Alvin Toffler and the Third Wave by Michael Finley

In the annals of contemporary change literature, Alvin Toffler is the 600-pound gorilla. e and his !ife and collaborator eidi Toffler have !ritten a ba"er#s do$en of boo"s that have all been best-sellers, starting !ay, !ay bac" in %&'% !ith Future (hoc". The family tree of thousands of boo"s about the future, and about ho! to cope !ith it, all lead to the leafy canopy !here he ma"es his roost. e has !ritten about society, culture, the media, organi$ations, science, computers, politics, and economics. )e could easily have pic"ed his brain for an entire day. (o ho! much could !e e*pect to s+uee$e from him in &0 minutes, -uite a lot, as it turned out. Toffler#s session !as li"e one of those pony cart rides you ta"e through .ld )illiamsburg, only the driver is going at brea"nec" speed, and the pony is !ide-eyed and snorting, and !hat you are loo"ing at is not a restoration of the past, but fleeting glimpses of the future.

Wave theory The central premise of Toffler#s tal" !as that human history, !hile it is comple* and contradictory, can be seen to fit patterns. The pattern he has been seeing in his career ta"es the shape of three great advances or !aves. The first !ave of transformation began !hen some prescient person about %0,000 years ago, probably a !oman, planted a seed and nurtured its gro!th. The age of agriculture began, and its significance !as that people moved a!ay from nomadic !andering and hunting and began to cluster into villages and develop culture. The second !ave !as an e*pression of machine muscle, the Industrial /evolution that began in the %0th century and gathered steam after America#s 1ivil )ar. 2eople began to leave the peasant culture of farming to come to !or" in city factories. It culminated in the (econd )orld )ar, a clash of smo"estac" 3uggernauts, and the e*plosion of the atomic bombs over 4apan. 4ust as the machine seemed at its most invincible, ho!ever, !e began to receive intimations of a gathering third !ave, based not on muscle but on mind. It is !hat !e variously call the information or the "no!ledge age, and !hile it is po!erfully driven by information technology, it has co-drivers as !ell, among them social demands !orld!ide for greater freedom and individuation. Economics old and new In the first !ave, !ealth !as land, and it !as e*clusive5 if I gre! rice on my acres, you could not. In the second !ave, !ealth diversified into three factors of production 6 land, labor, and capital. As !ith the rice paddy of the agrarian regime, each of these !as discrete, allo!ing for only one use at a time. To illustrate6 In the industrial regime, 7eneral Motors became rich by combining its resources 8its factories, its manpo!er, and its money9 to ma"e cars. :ach car loaded onto the truc" slightly drained the company of its resources. Today#s counterpart to 7eneral Motors, Microsoft, ma"es cars that anyone can easily replicate at home 8by copying dis"s9. Microsoft is not drained of its resources !hen it ships a pac"age of )indo!s &;. The land, muscle, and money in /edmond, )ashington, are not the source of the company#s !ealth5 the "no!ledge of its soft!are developers is. 8<icholas <egroponte#s tal" follo!ing Toffler#s !as based on this very notion of the undiminishable resources of the information age. Atoms, <egroponte said, are dedicated in nature6 they cannot be put to t!o uses simultaneously. =its, the atomic e+uivalents in the cyber!orld, upon !hich all digital information

is based, are endlessly interchangeable and reusable. )hen you do!nload a file, the file you do!nloaded is still there.9 :conomics has been lovingly defined as >the science of the allocation of scarce resources.> From the standpoint of the third !ave, in !hich the primary resource is "no!ledge, that second-!ave definition rings hollo!. In the first place, economics has never been much of a science, Toffler said. More to the point, our supply of "no!ledge is anything but scarce. Indeed, li"e paper money, in !hich the tangible gold of the earlier !aves has been replaced by alphanumeric figures stamped on intrinsically !orthless sheets of paper, our "no!ledge is ine*haustible.

Massification and demassification A central theme of the industrial regime !as centrali$ation and standardi$ation. )here the first !ave lac"ed the technology to connect locale to locale, and to organi$e large systems, the second !ave provided high!ay systems, cars, telephones, and mainframe computers, lin"ing remote outposts to central controls. At the height of the second !ave everything !as >mass,> from mass production to mass destruction. =oth Alvin and eidi Toffler !or"ed in factories !hen they !ere young, and they "ne!, as all factory !or"ers of that era "ne!, that the 3ob !as to turn out the longest possible line of identical products. This !as one point on !hich assembly-line capitalist enry Ford and assembly-line Mar*ist 4oseph (talin could agree6 the virtue of mass production. The larger the +uantity, the cheaper the run. =ut the economics changed. 1omputers ma"e changeovers less e*pensive. A recent (iemens manufacturing product !ent by the name ?ot (i$e .ne. To be sure, the bureaucracy and pyramid po!er structure of the second !ave made possible many !onderful things. 1onsumer goods streamed through factories at an unprecedented pace. Medicines, appliances, government services, and entertainment all found their !ay from production centers to every noo" and mar"et niche. =ut the price of +uality goods !as sameness. In the famous !ords of enry Ford, >They can have a car any color they li"e, so long as it#s blac".> The completion of the @nion 2acific /ailroad in %06' created a single transcontinental megamar"et that !ouldsoon over!helm every micromar"et it passed through. 1984 and beyond The tyranny of the factory inspired a blea" futurism in !hich =ig =rother ruled the planet through centrali$ed information control. =ut something happened that prevented the nightmares of7eorge .r!ell 8%&0A9 and Aldous u*ley 8=rave <e! )orld9 fromcoming to pass. Technology too" a sharp turn a!ay from standardi$ation and to!ard individuation and diversity. In a not-al!ays-pleasant !ay, the third !ave began decentrali$ing the machine heart. Today is a time of transition, in !hich !e !itness the curious spectacle of massive second-!ave-type enterprises adapting to the third-!ave appetite for differentiation. Ta"e the coffee e*ample. In the %&B0s each to!n had its distinct coffee flavor. In the %&'0s it !as Ma*!ell ouse and McConald#s scalding coffee, from sea to shining sea. =y the %&&0s, an e*plosion of mom-andpop coffeehouses too" place across the country. Today you stop, as I did recently, at a coffee shop in Talladega, Alabama, and order a double latt of decaffeinated Denyan !ith a finger of amaretto ha$elnut syrup in . .r you can have the best of all !orlds, second !ave McConalds# standardi$ation combined !ith third !ave product choice, by !al"ing into any of the B,000 (tarbuc"s coffee shops nation!ide.

In retail, !e have !itnessed the second-!ave 3uggernaut )al-Mart brea" upon cities small and large, !ith the third-!ave possibility of a single store selling %00,000 different items. Again, the Tofflers have coined a term for a third-!ave predicament, familiar to anyone !ho has surfed the Internet, shopped at a !arehouse grocery store, or installed satellite do!nload television 6 overchoice.

Mass culture Mass culture has not vanished !ith the arrival of the third !ave. )e still have Cisney, roc" and roll, 2o!erball, and 1=(. =ut alongside these mainstream cultural entities, there have developed a vast array of demassified niches. The @senet on Internet boasts %0,000 special interest ne!sgroups. .n the radioit is possible to turn the dial and find stations dedicated to certain types of music, from classical and contemporary tobluegrass, $ydeco, salsa, te3ana, tropical, bomba, and bangra. To a thousand different strains, the tastes of individuals are emerging as a mar"et force to be dealt !ith.

The emerging politics The clearest sign of changing politics is the decay of political parties. The day !hen a Fran"lin /oosevelt can put together astring of four elections by combining a handful of voter blocs8farmers, labor, intellectuals, the rural (outh, and the urban <orth9 into a single lasting coalition is gone. :lection todayre+uires stringing together hundreds of splintered grassrootsgroups 6 the nonsmo"ers, AIC( activists, save-the-!hales peopleand !hat-have-you. :very group is passionate, and narro! in focus. It is in every !ay a more daunting process, and it is conducted, as ma"ing fran"furters should not be, in full vie! of the public. It is no !onder that no one, in the @nited (tates, in 4apan, in Italy, or any!here, believes in parties any more. 2arties !ere a static second-!ave, homogeni$ed, massified function that do not seem relevant in the more volatile, diversified, heterogeneous third !ave.

The state of the family Many people share the sense that the traditional nuclear family of the #;0s, !ith !or"ing father and stayat-home mother, is the best defense against the !rong "inds of changes in a society.=ut is it reasonable to e*pect that everything else in society !ill change, but the family unit !ill undergo no change, Thus !e have the proliferation of family types today 6 the remarrieds, the adopteds, the blended family, the single-parent family, the same-se* family, the $ero-parent family, the family of convenience, the virtual family. Toffler does not endorse the fracturing of the American family that has occurred in the past E0 years, but he notes that it is of a piece !ith everything else that has happened.

A management revolution 1entrali$ed management made the !orld go round from the rise of the nation-state through )orld )ar II. In a simple system, a single individual could provide the !isdom and authority to guide a large enterprise.

<o one believes that anymore. The emphasis, since the %&'0s at least, has been on decentrali$ation, on delegation of authority and empo!erment, on self-managing teams, on the leader-as-facilitator as opposed to the leader-as-god. /unning a large enterprise from a hub on the basis of a single person#s competence, Toffler said, is li"e a doctor ma"ing morning rounds and prescribing Falium for everybody. Gou can#t doctor an entire economy, or even an entire organi$ation, !ith one medicine anymore. In the demassified organi$ation of today, onesi$e-fits-all doesn#t cut it anymore. Civersity and change are "ey. :very leader should chec" for the novelty ratio on the organi$ation#s product offerings6 ho! many are si* months old or less versus five years old or more, The same can be applied to people6 ho! many have arrived in the past si* months, versus those !ho have been around five years or longer, o! old are the organi$ation#s e*isting managerial practices, )hen !as the form you are no! holding in your hand last changed, o! might it be improved, In every company ne! ideas, ne! products, and ne! people are !aiting to be born. The leader#s tas" is to get them out and breathing.

The demassification of intelligence It sometimes seems that in the competitive third !ave you must be a roc"et scientist to survive. =ut Toffler sees the current era as one in !hich multiple intelligences are finally identified and given their due. In the third !ave, good ideas can come from any!here and anyone. It does not behoove management to treat li"e dummies people !ho are supplying the native !it that allo!s organi$ations to succeed. 1onventionally >smart> people !ithout motivation or energy or good health tend not to amount to much, he said. Indeed, reducing a person#s gifts to an I- number is a "ind of ultimate unintelligence, but about !hat you might e*pect of a second-!ave educational system that still sees teaching as a factory activity and young human beings as products to be processed. The ne! intelligence !ill be all over the place. It may mean courage, imagination, entrepreneurialism, !armth, organi$ational savvy, or street smarts. These are the "inds of brains that !ill thrive in the third !ave. /eduction of intelligence to a bell curve is a to*ic supersimplification of reality.

Third wave playthings =eside human intelligence, Toffler is interested in !here !e are embedding machine intelligence, creating smart products. Microchips have already migrated from the des"top to our environment, so that the average home today has B00 chips performing discrete tas"s. The connectivity specialists at <ovell have floated a goal of net!or"ing a billion different products. )hy don#t the B00 chips in your house tal" to one another, If your toilet develops a lea", !hy can#t it diagnose itself, research the matter, and call the plumber on its o!n,

The high price of sleeping At a dinner party held for the 1hinese ambassador in the late %&'0s, Toffler found himself seated !ith the top e*ecutives from <=1 and /1A. (ince it !ould be unli"e him not to ta"e advantage of such access, he as"ed them ho! broadcasting !ould be different five years hence. =oth smiled languidly and assured Toffler there !ould be no ma3or changes.

They, li"e everyone else !ho !ould lose their 3obs in the years ahead for not seeing the approaching third !ave, sa! a future of fine tuning and incremental ad3ustments. Amidst the tremendous upheaval of our times, they !ere asleep at the !heel and proud of it. The po!er of the third !ave has ta"en even the Tofflers by surprise. )hen they published Future (hoc" in %&'%, they sa! the "no!ledge age as an outgro!th of the industrial age that !ould re+uire only a bit of fine tuning. They no! see it as more revolutionary than that. The regime of the smo"estac"s has been toppled forever. )hat remains is still frothing and changing its shape. It is a !hole ne! era, !ith dangers and opportunities uni+uely its o!n. 2 !idebar" #r$ %ivingston& ' prosume $ $ $ )e are not currently in Toffler#s third !ave5 !e are still in transition bet!een the second and third !aves, and that is !hy the implications of the transformation are not immediately obvious. 4ust as "no!ledge is replacing material and manpo!er as the fulcrum of the ne! economy, the old roles of producer and consumer are blurring. In the case of )indo!s &;, !hich anyone !ith a dis" drive can duplicate as !ell as 7M made 1adillacs, those roles have lost much meaning. The Tofflers have come up !ith a !ord that describes the blurred role !e all play 6 prosumer. As prosumers !e have a ne! set of responsibilities, to educate ourselves. )e are no longer a passive mar"et upon !hich industry dumps consumer goods but a part of the process, pulling to!ard us the information and services that !e design from our o!n imagination. It is a version of capitalism that colonial economics 8>There#s a suc"er born every minute>9 never envisaged. In the third !ave, the prosumer is al!ays right.

