Actually, we are smack in the middle. Between the two periods there is what I have called the turning point, which is a time of institutional recomposition. It has lasted anywhere from two to 13 years (as was the case in the last one, in the 1930s). This is the period in which perverse trends have to be reversed: The income polarization and the madness of the bubble years have to be overcome, but also the decision-making power has to move (or be moved) from the hands of financial capital to those of production capital. Today, long-term investment is almost impossible, because the quarterly pressure for profits coming from the financial markets ties the hands of CEOs and every other top manager. Under those conditions cost-cutting can become more important than innovation, and lots of human capital can be wasted.

The most recent turning point saw the establishment of both the national welfare state and the main international organizations. That created conditions for the growth of mass markets in each country and around the world. This global revolution is going to need an equally imaginative set of institutions if it is to flourish in a peaceful and prosperous world. What have the global impacts of the IT revolution been?

Good and bad. Globalization is basically the result of the fantastic power and low cost of digital telecommunications. Because of that power, global corporations can be huge, and they can relate to an extremely large network of suppliers and allies across the world. Finance can function 24 hours a day, around the globe, for the same reason. Outsourcing, offshoring and every other phenomenon that Tom Friedman describes-in terms of the incorporation of new regions of the world to full participation in world markets-has come about on the wave of worldwide installation of the IT revolution. The knowledge society, with its potential for raising the quality of life of a great many people, is based on IT.

However, that same IT and that very globalization have also led to intense polarization. The rich have gotten richer and the poor poorer, within each country and across the globe. While many countries in Asia have risen to development, Latin America has been marginalized, and Africa and the Middle East practically excluded. The great migratory pressures of those who would risk their lives for a chance to work, and to live a better life, have the same origin as much of the violence and resentment that angry leaders so successfully foment, and that threatens the advanced world. One group fights with hope; the other with hate. And naturally, the latter can also take advantage of IT technologies

What are you seeing now in terms of the flow of global capital?

There is obviously a very high concentration of investment and employment creation in China and India, to the detriment not only of the other developing countries but also of the developed ones. If it weren't for the reinvestment of the Asian surpluses in the U.S., the American economy would be in very serious trouble. In my view, jobless growth is unacceptable for societies that have known a high quality of life for all. Something has to be done in order to induce a significant wave of investment in the advanced countries.

But none of this will be done by the markets alone. A major process of consensus would have to be undertaken to shift the present conditions through intelligent policies and a shared vision. Right now a lot of capital is being used in derivative mountains, infinite hedge fund loops and housing bubbles. All that could be creating jobs in America, in Europe and across the excluded regions of the world.

Is that similar or dissimilar to previous revolutions?

Well, the income polarization has occurred with each of the major bubbles, and the need to expand markets and to create opportunities for investment has appeared each time at this point in the surge. The Golden Age is essentially the flourishing of the full range of possibilities under more favorable institutional conditions, often with the intervention of the state reining in finance and redistributing income.

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