THE JUDAS ECONOMY: The Triumph of Capital and the Betrayal of Work.<i> By William Wolman and Anne Colamosca</i> .<i> Addison-Wesley: 256 pp., $24</i>

The title, “The Judas Economy: The Triumph of Capital and the Betrayal of Work,” says it all: We are living in a time of self-inflicted economic troubles, a time when capitalism’s triumph threatens to bring on its own defeat. At the core of this disquieting scenario is the belief that, in the new environment of a global market, the energies unleashed by the market become the source of profoundly destructive change. The message is that these energies must now be contained.

As the authors put it: “The market is now God; economic planning is the devil incarnate. Free market ideology has finally ridden to total victory. . . . The collapse of the Soviet Union brings to capitalism something it had always sought but never before achieved: a withering away of all the important opposition to the idea that the free market is the ideal way to organize society. . . .”

If these were the sentiments of someone speaking from the left, they would not carry much weight. But the words belong to William Wolman, chief economist at Business Week magazine and regular commentator on CNBC television, and co-author Anne Colamosca, a Business Week staff writer. They do not expect, nor do they want to see, capitalism replaced by socialism or some other economic system. Their worry is that capitalism may be in the process of severely injuring itself. There is a strong possibility that they are right.

At the heart of Wolman and Colamosca’s impassioned tract is a deep concern about the emergence of a new worldwide economic trend, whose effect on us and on most other advanced economies has been twofold: profits for capital, losses for labor. We have all heard about the downsizing of big corporations and the outsourcing of production, but we may not be aware of their extent and implications: In the United States alone, about a half-million employees have been let go each year for the last six years, while on a worldwide scale, direct investment in building foreign plants and operations hit $325 billion in 1995, up 46% from 1994, with American companies investing the most.

Today’s enormously competitive business atmosphere has pressured many companies in the United States to take such actions, while turning to foreign soil--China, Indonesia, South Korea or India, for example--where they can invest more profitably in plants and capital, not least because workers’ wages are often only 10% of their American counterparts’, although their productivity is at least 75% of their counterparts’. The result has been the emergence of a global work force, including highly trained workers capable of designing, as well as operating, the latest in production processes. A considerable number of American workers who have been displaced in the process have found employment again, although these jobs are not as remunerative as the positions from which they were severed. With higher productivity, business firms in the less-developed world--most of them owned by United States, Japanese and European corporations--can more easily enter the rich markets of the West. In combination with the widespread pulling-down of the barriers that formerly protected markets from low wage competition, the international playing field is certainly not level, but it is tilted far less than it was 20 or even 10 years ago.

The most disturbing effect of today’s global economy has been an unprecedented shift in the distribution of incomes between capital and labor, especially in the United States, which lacks the strong unions and minimum wage standards widely found in Europe. Profits and remuneration for American chief executives have soared; workers’ wages have remained stagnant or even declined. Wolman and Colamosca cite the latest figures showing that between 1983 and 1992, the net worth of the top 1% of the nation increased by an unprecedented 28%, while real hourly wages and family incomes remained unchanged or drifted slightly downward over roughly the same period.

But is this betrayal? There is no doubt that the elite in top management in the United States have shrugged their shoulders at globalization’s impact on those who work for them. And it is also the case that the wholesale dismantling of capital controls such as protective tariffs has vastly helped to create today’s wide-open world market. Nonetheless, the Judas economy of the book’s title diverts our attention from what may ultimately be the decisive cause of globalization itself. What Wolman and Colamosca fail to consider is the impact of technology in the form of computer networks, which enable distant manufacturing operations to be monitored as effectively as if they were in the same building; automation, which has simplified skill levels to a degree unknown 20 years ago; and the jet, which has reduced the distances between countries and faraway business partners. I do not doubt that sheer greed and social indifference, which the authors emphasize, play an important role in bringing about market globalization. Nonetheless, I ask: Without technological advances, would there be a world economy in the first place? I doubt it.