!idebar" (uppa )oe ?i"e a steamroller grinding across the landscape, the massification of America ran roughshod over local individuality, replacing it !ith one-si$e-fits-all conformity. Toffler recalled ho! every to!n had a differenttasting cup of coffee at onetime, because every to!n had its o!n roaster. )ith the emergence of mass production and mass merchandising, small-to!n roasters !ere replaced by the central roaster at 1hase and (anborn or 1hoc" Full o# <uts. (idebar6 Ges sir, no sir Toffler, consulting !ith the Cepartment of Cefense, had doubts about such a hierarchical organi$ation mustering the !ill to change itself. e too" heart !hen he learned !hat the ne! motto among many in the military is6 #isagreement will not be treated as disloyalty$ It is a motto he recommends for organi$ations that thin" themselves much less hierarchical. -----------------------------------------------------------------------*erspectives +or A (hanging World A ,eturn -isit With Alvin Toffler =y Mary :isenhart

)e are living through the birth pangs of a ne! civili$ation !hose institutions are not yet in place. A fundamental s"ill needed by policy ma"ers, politicians, and politically active citi$ens today--if they really !ant to "no! !hat they are doing--is the ability to distinguish bet!een proposals designed to "eep the tottering (econd )ave system on life-support from those that spread and smooth our transition to the Third )ave civili$ation.>

--Alvin and

eidi Toffler, 1reating a <e! 1ivili$ation

In the year and a half since our first visit !ith futurists Alvin and eidi Toffler 8>(urfing the Third )ave,> Issue H%%09, their !or" has become even more influential--not least because one <e!t 7ingrich, !ho became their friend in his teaching-assistant days, regards their vie!s on technology-driven social change as vital to planning for America#s role in the ne*t century. ?ast year, the Tofflers !ere approached by the 7ingrich-related 2rogress I Freedom Foundation for permission to distribute an anthology of their previous !or" 8selections from 2o!ershift , The Third )ave, and )ar and Anti-)ar9 !ith updated commentary. The idea, Alvin Toffler e*plains, !as that the boo" !ould be a special educational edition, to be distributed to 1apitol ill types. After the Foundation had distributed five thousand copies, the boo" !ent into commercial publication and bestsellerdom. ?aughs Toffler, >The irony of all that is that the boo" publisher is Turner =oo"s, so !e#ve got Ted Turner on one side and <e!t 7ingrich, !ho !rote the introduction, on the otherJ )hich goes to sho! that all the standard political alliances and assumptions need to be ree*amined--it#s something !e#ve been saying for t!enty-five or thirty years.> 81reating a <e! 1ivili$ation, Turner 2ublishing, I(=< %-;'0E6-BBE-0, K'.&;9 )ho#s the 2rogress I Freedom Foundation, and !hy do they !ant us to read your boo", The 2rogress I Freedom Foundation !as 3ust established a year or t!o ago by a man named 4eff :isenach. :isenach is very close to <e!t 7ingrich. The 2rogress I Freedom Foundation#s position is not e*actly the 7ingrich position on some issues. They#re very close as people. =ut the point of the foundation, as it appeared to me, is that it !ants to have a much broader policy. It !ants to !or" !ith Cemocrats as !ell as /epublicans5 and it has brought in 7eorge 7ilder and 4ay Dey!orth--he#s the chairman of the foundation5 he !as science advisor to /eagan. (o it#s very much a cutting-edge technologically oriented group, !hich has, I !ould say, a fair libertarian strea". )e ourselves are not affiliated !ith the 2rogress I Freedom Foundation, although !e li"e a lot of !hat they are doing. =ut not %000L. <ot %000L anything. Its pitch is that there#s enough bitching and criticism, that !hat !e need are positive images of the future that progress is possible !ithin a conte*t of freedom. I#ll give you an e*ample of a position in !hich they differ !ith the /epublicans, and I share their vie!. .n training and retraining of the unemployed, basically the /epublican position seems to be, >Dill the 4ob 1orps and give the money to the states and let them !orry about it.> The Cemocrats have come up !ith a position !hich says, ><o, ta"e the money and voucheri$e it, give it to the individuals to be able to buy !hatever "inds of training they !ant.> That is a much better, much more Third )ave solution. That#s actually li"e the 7I =ill of /ights that came after )orld )ar II, but you don#t have to !ait for a !ar. That#s a good position5 that#s one e*ample of a position the 2rogress I Freedom Foundation probably !ould hold in opposition to the /epublican party as such. I "no! :isenach is !or"ing !ith (ecretary of ousing 1isneros, he#s !or"ing !ith (ecretary of ?abor /eich, and any number of contacts !ithin the administration. The ob3ect is to build a "ind of visionary thin" tan" !hich is not 3ust a captive of the /epublican party, although it is still very closely and personally associated. (o that#s the story. I thin" the 2rogress I Freedom Foundation has a good chance to produce some interesting ideas that !e haven#t seen around before.

I "no! they#re interested in the !hole issue of the civil society, the civil society being all those organi$ations that are neither government nor corporate--nonprofits, essentially. The churches, the unions, the self-help organi$ations and so forth--I thin" they regard that as a very important social system !ithin the society, and have some very interesting notions about ho! they might be supported financially. They#re trying to do some imaginative thin"ing, and my hat is therefore off to them. That doesn#t mean I have to agree !ith all the stuff that comes out of it. (o ho! does imaginative thin"ing filter into the government process, )ith great difficulty. MlaughsN I#ll tell you. The real ans!er, It filters in privately, and seldom gets public e*pression. )hat you have on 1apitol ill are +uite a number of very smart people, !ho "no! much more and are much better than their output suggests. )hat !e#ve said for many years is that you could have ;E; saints and geniuses in the (enate and the ouse, and 1ongress !ould still ma"e stupid decisions, because it isn#t the I- or the intelligence of the members, or even their a!areness that is decisive. They are, to a considerable degree, the captive of organi$ed constituencies. They "no! that, !e "no! that, and it means that they get dumbed do!n. I#ll give you t!o e*amples. I spo"e !ith one of the top Cemocratic leaders a fe! !ee"s ago, and congratulated him on some victory they had 3ust !on--despite their minority status they managed to !in something in that day#s tactical battle. e said to me, in private, >Con#t congratulate me. It !as the !rong issue. )e had the !rong position. )e shouldn#t have been pushing this. I am a prisoner of my party and of the game. This is the !ay the game has to be played.> I thin" he !ould agree !ith eidi#s and my assessment, that the system is on thin ice, that it#s fragile, that this t!o-party arrangement could splinter easily ne*t time. That could have some good things about it, but it could have some very to*ic things about it as !ell. A fe! days later I got a call from a /epublican counterpart of his, a senator. The /epublican says the same thing, privately. e says, >I have to spend t!o-thirds of my time on public relations. I#m on this committee, that subcommittee, that 3oint committee, etc., etc. Co you thin" I can possibly "no! all the things I need to "no! in order to ma"e intelligent decisions about this, The ans!er is noJ It#s simply impossible. >Therefore my staff ma"es the decisions. =ut !ho elected them,> (o the system isn#t really !or"ing the !ay it !as supposed to !or". It#s overloaded. It#s blo!ing its fuses. In our terminology, it#s suffering future shoc". It can#t handle the comple*ity and the speed of change. And even !hen it tries to come to terms !ith it--for a technological e*ample, !hen they get email, they tend not to "no! !hat to do !ith it. They !ant to hear from their constituents, but !ait a minute... >Co !e really !ant to hear from them,> MlaughsN Ges, and > o! do !e read all this stuff,> This doesn#t +uite map out to the interest groups--there are all these individuals spea"ing. /ight. =ut those individuals !ill also eventually form groups. I thin" !hat you have therefore is a system !hich reduces the intelligence of the output, and reduces the significance of the intelligence of the members. (ure you#ve got a lot of corrupt politicians and stupid politicians, but you#ve got a lot of +uite smart ones also, !ho are over!helmed, 3ust plain over!helmed.

'

And I should say that it#s not 3ust a +uestion of the legislative branch being over!helmed5 the same thing is true for the )hite ouse, the same thing is true for the bureaucracy. <or is it only an American problem. The same thing is happening in many countries. As far as technology is concerned, I had a really sobering conversation !ith somebody in, shall !e say, one of our investigative agencies, !ho !as complaining about the fact that their computer technology is thirty years old, in the entire agency. They don#t "no! ho! to handle email, they fa* things and even hand-deliver them. They#re constrained by stupid secrecy re+uirements and so forth. My friend is tearing his hair out because, as he puts it, the bad guys have better technology than !e have. It#s li"e 4im =id$os of /(A said a couple years ago--2ablo :scobar 8!ho !as still alive at the time9 isn#t going to use a 1lipper phone... MlaughsN /ightJ This is trueJ A significant thing has happened since !e last tal"ed--and technology is part of the picture, but only a part of the picture. I thin" that the leadership of both parties no! understands, although they don#t necessarily say so, that the smo"estac" era is behind us. )e#re never going to repeople those obsolete assembly lines. The difference is, as !e said in this boo", it#s easier for the /epublicans to cope !ith that than it is for the Cemocrats. For the Cemocrats, their "ey constituencies are being hurt, decimated. <ot only that, the specific changes that they !ant to ma"e--7ore, for e*ample, !ith the /einventing 7overnment initiative. )hat he !ants ma"es very good sense, but ho! do you do that if you need the votes of the civil service !or"ers, Gou can#t. (o !e really ought to be thin"ing more subtly about politics, and thin" about a division of labor. )hat is it that the /epublicans can do that the Cemocrats can#t, As <i*on going to 1hina !as something !hich the Cemocrats could never have done. )hat are the things that the /epublicans can get a!ay !ith and the Cemocrats cannot, and !hat are the things that the Cemocrats can do that the /epublicans can#t, And someho!, get a division of labor going bet!een them. I thin" that happens on certain things. <ot consciously, not strategically, not deliberately5 but in fact there is a "ind of implicit division of labor about issues. The danger that looms ahead, as far as eidi and I are concerned, is a sudden multiplication of parties. At one time !e !ould have thought that !as a good thing, because !e al!ays argued for greater diversity and broader representation. =ut I have been compelled to rethin" that position, or at least to shade it, under the influence of a friend of ours !ho used to be the chief political correspondent for the ?ondon Times. e said, >Gou Americans have a t!o-party system. )e :uropeans live !ith multiple parties. Gou say that having more parties !ould be more democratic. >=ut,> he said, >in fact it#s less. =ecause if you have multiple parties and you have to form a coalition, that process is al!ays done behind the scenes and in !hat !e !ould call a smo"e-filled room. (o the actual creation of a government is less democratic in a multi-party system than it is in a t!o-party system.> That#s his argument, and I thin" there#s something to that. If !e loo" at the deals that are made bet!een lead parties and splinter parties in :urope and other parts of the !orld, !e can see that. aving multiple parties also in no !ay guarantees the e*pression of multiple interests or vie!s. I 3ust came bac" from Thailand, !here you have five parties in the governing coalition, si* parties in the opposition coalition, and as far as I could see, minuscule differences among themJ MlaughsN They#re personal parties !ith charismatic leaders, and you vote for the person !ho#s leading that particular group, rather than for a set of ideas. (o !hat sort of approach to government !ould you li"e to see,

