Lester Thurow, Building Wealth -- The New Rules for Individuals, Companies and Nations, Harper Collins, 1999, 301 pages.
has compiled an enviable track record: He's an economics professor at the
Massachusetts Institute of Technology
and former head of MIT's Sloan School of Management; he's able to weave bestsellers from material others term "the dismal science"; and he's a persuasive and candid speaker who can make even the most difficult economic conundrums seem open to simple, sane and sensible solutions.
In this latest book, however, Prof. Thurow's best efforts haven't yielded a worthwhile read. Without having watched him work, I can only guess at his process, but it feels like he's done little more than jot some notes on the back of an envelope, ask a grad student to expand them into an article for the
and hire a ghostwriter to complete a 300-page tome. We would have been better served by reading the notes directly off the envelope.
Of course, it's a wonderfully intelligent and informed book. Whether from personal experience or vast professional reading, Thurow throws out examples from top corporations and national policy initiatives as easily as your favorite bar buddy recites American League batting averages. But facts don't make an argument, and verbiage doesn't replace cogent thinking.
, I couldn't escape the feeling that it's an overheated, one-sided argument praising the well-worn notion of the "knowledge economy" that's now replacing the industrial economy. And what Thurow has to say is fundamentally flawed.
To be sure, there are good points and sharp insights, particularly a focus on what Thurow calls disequilibriums -- or situations in rapid flux -- in societies, technologies and the economic development of nations. For example, Thurow trots out businessmen who take advantage of changes wrought by these disequilibriums to earn fortunes just by bringing ideas and businesses from advanced nations to less developed nations.
He argues that public-works projects such as bridges and highways could be built faster, cheaper and more efficiently if builders had to sign on for long-term maintenance and also had to pay interest charges accrued during the construction phase. And Thurow advocates a sensible system of highway tolls, carefully adjusted to limit automobile traffic during rush hours and simultaneously provide subsidies for people who take public transportation or drive at off-peak hours of the day and night.
He further discourses on the political implications of a system in which real wages are falling for the bottom two-thirds of the workforce. And like a true scientist, he wonders, "Will a political explosion in fact occur?"
But there are wrongheaded notions, too.
For example, Thurow says
owns only knowledge, the much-ballyhooed paradigm element for building wealth in the modern era. True enough. But Gates would have a heck of a time selling us that knowledge without using plenty of old-fashioned sources of wealth such as factories and disk-duplicators, without building an organization and utilizing tactics to drive viable competitors out of the market, and without relying on property-rights laws and expensive lawyers to protect his sources of wealth from would-be pirates.
So it's a little oversimplified to cite Gates as an example of someone building wealth purely on knowledge. It's like claiming the U.S. has built its wealth on entrepreneurship; it's a necessary element, but not sufficient to explain the results all by itself.
There are also contradictions and some apparently fuzzy thinking. In his section called "Managing the Tensions of Wealth Creation," Thurow seems to be arguing that destroying the "efficiency" of
telephone monopoly in the early 1980s deprived the U.S. of major economic benefits. Maybe he's right. He's a professor, after all. But turn one page, and he's arguing from an opposing point of view, claiming that Japan's centralized economy suffers today because it's too monolithic, creating a situation in which "at the top there is a lack of creativity" and "no cracks in the system where flowers can grow."
Clearly, this book doesn't reflect the rigor, the depth of analysis, the consistency of logic or the careful consideration of implications that one expects from a leading light in economic policy. It has the feel of a first draft, minimally revised. There's even a typographical error on page 156.
More to the point, for you and me, the book doesn't convey much knowledge about how to build our individual wealth, except that we ought to try coming up with a creative way to take advantage of today's disequilibriums. For a book priced at $27.50, that's not much knowledge to impart. Perhaps Thurow is teaching by demonstrating that a good way to build wealth in the knowledge economy is to package one or two simple ideas at a time, and price it exorbitantly.
But the book's subtitle --
The New Rules for Individuals, Companies and Nations
-- may provide a stronger clue about what's going on here. Much of the book, replete with rhetorical questions about what the future may bring, reads like Thurow's proposal to consult for companies and nations that want to remain economically viable in a rapidly changing world. For them, the $27.50 price tag is peanuts compared to what they'll pay for his one-on-one analysis, advice and answers. It remains to be seen if he gives them better value than he's giving us.
Robert Moskowitz is a freelance author and editor, and has contributed to Investor's Business Daily, PC Week, Computer World and the Journal of Accountancy, among others. He is also the author of several books, and invites your feedback at
TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon purchases by customers directed there from TSC.