(FORTUNE Magazine) – Adam Smith, Karl Marx, and Thorstein Veblen all recognized the centrality of work in the lives of men and women and in the operation of the economy. Most contemporary social scientists have forgotten it. Shoshana Zuboff, in her recent In the Age of the Smart Machine: The Future of Work and Power (Basic Books, $19.95), demonstrates that the old masters were on the right track. Yes, new technology creates the potential for a better world. But the decisions individuals make about using the technology in their day-to-day work determine whether the potential will be realized. Zuboff, an associate professor at Harvard business school, deals perceptively with one of the great transformations of modern life: the impact of computerization on work, workers, and the corporation. A lot of workers don't like it. Zuboff interviewed employees at paper mills, an insurance office, a communications firm, a drug company, and a bank (none referred to by its real name) and heard similar comments. ''It's a thinking job now.'' ''The job is more mental; it takes place in your head.'' ''You must use your brain, not your hands.'' For many workers that's a problem. If you're a clerical employee, you may feel disconnected from your job, since you no longer touch the papers and files. If you're a blue-collar worker, then formerly valuable skills, acquired over years, are suddenly unimportant. The speed with which computers transform U.S. industry will depend in part on how quickly schools and companies can transform workers. Computers, as Zuboff explains, place a premium on ''intellective mastery,'' an ability to deal with abstract thought. That requirement is redefining the factory worker. Of the two paper plants Zuboff studied, the older one employed a work force with a tenth-grade education on average. But at the newer, computerized plant, management ended up hiring workers with an average of two years of post- secondary schooling -- four extra years of education. Computers are revolutionizing relations between workers and managers. What happens when the underlings sit at keyboards and can tap into all sorts of databases, gaining their own understanding of the corporation and forming their own ideas of how it should work? The result is unprecedented anxieties, tensions, and ambivalences. Managers want and need control; they are paid to exercise it. But the new technology enables workers to improve their effectiveness in previously unthought-of ways all by themselves. The choice that executives face is straightforward. They can retain their preoccupation with authority and use computers simply to replace people -- in other words, automate. That will probably enable them to do faster or cheaper what they do already. Or they can acknowledge the power of the computer to place vast amounts of useful information before all kinds of employees, enabling them to do their jobs better. Zuboff calls this ''informating,'' and the informated organization is where she sees the world heading. IT WON'T BE an easy trip, since managers and workers will have to reorient their minds to get there. For example, in a traditional organization, sales managers often keep salesmen in the dark about what products cost and how many are on hand, the better to control their activities. In an informated organization, salesmen would have computers that would give them up-to-the- minute information on those facts so they could tailor the best deals. Of course those salesmen would need to know how to use the data -- which in a traditional organization they wouldn't. Zuboff's book is full of learning and revelation. It is not easy going, not a novel that can be read for its plot, though it tells a most important story, one without an ending. Reading it demands significant time and concentration. That is not an unreasonable investment to make in return for a wealth of insight about one of the most important economic transformations of the second half of the 20th century.