.h, I !as afraid you#d as" that +uestion. MlaughsN I don#t have that ans!er. =ut !hat I do believe is this. )e have got very smart people in this country, !hose profession is organi$ational redesign. 2eople !ho thin" deeply about > o! do you restructure a gigantic corporation, o! do you change culture in bureaucracies, o! do you do all these things,> )e have very smart and creative people !or"ing on technological innovation. There#s no shortage of creativity. And even, in the case of organi$ational design fol"s, of special competence. =ut almost none of that is addressed to government. It#s all in the private sector and focused on change in the private sector. There are organi$ations of organi$ational planners. I !ould li"e to see organi$ations li"e that5 I !ould li"e to see technological centers5 I#d li"e to see creative people from many different !al"s of life, but particularly people !ith some sophisticated organi$ational s"ills, come together and begin a series of conferences, meetings, on ho! you design a democracy for the t!enty-first century. And get inputs into that process from a very broad range of people !ho !ould not ordinarily be part of that. In :ngland, the /oyal (ociety of Architecture 3ust had a contest among young architecture students for the design of a 2arliamentary building for the t!enty-first century. They had this "ind, that "ind, and the other "ind--one side said, >)ell, ma"e it virtual, they#re not going to have a building at all.> It seems to me that it !ould be a really !orth!hile process 3ust to get people thin"ing that change in government structure and in political structure is necessary and is legitimate. To, in fact, invite the public to do that. In 4apan the 2rime Minister#s office !ill fre+uently have a contest for essays on the t!enty-first century. I !ould li"e to see a call from responsible high-level political leadership that says to college "ids across the country, >This is going to be your country. )hat should a democracy of the t!enty-first century be structured li"e, )hat organi$ational and structural changes !ould be useful,> Then I come to eidi#s >theory of congruence,> !hich I thin" is really important--you cannot restructure your private-sector organi$ations as radically as !e are doing, and fail to restructure the !ay the public sector is organi$ed. :ach one !ill cho"e or "ill the other. I !ould !elcome a conference, at a minimum, to get a society of organi$ation theorists and consultants, people !ho have been doing this all over the country and all over the !orld, get together, but focus for once on the public sector, not the private sector. Focus not 3ust on the bureaucracy but on the political structure itself. Dno!ing !hat tools are no! available to us, "no!ing !hat e*perience !e#ve had in the private sector about the si$e and scale and structure of organi$ations--!hat have !e learned from all of that that might provide a better model, I don#t have that model. I don#t thin" anybody does. And if anybody had it too !ell pac"aged or too neat, I#d !orry about it. Gou tal" a lot in 1reating a <e! 1ivili$ation about the ongoing conflict bet!een (econd )ave people trying to "eep things the !ay they !ere, the ones Marshall Mc?uhan might have characteri$ed as driving !ith their eye on the rear-vie! mirror, and Third )ave people that can#t !ait for the future. )here do you see some of the hot spots in that conflict, The ta* codes. The ta* codes are very important because they either drive industries or "ill industries. They !ere designed to support yesterday#s =ethlehem (teels of the !orld. They !ere designed for the benefit of the giant corporations that !ere able to lobby them into e*istence. They act li"e a dead hand on the ne! dynamic Third )ave industries !here depreciation can#t be over ten or t!enty years, it#s ten !ee"sJ )e have a ta* system !hich seriously holds bac" the development of the Third )ave sector. /egulatory stuff, /IC re+uirements, all of these !ere implicitly designed, in effect, to prevent the Third )ave from happening.

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Then you have a !hole bunch of other things. Ta"e the issue of !or" at home. =oy, did they ma"e fun of us !hen !e !rote The Third )ave and said that people !ere going to !or" at home. They said, >Ah, visionary nonsense.> )ho#s against it, )ho#s against it is the Internal /evenue (ervice and the trade unions. Those are the t!o. .ne of the reasons our hats should be off to 7ingrich is that he is in favor of ma"ing it easier for people to !or" at home. Again, I thin" the Cemocrats are not e*plicitly or specifically opposed to that, but they#re in hoc" to the unions, !ho are opposed to it. And !ho indeed need to see that the adversarial paradigm has had its day, or they#re not serving their membership !ell. Ges. They#re not, and that#s !hy they#re dying. I had a very interesting conversation !ith a columnist for the (an Ciego@nion Tribune the other day, in !hich he as"ed me, >Co !e need unions,> )ell, people do need protection !hen they#re up against a giant organi$ation. =ut !hat "ind, )hat I found myself saying in response is that I suspect !hat !e#ll need is something more on an association model, !here the associations of home-!or"ers or the associations of people in different industries, !hatever they may be, provide certain common services for them. Maybe they provide common health and !elfare services, but also maybe they lobby for them, as unions and trade associations do. ?i"e the AMA does. :*actly. (o that may be more the model to!ard !hich !e !ill move. =ut !here you have large numbers of !or"ers doing (econd )ave !or", rote and repetitive !or" in fre+uently ugly and terrible surroundings, they need unions. @nfortunately the unions !ill not be around very long unless they themselves rethin" their structure. And the unions historically have al!ays been reactive rather than proactive. A good e*ample of that--unions used to be local. That#s !hy they !ere called >locals.> It#s only !hen big business began to go national that you got national unions. =ig business goes global5 unions begin tal"ing about international relationships and so on. (o the unions have seldom been imaginative about organi$ational structure. They#ve been reactive. All you have to do is loo" at the e*ecutive board of the AF?-1I. today. There#s a fight looming for the presidency, for the first time in many years. it#s a perfect e*ample of (econd )ave lunacy. ?ane Dir"land is president these days, I !or"ed for them years and years ago in 7eorge Meany#s day, and eidi !as a @A) shop ste!ard. (o !e "no! a bit about the labor movement. The AF?-1I.#s a federation, but the real po!er is in the individual unions, rather than in the federation itself. (ome of the unions are no! saying, >)e#re going to fight an internal battle for ne! leadership.> I 3ust read in today#s paper that Al (han"er, !ho#s the head of the teachers# union, said, >)hy should !e have a fight, <obody has any ne! ideas any!ay.> MlaughterN 7ee, a rare burst of candor... I might not be +uoting him verbatim, but that !as the gist. The businesses that are most successful at this point are not the ones that the unions are historically set up to deal !ith. <o. )e studied labor history, and I "no! a lot about it. The unions began !ith the craft unions--the carpenters, the 3oiners--

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)ho in turn came from the guilds-/ight. They came out of the guild movement. (o you started !ith these craftOartisan unions, basically, and in the @nited (tates it !asn#t till the %&E0s that the 1I. !as formed, the 1ongress of Industrial .rgani$ations. That#s !hen you got mass organi$ation for the mass-production industries--the steel!or"ers, the auto !or"ers, and so on. There !ere heroic battles 3ust to get organi$ed, 3ust to be allo!ed to get organi$ed. In those days, it !as very necessary. Absolutely. And then the AF? and the 1I. merged, I believe in %&;;. =ut no! the industrial model is fading a!ay. I suppose that in a sense the craft unions have a better chance of survival than the mass unions in the 1I., !hich is really strange. =ut that could !ell be the case. The other thing that#s happened is that the union membership has gone do!n very, very radically in the country--and in almost every )estern country--and no! a very significant percentage of it, indeed I thin" a gro!ing percentage of it, is in the civil service unions. <o! that#s not a very good situation. If you need to have a fle*ible government, if you need to change government, that#s really a bad development. <ot that they don#t need some form of individual protection against their employers, but... It#s pretty retro. It is, definitely. (o ne*t !ee" you#re spea"ing at a )ashington conference that seems to epitomi$e (econd )aveOThird )ave conflict6 >The 7lobal Information :*plosion6 A Threat to <ational (ecurity,> )hat#s all that about, )ell, in fact I#m less li"ely to address that myself. I thin" that !hat eidi and I !ant to convey to these fol"s is that the global system has a different structure. )hat do you mean by global system, ?et me go bac" again historically. =efore the Industrial /evolution, the !orld consisted of a !hole mishmash of political entities. Gou had city-states5 you had empires5 you had duchies5 you had leagues of cities5 you had the papal states5 you had large territories that !ere ungoverned5 you had blurry borders5 and so forth. That#s the !ay the !orld !as. )ith the coming of the Industrial /evolution and the rise of the modern nation-state, !e no! have a map in !hich every inch is neatly delimited, pin" and blue and red blotches on the map, and the !or"ing assumption has been that you#ve got * number of nations in "ind of a <e!tonian conflict !ith each other. They bounce off against each other5 they form a balance of po!er coalition5 but the components of the system, the basic actors, are nations. )hat is happening no! as !e go into a Third )ave !orld is that !e#re going bac" to a much more heterogeneous global order, or disorder, in !hich you have city-states li"e (ingapore5 !e don#t yet have leagues of cities but I#m sure !e !ill. /egions are becoming more important, subnational regions. =i- and trinational regions are becoming important. <e! forms of business organi$ations !hich are no longer committed to any particular country, essentially stateless business organi$ations, are becoming important. /eligion--Islam, the 1atholic 1hurch. <arcotraficantes. 7lobal media empires, and the civil societies, the 7reenpeaces of the !orld. )e use a computer analogy. It#s as though you have a computer !ith a lot of different "inds of components in it, instead of a machine that had a handful of homogeneous components. It#s a much more comple*, dynamic system out there.

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In that system !hat#s happening is !hat !e call trisection. )e#re going from a !orld in !hich the basic distribution of po!er !as bet!een industrial countries on top and agrarian countries, shall !e say, on the bottom. That has been the dominant distribution of global po!er ever since the Industrial /evolution. That#s no! changing, and !hat#s happening is that !e#re moving to a trisected rather than a bisected system. <o! you have agrarian countries, you have cheap-labor manufacturing (econd )ave smo"estac" countries, and you no! have Third )ave countries, or countries in that transition, and each of them has different re+uirements of the !orld system. The other thing, to pursue the computer and communication analogy a bit, is that they re+uire different levels of connectivity. If you#re an agrarian country and all you#re doing is selling sugar or some other cash crop, or even if you#re mining ra! materials, you have relatively small numbers of customers, and relatively limited inputs from outside. I#ll give you an e*ample. I visited a company that mines iron ore in =ra$il. They#ve been doing this for decades. They basically have thirty-five customers around the !orld, and have stable relationships !ith them. The !orld price may go up and do!n, but basically they have very limited contact !ith the outside !orld. They don#t need a lot of contact in order for that operation to continue. 1ontrast that !ith a (econd )ave country, !hich needs mar"ets all over the !orld, !hich needs ra! materials, components from all over the place, 3ust to ma"e its product, so it needs a higher level of connectivity. )hen you get to the Third )ave, you#re tal"ing total connectivity. )e had some figures in )ar and Anti)ar on that--in %&E0 or thereabouts, the @( had on the order of thirty or forty treaties and agreements !ith the outside !orld. =y %&60 !e had B00 some-odd treaties and agreements !ith the outside !orld. 1an you guess !hat !e have no!, )e have over a thousand treaties and more than ten thousand agreements. (o that#s connectivity. That#s being lin"ed into the outside !orld. There is a naive vie! that all this interdependency ma"es for peace. There#s an assumption that interdependency is necessarily good--it#s global, it#s peace-loving, democracies don#t fight, trading partners don#t fight... )ell, this 3ust happens to be historically false. The t!o greatest trading partners in the !orld in %&%A !ere :ngland and 7ermany. Interdependency sometimes is positive and sometimes is negative. For us, it has really parado*ical conse+uences, because !hat you see is that the smaller and !ea"er the state or the group, the less constraint it has on its behavior. The bigger and more comple* and more Third )ave it is, the more constraints !e operate under. 7eneral Aidid can run rings around us in (omalia--he doesn#t have to as" anybody. )e have to clear every move !ith the @nited <ations, !ith 2aris, !ith ?ondon, !ith To"yo, !ith Mosco!, before !e can do anything. Interdependence can sometimes prevent foolish and stupid and dangerous things, but it can also sometimes allo! very dangerous small antagonists to literally run rings around you. (o basically !hat I !ant to do at the conference is dra! this map, and to get our military, diplomatic, and foreign policy establishment to stop thin"ing, as they do, that it#s still a game of nation-states, and that all our problems a conse+uence of the end of the 1old )ar. I mean, if you as" them >)hy are !e having these conflicts,>--it#s the end of the 1old )ar. It#s the same people !ho, during the 1old )ar, attributed everything to the 1old )arJ MlaughsN The end of the 1old )ar is a symptom. It#s the end of industrialism. )e#re transitioning out of a giant three hundred-year po!erhouse of a civili$ation, and !e#re creating a ne! one. If you loo" at things in that longer perspective, you then can see patterns that other!ise escape notice.

