Stories By Mary Eisenhart

Hearts Online--A Publishing Adventure

Nancy Capulet not only met her future spouse online, she wrote and self-published a book of online-dating advice. In the process, she got the book out months before a conventional publisher could deliver, enjoyed creative control--and also found out that self-publishing is a lot of work.


Surfing The Sea Of Chaos

Reva Basch, online-research maven and author of the recent Researching Online For Dummies, offers insights into the rapidly changing digital-information landscape, and offers advice on finding what you want to know efficently.

Breakfast With Guy CEO Guy Kawasaki on the business of starting up startups

For Salon

Domain Names From Paradise

Domain name sales fuel economic reinvention of island kingdom.

How Palm Beat Microsoft: An Interview with Donna Dubinsky

Social Engineering, Web-Style: An Interview with Cliff Figallo


Interview with Jerry Garcia of the Grateful Dead, November 12, 1987

 Interview with John Walker, Autodesk co-founder, March 26, 1992

Interview with Auto-By-Tel founder Pete Ellis, from MicroTimes Issue #179 (1998)

Surfing The Third Wave:
Alvin And Heidi Toffler
On Life And Work In The Information Age, from MicroTimes issue #118 (1994)

From MicroTimes, 1995

Perspectives For A Changing World

A Return Visit With Alvin Toffler
By Mary Eisenhart


"We are living through the birth pangs of a new civilization whose institutions are not yet in place. A fundamental skill needed by policy makers, politicians, and politically active citizens today--if they really want to know what they are doing--is the ability to distinguish between proposals designed to keep the tottering Second Wave system on life-support from those that spread and smooth our transition to the Third Wave civilization."

--Alvin and Heidi Toffler, Creating a New Civilization


In the year and a half since our first visit with futurists Alvin and Heidi Toffler ("Surfing the Third Wave," Issue #118), their work has become even more influential--not least because one Newt Gingrich, who became their friend in his teaching-assistant days, regards their views on technology-driven social change as vital to planning for America's role in the next century.

Last year, the Tofflers were approached by the Gingrich-related Progress & Freedom Foundation for permission to distribute an anthology of their previous work (selections from Powershift , The Third Wave, and War and Anti-War) with updated commentary. The idea, Alvin Toffler explains, was that the book would be a special educational edition, to be distributed to Capitol Hill types.

After the Foundation had distributed five thousand copies, the book went into commercial publication and bestsellerdom.

Laughs Toffler, "The irony of all that is that the book publisher is Turner Books, so we've got Ted Turner on one side and Newt Gingrich, who wrote the introduction, on the other! Which goes to show that all the standard political alliances and assumptions need to be reexamined--it's something we've been saying for twenty-five or thirty years." (Creating a New Civilization, Turner Publishing, ISBN 1-57036-223-8, $7.95)


Who's the Progress & Freedom Foundation, and why do they want us to read your book?

The Progress & Freedom Foundation was just established a year or two ago by a man named Jeff Eisenach. Eisenach is very close to Newt Gingrich.

The Progress & Freedom Foundation's position is not exactly the Gingrich position on some issues. They're very close as people. But the point of the foundation, as it appeared to me, is that it wants to have a much broader policy. It wants to work with Democrats as well as Republicans; and it has brought in George Gilder and Jay Keyworth--he's the chairman of the foundation; he was science advisor to Reagan. So it's very much a cutting-edge technologically oriented group, which has, I would say, a fair libertarian streak. We ourselves are not affiliated with the Progress & Freedom Foundation, although we like a lot of what they are doing. But not 1000%. Not 1000% anything.

Its pitch is that there's enough bitching and criticism, that what we need are positive images of the future that progress is possible within a context of freedom.

I'll give you an example of a position in which they differ with the Republicans, and I share their view. On training and retraining of the unemployed, basically the Republican position seems to be, "Kill the Job Corps and give the money to the states and let them worry about it." The Democrats have come up with a position which says, "No, take the money and voucherize it, give it to the individuals to be able to buy whatever kinds of training they want."

