Economic history of the world

CREATING WEALTH: Lester C. Thurow; Nicholas Brealey Publishing, London; Distributed by Research Press, 2/25, Ansari Road, New Delhi-110002. 12.99 pounds.

THE AUTHOR of the book under review, a former Dean of MIT's Sloan School of Management, has written a thought-provoking book on world economy. His incisive analysis of the economic history of the world provides an insight into the future and will enable the nations to see their strength and weakness in order to formulate policies for growth and development. He has rightly compared the treasure of wealth to the pyramid. It needs stupendous work, enormous materials and far reaching vision to build wealth as big and as stable as a pyramid.

The book, in four parts, deals with knowledge based economy, wealth, treasure and builders. The author has analysed the stages of economic development of different countries by pinpointing the contribution of steam power, electric power, atomic power and chip power. He is emphatic in his assertion that the success of any country in improving the economic standard in future depends on knowledge and not on land, labour and capital as propounded by Adam Smith. In his analysis, the American and the Japanese economies have inherent weaknesses in the areas of education and creativity. The Americans are afraid of taking bold steps based on profound research in biotechnology. In his opinion the continent of Europe is endowed with everything but the negative social factors combined with the inertia built over decades inhibit them from exploiting the natural resources with superior knowledge.

His views on globalisation are curious and add yet another dimension to the multifarious views on the subject. He says that the world is going to have a global economy without a global government. No one is going to be capable of setting up a global government. The war between the nations on economic issues will be necessarily negotiated while the world bodies watch helplessly. The global bodies are not powerful enough to dictate to national governments and on the other hand national governments may dictate to the world bodies. The world bodies only have an imposing facade with no structure. After the industrial revolution national companies eliminated local companies and now in the process of globalisation, global corporates wreck national companies. But the turbulence caused by national companies on local companies was mild when compared to global corporates replacing national companies. The anomalous situation created by globalisation needs to be examined in depth.

Yet another area in which his views are forthright and radical relate to biotechnology. According to him microbiology, even at the present level of research findings, can cause phenomenal change in plant breeding, animal reproduction and human creation. If nothing astonishing is happening right now it is because all governments including the U.S. consider these experiments as dangerous, unethical and revolutionary which will upset the stability of society. But everyone including those who are for change and others who are opposed to it know that biotechnology holds the key to solve many human problems which are genetic in nature.

On infrastructure development the author is prophetic in his pronouncement. Only those interested in the future build tools. Whatever they may say, those who build new tools are not interested in the future. The society, which saves less and consumes more, moves towards disaster. The American military investment in Internet, for over 25 years, although for military purpose, has given the world a modern tool for communication. Basic infrastructure building is the function of the government, more so if it cannot generate immediate income to justify the investment. But wherever possible, private investments should be encouraged. However, any country which totally depends on private investment in the development of human skill will find dangerous distortion of skill, both in quality and distribution.

It is strange that the author, in his elaborate treatment of the subject, has largely ignored Asian countries (except Japan), Africa and Australia. He has neither dealt with in detail the strength of the countries in this region nor given his view or suggestion to make the nations forward looking and progressive. It is disappointing that he has ignored India and whatever stray comments made are not kind. He draws no conclusion or gives suggestions about the Indus Valley civilisation, Vedic knowledge, India's contribution in mathematics (zero for instance) and works of Aryabhatta and Kautilya, which are knowledge-based and largely valid, even today for any nation.

However, the book is like a beautiful jewel studded with precious stones. The author's views, remarks and comments are scholarly and didactic. The book must be read by everyone who has a role to play in the development of society, more importantly teachers and builders of future organisations.

S. ARUNAJATESAN

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