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(o !e plan to spell this ne! global model out for them. <o! there !ill be other people there !ho !ill be tal"ing5 some of them you "no! very !ell. /obert (teele !ill be there--he !ill be tal"ing about a national "no!ledge strategy and a <ational Information Act of some "ind--and I !ant to hear !hat some of the others have to say. )e loo" for!ard to meeting some very smart and interesting people that are going to be there. .n this other related +uestion of information strategy, information !ar--!e have met some very, very intelligent people, either in the military or civilians teaching at the military academies and so forth, !ho have devoted some thought to this5 not 3ust thought about > o! do you shoot somebody#s radar do!n,>, but ethical thought. )hat are the conse+uences of information !arfare for politics, for morality, They#ve done some serious philosophical thin"ing about these issues. (o !hat#s a scenario involving information !ar, There is no agreed definition. =y and large, the services in their more formal e*pressions ta"e a relatively narro! vie! of !hat information !ar comprises. As I started to say, it#s shooting out the other guy#s radar and ma"ing sure yours operatesJ MlaughsN It#s electronic !arfare and so on. That, in our 3udgment, is a very, very narro! conception. )e thin" !e#re li"ely to see very smart players on the global scene, and not necessarily nations, begin to apply information 3udo to the system. That could ta"e the form of electronic terrorism, or it could be strategic propaganda, putting a spin on things a certain !ay. .ne scenario that#s been floating around is--imagine (addam ussein !ants to start another !ar, but he !ants support from the other Arabs, !hich he didn#t have before. (o, using the latest and most effective special effects technology and the best "ind of olly!ood talent that you could possibly buy, he ma"es a program that loo"s indistinguishable from a 1<< special bulletin. It sho!s Israeli paratroopers attac"ing Mecca. And he beams it up to a satellite, and then do!n to, say, <orth Africa. And the entire Arab !orld goes up in arms... And by the time they go >.oops,> Tel Aviv has been bombed... :*actly. That#s one of many very unpleasant scenarios. (o !hen you tal" about information !arfare, you#re playing !ith a very dicey !eapon. .n the other hand, having said that, eidi and I are convinced that such !eapons !ill and if only for defensive purposes, !e ought to be studying this and be a!are of the modes in !hich it operates. In )ar and Anti-)ar !e said that militaries !ould eventually develop "no!ledge strategies. In our definition therefore, information !arfare goes all the !ay from "noc"ing out the radar to >)hat is the education system of the country, )hat "ind of /IC is the country doing,> All the soft things that go to!ard the creation of either security or offensive capability, as the case may be. 1ountries, I thin", !ill begin to do that--they#ll loo" at the relationship of their education, /IC, brain drains !hich can be either attracted or indeed reversed. They#ll loo" at intelligence, of course, as all parts of the armamentarium of the info!arrior. That !ill create a very, very strange !orld, and in many !ays a dangerous !orld. Industrial espionage is an old and time-honored practice. =ac" in the early Industrial /evolution days, the =rits, not the government but an individual, !ent over to ?eghorn in Italy, !here they !ere using, for the time, a very advanced system for ma"ing sil" fabrics. e literally dre! the machines and created a duplicate in :ngland. And in %'0A 2eter the 7reat had spies sent to :ngland to study the steam engine. (o this has been going on for a long time, but nothing li"e !hat !e no! face. My purpose at the conference is to broaden their hori$ons as to the nature of the system the @( is no! operating in, and to ma"e them thin" about information pressure points they might not have given a lot of thought to. .ne of the possible e*tensions of !hat you#re saying is that nation-states !ill cease to e*ist.

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<o, I don#t agree !ith that. I thin" they !ill continue to e*ist--they may be big or they may be small5 they may be decentrali$ed5 they may be federations5 they may have other organi$ational forms. =ut I don#t thin" they#re necessarily going to disappear. .n the other hand, they certainly !ill have a reduced salience in the system, because you have all these counterforces springing up around them. )e have to be realistic. <ationalism dies hard. 2eople really feel this very deeply. Moreover, I thin" !e should not be naive globalists. <ot everything that is >global> is good. )itness the narco business, !hich is certainly global.(urely !e don#t !ant to feed those paranoid conspiracy theories that some people in this country seem to harbor, that one !orld government is going to dominate the @nited (tates and the @< is going to ta"e over. The @< can#t find its !ay out of a paper bag. =ut aside from that, I thin" that !e !ant to maintain diverse cultures and national differences, and to have smaller and more manageable units that people can identify !ith, !hile at the same time having civili$ed relationships !ith the others on the planet. That#s hard to do. 2ersonal computer technology in particular, and a lot of its associated technologies, have had the effect of giving individual people the "inds of tools that formerly only governments and other priesthoods had. These tools allo!ed them to do !hat they !anted, and do end-runs around all those hierarchical structures. I#m very much in favor of end-runs around hierarchical structures, but at the same time--that#s !hat gives you =osnias. That#s !hat gives you Devin Mitnic"s. /ight. And gives you the potential for some things much !orse than !e#ve even imagined. .ne of the things that all this is enabling is the formation of entities and constituencies and !orlds, essentially, that are based on something other than geographical pro*imity. This ma"es the geographically based entities very nervous. .ne classic (econd )ave-Third )ave conflict, to me, is the prosecution in Tennessee of a couple running an P-rated ==( in Milpitas because someone in Tennessee could do!nload images that violated local community standards. /ight. It drives #em cra$y. From !hat I can see, there#s a very serious conflict bre!ing bet!een la! enforcement people, !ho thin" they should be able to regulate !hat you#re doing online !ith somebody in (ingapore 8and conversely (ingaporean authorities thin"ing they should be able to regulate it also9, and the computer people !ho thin" that there is something radically different going on, a different entity called >cyberspace.> .ne of the things that#s going on in )ashington is that people li"e MF=I CirectorN ?ouie Freeh are trying to clamp do!n on the freedom of the online !orld in a pretty distinctly (econd )ave fashion. =ut give those guys their due. They face some real-!orld problems. They really do face some real problems. I#m not saying they don#t have some real problems. I#m saying I thin" that they#re failing to come to grips !ith the fact that something radically different is going on here. Ges, they#re trying to deal !ith it using the old tools. And the same thing is true of intellectual property. )e#re trying to grope !ith intellectual property as if it !ere a physical property of some "ind, and that doesn#t !or" very !ell. (o ho! do you civili$e all that stuff, I don#t "no!. I thin" you do it through, on the one hand, a lot of creative ideas coming up, a lot of them being crushed and "illed, and some of them surviving in a "ind of Car!inian sense, and a lot of conflict. Gou don#t get changes on this scale !ithout conflict. Those of us !ho feel some sense of responsibility !ant to "eep that conflict from becoming bloody, to ma"e it a civili$ed conflict, rather than 3ust a source of violence, !hich it could easily become.

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There are very serious +uestions. I !ould include, under America#s informational e*ports, the movies. The violent crap that !e#re dumping on the rest of the !orld does not leave the rest of the !orld amused. It#s really complicated. Gou get the French saying, >)ell, !e#ve got to have French content.> That#s a protectionist game, you see right through that one. =ut !hat about the !orld of Islam, and not 3ust Islam, that says, >)e don#t li"e your morals. )e don#t li"e !hat you#re teaching our "ids>, That#s a legitimate position for them to hold. Anybody !ho loo"s at American television and American movies !ith any "ind of mature vie! recogni$es that a lot of it is 3ust plain sludge, and meretricious at that. It#s not 3ust the violence, it#s the violence accompanied by the smir" and the 3o"e. And the shallo!ness. And the shallo!ness of it all. (o the +uestion then arises--do countries, or do communities, !hether it#s a country or not, have the right to try to control that, I don#t thin" they can--certainly at this stage. There#s no !ay that ?ee Duan Ge! can. They can#t prevent the guy !ith the dish from do!nloading all "inds of stuff. :*actly. <o! I believe that all systems, by definition, have limits. All systems have some limitations, and that goes for our libertarian vie!s as !ell. There#s no such thing as absolute liberty possible. That may be our ideal, but you#re dealing !ith people, and conflicting interests. I thin" !e have to ta"e a balanced vie! of it. America#s great contribution, if anything, has been the First Amendment. That is one of the truly !onderful stunning things in history. )e don#t !ant to lose that. =ut !e have to understand that ?ouie Freeh has a problem. And so does the <(A, and so does the 1IA, and so do all of these agencies. They have serious problems, and those problems are not 3ust bureaucratic internal problems, they#re problems for us as a people. The +uestion is, ho! to accommodate both the need for ma*imum freedom of e*pression and the recognition that the ne*t time it !on#t be a fertili$er bomb in ."lahoma 1ity, it#ll be something else, something potentially far more horrible. I also thin" that !e are already moving to a "ind of bar-coded !orld, in !hich for good or for ill, !e#ll tag the components of e*plosives. )e may even bar-code people, in effect. And !e have these smart high!ays that ma"e it possible for people to "no! e*actly !here you drove, at !hat time, and !hether you !ere visiting your mistress !hen you !ere supposed to be at the office, and that sort of stuff. All of that is frightening. All of that is the .r!ellian side of cyberspace. =ut !hat .r!ell didn#t suspect !as the interactivity. And the fact that there !as a gigantic counterforce springing up to confront the state. I don#t e*pect any neat solutions for many years. 2articularly !hen you get outside the frame of the American 1onstitution and you#re dealing !ith 1hina, or you#re dealing !ith countries !hose values and attitudes are totally different from our o!n, and maybe legitimately different from our o!n. I thin" there#s 3ust going to be a tremendous amount of turbulence about all of this, and because information is so important to the ma"ing of money, to the ma"ing of !ar, to policing, to having a stable society, the battles over information are going to get more and more intense, not less. o! do you see the haveOhave-not dichotomy,

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eidi and I used to go around and lecture about this t!enty or thirty years ago. )e tal"ed about the potential for a helot society, and tried to offer an early !arning about this potential division into info-rich and info-poor. .n the other hand, I#m some!hat more optimistic no!, rather than less. =ecause I thin" several things are going to conduce to create !hat !e call ubi+uiti$ation or universali$ation of a lot of this. First, the costs of technology are going to come do!n much further. <o! it#s true, there#s al!ays going to be a government or a company that has more money than you or I have, and they#ll al!ays have access to something better. =ut the same dispersal of information po!er that is happening vis Q vis the individual and the state is also happening vis Q vis the individual and the corporation. 1ontrol from the top is harder, and the plummeting cost of communication is going to mean that a lot of people are going to have access to it !ho today do not. The other positive thing is that it#s actually in the self-interest of the corporations to have everybody in the system. It#s not a +uestion of corporate po!er trying to restrict the spread of the system. They have more people to send bills to. They have more people to advertise to. And so on. <or is there uniform corporate po!er--they themselves have many different positions, many different needs and policies and competition and so on. It#s not as though the corporate !orld !ants to prevent poor people from having computers--I thin" +uite the reverse is true--it is in their interest, both as creators of the technology and as users of the technology, to have it as universal as possible. I believe that therefore it !ill be. The +uestion then becomes !hether it#s relative or absolute. The criticism people made of 7ingrich !hen he said that every poor "id should have a laptop--they said, >Ah yes, but it must be net!or"edJ> )ell, then, the ne*t person says it has to have-/eal-time E-CJ MultimediaJ MlaughsN :*actlyJ Gou "eep raising the ante. I thin" that this stuff is going to become so cheap, and is going to spread so far and fast--the universali$ation of it is going to get a big push from some of these giant media outfits, most of !hich I thin" are going to lose their shirts. =ut in the process they#re going to sell a lot of computers and a lot of net!or"ing and bring more and more people into the system. (o in that sense info-rich and info-poor, in the narro! sense of computer access--I thin" that#s going to !or" itself out, 3ust as the telephone did. In the larger sense of education and the ability to earn a living and 3obs, that#s a tougher nut to crac". =ecause it is not in everybody#s interest to spend their lives ma"ing 3obs5 it#s in their interest to spend their lives ma"ing money. And there, I thin" in order to even begin to thin" seriously about that problem, !hat !e#re going to have to do is burn our economics te*tboo"s. .ur economics te*tboo"s are medieval. I have, ne*t to my des", a brand-ne! %&&A economics te*t for graduate students !hich still says the factors of production are land, labor, and capital. The !orld >"no!ledge> doesn#t appear. If !e#re still publishing graduate economics te*ts that say that--I#m not in favor of boo"-burning, but I !ould send them to some storage bin some!here. /ecycle This =oo"J MlaughsN Geah, recycle this boo"J )e need to really start from scratch. The problem !ith employment, as !e#ve !ritten and I#m sure you#ve heard us say, is that in a (econd )ave economy, if you have a million people unemployed, you can stimulate the economy !ith Deynesian or other macroeconomic manipulations. Gou can create a million 3obs, and you have solved your problem. In a Third )ave economy, you have a million people unemployed, you do the same thing, and you succeed in creating ten million 3obs, but these people can#t