That is a much better, much more Third Wave solution. That's actually like the GI Bill of Rights that came after World War II, but you don't have to wait for a war. That's a good position; that's one example of a position the Progress & Freedom Foundation probably would hold in opposition to the Republican party as such.

I know Eisenach is working with Secretary of Housing Cisneros, he's working with Secretary of Labor Reich, and any number of contacts within the administration. The object is to build a kind of visionary think tank which is not just a captive of the Republican party, although it is still very closely and personally associated.

So that's the story. I think the Progress & Freedom Foundation has a good chance to produce some interesting ideas that we haven't seen around before.

I know they're interested in the whole issue of the civil society, the civil society being all those organizations that are neither government nor corporate--nonprofits, essentially. The churches, the unions, the self-help organizations and so forth--I think they regard that as a very important social system within the society, and have some very interesting notions about how they might be supported financially.

They're trying to do some imaginative thinking, and my hat is therefore off to them. That doesn't mean I have to agree with all the stuff that comes out of it.

So how does imaginative thinking filter into the government process?

With great difficulty. [laughs]

I'll tell you. The real answer? It filters in privately, and seldom gets public expression.

What you have on Capitol Hill are quite a number of very smart people, who know much more and are much better than their output suggests. What we've said for many years is that you could have 535 saints and geniuses in the Senate and the House, and Congress would still make stupid decisions, because it isn't the IQ or the intelligence of the members, or even their awareness that is decisive. They are, to a considerable degree, the captive of organized constituencies. They know that, we know that, and it means that they get dumbed down.

I'll give you two examples.

I spoke with one of the top Democratic leaders a few weeks ago, and congratulated him on some victory they had just won--despite their minority status they managed to win something in that day's tactical battle. He said to me, in private, "Don't congratulate me. It was the wrong issue. We had the wrong position. We shouldn't have been pushing this. I am a prisoner of my party and of the game. This is the way the game has to be played."

I think he would agree with Heidi's and my assessment, that the system is on thin ice, that it's fragile, that this two-party arrangement could splinter easily next time. That could have some good things about it, but it could have some very toxic things about it as well.

A few days later I got a call from a Republican counterpart of his, a senator. The Republican says the same thing, privately. He says, "I have to spend two-thirds of my time on public relations. I'm on this committee, that subcommittee, that joint committee, etc., etc. Do you think I can possibly know all the things I need to know in order to make intelligent decisions about this? The answer is no! It's simply impossible.

"Therefore my staff makes the decisions. But who elected them?"

So the system isn't really working the way it was supposed to work. It's overloaded. It's blowing its fuses. In our terminology, it's suffering future shock. It can't handle the complexity and the speed of change.

And even when it tries to come to terms with it--for a technological example, when they get email, they tend not to know what to do with it. They want to hear from their constituents, but wait a minute...

"Do we really want to hear from them?" [laughs] Yes, and "How do we read all this stuff?"

This doesn't quite map out to the interest groups--there are all these individuals speaking.

Right. But those individuals will also eventually form groups.

I think what you have therefore is a system which reduces the intelligence of the output, and reduces the significance of the intelligence of the members. Sure you've got a lot of corrupt politicians and stupid politicians, but you've got a lot of quite smart ones also, who are overwhelmed, just plain overwhelmed.

And I should say that it's not just a question of the legislative branch being overwhelmed; the same thing is true for the White House, the same thing is true for the bureaucracy. Nor 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 with somebody in, shall we say, one of our investigative agencies, who was complaining about the fact that their computer technology is thirty years old, in the entire agency. They don't know how to handle email, they fax things and even hand-deliver them. They're constrained by stupid secrecy requirements and so forth.

My friend is tearing his hair out because, as he puts it, the bad guys have better technology than we have.

It's like Jim Bidzos of RSA said a couple years ago--Pablo Escobar (who was still alive at the time) isn't going to use a Clipper phone...

