The Future of Success (2 page)

In the pages ahead, I explore these trends and their implications in detail. Part One of the book is about the new work. In it, I explain how new technologies are changing the way work is organized and rewarded. Part Two is about the new life. There, I explore the consequences of the new work for ourselves, our families, and our communities. Part Three is about the personal and social choices all of this implies.

The trends I discuss are powerful indeed—but they are not irreversible, or at least not unalterable. We can, if we wish, reassess our standard measure of success. We can affirm that our life’s worth isn’t synonymous with our net worth; that the quality of our society is different from our gross national product. We can, if we want, choose fuller and more balanced lives, and we can create a more balanced society. The question is: Do we really want to?

CHAPTER ONE

W
E ARE ENTERING
the Age of the Terrific Deal, where choices are almost limitless and it’s easy to switch to something better. This is the first principle of the new economy. Understanding it is the first step toward understanding what is happening to the rest of our lives. All else follows.

And who doesn’t want a better deal? Only the indolent, insane, or congenitally complacent would pass up a product that’s obviously better (and costs no more) or cheaper (and of the same quality), an investment with a higher return, a more rewarding job, a more comfortable community. You owe it to yourself, your family.

You owe it to capitalism. The system works only if people are pushing for the best deals. Otherwise, producers fail to innovate or invest, or they squander money and effort on the wrong things. When millions of people are constantly seeking something better, the market disciplines all players. Everyone has to do his or her best in order to satisfy everyone else. All resources are put to their best uses. People work hard. Economies surge forward.

This has long been the American way. It is now rapidly becoming the world way. America was founded by people who left places and abandoned old ways in search of a better deal. And if they didn’t find it where they landed, they kept moving until they did. Subsequent generations of immigrants added to the restless brew. The freedom to exit is not explicitly listed in the Bill of Rights, but it’s among our most precious.
¹

We’re still moving. “Where are you from?” has become a difficult question to answer. Each year, 17 percent of Americans change residences. By second grade, almost 40 percent of American children have already attended more than one school. Almost 3 percent of families move to another state each year; about 20 percent of workers change jobs.
²
A growing number are changing their spouses or partners, although not usually on an annual basis. More are lifting their faces, amplifying their busts, reinvigorating their erections. If people are not getting makeovers, they are
starting
over. The very idea of “settling”—settling down, settling in, settling for second-best—runs against the national grain.

When I travel abroad, I’m always asked: Why aren’t you Americans ever satisfied with what you have? I tell them it’s in the genes, maybe the water. The American historian Frederick Jackson Turner saw the American frontier as “the great escape from the bondage of the past,” and rued its closing in the last decade of the nineteenth century as a constraint on the American spirit.
³
But Turner barely lived to hear of the automobile, and never contemplated the Sunbelt, the suburbs, television, and cyberspace. The American cannot be contained.

We never cease to talk about
going.
“Go West, young man,” urged Horace Greeley, the editor of the
New York Tribune,
a century and a half ago.
⁴
A generation ago, someone with notable ambition was said to have “get-up-and-go”—among the highest of compliments. A “go-getter” is admirable; he or she doesn’t wait for opportunity to knock. Express hesitation about doing an ambitious thing, no matter how rash, and someone is sure to urge you to “go for it.” (I once briefly considered a bungee jump. The portion of my brain governing judgment won out after a few seconds, but in the brief interval of equipoise a stranger shouted these three words so loudly that I almost dropped off the precipice anyway, minus cord.) Not to “go” when the going is good is a sign of moral weakness, a lack of gumption and grit. The characters of Horatio Alger’s popular novels went for it—from rags to riches.

The insistence on a better deal didn’t begin in America, nor is it this culture’s exclusive province. It’s just more extreme here. For most of its history, humankind lived in small villages surrounded by dense forests, deserts, wide savannahs, nearly impassable mountains, or otherwise dangerous and mysterious terrain. Travel was perilous, information scarce. Most people died in the village where they were born. The history of modern Western civilization—the great waves of exploration, expansion, and invention that commenced in the fifteenth century—can be understood, in part, as the continuous pursuit of better deals.

