The Future of Capitalism: How Today's Economic Forces Shape Tomorrow's World

In a farsighted, magisterial report, influential Massachusetts Institute of Technology economist Thurow brilliantly gauges the perils for U.S. capitalism in the emerging global economy. He warns that massive investments in skills and education are crucial if we are to cope with new technologies and with the shift to ""brainpower industries"" (communications, computers, etc.). Yet U.S. corporations, instead of integrating their skilled work forces into their organizations, are doing precisely the opposite and downsizing, observes Thurow with alarm. In place of a payroll tax, he proposes a progressive, value-added consumption tax to pay for pensions and health-care benefits for the elderly. In a multipolar world with no single dominant power, much of the U.S. military machine is essentially unusable and irrelevant, Thurow argues, and he envisions America playing an active but reduced role on the world stage. Appalled at our ever-lower personal-savings rate and staggering, still growing trade deficits, he predicts that the world's financial markets will soon clamp down on the U.S., with cataclysmic impact on Japan and on Third World development. Author tour. (Mar.)