There may be some other cases where that isn't true, but I think it is obviously not true now in education, especially as education creates the essential basis of our competitiveness internationally. There is some disagreement about which part of our educational apparatus is the one that is crucial. Is it K through 12? Is it the first two years of college education? There are disagreements and different studies that show different parts of the educational process as more important. But I think that all the studies show that unless you have an educated population, you really can do nothing. One of the surprising things about the United States is that we had not realized this until very recently. If you look at American production after 1945, through the 1950s and perhaps into the 1960s, a very high education wasn't necessary because even a high school education -- and not even a good high school education -- was still good enough to put bolt number-36 on to a chassis in a production line. The reason we could get along with not a very highly educated population was that the amount of capital per worker was so incredibly high that what was left to do on the assembly line was essentially just routine operations. But now we are moving away from economies of scale to economies of scope; where on a single production line, you may switch over production from one item to another very rapidly. And this requires the kind of labor force which will be able to quickly change the computer programs and robots and all the rest that contribute to the process. You can't get on with someone with a bare high school education in doing that. This is no longer just a routine operation. Ultimately, you need a very high-level manufacturing population that knows a lot, that understands some degree of mathematics, can read tables and instruction books and can do calculations. So I think this is the direction in which we ultimately have to move.
The surprising thing, except for President Clinton, few have been fully aware of this. I think the amount we are doing to improve education is still very little compared to what we must do over the longer term. Basically, my judgment is that, while it would be really good to have better student/ teacher ratios and that sort of thing in the classroom, we basically need a much higher-level teacher than we have now. It is interesting that during the period when we discriminated against women, we had a better educational system than virtually any of our competitors. And we did it, of course, by insisting that women who would otherwise have gone to law school or business school, could only have jobs teaching high school or grade school. So we had, without paying for it, an incredible infusion of great female talent in our schools. Now, especially since the returns to high school or grade school teaching are so low, we are getting -- I hate to say it -- inadequate men instead of extremely good women. And somehow this has got to be turned around and a greater priority put on what we do as a nation in the educational field. There is no reason why we should be so far behind Singapore and Taiwan and Japan and other countries.
Q: In one article, you also wrote, "Though peaceful in its international implications, the rise of the virtual state portends a crisis for democratic politics." Can you explain what you meant by this?
A: Up until fairly recently, even though we didn't have a closed international economy, we basically had an economy where most of our industries didn't have major competition. The chemical industry did not; the auto industry for a long time did not; the electronics industry did not. For most consumer electronics, you