A new kind of capitalism is raging around the globe--and its economic and social consequences could be crippling. In Turbo-Capitalism
, Edward Luttwak, a noted international strategist and consultant, warns that the free market has gone amok. He predicts possible massive increases in poverty, crime, and unemployment, especially in the Third World, which lacks the political and legal systems of the U.S. Unlike the benign, carefully controlled capitalism that ruled from the 1940s to the 1980s, this new whirlwind capitalism will eventually create tremendous social upheaval. "Allowing turbo-capitalism to have its way, as in the United States and the United Kingdom, results in widening income differentials in exchange for not-so-rapid growth," writes Luttwak, who provides plenty of statistics to support his argument. Luttwak acknowledges that economic progress could be crippled if the world returns to the old model of government regulation, and this he calls the "great dilemma," with no easy answers.
While Luttwak's interest is more global, he offers some domestic examples to illustrate the effects of capitalism unleashed. He points to Boeing, which suffered from massive layoffs in the 1990s, even as aircraft orders soared. And he ridicules the notion that high-tech will come to the rescue with thousands of new jobs for downsized blue-collar and white-collar workers, calling these hopes "The Microsoft Mirage." A sweeping, sometimes densely written treatise, Turbo-Capitalism raises important questions for policymakers and business leaders. --Dan Ring
From Publishers Weekly
Since the administrations of Reagan and Thatcher, the virtues of deregulation and privatization have become accepted wisdom in the U.S. and the U.K. Luttwak, a senior fellow at the Center for Strategic and International Studies in Washington, D.C., and the author of The Endangered American Dream, has dubbed this free market, with its accelerated rate of structural change, "turbo-capitalism." Although he shares the general opinion that deregulation, privatization and globalization have reinvigorated sleepy economies, he writes that within the shiny apple of prosperity achieved in the U.S. and Britain lurks a worm in the form of reduced real wages, greater income inequality and increased alienation among those excluded from the benefits of growth. Luttwak argues that, in the U.S., such negative consequences are balanced by a vigorous legal system and Calvinist values. He is not as sanguine about the prospects for countries where turbo-capitalism is unchecked by such legal and cultural balances. Seeing unemployment as the global problem of our time and realizing that turbo-capitalism is more likely to aggravate than alleviate it, Luttwak singles out Japan as exemplary for its full employment policy, which endorses the position that the economy exists to serve society, not the other way around. Clearly relishing his Cassandra-like role, Luttwak outlines worst-case scenarios: conservative European monetary policy (with the euro) inhibits employment opportunities; geo-economic conflicts erupt with the spread of globalization. Even if his darkest forebodings never materialize, Luttwak puts readers on notice that, at the very least, speed bumps lie along the road ahead.
Copyright 1999 Reed Business Information, Inc.