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Executive Times |
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2006 Book Reviews |
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Revolutionary
Wealth by Alvin and Heidi Toffler |
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Rating: |
** |
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(Mildly Recommended) |
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Click on
title or picture to buy from amazon.com |
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Snippets Chances
are, if you liked earlier Toffler books, you’ll like the latest Alvin and
Heidi Toffler offering, Revolutionary
Wealth. It’s both obvious and tedious that this work evolved from the
author’s past work, and readers can almost visualize the snippets of clipped
facts from here, there and everywhere that fills the pages of Revolutionary
Wealth with a somewhat scattered collection of tidbits. Here’s an excerpt,
all of Chapter 4, “Deep Fundamentals,” pp. 24-28: Every morning, millions of people around the world blink
their eyes open and immediately check the Web for stock-market prices, scan
the business pages of their newspaper, tune in to the latest business news on
TV—or do all three. Only then do they worry about breakfast. Some, no
doubt, would be willing to embed a microchip in their brain if it would
automatically alert them to the latest twitch in interest rates or changes in
their stock portfolio. Before long, some will. Until
then, housewives in No one can
pretend to understand how the media and its unprecedented output of
information (and misinformation) influence and distort stock markets and the
world money economy. Nonetheless, amid all the
clamor, experts confidently attribute an astonishing variety of stock-market
swings, business shifts and economic ups and downs to changes in what they
call “fundamentals.” General
Motors’ chief economist allows that “mainstream economic fundamentals remain
strong.” The chairman of Time Warner Telecom attributes its success in a weak
economy to its “sound business fundamentals” despite the odd fact that its
stock price had plummeted 90 percent in the previous twelve months. A top
economist at Credit Suisse First Boston urges investors to look at What
exactly we mean by that term, however, remains extremely hazy. ~epending on who does the talking, it includes factors
like “low inflation,” “sound credit quality” and “world prices for gold and
copper.” Or maybe not. During the
wild run-up of the U.S. stock market in the 1990s, economists threw into the
definitional gumbo such supposedly fundamental variables as a balanced
government budget, a strong manufacturing sector, the presence or absence of
a global central bank, the disparity between stock prices and profits,
levels of personal borrowing and the percentage of low-wage jobs, not to
mention increased bankruptcies. No doubt
some of these variables are important—sometimes. But what if, in fact, by
focusing on them we miss some things that are even more important? What if
all such factors depend, directly or not, on a deeper set of forces—”deep
fundamentals,” so to speak, that shape the more superficial fundamentals
themselves? What if
the fundamentals tell us one thing and the deep fundamentals another? And
what if these more basic, more potent factors are themselves changing at high
speed? THE INERRANTISTS Christian theologians use the term inerrantists for those who insist that, even after
two thousand years of problematic interpretations and mistranslations, the
Bible is error-free, and that, moreover, its every word must be understood in
its most literal sense. Economics
has its own inerrantists who maintain, in the face
of all sorts of anomalous, puzzling and contradictory evidence,
that nothing has really changed. At the “fundamental” level, they
claim the economy has been only minimally affected by the digital upheaval
and the shift to a knowledge-based economy. The
manager of one of This
illusion, however, becomes unsustainable the minute we shift our gaze from
the everyday fundamentals to the deeper ones. For it is at this deeper level
that we find the most compelling evidence that the economy is not “as it was
before”—that, in fact, today’s entire structure of wealth creation is quaking
and rocking, suggesting even bigger changes to come. OBSOLETE FUNDAMENTALS Not only are there such sub-surface fundamentals, but
there is a coherent way of determining what they are. Across the
planet today, as we’ve just seen, we find three markedly different
wealth-making systems, crudely symbolized by the plow, the assembly line and
the computer. The first thing we need to know is that much of what today
passes for “fundamental” is not present in all of them. For example, while “a
strong manufacturing sector” virtually defines the industrial wealth system,
it was vestigial in pre-industrial peasant economies—and still is in many
parts of the world. Again,
while the Federal Reserve and central banks in general have played a key role
throughout the industrial age, they did not exist as such in preindustrial societies, and they may not in the future.