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do those 3obs. (o the problem of unemployment has gone from +uantitative to +ualitative. It#s a +uestion of s"ill matching. (o that#s !hy the 1linton administration says !e need to have retraining. There#s several problems !ith that5 one is it overloo"s acceleration. =y the time you#re trained, the s"ill re+uirements may be changed again. And secondly, it implies a much better forecasting capability than !e have as to !hat s"ills !ill be re+uired. Indeed, !e no! "no! that it isn#t 3ust people !ithout s"ills !ho are unemployed, it#s tens of thousands of roc"et scientists !ith the !rong s"ills. It#s not a +uestion of education or no education, training or no training5 you#ve got to hit a moving target. That says to me that !e#re going to be living !ith structural unemployment for a long time, and that that is going to include large numbers of educated middle-class people !ho !ill at least go through a fe! months of unemployment, and maybe, !ith luc", some retooling during that time, and maybe, !ith luc", be able to get bac" into it. That !ill change the politics of unemployment. It#s no longer 3ust Those 2eople do!n in the ghetto or the barrio or the poor part of to!n !ho are potential victims of unemployment, but it#s us. I thin" that !ill force political attention to the problem, and hopefully !e#ll get some fresh ideas out of it. My o!n vie! is there#s no solution to the problem given the current definitions that economists use and the current accounting systems that companies have. That you can#t solve the problem !ithin the constraints of the current (econd )ave notions of economics. It#s a garbage-in, garbage-out situation. Ges. Gou have to "no! !ho is really productive in the economy. And the definition of >productive> isn#t !hat it once !as. :*actly. The economists# definitions of production are hopelessly anachronistic and very, very narro!. =ecause they start !ith >the only thing that matters is something that involves an e*change of money,> basically. =ut !e no! "no! that mothers raising "ids, ho! they raise their "ids, has a big impact on productivity in the economy. (o you have to redefine all the economic terminology, the categories that !e have--!hat is efficiency, !hat is productivity, Forget 7<2 or 7C2, and so on. This is going to re+uire an intellectual revolution in economics. I thin" !e#re beginning to move in that direction. <evertheless, governments are still listening to these Merlins, people !ith supposedly magical s"ill to manipulate. .ne of the first lessons of the ne! economics, !hich is true in the old as !ell but has been radically ignored, is that you can do all the macroeconomic manipulation you !ant, but people don#t live in the macroeconomy, they live in the microeconomy. Ta"e ?atin America. Me*ico, =ra$il, Argentina, they#re all patting themselves on the bac" for having lic"ed inflation and for having begun to privati$e and for having begun to carry out !hat is in effect the International Monetary Fund formula. And indeed, people are ma"ing money--until the Me*ican peso collapsed, but leave that aside, even. The fact is, if you tal" to the cab drivers, they#re not doing so terrifically. Gou tal" to the ordinary people, they#re not doing so terrifically. )e#ve had that e*perience for many, many years. .ne of the reasons for our misestimating !hat#s happening in these places is !e pay too much attention to the macroeconomy and not enough to the microeconomy. This is !hy a lot of investors got stuc" in Me*ico, and !hy they !ill get stuc" in other countries, because they read the same )all (treet 4ournal articles, they read the same financial information, dra!n from <e!tonian models, and they thin" that#s an economy.

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eidi and I believe that if you !ant to understand an economy, you#ve got to understand culture. Gou#ve got to understand social institutions. Gou#ve got to understand politics. Gou#ve got to understand a lot of things other than ho! the money is flo!ing through the system. (o I thin" the ne*t ma3or intellectual revolution has to be in economics. That !ill ma"e a great many people very unhappy. )hat are the !inners going to loo" li"e, My hunch, They#ll have short lives. MlaughsN 4ust because everything is more ephemeral. ?i"e the computer business--the people !ho !ere the gods ten years ago are mostly gone. /ight. And I thin" that is, in fact, a conse+uence of acceleration. Gou live in an accelerated environment, that#s the nature of the game. I can#t tell you !hat technology or !hat business is going to succeed, but I thin" it#s important for people to understand that the Third )ave is not 3ust happening in the @nited (tates, nor is it 3ust happening in (ingapore and 4apan and these ne!ly industriali$ed countries. 1ells or little implantations of Third )ave technology and Third )ave people are popping up in the strangest parts of the !orld, from =ra$il to =angalore. )e#re buying soft!are from India, and India is buying soft!are from Fietnam. .n the one hand the complacence on the part of the @nited (tates and 4apan and other countries is going to do them in. And on the other hand, the obsolete "ind of third-!orldism that !e sa! in the #'0s and #00s, the south-against-the-north rhetoric, is going to hurt the poor countries, to the degree that they#re still thin"ing along those lines. I thin" !e#re going to see ama$ing technological brea"throughs, !hich I cannot forecast, popping up in the most ama$ing places. )hat should the smart little country be doing right no!, I#m going to ma"e a cynical statement. The smartest thing a small country can do is get rid of its peasants. That#s e*actly !hy (ingapore is (ingapore. (ingapore never had to deal !ith a First )ave population. )hen Malaya !as bro"en up in the early #60s, (ingapore may have felt that it !as being cheated of population at the time. =ut the best thing that ever happened to it !as it didn#t have to deal !ith an impoverished First )ave peasantry. I#m being cynical and being facetious about it, but the fact of the matter is that countries saddled !ith large First )ave peasant populations, especially if those peasants are uneducated, obviously have the !orst drag on the system. Those countries that have an at least reasonably educated population have a better chance, if !e still thin" in terms of countries. )hat if !e thin" in terms of Microsoft, !hich is bigger than countries, I#m 3ust using that as an e*ample, but you could say Apple, or e!lett-2ac"ard... )ell, let#s say ATIT, because that#s the case I "no! something about. In %&6; !e coined the concept >Future (hoc",> and tal"ed about the need for long-range planning. As a response to that, in about %&60 !e got a call from a very high official of ATIT, then head+uartered on lo!er =road!ay in Manhattan. I !ent in to see him, and he said, >I#d li"e you to come and do some !or" for ATIT.> I said, >)hat,> e said, >)e#ve had the same corporate mission for over fifty years--put the same blac" telephone in every American home. )e did it. (ince the #;0s !e#ve been putting green phones and pin" phones and

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!hite phones in. =ut no! !e#ve got these things called satellites and computers and stuff, and !hat should our mission be for the future,> I said, >)hy are you as"ing me, I don#t "no! anything about the =ell systems and the telecommunications industry.> e said, >That#s o"ay, spend three or four years studying this.> I said, >)hat#s my mission,> e offered the most platinum-plated consulting assignment I suppose anybody#s ever got--he said, >Ma"e a movie. )rite a boo". 7ive a report to the board. )rite maga$ine articles. Gou decideJ> MlaughterN )hat a dealJ :specially if you#re starving at the time, as !e !ere, not yet having published Future (hoc". (o !hile !riting Future (hoc" !e spent three or four years studying the =ell system, intervie!ing everybody from the chairman on do!n to engineers and employees. )ent to =ell ?abs and so on, and then in %&'B delivered a boo"-length report in si* copies to the board of directors. )hat it said !as, >Gou#re going to have to brea" up the =ell system.> o! many years before 4udge 7reen, A little over ten years. >Gou#re going to have to brea" up the =ell system. =ut you don#t have to brea" it up the !ay the government !anted you to>--because the government !anted to brea" them up ever since the late #A0s. The government#s position !as, >)e !ant to separate manufacturing from the rest. )e !ant you to divest )estern :lectric. )e believe )estern :lectric is charging you too much for the telephones it#s ma"ing, giving you the opportunity to 3ac" up your rate base !hen you go in for a negotiated increase.> This !as !hy the government !as after ATIT for all these years. )hat !e said !as, ><o, you have to brea" it up, but not that !ay. ere#s your ne! mission. The old mission !as universal service, all communications for anybody !ho needs it. )ell, !e no! live in a !orld in !hich nobody can provide that. Gour ne! mission should be only those communications services that nobody else can provide.> If you then applied that as a criterion to the company at that time, !hat you !ould have left--M1I !as still a very small spec" on the hori$on, (print didn#t e*ist--that meant you "ept long lines, you "ept =ell ?abs, you "ept the high-tech ends of )estern :lectric. Anybody could stamp out telephones--let somebody else do that. )e didn#t have +uite the guts to say, >7et rid of the operating companies,> but !e did say, >Gou don#t need to o!n them %00L. .!n them B0L or some other percentage, but there#s no reason you have to completely o!n and operate the /=.1s. They#d operate better separately, and you could use that capital to do better things !ith.> And if you put the system bac" together again today as though it !ere a single company, it !ould be a K%'0 billion corporation. That#s my ans!er to Microsoft, or to any of the mega-mega giants, that at some point it#s going to be more sensible to brea" up in some !ay, shape, or form. Maybe you form a corporation !hich is a "ind of federation.

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In the boo" !e did based on our report to ATIT--called The Adaptive 1orporation--!e use the term >constellation.> )e said ATIT should run a university for its suppliers. ATIT should contract out everything it possibly could. A good e*ample at that time--!e !ere 3ust coming out of the %&60 riot in the ghettos, and you could not send an ATIT truc" into the ghetto !ithout the danger of somebody getting hurt. )e said, >)hy shouldn#t installation be o!ned by a thousand small companies, including blac"-o!ned companies in the ghettos,> (o that !as !hat !e said in the report. The day !e sent it in, a chill descended on our relationship !ith ATIT. MlaughsN It !as as though they had cut off our phone service. The chec" came in the mail, and that !as it. <o presentation to the boardJ And in fact !hat happened !as a !onderful story. They loc"ed the si* copies up, literally under loc" and "ey, and even if you !ere the president of an /=.1 you couldn#t get to see it. I thin" maybe because they !ere afraid of @ncle (am seeing it, although no one ever said that to me. (o you couldn#t lay your hands on a copy--e*cept for one thing. I had great admiration for the people there. They !ere very smart, very technically terrific, and believe it or not, they had a certain service ethic. They really did believe they !ere doing something for the country and it !as really important. I had a lot of admiration for them, but I used to tease them mercilessly and say, >Gou guys are organi$ed li"e a (oviet ministry.> And as in the (oviet @nion, sami$dat copies of our report began to circulate. MlaughterN And then one night three years later eidi and I !ere in Florida, and I had to give a speech to the board of directors of the then Draft Food 1ompany. )ho should be on the board, but 4ohn Ce=uts, !ho !as the chairman of ATIT. As !e !al"ed in to dinner, he put his arm around eidi and said, >That#s a !onderful report.> )e "ne! the 2olitburo had met and the party line had changedJ /elations !armed after that, and !hen the company !as actually bro"en up, !e as"ed permission of them to publish the report. They !ere "ind enough to say >7o ahead,> and so !e published The Adaptive 1orporation, !hich used that report !ith some updating material. )e thought >nobody !ill really be interested in this monograph,> but this monograph has since been published in virtually every country in the !orld5 every Ministry of 2ost and Telecommunications "no!s this boo". It !on the 7olden Dey a!ard in 1hinaJ MlaughsN (o again, I#m not pointing this gun at Microsoft5 I confess I don#t "no! about the internal life of Microsoft5 I haven#t spent four years studying it. (o I don#t "no!. =ut 3ust as a starting assumption, there#s a point of scale and comple*ity at !hich an organi$ation 3ust becomes, as !e all "no!, loggy and less creative and slo!er to react and so on. If they can figure out a !ay to avoid that, more po!er to them. 1opyright %&&; by Mary :isenhart and MicroTimes. All rights reserved. ------------------------------------------------------------------------

!urfing The Third Wave Alvin And .eidi Toffler /n %ife And Wor0 'n The 'nformation Age =y Mary :isenhart From MicroTimes H%%0, 4anuary E, %&&A