Motivated by a mixture of curiosity and greed, Western capitalism grew and spread. The historic steps constitute well-known chapters of history books: The Age of Exploration, the Age of Imperialism, the first Industrial Revolution, the Age of Mass Production that ushered in the great industrial consolidations at the start of the twentieth century. But the chapters oversimplify. History was never this neatly sequential, nor as innocent as these titles suggest. There were periods of confusion and backsliding, of reaction and bloody repression. All that can be said with confidence is that those who wanted something better, and had the best tools at their disposal to get it, gained ground. If history is written by the winners, it is won by the most ambitious.

T
HE WORLD
is in the midst of another great opening: the Age of the Terrific Deal. It started in America several decades ago and has been gathering momentum ever since. It’s about to accelerate very sharply. It’s based on technology and imagination. Combine the Internet, wireless satellites, and fiber optics, great leaps in computing power (through circuits no wider than a few atoms), a quantum expansion of broadband connection (transmitting more and faster digital data into homes and offices through networks of fiber-optic cables and constellations of satellites), a map of the human genome and tools to select and combine genes and even molecules—and you’ve got a giant, real-time, global bazaar of almost infinite choice and possibility.

Finding and switching to something better is easier today than at any other time in the history of humanity, and in a few years, will be easier still. We’re on the way to getting exactly what we want instantly, from anywhere, at the best value for our money.

Until recently, the major difficulty in getting exactly what you wanted was oftentimes the extra cost of making one-of-a-kind. I’m all of four feet ten inches tall, with a waistline significantly larger than that of a ten-year-old boy, which means that if I’m to look even vaguely respectable, anything I wear has to be custom-tailored. It is a royal pain, and often I don’t bother. But recently I discovered the Web site of a clothing manufacturer on which I can enter all my size specifications and select the shirts and trousers (along with fabrics and styles) I want. Within days the garments arrive at my front door. When I first ordered, I expected the tailor who received my improbable measurements to assume they were mistaken, and change them (this had happened before). But the shirt and trousers fit perfectly. And then it hit me: I wasn’t dealing with a tailor. I was transacting with a computer that had no independent judgment.

In the pre-industrial era, craftsmen made almost everything to order, but this was expensive. Then came mass production—giant machines powered by electricity; large looms capable of weaving great sheets of cloth; machines that spit out tens of thousands of matches, cigarettes, and nails; giant vats distilling and refining petroleum, sugar, alcohol, and chemicals; huge furnaces for making steel; big molding and stamping machines turning out auto parts; and then vast assembly lines. As the scale of production grew, the cost of each item produced plummeted.

But the logic of mass production dictated sameness. The first mass-produced shoes in America were called “straights,” because they didn’t distinguish between left and right feet. Henry Ford’s assembly line lowered the cost and democratized the availability of the automobile, but did so by narrowing choice. “Any customer can have a car painted any color that he wants, as long as it’s black,” he famously offered.

In order to ensure a profit, mass-producers had to invest up front and then predict how many identical items could be sold and at what price. Accuracy of prediction brought high reward; inaccuracy could mean bankruptcy. Improving the odds by stabilizing the market became the core managerial task of the twentieth century. There were essentially four rules: (1) To avoid the possibility that suppliers might unexpectedly raise prices or competitors might overtake their own product with new inventions, producers bought or merged with other producers—enabling the few survivors within each industry to coordinate plans informally thereafter. By the midpoint of the twentieth century, economists spoke with awe and no small discomfort about “oligopolies,” such as the Big Three automakers and the five major steelmakers. (2) Where oligopolies didn’t evolve on their own, regulatory agencies set prices and standards. That such agencies protected consumers from fly-by-night operators and unpredictable service was not inconsistent with their simultaneous roles as guardians of industry stability and bulwarks against excessive competition. (3) To avoid wildcat strikes and work stoppages, producers eventually, grudgingly, accepted organized labor. By the middle of the twentieth century, almost 40 percent of America’s working people belonged to a union—often organized by industry so that no individual company would be at a competitive disadvantage relative to others, and so that wage and benefit increases could be conveniently passed along to customers in the form of higher prices. (4) Finally, to reduce the risk that consumers might fail to buy as many items as were planned, producers embarked upon campaigns of mass persuasion. Madison Avenue burst forth with jingles, contests, and, by midcentury, that great monument to American ingenuity—the thirty-second television commercial. Thus was the American consumer—eventually the world consumer—lured into wanting that which was made available in large quantities. Mass persuasion did not always work, as evidenced by the Edsel and the New Coke, but the occasional failure did not detract from the effectiveness of the overall approach.
⁵