[laughs] Right! This is true!

A significant thing has happened since we last talked--and technology is part of the picture, but only a part of the picture. I think that the leadership of both parties now understands, although they don't necessarily say so, that the smokestack era is behind us. We're never going to repeople those obsolete assembly lines.

The difference is, as we said in this book, it's easier for the Republicans to cope with that than it is for the Democrats. For the Democrats, their key constituencies are being hurt, decimated. Not only that, the specific changes that they want to make--Gore, for example, with the Reinventing Government initiative. What he wants makes very good sense, but how do you do that if you need the votes of the civil service workers? You can't.

So we really ought to be thinking more subtly about politics, and think about a division of labor. What is it that the Republicans can do that the Democrats can't? As Nixon going to China was something which the Democrats could never have done. What are the things that the Republicans can get away with and the Democrats cannot, and what are the things that the Democrats can do that the Republicans can't? And somehow, get a division of labor going between them.

I think that happens on certain things. Not consciously, not strategically, not deliberately; but in fact there is a kind of implicit division of labor about issues.

The danger that looms ahead, as far as Heidi and I are concerned, is a sudden multiplication of parties. At one time we would have thought that was a good thing, because we always argued for greater diversity and broader representation. But I have been compelled to rethink that position, or at least to shade it, under the influence of a friend of ours who used to be the chief political correspondent for the London Times.

He said, "You Americans have a two-party system. We Europeans live with multiple parties. You say that having more parties would be more democratic.

"But," he said, "in fact it's less. Because if you have multiple parties and you have to form a coalition, that process is always done behind the scenes and in what we would call a smoke-filled room. So the actual creation of a government is less democratic in a multi-party system than it is in a two-party system." That's his argument, and I think there's something to that. If we look at the deals that are made between lead parties and splinter parties in Europe and other parts of the world, we can see that.

Having multiple parties also in no way guarantees the expression of multiple interests or views. I just came back from Thailand, where you have five parties in the governing coalition, six parties in the opposition coalition, and as far as I could see, minuscule differences among them! [laughs] They're personal parties with charismatic leaders, and you vote for the person who's leading that particular group, rather than for a set of ideas.

So what sort of approach to government would you like to see?

Oh, I was afraid you'd ask that question. [laughs]

I don't have that answer. But what I do believe is this. We have got very smart people in this country, whose profession is organizational redesign. People who think deeply about "How do you restructure a gigantic corporation? How do you change culture in bureaucracies? How do you do all these things?"

We have very smart and creative people working on technological innovation. There's no shortage of creativity. And even, in the case of organizational design folks, of special competence. But 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 organizations of organizational planners. I would like to see organizations like that; I would like to see technological centers; I'd like to see creative people from many different walks of life, but particularly people with some sophisticated organizational skills, come together and begin a series of conferences, meetings, on how you design a democracy for the twenty-first century. And get inputs into that process from a very broad range of people who would not ordinarily be part of that.

In England, the Royal Society of Architecture just had a contest among young architecture students for the design of a Parliamentary building for the twenty-first century. They had this kind, that kind, and the other kind--one side said, "Well, make it virtual, they're not going to have a building at all."

It seems to me that it would be a really worthwhile process just to get people thinking that change in government structure and in political structure is necessary and is legitimate. To, in fact, invite the public to do that. In Japan the Prime Minister's office will frequently have a contest for essays on the twenty-first century.

I would like to see a call from responsible high-level political leadership that says to college kids across the country, "This is going to be your country. What should a democracy of the twenty-first century be structured like? What organizational and structural changes would be useful?"

Then I come to Heidi's "theory of congruence," which I think is really important--you cannot restructure your private-sector organizations as radically as we are doing, and fail to restructure the way the public sector is organized. Each one will choke or kill the other.