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For almost three decades, Alvin and eidi Toffler have been thin"ing and and !riting about the impact of technology on people and culture. In several boo"s, notably Future (hoc",The Third )ave, and 2o!ershift , they#ve considered events around the !orld and their implications for social change5 their findings are !idely studied by governments, businesses, and ordinary citi$ens trying to ma"e sense of an increasingly chaotic !orld. Their current boo", )ar and Anti-)ar, analy$es the parallels bet!een business and military organi$ations in the information age--as !ith business, the military is evolving a!ay from traditional command-andcontrol structures and becoming increasingly dependent on smaller, smarter, more efficient groups of people using ever-more-comple* technology. (ince the Tofflers# vie!s are integral to such recent phenomena as >do!nsi$ing> and >3ust-in-time manufacturing,> to say nothing of the very e*istence of the personal computer industry, !e !ere glad to have the opportunity for a conversation !ith them during a recent visit to (an Francisco. A lot of our readers probably !eren#t born !hen Future (hoc" came out, so could you do a brief summary of the previous boo"s and !here )ar and Anti-)ar fits in, Alvin Toffler6 In Future (hoc", eidi and I !rote about the acceleration of change, driven to a considerable degree by technology, but not entirely. )e !rote that boo" in the late #60s, and it !as published in %&'0. In that era, in that distant epoch, nobody yet appreciated that things !ere speeding up. )e had to fight to ma"e the case that the pace of life !as becoming more rapid, that technological and social changes !ere more and more rapid, and so on. The boo" made that case, and it also argued that there#s an upper limit to the capability of any system, !hether it#s a computer system or a human biological system, to cope !ith change5 that belo! a certain level human beings are understimulated, and above a certain level of change, a certain rapidity or comple*ity of the changes they face, they are sub3ect to maladaptation or difficulty. )e call that >future shoc">--!hen too much change hits too fast for people to absorb, they then began to sho! signs of either deteriorated decision-ma"ing capability or disorientation5 indeed, in some cases, stress and illness and so forth. )hat !as happening at the time that suggested this to you, )e !rote an article in %&6; for a maga$ine called ori$on called,>The Future as a )ay of ?ife.> In that article, !e argued this case6 that things !ere accelerating, that long-range planning or long-range thin"ing !as going to be necessary, and that there !ould be difficulty in adapting to the speed of change. )e coined the !ord >future shoc"> in that article in %&6;. I can remember !hen the term occurred. I !as intervie!ing a friend, a psychologist, on the telephone, about culture shoc"--the disorienting effects of suddenly being thrust into a completely alien !orld. In the course of that conversation, as she described the symptoms or the conse+uences of that, it occurred to me that you could be plunged into an alien culture in your o!n society if an alien future arrived more rapidly than you !ere prepared for. (o !e said that future shoc" is the conse+uence of the premature arrival of the future. And that boo", !hich !e thought !ould have a modest success, turned out to be a humongous bestseller all over the !orld. Indeed, it !as the fourth- or fifth-best-selling nonfiction boo" in the entire decade of the #'0s, and lent the term >future shoc"> to the language--it#s in many dictionaries, it#s in headlines every day of the !ee" and so on. That, then, !as follo!ed by another ma3or boo" in %&00 called The Third )ave, ten years after Future (hoc". That boo" said that the changes around us are not entirely random, that you can see patterns, and that basically !hat !as happening !as a revolutionary upheaval on a par !ith, or even greater than, the industrial revolution--or indeed the agrarian revolution that came first. )e used the terminology First )ave, (econd )ave, Third )ave.

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The first !ave of change !as tic"ed off by the agriculture revolution, !hen some prehistoric :instein, probably a !oman, planted the frst seed. That !as the invention of agriculture, and it spread slo!ly, until no! virtually the entire !orld is capable of agriculture, e*cept for a fe! remaining tribal or nomadic populations. =asically the !hole !orld has learned the game of ho! you ma"e nature gro! things. Then came the industrial revolution of t!o or three hundred years ago, !hich launched !hat !e call the second great transformatory !ave in history, and gave rise to an industrial civili$ation. That industrial civili$ation had multiple forms. It had capitalists and communists5 it had 4apanese, Dorean,(!edish, or American versions5 but all of the industrial countries, by definition, !ere based on mass production, mass distribution, mass consumption, mass education, mass media, mass entertainment. (ociologists referred to it as the mass society. The old scenarios, the scenarios of .r!ell and u*ley and hundreds, if not thousands, of science fiction !riters, sa! the continual advance of technology as necessarily increasing the industrial character of society--ma"ing it more bureaucratic, more centrali$ed, more impersonal, more robotoid, and so on. =oth in Future (hoc" and then !ith much more detail in The Third )ave, !e argued that in fact a turn !as ta"ing place5 that the third !ave, !hile it !as technological, !as not industrial, and that there#s a distinction bet!een these t!o5 and that especially the rise of the computer, but also many other technologies lin"ed together, !ere giving rise to a ne! "ind of society, or civili$ation as !e call it, that contrasts !ith the mass society produced by industrial civili$ation. It is !hat !e call a demassified society. It is heterogeneous5 it has much more room for diversity. And the computers, rather than suppressing diversity, have in fact made possible and fostered a high degree of diversity, particularly as !e shifted from the mainframe to the 21. (o you no! move from mass production to demassified production of customi$ed products--small-run production. In parallel, you move to!ard demassified micro-mar"ets--bouti+ues, targeted catalog shopping, etc., as e*amples. Gou move to!ard a more diverse family structure--not everybody#s in the nuclear family any more. In fact the !or"ing father, stay-at-home mother, !ith t!o "ids under eighteen- probably represents under ;L of the American population today. Instead of nuclear, !e have a !ide variety of family forms. )e sometimes summari$e the changes in terms of a biological analogy6 that society is going through cellular differentiation and a speedup of metabolism at the same time. Then came 2o!ershift, !hich !e published ten years later in %&&0. 2o!ershift focused more directly on the implications, particularly the economic implications, but more genera@y the po!er implications, of a society in !hich "no!ledge has become the central economic resource. It focused a lot on the economy, on business5 tal"ed some about dhe future of the nation-state and of politics5 and did a very +uic" rough s"etch of some of the global implications but didn#t focus closely on them. This ne! boo", )ar and Anti-)ar, ta"es as its premise that "no!ledge stands in a ne! relationship to economic production. The boo" loo"s at the implications of this for both economic po!er and military po!er. Dno!ledge no! becomes central to both "inds of po!er on the planet. <o!, !hat does that mean in terms of conflict, !ar, peace"eeping, and the global system, )e don#t regard this boo" as part of the trilogy that !as formed by Future (hoc", Third )ave, and 2o!ershift, but it clearly comes out of the same brains and applies some of the same "ind of thin"ing, this time to a special problem. /ather than to ho! civili$ation is changing as a !hole, it loo"s at the process of conflict. My understanding is that you see the military !orld e*periencing more or less the same "ind of change the industrial !orld is e*periencing. As !e have 3ust-in-time factories, !e are no! moving to a 3ust-in-time military, That#s right. That#s right. Absolutely parallel. For one thing, the role of information is gro!ing in importance in both the economy and in !ar.

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The military is undergoing a set of changes that directly parallel the changes ta"ing place in business. .ne e*ample, of course, is demassification. =ecause of computer controls and numerical controls and information technology, !e no! are capable of producing short runs of products economically, instead of the traditional industrial-style assembly-line long runs of mass production5 if !e#re capable of demassified production, precision targeted !eapons are the parallel to that--that is, demassified destruction. If companies are do!nsi$ing, not 3ust because of the recession but because they#re restructuring into smaller !or" units, the military is doing precisely the same. )e#re moving into a military situation in !hich a brigade can do !hat a division used to be able to do, given information-intensive technology. eidi Toffler6 Therefore !e don#t need thousands of tan"s produced assembly-line fashion in the future5 and, since the military is smaller and more information-dependent, and you can upgrade the electronics in a tan", you don#t need factories mass-producing. (o that !ea"ens the military-industrial comple*. AT6 It !ea"ens the second-!ave military-industrial comple*. In the third !ave, the military-industrial comple* disappears. It melts into a civilian-military comple*, !ith the emergence of dual-use, or multipleuse, technologies. More and more !eaponry is going to come off the shelf, or more comple*ly, be configured out of pieces of different technologies off different shelves, assembled into !eapon pac"ages. )hat !e#ve been saying to people, trying to ma"e them !a"e up about this, is that someday a company li"e /evlon is going to produce some nice innocent cosmetic !hich 3ust happens to be a precursor to somebody else#s chemical !eapon. T6 2eople thin" that the recent budget cuts are !hat have fueled the de-scaling, but I thin" big companies li"e ughes and 7eneral Cynamics have "no!n this for years. AT6 1orporate America is, on the one hand, driven by the recession to lay off people. =ut it is also restructuring, so that they#re not going to put those people bac" on. )or" is ta"ing place in smaller groups, and the same thing is true in the military. Fighting is ta"ing place, or !ill be ta"ing place, in smaller groups. (imilarly, !e#re going to be moving to!ard increasing roboti$ation, driven by hypercompetition in the global mar"et. The rnilitary is going to be moving to!ard roboti$ation. In )ar and Anti-)ar !e discuss the philosophical debate over the degree of autonomy that robots ought to be permitted. )hat if they#re too smart and they ta"e over, AT6 Ges, e*actly. T6 The truth is, the smarter the machine is, or the smarter the programming in it, the less smart you have to be. AT6 =ut the more smart you have to be to control the system. (o there are these many parallel changes. (ystems integration. )e no! "no! that companies are engaged in very, very comple* interactions. They have lots of subsidiaries and profit centers, and they#re dealing !ith large numbers of customers, and they#ve got custom-made relationships bet!een the customers and themselves. And they need computer systems and information systems to "eep trac" of their tens of thousands or even more products. They can#t do that !ithout the computer. If you do that !ith a computer system, and then you lin" into the net!or" that connects you to the supplier on the one side and the distributor or retailer on the other side, you have to have systems integration. It#s e*actly the same for the military. There are many problems, but the military has the problem that !hen an air tas"ing order is created for the 7ulf )ar, there are permutations of literally tens of thousands of factors that have to be fed into the computer in order to >deconflict the s"ies.> (o there is a heavy

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re+uirement for systems integration. (ystems integration in turn re+uires a heavy electronic infrastructure. And therefore more net!or"s, and therefore more technologies for data transfer, and so forth. (o everything that is happening in the civilian economy is paralleled in !ar. :verything !e#re doing for production is paralleled in !hat !e#re doing for destruction. Gou#ve said that second-!ave entities are predicated on hierarchical structures !here the people at the top "no! everything the people on the bottom need to do, !hereas in third-!ave structures the person on the bottom is the one !ho#s dealing !ith the situation in real time, and so they#re the ones !ho have to "no! this stuff. T6 There has to be feedbac". The top can#t continue to function unless it gets feedbac" from the bottom, and from all the levels. AT6 =ut the "ey hidden fact that no one tal"s about in traditional hierarchical bureaucracies is the assumption made by the people on top that they "no! !hat the people do!n belo! need to "no!. That#s 3ust not tenable any more. T6 They didn#t even have to as" the people on the bottom. They "ne!. AT6 They said, >Gou#re going to handle this 3ob, and in order to do that, you get this information and report to this line. Gou#re going to handle that 3ob...> )ell, the reality is that it#s so comple* no!, and shifting so rapidly, that people on top are the last ones to find out !hat#s going on, and that#s !hy this !hole discussion of >empo!erment> is not a result of altruism or <e! Age feelie stuff--it#s that you can#t ma"e a profit, you can#t ma"e a product, the old !ay. Gou haue to empo!er to a certain degree the people !ho are actually doing that !or". =ecause no! they#re the ones !ho "no!, and they can tell you !hat you cannot tell them. Gou#ve said on occasion that you used to !or" in a factory. T6 This !as !hen !e !ere very young. )hen !e graduated from the university in %&A& there !as a recession in this country, +uite a severe one. I remember the best 3ob I could get, and you needed a college degree for that, !as an airline reservation cler". That !as my first 3ob after I graduated. It !as on a s!ing shift--t!o !ee"s from 0 am to A pm, t!o !ee"s A to midnight, and t!o !ee"s midnight to 0 am. (o you al!ays had 3et lag. T6 Aaah. It !as unbelievable. AT6 .n the groundJ T6 I could not do that 3ob more than si* months, because !hen you change every t!o !ee"s, it ta"es about t!o !ee"s to get ad3usted. It !as 3ust an impossible 3ob, but it !as the only 3ob I could get, and it paid A0 or A; dollars a !ee". And you had to be a college graduate. (o !e both left <e! Gor" about then and !ent to the Mid!est. My first 3ob there !as in a library, also for A; dollars a !ee". =ut the factories !ere paying better--about K%.0; an hour. AT6 I never got that. I got K%.A& and then K%.;E. T6 (o I made more money in a factory than I did in the library or at :astern Airlines reservations. And I did not have to !or" that horrible s!ing shift every t!o !ee"s. My first 3ob !as for 7eneral :lectric, and I did not tell them on the application that I had a college degree because I "ne! that !ould dis+ualify me. I !ould have been >over+ualified.>

