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Three Lectures on Post-Industrial Society

Daniel Cohen, MIT Press, November 2008, 120 pages, £12.95.

This collection of lectures (whose title echoes Daniel Bell’s seminal 1973 work on the same subject) given by the eminent French macroeconomist offer a bird’s-eye view of the changes brought about in the structure of the global and national economies by technological change and the liberalisation of world trade and finance. Although they predate ‘The Crunch’, they offer a useful framework for thinking about the structural economic implications of the inevitable reversal in the scope of global financial markets.

The first essay describes the ‘ruptures’ – a marvellously apt Gallic phrase – in the structure of production and work which have taken place in the late 20th and early 21st centuries. Large industrial corporations, and the implicit social contract they embodied, have been dismantled by the dis-integration and relocation of production chains. This is the post-industrial society of the title, otherwise variously described as the service economy, or the information society. The key ‘rupture’ is the change in the nature of work, due to the increasing value of time – real wages have risen and also technology has increased the scope for spending work and ‘leisure’ time productively. Cohen links this to the growing divorce between the wage-earning masses and the upper echelons, with much larger increases in pay and often paid in stock options.

The second lecture gives an overview of how the new types of enterprises fit into the picture of globalisation. It posits a link between the internal transformation of western capitalism and the dramatic entry into the global market economy by India and China. Here too one of his themes is the widening of inequality between rich and poor, both within nations and between those which have the muscle to benefit from international markets and those which don’t. Size is one source of asymmetry. Another is that between centres which are increasingly attractive to a wide range of economic activities and poor peripheries which specialise in just a few – with the new twist that the growing centres can just as well be in an emerging economy as a developed one.

The final lecture asks what hope there is for the European-style welfare state in this far more competitive and less worker-friendly world. Cohen rightly dismisses as absurd the idea that only the Anglo-Saxon model of capitalism will work; but is also critical of the failings of the French social model, which he argues is excessively elitist and raises insurmountable hurdles for the poor who live in the banlieues. His (unsurprising) solution to the problem of how to square competitive global capitalism with a fair society is education, and he is also critical of the weaknesses of European universities compared with American ones.

It is useful to read this book during the course of the financial market meltdown, as a reminder that financial liberalisation hasn’t been the only major trend of the past 20 years. The technological changes and industrial restructuring of global production will not be unwound even though the massive portfolio capital flows washing around world financial markets certainly will. Cohen has long been a thoughtful observer of globalisation, bringing a fresh perspective to a literature dominated by Anglo-Saxon interpretations. For readers familiar with the literature on globalisation, there will not be much that’s new here, but this book is an enjoyable philosophical reflection on the deep structure of the modern global economy.

Diane Coyle

Enlightenment Economics

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