BOOKS

By WALTER SHAPIRO

THE WORK OF NATIONS by Robert B. Reich; Knopf; 331 pages; $24

Since the invention of supply-side economics, most of the slick idea packagers in American life have been conservatives who view taxes with the horror that Carry Nation once reserved for saloons. Harvard political economist Robert Reich is the rare exception, a glib and unrepentant liberal who has become -- almost by default -- the John Kenneth Galbraith of the baby- boom generation. The publication of Reich's new economic synthesis, The Work of Nations, comes in the midst of a Republican recession with record budget and troubling trade deficits. But rather than indulging in hand wringing and partisan I-told-you-sos, Reich adopts a surprisingly upbeat, almost gee-whiz, tone as he describes the New Age world economy.

Reich's thesis is sound-bite simple: economic nationalism has become as outmoded as the typewriter. The dominance of globe-girdling corporations like IBM, Sony and Siemens has rendered America irrelevant in a traditional economic sense, along with all national borders. This "global web" (a favorite Reich phrase) means that today "a sports car is financed in Japan, designed in Italy, and assembled in Indiana." Thus it is folly to subsidize or even root for an American company against its Japanese or European competitors, since such national labels are just convenient fictions, like tankers flying the Panamanian flag. What matters to Reich, pure and simple, is high-quality jobs and an American work force prepared to fill them.

Think of Reich's achievement, wiping away most of America's purported economic problems in 331 pages. The trade imbalance becomes a meaningless statistic, since it is primarily caused by "American-owned firms making things abroad." The budget deficit is a mere piffle in a world where financial capital sloshes over national borders. The book ridicules as "outmoded thinking" fears that foreigners are buying up America. "As corporations of all nations are transformed into global webs," Reich explains, "the important question . . . is not which nation's citizens own what, but which nation's citizens learn how to do what."

But are giant corporations truly international bastions of equal-opportunity employment? A seemingly innocuous footnote jeopardizes the book's central argument. After praising Sony for its global management team, Reich concedes in tiny type that the general pattern is that the "directors and top officers of Japanese corporations are uniformly Japanese." Wait a second. If most Japanese companies are still so xenophobic, does this not suggest that high- quality jobs for Americans are, in truth, quite limited?

In the last half of the book, Reich abruptly shifts from Pangloss to pessimist with an artful analysis of the nation's class cleavages. He correctly identifies the growing economic and social gap between the well- educated elite ("the fortunate fifth") and the rest of the nation as the major threat to future prosperity. His remedies are mostly liberal boiler plate: progressive taxation, job training and reinvestment in the nation's infrastructure. Familiar Reich stuff -- but probably not the right stuff for Democrats hungering for an economic road map toward 1992 and beyond.