I would welcome a conference, at a minimum, to get a society of organization theorists and consultants, people who have been doing this all over the country and all over the world, get together, but focus for once on the public sector, not the private sector. Focus not just on the bureaucracy but on the political structure itself. Knowing what tools are now available to us, knowing what experience we've had in the private sector about the size and scale and structure of organizations--what have we learned from all of that that might provide a better model?

I don't have that model. I don't think anybody does. And if anybody had it too well packaged or too neat, I'd worry about it.

You talk a lot in Creating a New Civilization about the ongoing conflict between Second Wave people trying to keep things the way they were, the ones Marshall McLuhan might have characterized as driving with their eye on the rear-view mirror, and Third Wave people that can't wait for the future. Where do you see some of the hot spots in that conflict?

The tax codes. The tax codes are very important because they either drive industries or kill industries. They were designed to support yesterday's Bethlehem Steels of the world. They were designed for the benefit of the giant corporations that were able to lobby them into existence. They act like a dead hand on the new dynamic Third Wave industries where depreciation can't be over ten or twenty years, it's ten weeks!

We have a tax system which seriously holds back the development of the Third Wave sector. Regulatory stuff, R&D requirements, all of these were implicitly designed, in effect, to prevent the Third Wave from happening.

Then you have a whole bunch of other things. Take the issue of work at home. Boy, did they make fun of us when we wrote The Third Wave and said that people were going to work at home. They said, "Ah, visionary nonsense."

Who's against it? Who's against it is the Internal Revenue Service and the trade unions. Those are the two. One of the reasons our hats should be off to Gingrich is that he is in favor of making it easier for people to work at home.

Again, I think the Democrats are not explicitly or specifically opposed to that, but they're in hock to the unions, who are opposed to it.

And who indeed need to see that the adversarial paradigm has had its day, or they're not serving their membership well.

Yes. They're not, and that's why they're dying.

I had a very interesting conversation with a columnist for the San DiegoUnion Tribune the other day, in which he asked me, "Do we need unions?" Well, people do need protection when they're up against a giant organization. But what kind?

What I found myself saying in response is that I suspect what we'll need is something more on an association model, where the associations of home-workers or the associations of people in different industries, whatever they may be, provide certain common services for them. Maybe they provide common health and welfare services, but also maybe they lobby for them, as unions and trade associations do.

Like the AMA does.

Exactly. So that may be more the model toward which we will move. But where you have large numbers of workers doing Second Wave work, rote and repetitive work in frequently ugly and terrible surroundings, they need unions. Unfortunately the unions will not be around very long unless they themselves rethink their structure. And the unions historically have always been reactive rather than proactive.

A good example of that--unions used to be local. That's why they were called "locals." It's only when big business began to go national that you got national unions. Big business goes global; unions begin talking about international relationships and so on. So the unions have seldom been imaginative about organizational structure. They've been reactive.

All you have to do is look at the executive board of the AFL-CIO today. There's a fight looming for the presidency, for the first time in many years. it's a perfect example of Second Wave lunacy. Lane Kirkland is president these days, I worked for them years and years ago in George Meany's day, and Heidi was a UAW shop steward. So we know a bit about the labor movement.

The AFL-CIO's a federation, but the real power is in the individual unions, rather than in the federation itself. Some of the unions are now saying, "We're going to fight an internal battle for new leadership." I just read in today's paper that Al Shanker, who's the head of the teachers' union, said, "Why should we have a fight? Nobody has any new ideas anyway." [laughter]

Gee, a rare burst of candor...

I might not be quoting him verbatim, but that was the gist.

The businesses that are most successful at this point are not the ones that the unions are historically set up to deal with.

No. We studied labor history, and I know a lot about it. The unions began with the craft unions--the carpenters, the joiners--

Who in turn came from the guilds--

Right. They came out of the guild movement. So you started with these craft/artisan unions, basically, and in the United States it wasn't till the 1930s that the CIO was formed, the Congress of Industrial Organizations. That's when you got mass organization for the mass-production industries--the steelworkers, the auto workers, and so on. There were heroic battles just to get organized, just to be allowed to get organized.

