http://www.nybooks.com/articles/archives/2015/dec/17/robert-reich-challenging-oligarchy/?utm_medium=email&utm_campaign=NYR+Krugman+de+Bellaigue&utm_content=NYR+Krugman+de+Bellaigue+CID_2af3e235cd491e57e9cfadeb068c7d75&utm_source=Newsletter&utm_term=Challenging%20the%20Oligarchy
Knopf, 279 pp., $26.95
Back in 1991, in what now seems like a far more innocent time, Robert Reich published an influential book titled The Work of Nations, which among other things helped land him a cabinet post in the Clinton administration. It was a good book for its time—but time has moved on. And the gap between that relatively sunny take and Reich’s latest, Saving Capitalism, is itself an indicator of the unpleasant ways America has changed.
The Work of Nations was in some ways a groundbreaking work, because it focused squarely on the issue of rising inequality—an issue some economists, myself included, were already taking seriously, but that was not yet central to political discourse. Reich’s book saw inequality largely as a technical problem, with a technocratic, win-win solution. That was then. These days, Reich offers a much darker vision, and what is in effect a call for class war—or if you like, for an uprising of workers against the quiet class war that America’s oligarchy has been waging for decades.
1.
To understand the difference between The Work of Nations and Saving Capitalism, you need to know about two things. One, which is familiar to most of us, is the increasingly ugly turn taken by American politics, which I’ll be discussing later. The other is more of an insider debate, but one with huge implications for policy and politics alike: the rise and fall of the theory of skill-biased technological change, which was once so widely accepted among economists that it was frequently referred to simply as SBTC.
The starting point for SBTC was the observation that, around 1980, wages of college graduates began rising much more rapidly than wages of Americans with only a high school degree or less. Why?