No less a worthy than the governor of the Bank of England, Mervyn King, has suggested that they may disappear, since
many of their functions will no longer be needed or will be carried out
automatically by the electronic infrastructure. Among the many so-called
fundamentals, in short, some are relevant only for societies at one stage of
development and not another. By
contrast, some fundamentals are so vital to wealth creation that they matter
in all economies, at all stages of development, in all cultures and every civilization,
past or present. These are
the deep fundamentals. THE FUTURE OF THE JOB Some of the deep fundamentals are obvious. For example,
work. It may
come as a surprise to many that, until field labor was replaced by factory
work, few of our ancestors ever held a job. This surely wasn’t because they
were rich. Most were wretchedly poor. They didn’t hold jobs because the
“job,” in today’s sense of formally committed work in return for stipulated
pay, had not yet been invented. Like the steam engine and other industrial
innovations, jobs and wage labor became widespread only during the last three
centuries. Work
itself was transferred from outdoors to indoors, on schedules set no longer
by sunrise and sunset but by the punch clock. Most payment came in the form
of wages based on hours worked. Indeed, these arrangements essentially
defined the term job. But the
job is only one way of packaging work. And as the latest, knowledge-based
wealth system unfolds, we are moving toward a future in which, as we’ll see,
more people “work” but fewer hold ‘lobs.” It will drastically alter labor
relations, human resource departments, legislation and the overall labor
market. It is bad news for trade unions as we know them. The deep fundamental
of work is changing more profoundly than at any time since the industrial
revolution. Division
of labor, like work itself, traces back to hunting and gathering, when the
division was mainly based on gender. But here, too, we are approaching a
turning point. Ever hear
of a “metallurgy and failure analysis litigation consultant” or a
“post-harvest horticulturalist”? Neither have most of us. (The latter is the superspecialist who determines such things as how many
microscopic holes are needed to admit oxygen into the plastic bags that hold
vegetables in the supermarket.) Adam Smith
in 1776 called the division of labor the source of “the greatest improvement
in the productive powers of labour.” And this has
been true ever since. But the more refined and specialized tasks become, the
harder and more expensive it becomes to integrate them—especially in an
innovation-driven competitive economy. At some
point, the costs of integration may exceed the value of such
super-specialization. Moreover, narrowly focused specialists may be good at
incremental innovation. But breakthrough innovation is often the product of
temporary teams whose members cross disciplinary boundaries—at a time when
breakthroughs in every field are, in fact, blurring those very boundaries.
And this is not just a matter for scientists and researchers. The new
wealth system demands a complete shake-up in the way increasingly temporary
skill sets are organized for increasingly temporary purposes throughout the
economy. Nothing is more deeply fundamental to the creation of wealth. Not only
are work and the division of labor changing, but income distribution
itself—the “who gets what?”—may be heading, over the long term, toward truly
revolutionary change. INTERPLAY These are just a few examples of fundamentals that lie
beneath the “fundamentals.” And they are even more important than they may
seem because they form a system. Thus, changes in the deep fundamentals
interact with one another. Moreover, the limited examples cited so far are
just that—limited. A fuller list would surely include others—energy, the
environment and family structure, for example—all changing at high speed, all
shaking the ground Under the more superficial, everyday fundamentals. Many of
the deep fundamentals have received scrutiny from time to time. For example,
since the 1970s, the relationship between the biosphere and wealth creation
has become the center of global concern and controversy. By contrast, several of the deep fundamentals most
relevant to revolutionary wealth have, in fact,
received scant attention. That, therefore, takes us on a journey to strange, largely
unknown territory to probe three of the fastest-changing, most powerful and
most fascinating of all the deep fundamentals today—three that will without
question shape the future of wealth. If pressed to
answer whether there’s anything new on these pages, I’d be unlikely to point
my finger at more than one or two things. The repetition within the book
became tedious at times, and the organization seemed odd. The authors’
jargon, especially their own made-up words, became infuriating at times. Even
with these shortcomings, Revolutionary
Wealth is recommended to readers as another source of thinking about what
the events of the present may mean for the future. Hold your nose or roll
your eyes for the bits that are purely rot, and enjoy those rare snippets
that will help you think differently about what’s ahead. Steve Hopkins,
June 26, 2006 |
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The recommendation rating for
this book appeared in the July 2006
issue of Executive Times URL for this review: http://www.hopkinsandcompany.com/Books/Revolutionary
Wealth.htm For Reprint Permission,
Contact: Hopkins & Company, LLC • E-mail: books@hopkinsandcompany.com |
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