In those days, it was very necessary.

Absolutely. And then the AFL and the CIO merged, I believe in 1955. But now the industrial model is fading away.

I suppose that in a sense the craft unions have a better chance of survival than the mass unions in the CIO, which is really strange. But that could well be the case.

The other thing that's happened is that the union membership has gone down very, very radically in the country--and in almost every Western country--and now a very significant percentage of it, indeed I think a growing percentage of it, is in the civil service unions.

Now that's not a very good situation. If you need to have a flexible government, if you need to change government, that's really a bad development. Not that they don't need some form of individual protection against their employers, but...

It's pretty retro.

It is, definitely.

So next week you're speaking at a Washington conference that seems to epitomize Second Wave/Third Wave conflict: "The Global Information Explosion: A Threat to National Security?" What's all that about?

Well, in fact I'm less likely to address that myself. I think that what Heidi and I want to convey to these folks is that the global system has a different structure.

What do you mean by global system?

Let me go back again historically. Before the Industrial Revolution, the world consisted of a whole mishmash of political entities. You had city-states; you had empires; you had duchies; you had leagues of cities; you had the papal states; you had large territories that were ungoverned; you had blurry borders; and so forth.

That's the way the world was. With the coming of the Industrial Revolution and the rise of the modern nation-state, we now have a map in which every inch is neatly delimited, pink and blue and red blotches on the map, and the working assumption has been that you've got x number of nations in kind of a Newtonian conflict with each other. They bounce off against each other; they form a balance of power coalition; but the components of the system, the basic actors, are nations.

What is happening now as we go into a Third Wave world is that we're going back to a much more heterogeneous global order, or disorder, in which you have city-states like Singapore; we don't yet have leagues of cities but I'm sure we will. Regions are becoming more important, subnational regions. Bi- and trinational regions are becoming important. New forms of business organizations which are no longer committed to any particular country, essentially stateless business organizations, are becoming important. Religion--Islam, the Catholic Church. Narcotraficantes. Global media empires, and the civil societies, the Greenpeaces of the world.

We use a computer analogy. It's as though you have a computer with a lot of different kinds of components in it, instead of a machine that had a handful of homogeneous components. It's a much more complex, dynamic system out there.

In that system what's happening is what we call trisection. We're going from a world in which the basic distribution of power was between industrial countries on top and agrarian countries, shall we say, on the bottom. That has been the dominant distribution of global power ever since the Industrial Revolution.

That's now changing, and what's happening is that we're moving to a trisected rather than a bisected system. Now you have agrarian countries, you have cheap-labor manufacturing Second Wave smokestack countries, and you now have Third Wave countries, or countries in that transition, and each of them has different requirements of the world system.

The other thing, to pursue the computer and communication analogy a bit, is that they require 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 raw materials, you have relatively small numbers of customers, and relatively limited inputs from outside.

I'll give you an example. I visited a company that mines iron ore in Brazil. They've been doing this for decades. They basically have thirty-five customers around the world, and have stable relationships with them. The world price may go up and down, but basically they have very limited contact with the outside world. They don't need a lot of contact in order for that operation to continue.

Contrast that with a Second Wave country, which needs markets all over the world, which needs raw materials, components from all over the place, just to make its product, so it needs a higher level of connectivity.

When you get to the Third Wave, you're talking total connectivity. We had some figures in War and Anti-War on that--in 1930 or thereabouts, the US had on the order of thirty or forty treaties and agreements with the outside world. By 1968 we had 280 some-odd treaties and agreements with the outside world. Can you guess what we have now?

We have over a thousand treaties and more than ten thousand agreements. So that's connectivity. That's being linked into the outside world.

There is a naive view that all this interdependency makes 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... Well, this just happens to be historically false. The two greatest trading partners in the world in 1914 were England and Germany.

