21ST CENTURY CAPITALISM--INTRODUCTION

'Inside a gleaming computer center in Taipei, a young engineer labors late into the night. Connected by the Internet to some of the best software writers in the U.S., he is helping design a digital phone system that will match anything the U.S. or Europe can muster.

In China's northern boomtown of Tianjin, an auto worker pores over documents on how to arrange a low-interest mortgage on a modern condominium. In Mexico City, a working couple plows savings into a mutual fund, all to put two children through private school.

Ingenuity, new prosperity, middle-class striving--familiar Western values are appearing on the frontiers of capitalism. Multiply these scenes by the millions, and you see the shape of a revolution that will transform the global economy well into the next century. Already, capitalism is flourishing in regions as diverse as communist Asia and the former dictatorships of Latin America. Affluence is lifting millions out of poverty, giving many the chance to purchase their first Fiats and Toyotas as well as their first Apple computers and Panasonic VCRs. And inflation is brought to heel in even the most wayward economies.

Global politics is also entering a new age. Constitutional democracy is sweeping through Central Europe, Russia, Latin America, Korea, and Taiwan. Ideas transmitted by satellite broadcasts, fax machines, and Internet ports are prying open even authoritarian regimes.

Why is all this happening now? The death throes of communism clearly gave birth to the era, leaving most nations with only one choice--to join, in one fashion or another, the market economy.

The implications are huge for rich and poor alike. Hundreds of millions of peasants are leaving ancient ways of life for the factory. Cities such as Guangzhou and Bangalore teem with new inhabitants. Many are living poorly, of course, but just as many are thriving.

In this tumultuous era, not only is capitalism global but so is the Information Revolution. ``An unprecedented number of people around the planet are moving from an agricultural economy to an industrial one just as the world is entering the digital age,'' says Robert Avila, chief economist of The Futures Group, a Glastonbury (Conn.) consultancy. As powerful data networks spread, the developing nations will be drawn into the borderless information economy. In this world, a former Chinese peasant makes auto parts designed by CAD-CAM engineers in Hong Kong, who hold videoconferences with customers in Detroit.

Cheaper, more-powerful electronics will spread faster than imagined into every aspect of economic life. Virtual universities will seek students from around the world, and doctors will diagnose distantly located patients by way of fiber-optic hookups. Someday soon, electronic networks will connect a saver in Bremen with a small businesswoman in Jakarta. John S. Mayo, president of AT&T Bell Laboratories believes that the next stage of the Information Revolution will change the way we live.

These changes are creating new opportunities for profits--and money is in hot pursuit of them. Hundreds of billions of dollars from the West are streaming into new markets. Capital hasn't flowed across the globe so copiously since the heyday, a century ago, of such financiers as the Morgans and the Rothschilds.

Yet for all its amazing promise, there is much uneasiness about the new era. The middle manager in Chicago, say, or the auto worker in Bavaria will find themselves, for the first time, operating in a world market of increasing pressures. In this new age, corporations will force constant change upon their employees as their executives pursue--sometimes unsuccessfully--a vision of the global organization. Jarring trends will include a much more diverse body of shareholders and managers, constantly changing partners and allies in the quest for new technology and markets, and an emphasis on rapid product development.

Advanced skills will be needed in this volatile atmosphere. The new technocratic elites will be adept at moving capital around the world, transferring knowhow, and shaping consumer culture worldwide. Increasingly, non-Westerners will make up their ranks.

Will optimism about 21st century capitalism ultimately prove misguided? Hundreds of millions of people will not benefit from this new economic order. Victims include an older generation of unemployable Russians, the uprooted of India, and the newly idle of Europe and the U.S. In its most unbridled form, capitalism certainly delivers wealth but stumbles when it comes to distributing its rewards equitably enough. Resentment against capitalism could provoke a backlash against free trade and its sponsors. And few institutions now exist to regulate the excesses of global finance and post-cold-war geopolitics.

But capitalism will probably surprise us with its inventiveness. It has proven its resilience over the competing systems of fascism and communism and transformed itself to accommodate dozens of cultures worldwide. Capitalism is already delivering the first fruits of prosperity to new adherents in China, Taiwan, and Mexico. Billions more are eager to benefit from this wealth. Their energy will help shape an age that is already upon us.