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(o I neglected to put that do!n, I put do!n high school diploma, and I got the 3ob. I made light bulbs at a machine for a year. The 3ob !as mindless, it !as boring. I as"ed many times--they !ere very small light bulbs--!hat these light bulbs !ere for. And no one !ould tell me. AT6 .r nobody "ne!. T6 <oJ I#m sure somebody "ne!J MlaughterN =ut !hy in the !orld !ould I need to "no! !hat the light bulbs !ere being used for, Cid they ever tell you you !eren#t being paid to thin", I al!ays used to love that one !hen I !as !or"ing in retail... AT6 GesJ All the timeJ All the timeJ T6 GesJ I#ve given this illustration many times6 I "ne! my machine fairly !ell. It !as simple. I had filaments in one hand and a t!ee$er in the other, and !ith the t!ee$er I put the filaments into the gas 3et slots as they !ent by. The machine moved every second or so and a ne! gas 3et came in front of me--it !as a circular machine. And then at one point the glass came do!n over it, and at another point the fire came out and melted the glass. Then at another point it !ent do!n the chute to the machine belo! me. )hen my machine bro"e do!n, I "ne! !hy it !as bro"en. I could not call the maintenance foreman and say, >1all somebody to fi* the machine, this is !hat#s !rong !ith it.> I had to call my foreman. My foreman !ould come over. e#d go > m,> I !asn#t supposed to tell him !hat !as !rong, because I !asn#t supposed to "no!, because I !as too stupid. (o then he !ould call upstairs, !here the !hiteshirted people !ere !ho came to visit on the shop floor about once a month. e !ould call one of them. .ne of them !ould call the maintenance foreman. The maintenance foreman !ould then call my foreman. They !ould decide that they !ould send a mechanic to the machine. The mechanic !ould come. I !ould tell the mechanic !hat !as !rong and ho! I thought he should fi* it, and he fi*ed it. In the meantime the machine !as do!n for t!o hours. I could have called the mechanic in the first place and told him !hat !as !rong--and it !ould have been fi*ed in ten minutes. <o!, !e travel around corporate America today, and I sometimes find these old-time 1:.s !ho try to tell me ho! efficient the factories !ere in the old days. They !ere not efficient at all. They !ere inefflcient. =ut !e devastated :urope and 4apan during )orld )ar II. (o !e had no competition after!ards and !e could ma"e a profit even if our companies !ere inefficient. AT6 It didn#t matter if !e !ere inefficient. T6 (o tal"ing about the !onderful productive capacity and the !or"er productivity--this is all a fantasy in the minds of these old managers. It#s much more efficient no! in smaller !or"groups. Fery fre+uently !e ran out of glass or some other thing-They hadn#t found out about 3ust-in-time ordering... T6 <o. They !ere inefficient, but they thought they !ere efficient. I thin" that illustrates many components of second-!ave style factory management. The same !as true !hen I !or"ed in the aluminum foundry--there, I !as an elected @A) shop ste!ard, and I !as al!ays getting in trouble. At least the management !ould tal" to me then, but if I got too obstreperous I !as sent to a room !hich !as off in the corner... AT6 (iberiaJ

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T6 ...that bro"e up the sand cores and too" the grommets out and put them on a belt. They !ere punishing me, "eeping me a!ay from my !or"ers. I mean, this is !hat you do to children in school, you don#t do this to adults. And they also visited the factory floor about once a month. I believe !e made airplane engines. I again as"ed--no!, I !as a union rep. I !as still considered too stupid to "no! !hat !e !ere ma"ing. And I thin" all of the !or"ers !ere e*ceedingly smart. They "ne!--!hen the time-study men came in the front door of the factory, the !ord !ent around very +uic"ly, >(lo! do!n today.> These !ere games that !ere played. =ut the management really thought !e !ere too stupid. .f course they !ouldn#t have brought time-study men in if they didn#t. AT6 It !as the epoch of Taylorism. This !as the time !hen Taylorism !as in flo!er. And apparently Taylor !as deeply chagrined at !hat use his !or" !as put to, because he thought the !or"ers !ould get the payoff from all this increased efficiency... AT6 MlaughsN And they didn#tJ T6 They 3ust retimed the 3obs so you had to produce more if you !ere doing piece!or" 3obs. I !as a core paster, and this !as piece!or". =ut they also too" none of the human factors into account, that in the morning you#re more a!a"e, you feel better, you#re producing more5 in the afternoon you get tired, so you !or" slo!er. I mean, this !as the machine model of the human being also. AT6 (o !hat !e resent today are people !ho continually glorify that "ind of labor, and say that#s !hat !e need. The fact is that it#s dehumani$ing, brutali$ing labor. )e need a better economic system. )e cannot 3ust thro! millions of people out of !or" !ithout doing something about that--but the solution is not to go bac" to that old system. )e have to go to a smarter, not a dumber, production system, !hich in turn re+uires smarter, not dumber people. The +uestion is ho! to do that, and it#s e*tremely difficult. It#s difficult because in the old system, because it !as lo!-s"ill, !or" !as essentially interchangeable. If !e got laid off, or !e fell ill, they could replace us in five minutes because they didn#t have to teach anybody anything. <o!, of course, the high s"ill levels re+uire that you either get people that have the s"ills, or there#s an investment of time in teaching. <ot only mechanical s"ills, but teaching culture, in the sense of learning ho! to get along !ith the other members of that team. Gou#re no longer a machine, you#re a person. T6 Gou can#t ta"e a manager out of a foundry that operates the !ay it did in %&A0 or %&;0 and put him into a high-tech company in (ilicon Falley. AT6 It#s not 3ust the !or"ers, it#s the managers too. The basic change is !e#re moving from interchangeable labor. As the Industrial /evolution gave rise to interchangeable parts and interchangeable labor, !e#re no! moving to noninterchangeable parts because they can be custom-made and individuali$ed as the 3ob re+uires, and to noninterchangeable people. That has a phenomenal effect on economic and social life, in the sense that in the old system, if you had P numbers of !or"ers unemployed, you could stimulate the economy, create P number of 3obs, and you#d solve your unemployment problem. Today you could have P numbert of people unemployed, you could create ;P 3obs, but those !or"ers could not do the 3obs. )hich means that the unemployment problem is directly related to s"ill re+uirements, and is much more comple* than !here you have interchangeable

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labor. It is also doubly difficult because of the rate of change--the s"ill re+uirements are changing constantly. (o that even if you train people for a 3ob, by the time they#re trained the s"ill re+uirements may have changed again. (o that creates a truly intractable problem of unemployment that#s not going to go a!ay. T6 =ut most of the unemployment is among the people !ho sell muscle po!er. 2eople !ho !or"ed in the construction industries, and there#s very little construction going on. 2eople !ho !or"ed in auto factories. AT6 (econd-!ave !or" is drying up. That creates a monumental social problem for us, and I don#t thin" that even this administration, !hich tal"s a lot about it, understands ho! profound this crisis is. T6 And neither does the AF?-1I.. AT6 )ell, it depends on !hich union, because some of them are organi$ing "no!ledge !or"ers. =ut the old mainstream unions. T6 I#m disappointed in the 1)A. They give lip service to understanding, but I don#t believe they really do. The unions tend to be violently opposed to telecommuting, for instance. AT6 GesJ The unions see that as an attac", !hereas itmay be liberating for many !or"ers. =oth management and the unions 3ust seem to be interested in imposing this hierarchical adversarial boilerplate on people and ma"ing them conform to it rather than giving !or" a more human structure. AT6 :*actly. (o this is !hat !e#ve been !riting about for our lives, basically, and !hat is sad for us is to "no! that !e, and others as !ell, have !ritten some of this stuff t!enty-five and thirty years ago, but America !asn#t prepared to do anyhing about it. T6 I don#t thin" it !as as clear then--it !asn#t as clear then that it !as really happening. Then !hen !e published The Third )ave in %&00, the <e! Gor" Times blasted us and said that the idea of people !or"ing at home !as ridicuIous. AT6 >The Tofflers are visionary.> T6 >/idiculous. 2eople !ould never !or" at home.> They as"ed the +uestion, >)hy !ould anybody !ant to !or" at home,> AT6 MlaughsN And one of the great 3oys of the last fe! months !as to see an article in the <e! Gor" Times, in the same position as that first article I described, on page one, saying, >7uess !hat, 2eople are !or"ing at homeJ> MlaughterN I T6 /eporting on this as if they had al!ays "no!n that this !as the caseJ Tell us the story of your run-in !ith Con /egan... T6 That !as a )hite ouse lunch. )e !ere invited to have lunch !ith 2resident /eagan, then-Fice 2resident =ush, I thin" Meese !as at that lunch, and it !as /egan#s first day in the )hite ouse as chief of staff. And of course he !as invited to the lunch also. I thin" there !ere eight futurists and eight )hite ouse people.

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It !as in the family dining room in the )hite ouse, and it !as 3ust an open discussion. The president !as as"ing us +uestions. AT6 I opened by saying that futurists don#t all see the !orld in the same !ay... T6 And !e don#t. )e disagree violently. AT6 =ut !e all agree that something very big is happening, and it#s not 3ust more of the same. And /egan 3umped in... T6 After Al gave the introduction and said !e don#t all agree, /egan 3umped up. >Aaah, you futurists,> he said, >you all thin" !e#re going to run around cutting each other#s hair and flipping each other#s hamburgers. It#s going to be a service society,> he said, >and America#s not going to be a great manufacturing nation anymore.> The men are all tal"ing, but they#re not addressing his +uestion, and I sat there for about ten minutes !aiting for one of these men to ans!er him, and they didn#t. And it#s very difficult !hen you#re in a room !ith all these men to get a !ord in edge!ise, because they don#t pause long enough to ta"e a breath for anybody to 3ump in. (o after about ten minutes of !aiting for somebody to ans!er him, and they#re all tal"ing from their egos and their o!n agendas... AT6 Most of us don#t have egos... MlaughsN T6 ... I couldn#t stand it any more, and as soon as one of the gentlemen too" a slight breath, I said, >I !ould li"e to ans!er your +uestion, Mr. /egan. <o, that#s not !hat !e#re saying at all. )e#re not saying that America is not going to be a great manufacturing country. )e certainly are. =ut !e#re going to have fe!er people in the factories doing the manufacturing. )e#re going to have more automation. )e#re going to be more productive.> At that time, it must have been %&0;, the e*ample that !as current then !as the ne! Macintosh factory as opposed to the old Apple factory. They produced many more cdmputers !ith fe!er numbers of people in the factory. I had the figures. AT6 Gou !ere also tal"ing about agriculture. T6 I said,>=ecause !e have less than EL of our population in agriculture today, does that mean that !e#re not a great agricultural country,> AT6 In fact, the fe!er people !e had in agriculture, the larger the output has been. )hy could that not similarly be the case !ith manufacturing, T6 And I thin" I might as !ell have spo"en to the !all. e never responded. And I don#t thin" he understood the ans!er. AT6 Indeed, !e !rote him after!ards and gave him some figures, for that and some other +uestions, and never got a reply from Con /egan. =ut /egan has not gone do!n in history as the nicest, most intelligent chief of staff !e#ve ever had. True. =ut suppose that somebody li"e him comes along no!, and they#re trying to get a clue but they#re fi*ated on the !rong thing--ho! do you e*plain to such a person the difference bet!een a "no!ledge !or"er and a burger-flipper, T6 m...

The value-added component of a product used to be in the physical labor that !ent into it. The valueadded component of a product today is the information.