Interdependency sometimes is positive and sometimes is negative. For us, it has really paradoxical consequences, because what you see is that the smaller and weaker the state or the group, the less constraint it has on its behavior. The bigger and more complex and more Third Wave it is, the more constraints we operate under.

General Aidid can run rings around us in Somalia--he doesn't have to ask anybody. We have to clear every move with the United Nations, with Paris, with London, with Tokyo, with Moscow, before we can do anything. Interdependence can sometimes prevent foolish and stupid and dangerous things, but it can also sometimes allow very dangerous small antagonists to literally run rings around you.

So basically what I want to do at the conference is draw this map, and to get our military, diplomatic, and foreign policy establishment to stop thinking, as they do, that it's still a game of nation-states, and that all our problems a consequence of the end of the Cold War. I mean, if you ask them "Why are we having these conflicts?"--it's the end of the Cold War. It's the same people who, during the Cold War, attributed everything to the Cold War! [laughs]

The end of the Cold War is a symptom.

It's the end of industrialism. We're transitioning out of a giant three hundred-year powerhouse of a civilization, and we're creating a new one. If you look at things in that longer perspective, you then can see patterns that otherwise escape notice.

So we plan to spell this new global model out for them. Now there will be other people there who will be talking; some of them you know very well. Robert Steele will be there--he will be talking about a national knowledge strategy and a National Information Act of some kind--and I want to hear what some of the others have to say. We look forward to meeting some very smart and interesting people that are going to be there.

On this other related question of information strategy, information war--we have met some very, very intelligent people, either in the military or civilians teaching at the military academies and so forth, who have devoted some thought to this; not just thought about "How do you shoot somebody's radar down?", but ethical thought. What are the consequences of information warfare for politics, for morality? They've done some serious philosophical thinking about these issues.

So what's a scenario involving information war?

There is no agreed definition. By and large, the services in their more formal expressions take a relatively narrow view of what information war comprises. As I started to say, it's shooting out the other guy's radar and making sure yours operates! [laughs] It's electronic warfare and so on.

That, in our judgment, is a very, very narrow conception. We think we're likely to see very smart players on the global scene, and not necessarily nations, begin to apply information judo to the system. That could take the form of electronic terrorism, or it could be strategic propaganda, putting a spin on things a certain way.

One scenario that's been floating around is--imagine Saddam Hussein wants to start another war, but he wants support from the other Arabs, which he didn't have before. So, using the latest and most effective special effects technology and the best kind of Hollywood talent that you could possibly buy, he makes a program that looks indistinguishable from a CNN special bulletin. It shows Israeli paratroopers attacking Mecca. And he beams it up to a satellite, and then down to, say, North Africa. And the entire Arab world goes up in arms...

And by the time they go "Ooops," Tel Aviv has been bombed...

Exactly. That's one of many very unpleasant scenarios.

So when you talk about information warfare, you're playing with a very dicey weapon.

On the other hand, having said that, Heidi and I are convinced that such weapons will and if only for defensive purposes, we ought to be studying this and be aware of the modes in which it operates.

In War and Anti-War we said that militaries would eventually develop knowledge strategies. In our definition therefore, information warfare goes all the way from knocking out the radar to "What is the education system of the country? What kind of R&D is the country doing?" All the soft things that go toward the creation of either security or offensive capability, as the case may be. Countries, I think, will begin to do that--they'll look at the relationship of their education, R&D, brain drains which can be either attracted or indeed reversed. They'll look at intelligence, of course, as all parts of the armamentarium of the infowarrior. That will create a very, very strange world, and in many ways a dangerous world.

Industrial espionage is an old and time-honored practice. Back in the early Industrial Revolution days, the Brits, not the government but an individual, went over to Leghorn in Italy, where they were using, for the time, a very advanced system for making silk fabrics. He literally drew the machines and created a duplicate in England. And in 1704 Peter the Great had spies sent to England to study the steam engine. So this has been going on for a long time, but nothing like what we now face.