As a result of all this effort to guarantee a large and stable market for what was mass-produced, consumers got many more things, more cheaply. It was a virtuous cycle: Mass production begot mass marketing, which whetted appetites for more mass consumption, which, in turn, enlarged the system of mass production. But notably, choices were limited in order to reap the full efficiencies of large scale, and products didn’t change much from one year to the next. It was a small price to pay for the boon.

The emerging system is starkly different. I have detailed elsewhere the shift, starting in the 1970s and escalating since, from high-volume to high-
value
production, from standardized to more customized, rapidly improving products and services—in steel, plastics, chemicals, telecommunications, transportation, finance, entertainment, and many other industries.
⁶
Increasingly, digital technologies now enable sellers to tailor products to suit particular buyers while still keeping production costs down. There is no need to guarantee a large, stable market for every item.

How did I get my made-to-order shirts and slacks so cheaply? It was thanks to programmable robots, numerically controlled machine tools, computerized routing systems, and the Internet. Unlike the old machines and assembly lines that could do only one thing over and over, these new systems can instantly make one-of-a-kind, and then just as quickly make a different one-of-a-kind. My order went directly into a computer, where it was turned into digital symbols and then sent to a machine that took a piece of fabric, cut it to my specifications, and sewed it together in a flash. Then the finished product came back to me. Human beings along the way programmed the robots, designed the software, devised the Web site, and marketed it. I suspect that a few people still cut and sewed some of the pieces by hand, in barely sanitary conditions and for third-world wages.

The new global bazaar is connecting unique buyers with sellers who can meet their needs directly, eliminating the high-volume bottleneck in between. Made-to-order is becoming the rule. You can already custom-order your computer, your daily (or hourly) news, your car. Last Christmas, Nordstrom.com offered a choice of several million styles of shoe, tailored to customer specifications. A builder friend custom-orders the doors and windows he needs; the mill at the other end uses laser-guided machinery to cut the wood to my friend’s exact specifications. “On-demand printing” will soon allow you to get any out-of-print book that is stored on a publisher’s computer database. Soon to come: customized appliances, personalized music, made-to-order vitamins, medicines tailored to your genes.

Economies of production scale still matter, but less than they did. And the trend is away from making a large amount of the same identical, unchanging thing. In fact, in an era when customers crave what’s new and unique, large-scale production can be risky. Any enterprise dedicating itself to just a few lines is competitively endangered. The “shelf life” of products is continually shrinking. New software renders older software obsolete. So-called “killer apps”—fundamentally new ideas, products, and ways of doing business—alter the terms of competition for entire industries suddenly, without warning.

Yes, companies are merging into giant telecommunications-entertainment-Internet-financial behemoths, and the range of retail outlets continues to shrink. But, in most cases, the advantage of this sort of concentration is not in production scale; it’s in marketing and brand recognition—an issue to which I’ll return in the next chapter. Large size and a stable market are no longer prerequisites for low-cost production. Few companies any longer aim to sell a fixed volume of anything. This means they’re less dependent on a steady source of supply, and on a predictable mass market. And fewer industries are dominated by oligopolies. Competitive strength now turns on being better, faster, and cheaper than rivals. Mass marketing and advertising are giving way to pinpoint marketing directed to unique customers (like abnormally sized middle-aged men). Network-television audiences are dropping off. Mass-market magazines are losing readers.