow views the future as one with both enormous challenges and opportunities. He is not suggesting capitalism will implode as communism did, rather, he is saying that capitalism is in danger of stagnating, much as the economies in previous historical eras did when they had no significant competition, “Pharaonic, Roman, medieval, and mandarin economies also had no competitors, and they simply stagnated for centuries before they finally disappeared. Stagnation, not collapse, is the danger” (325).

Thurow writes with authority from an economic and historical perspective, yet he also uses language more creatively and interestingly than most economic writers. He not only uses the shifting plates of the earth’s surface to make a parallel to modern capitalism’s shifting disruptions, but he also applies evolutionary theory to highlight his point that, bottom line, it will be those countries will

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who must change are willing to not just change their strategy (e.g., restructuring capitalism to focus on the asset of man-made brainpower instead of physical capital) but also their mentality. Thurow knows this means those who presently hold power must accept changes that may not see them retain it in a similar aspect in future. For example, he discusses the untapped resource labor pools that have become available in countries embracing open markets, “Why would anyone pay an American physics Ph.D. $75,000 per year when a Nobel Prize winner can be employed in the old Soviet Union for $100 per month? Scientific wages have already started to respond to what is effectively a new cheap source of very highly skilled labor” (45). Part of Thurow’s advice for weathering the present storms of capitalism includes restructuring of the infrastructure of countries who hope to remain competitive in the future. Not only will skill sets shift but funding needs allocated for skills, education and knowledge. It will be brain power and not economic power that maintains competitive advantage in the Information Age. However, even though Thurow believes this is a crucial part of weathering the present punctuated equilibrium, he suggests that so
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Approximate Word count = 1949
Approximate Pages = 8 (250 words per page)

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