Economists might raise other points with respect to the argument of “The Judas Economy.” They might criticize Wolman and Colamosca above all for the degree to which they believe globalization is the reason working-class incomes have eroded. Laura d’Andrea Tyson, former chief of President Clinton’s Council of Advisors, estimates that imports may be responsible for 20% to 25% of the erosion of working-class income. A more important issue is that Wolman and Colamosca are mainly concerned with cushioning the impact of globalization on our work force. They suggest helping workers who have lost their jobs with such measures as making it easier for them to find new ones, giving them tax breaks to cover their moving costs and providing national job listings and catastrophe insurance for those hit by an unexpected job loss.

Such proposals are desirable and might easily be expanded to include such employment safeguards as an enlarged program of public works. However, there are deeper problems. The main challenge of the globalization problem, as I see it, is not how best to protect the well-being of our own workers, vitally important though that is. The challenge is how to advance a long overdue economic change, of which globalization is the leading edge.

I make this heretical statement because “globalization” has two meanings, one of which the authors largely ignore. One meaning, which Wolman and Colamosca place front and center, is to prevent the economies of the advanced nations from being inundated by low-priced exports from the less-developed nations. The other meaning is how these same less-developed nations can attain some degree of parity with the developed ones. That second meaning puts forward the desperately important and overlooked problem of how to bring the impoverished two-thirds of humankind to a level of existence that is within sight, if not yet grasped, with the remaining third. In the authors’ failure even to mention this aspect of globalization, I see evidence of the very ideological one-sidedness against which they protest so vigorously.

In our time, just such a process of economic redress is perhaps beginning. I say “perhaps” because global equalization will be a long drawn-out undertaking with very uncertain outcomes. To begin, we will have to see if the developing nations can control their population growth and ecological integrity--neither is easy, but both are essential for further development. Thereafter come more difficult political problems: If they choose the path of socialism, then how do they avoid the extremes that undid the Soviet Union? If they choose capitalism, then how do they avoid the corruption that undid Haiti? And then there looms the troubled relations among these countries locked in a competitive struggle to find a place in the world.

Given the magnitude of these obstacles, is a large-scale redress of inequality between the advanced and developing countries a realistic prospect for the coming century? It is hard not to answer that question pessimistically. But there is another response: Is there some alternative to such a doomed world-wide developmental effort? A promising answer may lie in the encouragement of regional trading blocs, such as the North American Free Trade Agreement that binds Canada, the United States and Mexico.

It is not difficult to imagine other such regional agreements centered on various advanced nations in Europe and elsewhere. Their purposes would be to reduce the unmanageable task of achieving global development to the more manageable task of encouraging regional growth. This would entail the gradual, steady lowering of barriers on imports from the junior nations to the leading nations in these agreements, always mindful that the leading nations’ economies must not be placed under intolerable strain, while also encouraging exports of capital from them to their junior partners. Not in the least, strict prohibitions would bar imports from any country that violated the decency of labor conditions, including the right of workers to form trade unions.

No doubt some of these blocs would fail, but it also seems realistic to expect that some would not. From these successes, small and large, one can hope for an internationalized growth process that is not possible today.

This is a prospect of special significance for advanced nations such as the United States. For us to treat globalization as if it were only a threat to be countered, as Wolman and Colamosca do, rather than as the first stage of a potentially historic transformation, would indeed be a betrayal, for no small part of the misery of the undeveloped world reflects the acts and policies of the advanced nations during their 200 or 300 years of global economic dominance. Fortunately, the United States is among the last involved in this history of abuse and exploitation, although even we have our actions to answer for in the Philippines, pre-World War II China and Latin America.

None of this is intended to dismiss, with a wave of the hand, the undoubted strains that present-day globalization imposes on us. No doubt it is difficult to take an affirmative, not merely defensive, stance with regard to the pains globalization forces on us today. Yet the redress of these very problems at home may have the effect of making our own society less indifferent to the well-being of its less-favored members. Wolman and Colamosca could write a powerful book on that possibility.