My purpose at the conference is to broaden their horizons as to the nature of the system the US is now operating in, and to make them think about information pressure points they might not have given a lot of thought to.

One of the possible extensions of what you're saying is that nation-states will cease to exist.

No, I don't agree with that. I think they will continue to exist--they may be big or they may be small; they may be decentralized; they may be federations; they may have other organizational forms. But I don't think they're necessarily going to disappear. On the other hand, they certainly will have a reduced salience in the system, because you have all these counterforces springing up around them.

We have to be realistic. Nationalism dies hard. People really feel this very deeply. Moreover, I think we should not be naive globalists. Not everything that is "global" is good. Witness the narco business, which is certainly global.Surely we don't want to feed those paranoid conspiracy theories that some people in this country seem to harbor, that one world government is going to dominate the United States and the UN is going to take over. The UN can't find its way out of a paper bag.

But aside from that, I think that we want to maintain diverse cultures and national differences, and to have smaller and more manageable units that people can identify with, while at the same time having civilized relationships with the others on the planet. That's hard to do.

Personal computer technology in particular, and a lot of its associated technologies, have had the effect of giving individual people the kinds of tools that formerly only governments and other priesthoods had. These tools allowed them to do what they wanted, 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 what gives you Bosnias. That's what gives you Kevin Mitnicks.

Right. And gives you the potential for some things much worse than we've even imagined.

One of the things that all this is enabling is the formation of entities and constituencies and worlds, essentially, that are based on something other than geographical proximity. This makes the geographically based entities very nervous. One classic Second Wave-Third Wave conflict, to me, is the prosecution in Tennessee of a couple running an X-rated BBS in Milpitas because someone in Tennessee could download images that violated local community standards.

Right. It drives 'em crazy.

From what I can see, there's a very serious conflict brewing between law enforcement people, who think they should be able to regulate what you're doing online with somebody in Singapore (and conversely Singaporean authorities thinking they should be able to regulate it also), and the computer people who think that there is something radically different going on, a different entity called "cyberspace."

One of the things that's going on in Washington is that people like [FBI Director] Louie Freeh are trying to clamp down on the freedom of the online world in a pretty distinctly Second Wave fashion.

But give those guys their due. They face some real-world problems. They really do face some real problems.

I'm not saying they don't have some real problems. I'm saying I think that they're failing to come to grips with the fact that something radically different is going on here.

Yes, they're trying to deal with it using the old tools.

And the same thing is true of intellectual property. We're trying to grope with intellectual property as if it were a physical property of some kind, and that doesn't work very well.

So how do you civilize all that stuff?

I don't know. I think you do it through, on the one hand, a lot of creative ideas coming up, a lot of them being crushed and killed, and some of them surviving in a kind of Darwinian sense, and a lot of conflict. You don't get changes on this scale without conflict.

Those of us who feel some sense of responsibility want to keep that conflict from becoming bloody, to make it a civilized conflict, rather than just a source of violence, which it could easily become.

There are very serious questions. I would include, under America's informational exports, the movies. The violent crap that we're dumping on the rest of the world does not leave the rest of the world amused.

It's really complicated. You get the French saying, "Well, we've got to have French content." That's a protectionist game, you see right through that one. But what about the world of Islam, and not just Islam, that says, "We don't like your morals. We don't like what you're teaching our kids"? That's a legitimate position for them to hold.

Anybody who looks at American television and American movies with any kind of mature view recognizes that a lot of it is just plain sludge, and meretricious at that. It's not just the violence, it's the violence accompanied by the smirk and the joke.

And the shallowness.

And the shallowness of it all.

So the question then arises--do countries, or do communities, whether it's a country or not, have the right to try to control that? I don't think they can--certainly at this stage. There's no way that Lee Kuan Yew can.

They can't prevent the guy with the dish from downloading all kinds of stuff.


