Friedman on U.S. Economy

Re “The Fate of a Nation,” Opinion, Aug. 20: One route to success on the lecture circuit, or even the bestseller list, is to divide up a complex subject such as the economy into a few neat categories with catchy titles. In the 1950s and 1960s, Harvard economist John Kenneth Galbraith was a master at this art. So one can sympathize with David Friedman’s ambitious division of the U.S. political economy into “wired,” “provincial” and “kluge” (kluge?). The problem is that complex subjects are not so easily categorized.

Friedman’s “wired” sector is indeed high-wage on average, but it has its share of low-wage employment, e.g., electronic assembly. The “kluge” universities which Friedman sees as dragging down the wired sector also mysteriously supply its high-tech work force. As for “provincial” political control, I don’t count many electoral votes surrounding Friedman’s “Idaho bunker.”

By the way, does anyone remember what the technostructure was?

DANIEL J.B. MITCHELL, Professor

Anderson Graduate School of Management

UCLA

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* Friedman’s analysis does not go far enough. He is quite accurate in stating that the “wired” segment correctly considers the government to be largely irrelevant to its concerns, but he misses or ignores the process that has already begun as a consequence of this perception.

Multinational corporate conglomerates that are created through mergers have no allegiance to a particular governmental or national entity. Their products and services cannot be identified by nationality. Furthermore, their sovereignty has now begun to extend into newly created extra-territorial enclaves--shopping malls, apartment and office complexes, entertainment “worlds,” “lands” and “walks” with their own laws and regulations that don’t necessarily reflect the laws of the outside world, their own security apparatus to replace the inadequate security force of the obsolete governmental entities, and with an allegiance, uniforms, identity, even flags and slogans that reflect a novel corporate allegiance.

I predict that faced with governmental inadequacy and irrelevance corporations will expand into other sorely needed areas--provision of safe housing in fenced security enclaves protected by a trained and armed force, safe and efficient schools to provide a good education for the children of corporate “citizens,” medical facilities and medical care providers for corporate “citizen” families, and even athletic teams competing for honor, improved morale and glory.

SI FRUMKIN

Studio City

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* Friedman’s article represents yet another installment in the endless story of American denial about the real role of our government. Friedman quotes high-tech businessmen as saying that government doesn’t understand them and is largely irrelevant to what they do. Many do indeed say these sort of things. But Friedman would be much truer if he then noted that, rhetoric notwithstanding, the central symbol of the high-tech economy--the Internet--was a government creation that is only now being cautiously privatized after many years of operation.

Friedman might also have noted that the mountain-based “provincials” who heap scorn on government would literally be unable to live in their redoubts except for the enormous federal investment in their relatively little-used segments of the interstate highway system. Maybe those poor backwards “kluges” who have the strange idea that government builds the key economic infrastructure have something to say to the nation.

NATHAN LANDAU

Albany, Calif.