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In this compelling and impassioned book,
Business Week chief economist Bill Wolman and Anne
Colamosca say what our business and government leaders are
unwilling to admit, but most Americans know in their gut:
in the brave new global economy, big money holds all the
cards while workers -- including white-collar professionals
-- are increasingly expendable.
We are experiencing a betrayal of work unparalleled
in our time, brought on by capital's unquestioned dominance
of the globe since the end of the cold war. In lucid prose,
the authors apply their inside knowledge of the economy
to show how the balance of power between capital and labor
has shifted decisively against all of us who must make our
living from work, be it from muscle, intelligence, or wit.
Until now, our leaders have chosen to ignore
that the new global economy has rewritten the economic rules
that have governed our thinking over the last fifty years.
The consequences for American competitiveness and morale
are dire. Yet there are many actions we could take, the
authors show, if only Americans would not let themselves
be blinded by a false faith in an ever-rising stock market,
and would begin to question the dogma of the politicians
and economists who assure us that the American economy is
getting healthier for all of us.
The downsizing trend will continue, the
authors argue, whether or not America grows more competitive.
A vastly expanded global labor pool, and the ability of
corporations to move more and more of their operations to
low-wage developing countries, guarantees this. The authors
underscore this point in a chilling chapter on the rise
of an educated, high-tech, and high-morale workforce in
Bangalore, India, ready for international work and a study
in contrast with the demoralized American middle class.
Wolman and Colamosca pointedly expose reengineering
and other management fads as mainly ways for corporations
to justify or obscure the firing of their workers. The insidious
effect of these purges is that workers blame themselves
for their fate. Furthermore, the panacea of the downsized
-- starting your own business -- is a mirage, according
to the authors. To succeed in the new economy you need capital,
and contrary to the hype only a lucky few will prosper on
their own. In clear terms the authors explain why, economically,
this is so. The dynamics of the global securities markets,
and the control of interest rates by the Federal Reserves
and Bundesbanks of the world, perpetuate a system where
fast economic growth is allowed only in developing countries.
Meanwhile in the U.S. and the rest of the developed world
inflation is kept low, so as to protect the value of the
wealthy's financial assets. Any nation which strays from
this policy is punished by a devastating outflow of investment
capital. The result: few economic opportunities for American
workers, combined with historically high real interest rates.
Not surprisingly, worker morale and productivity are suffering,
bankruptcies and debt are at record highs, and debt collection
is predicted to be one of the fastest-growing industries
in the US in the next five years.
In a final section, the authors provide
suggestions for how capitalism can "save itself"
and restore some balance of power to workers. Anything but
conventional wisdom, The Judas Economy will be essential
reading for all those concerned with the future of their
jobs, and of the American economy.
William Wolman is Chief Economist at
Business Week magazine and CNBC television, where
he appears regularly. He was editor of Business Week
from 1984 to 1989, and holds a Ph.D. in Economics from Stanford
University.
Anne Colamosca is a former Business
Week staff writer, and has written
for many other national magazines.
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