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AT6 Ihe problem is the manufacturers, the traditional second-!ave blue-collar smo"estac" industries, have an ideology. An ideology is a self-3ustifying rationale. Their ideology, !hich they#ve managed to peddle to a great many intellectuals in this country and to a large part of the political establishment as !ell, is that manufacturing is the "ey to an economy, and that services are necessarily unproductive and a !aste, basically. <o!, first of all, the tools !e use to measure service and information productivity !ere designed to measure hard!are, not soft!are. )e#re lousy at measuring the productivity of services. (o the ans!er is !hen !e see statistics saying in the service sector group, productivity !ent do!n, they#re meaningless, essentially. =ut they are useful as informational propaganda in defense of the old sectors. T6 And in Mar*ist economics, the !hite-collar !or"er lived off the surplus of the manufacturer--the manual !or"er. AT6 And that#s basically not different from the classical capitalist economist, either. 1lassical economists also tended to loo" at mental labor as !asteful and nonproductive. Cifferent !indo!s on the same thing. AT6 The "no!ledge !or"er is one !ho processes information data, ideas, symbols, images, and other forms of "no!ledge, as part of the tas" of creating !ealth. This is done at many different levels of comple*ity, some very simple, some very comple*, some more abstract, some less abstract. Gou can clearly see that an increasing number of 3obs, both in manufacturing and in services 8if that distinction still has any usefulness9, are based on "no!ledge manipulation. T6 7ive the e*ample of the seeds that caused a riot in India. AT6 I li"e that e*ample to suggest the conflicts that are inherent in all of this. The process of moving from one form of production to another is not necessarily a peaceful process, so there are !inners and there are losers in that process. And that#s true, not 3ust domestically. In India, in 4uly, there !as a riot--angry farmers attac"ed an American agribusiness firm. <o!, !hy did they do that, They said that the firm !as selling them seeds at too high a price, considering the fact that that variety of seeds had originated in India in the first place. The company, of course, had ta"en the seeds and genetically enhanced them, !hich !as, in fact, radically improving their productivity in India, by in effect in3ecting more information into those seeds. =ut the information is invisible. It too" millions of dollars of research and development to do that, but the Indian farmers cannot see that. They cannot see or touch the "no!ledge, the information. They can touch the high productivity, but that#s not no!, that#s after the crop comes in. (o they in fact !ent on the rampage, even though it started out as a peaceful demonstration. T6 <o! the value added is the information. AT6 )e believe that that is going to be true for almost all products. Information is being in3ected into hard!are, and of course is the basis of soft!are. (o that !e#re truly going to an economic system in !hich "no!ledge, as !e have argued, is the central resource. In 2o!ershift !e made the point, as !e#ve made repeatedly on other occasions, that the reason that "no!ledge is the central resource today is that !ith appropriate "no!ledge, !e can reduce all the other resources needed. T6 Gou can substitute "no!ledge for labor. AT6 Dno!ledge for labor, "no!ledge for energy, "no!ledge for space in the !arehouse, "no!ledge for capital, "no!ledge for all the inputs of production. Dno!ledge can reduce the re+uirements. It therefore is !hat in 2o!ershift !e called the >ultimate substitute> for the other factors of production. I#m "ind of curious--ta"e those smart !or"ers bac" in the factory !ho !eren#t allo!ed to be smart. Coes this do anything for them, or are they 3ust getting crushed in a different machine than the one they !ere getting crushed in thirty years ago, Institutions mutate5 !hat happens to people, AT6 Millions of people get caught in the crush. And one !ay of thin"ing about that is to loo" bac" at ho! the Industrial /evolution made its !ay onto the stage of history. There !as massive dislocation. There !ere !ars and civil !ars and unemployment and 3ust horrible conditions for many, many people.

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And yet, and yet--over the course of history, populations have migrated from the countryside to the slums of the city, because the slums of the city, as bad as they !ere, !ere better than the countryside. That#s still happening all over the !orld. (o the people !ho are attac"ing the terrible conditions today may be telling the truth, but it#s not set in ade+uate historical perspective. The reality is all those peasants !ho are pouring into Me*ico 1ity or into =ang"o" or into !herever are not stupid. They#re smart also. They#re not educated, they#re not economically s"illed at high-productivity !or", but they#re not stupid, and they "no! that even digging garbage in Manila is better than living out in the countryside and starving to death li"e an animal. T6 If those !or"ers stayed in the auto plant doing the interchangeable 3obs they#re not better off. If they left the factory and-AT6 If they got some s"ills that !ere not outmoded by the time they got them-That#s a problem. I !as tal"ing to some teachers in a high-school 3ob-training program recently, and they#re trying to come to grips !ith the fact that any s"ill they teach those "ids !ill be !orthless in five years. (o !hat do you do, )hat do you teach, T6 Gou teach them to thin". AT6 Ges. Gou have to teach meta-s"ills of some "ind, and it#s easy to say, but it#s not so easy to do. Gou#ve got to teach s"ills about s"ills. And thatOis not something !e "no! very much about doing. <obody "no!s very much about doing that. )e thin" that it !ould be helpful for them to understand things li"e ho! to model. =ecause if I understand !hat a model is, I can model lots of things. :ven if a model is inaccurate, it#s better to have a model of a situation than to be confused by an assortrnent of unorgani$ed, or random data. If a model is inade+uate, you can fi* it or replace it. T6 I#d teach "ids ho! to plug in and out of Internet. .r get into si* hundred databases. o! do you "no! that you#e getting good medical care, =y reading all the relevant papers that have been !ritten. Gou can get access to them. )e have a friend !ho has a business. e#s distilled vod"a that is free of impurities. AT6 7ive him a plug, honeyJ Tell her the name of the productJ MlaughsN T6 .h yes. (DGG vod"a. It#s sold here in (an Francisco. e !as thin"ing of bottling it in small airline bottles, and he !ent to loo" at the machinery needed to do this. AT6 e said they !anted fifty or one hundred thousand dollars for the machinery, but as an engineer, he said, >I could ma"e that for K%;,000.> T6 e said, >Gou "no!, the patents are probably all e*pired.> e !as tal"ing to his assistant about this, and the assistant said, >Con#t !orry.> e hoo"ed up his computer, and in fifteen minutes he had a printout of all the relevant patents. .ur friend said, >In the past I#d have to go to a patent attorney, I#d have to pay for a patent search, and this "id had it for me in fifteen minutes.> That, to me, is an e*ample of somebody !ho doesn#t 3ust have rote and repetitive computer s"ills. e thought about it. e thought about !here the databases !ere. e accessed them, he got the information, he had it printed out... e is invaluable to his employer. . AT6 e made his boss very, very happy that day. And saved him loads of money. That translates into productivity, if you measure productivity the !ay economists do, to include alcohol as productiveJ Mlaughsl .ne thing "eeps occurring to me--!hat about filtration, As you get more and more informationdependent, you also have a much bigger garbage-in, garbage-out problem. The conse+uences of disinformation, or bad information,or propaganda are all the more serious. T6 'n +uture !hoc0 in 1912 we tal0ed about information overload. ' thin0 if you3re bombarded with too much information about anything& you get overloaded and you can3t function$ )e !ere at Fort Dno* recently loo"ing at he programmers !or"ing in the simulations for the MIAl tan", they !ere trying to create programs that too" unnecessary data off the screen so the tan" driver !as not bombarded !ith all of this irrelevant information. It seems to me that that#s the 3ob of metaprogrammers-ho! do you get the information that#s relevant at the time, And ho! do you avoid being manipulated by somebody !ho#s trying to feed you information to ma"e you do !hat they !ant, AT6 Gou do that by understanding that all information is manipulated. T6 =ut you as the operator still have the option of getting additional information.

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AT6 )e#re not only manipulated deliberately, but !e#re also victims of loo"ing at a map and believing it is the same as the territory. Dor$ybs"i says no. Dor$ybs"i !as the father of general semantics, and he had a slogan6 >The map is not the territory.> The map is not the territory. T6 The !ord is not the thing. AT6 The word is not the thing$ And ' 0now that from personal e4perience$ As a correspondent in )ashington--I spent a fe! years there--I remember coming home from a very comple* set of congressional hearings. All day long, seven hours of detailed testimony about disarmament. And it had to do !ith thro! !eights and !arheads and 3ust really, really complicated stuff. T6 And he had to boil all that do!n to five hundred !ords. AT6 And suddenly I had to !rite the story, !hich !ould appear on page one of my paper, and I had to do it by a certain hour. I !rote it, and I said, >Gou "no!, that doesn#t really capture the comple*ity of !hat !ent on in that room.> (o I !rote it again, and again, and again, and again, and again. l "ept thro!ing the versions a!ay trying to encapsulate the comple* reality that occurred in that room, and finally the deadline !as upon me, and that !as the version that !as going to get printed. <o! as l filed that story, it suddenly occurred to me that there !ere going to be nine other stories around it on page one, !ritten by nine other 3ournalists, some of !hom might be more or less intelligent than I, more or less capable than I, more or less responsible. And the conse+uence of that is that !hat !e read is essentially a fiction. It may be the best fiction !e can get. It#s as close to the reality, perhaps, as !e can ma"e it, but it ain#t the reality. (o as far as information is concerned, !e#re also at the mercy of deliberate manipulators, and that#s true of all politicians and all bureaucrats and so forth... And all mar"eting departments... AT6 And all mar"eting departments. T6 And all governments. AT6 All of that. In 2o!ershift there are t!o chapters of !hich I#m more proud than eidi--they#ve never been favorites of hers, but I thin" they#re +uite useful. They outline the tactics that are used to manipulate information, !hether you#re tal"ing about political systems or individual corporate bureaucracies and so forth. Gou can disguise the sender--ma"e believe it#s coming from a different source than it really is coming from. Gou can disguise the message itself--you can tamper !ith the message itself Gou can tamper !ith the communicatlons. Gou can affect the receiver. Gou can !ithhold. Gou can route the memo to only these people and not those people. Gou can overload. Gou can send the budget in all in one gigantic document, as they do in 1ongress, so they can#t have a chance to really understand it. .r you can dribble the information out so slo!ly they can#t see the pattern. There are a million information tactics that are used every day of the !ee". And no! that it#s digital, it#s even easierJ Gou can put flying saucers in that picture... AT6 :*actlyJ (o the first of those chapters deals !ith conventional information tactics, and the second chapter in that series deals !ith !hat !e call metatactics as a result of the arrival of the computer. (o there you have many more options of ho! to manipulate. T6 Gou can build models and put in some variables and leave out others. AT6 Gou could !eight them differently. Gou could get something purporting to be the ob3ective facts !hich is carefully filtered to one point of vie! or another. My e*perience is that most people aren#t even a!are of !hat goes into this-->.h, I sa! it on TF so it must be trueJ> T6 )e have a friend !ho#s an eminent psychopharmacologist and statistical mathematician, and he says, >Al!ays loo" at the research design, then loo" at the basic statistics. And if they don#t ma"e sense. don#t 3ust accept them.> AT6 It struc" me as interesting some years ago !hen =ush !as still in--(ununu, !ho !as a computerni", !as chief of staff, and he got into a big battle !ith 7ore over the model for global !arming. )hat !as interesting to me !as not the substance of their positions, but the fact that the argument too" place over the ade+uacy of the model.

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That#s pretty sophisticated. (ununu !as arguing that !e don#t have enough points of information, enough data coming in, the model is inade+uate, !hy should !e base ma3or social or economic policies on this, 7ore#s position !as6 the model is ade+uate, the information is ade+uate for us to do something. <o! that#s a step removed from the argument over !hat you should do. That is a meta-battle going on.It#s an agenda-driven meta-battle. AT6 .f courseJ :verything#s agenda-Iriven in )ashington. T6 The people in the )hite ouse !ho !rite the option papers boil this all do!n and give the 2resident three options. AT6 igh, lo!, medium. It#s li"e those multiple-choice tests !here you !ant to chec" <one of the Above. AT6 That#s right. Crop the nu"e, do nothing, or continue doing !hat you have been doing. T6 There may be eighteen other options. AT6 And indeed the option !riters lead the decision-ma"er by the hand. I#ve spent some time loo"ing at options, potential options, as a literary form, and have loo"ed at this and tal"ed to the people doing this, in To"yo, in Mosco!, and in )ashington And I discovered, for e*ample, in )ashington, that you can say, > ere#s a problem, Mr. 2resident. ere are three options. Tic" one off.> .r you can say, much more cleverly, > ere is a problem, Mr. 2resident. ere is !hat you#ve said about it before. ere are several options. 1hoose one.> MlaughsN (o all information emanating frarn any large institution is regarded by the people in the institution as essentially ammunition. )ords are info-bullets. All agenda-driven. (ometimes the people are not even a!are of their agenda, but that#s a different story. That#s another level of comple*ity. T6 I thin" you have to assume that you#re being manipulated. =ut it#s good to as" the +uestion of ho! are you being manipulated, and by !hom. And !hy. AT6 Gou may !ant to lend yourself to some manipulations, because you may agree !ith the agenda. I#m sure !e#ve been used unbe"no!nst to us in defense of all "inds of things that !e !ould not necessarily agree !ith. And if !e are, you can be sure that you are and everybody else is. R 1opyright %&&A, %&&6 by Mary :isenhart and MicroTimes. All rights reserved. ------------------------------------------------------------------------

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