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Today's managers feel that a once clear separation between public and private sectors has broken down. Specifically, managers are spending heavily on education and training and wondering if this is their responsibility. In answering this question, the author looks back to Adam Smith's "The Wealth of Nations" and industrial capitalism's first social compact. As work became increasingly simplified under what Smith called the division of labor, the level of education that management required of its workforce declined. According to Smith, business managers were only responsible for providing the most rudimentary elements of education. Avishai goes on to examine business's social contract in a competitive environment that has superseded the division of labor. In the foreseeable future, virtually every business will focus on continuous learning and will therefore have both an obligation to support teaching and an opportunity to profit from it.

Israel faces an imperative to grow in the 1990s. This year, Israel welcomed 200,000 Russian immigrants (a number that will double in the coming year). How can this small country cope with its surging population? Israel has one big advantage: brainpower. It boasts the world's highest literacy rate, math skills, and number of scientists and technicians per capita. With market exposure and foreign partners, Israel could do well in world markets. The most important first step, however, is for the government to pursue peace.