Now I believe that all systems, by definition, have limits. All systems have some limitations, and that goes for our libertarian views as well. There's no such thing as absolute liberty possible. That may be our ideal, but you're dealing with people, and conflicting interests.

I think we have to take a balanced view of it. America's great contribution, if anything, has been the First Amendment. That is one of the truly wonderful stunning things in history. We don't want to lose that.

But we have to understand that Louie Freeh has a problem. And so does the NSA, and so does the CIA, and so do all of these agencies. They have serious problems, and those problems are not just bureaucratic internal problems, they're problems for us as a people. The question is, how to accommodate both the need for maximum freedom of expression and the recognition that the next time it won't be a fertilizer bomb in Oklahoma City, it'll be something else, something potentially far more horrible.

I also think that we are already moving to a kind of bar-coded world, in which for good or for ill, we'll tag the components of explosives. We may even bar-code people, in effect. And we have these smart highways that make it possible for people to know exactly where you drove, at what time, and whether you were visiting your mistress when you were supposed to be at the office, and that sort of stuff. All of that is frightening. All of that is the Orwellian side of cyberspace.

But what Orwell didn't suspect was the interactivity. And the fact that there was a gigantic counterforce springing up to confront the state.

I don't expect any neat solutions for many years. Particularly when you get outside the frame of the American Constitution and you're dealing with China, or you're dealing with countries whose values and attitudes are totally different from our own, and maybe legitimately different from our own.

I think there's just going to be a tremendous amount of turbulence about all of this, and because information is so important to the making of money, to the making of war, to policing, to having a stable society, the battles over information are going to get more and more intense, not less.

How do you see the have/have-not dichotomy?

Heidi and I used to go around and lecture about this twenty or thirty years ago. We talked about the potential for a helot society, and tried to offer an early warning about this potential division into info-rich and info-poor.

On the other hand, I'm somewhat more optimistic now, rather than less. Because I think several things are going to conduce to create what we call ubiquitization or universalization of a lot of this.

First, the costs of technology are going to come down much further. Now it's true, there's always going to be a government or a company that has more money than you or I have, and they'll always have access to something better. But the same dispersal of information power that is happening vis à vis the individual and the state is also happening vis à vis the individual and the corporation. Control 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 who 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 question of corporate power 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. Nor is there uniform corporate power--they themselves have many different positions, many different needs and policies and competition and so on. It's not as though the corporate world wants to prevent poor people from having computers--I think quite 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 will be. The question then becomes whether it's relative or absolute. The criticism people made of Gingrich when he said that every poor kid should have a laptop--they said, "Ah yes, but it must be networked!"

Well, then, the next person says it has to have--

Real-time 3-D! Multimedia!

[laughs] Exactly! You keep raising the ante.

I think that this stuff is going to become so cheap, and is going to spread so far and fast--the universalization of it is going to get a big push from some of these giant media outfits, most of which I think are going to lose their shirts. But in the process they're going to sell a lot of computers and a lot of networking and bring more and more people into the system.

So in that sense info-rich and info-poor, in the narrow sense of computer access--I think that's going to work itself out, just as the telephone did. In the larger sense of education and the ability to earn a living and jobs, that's a tougher nut to crack. Because it is not in everybody's interest to spend their lives making jobs; it's in their interest to spend their lives making money.

And there, I think in order to even begin to think seriously about that problem, what we're going to have to do is burn our economics textbooks. Our economics textbooks are medieval. I have, next to my desk, a brand-new 1994 economics text for graduate students which still says the factors of production are land, labor, and capital. The world "knowledge" doesn't appear. If we're still publishing graduate economics texts that say that--I'm not in favor of book-burning, but I would send them to some storage bin somewhere.

Recycle This Book!

[laughs] Yeah, recycle this book!

We need to really start from scratch. The problem with employment, as we've written and I'm sure you've heard us say, is that in a Second Wave economy, if you have a million people unemployed, you can stimulate the economy with Keynesian or other macroeconomic manipulations. You can create a million jobs, and you have solved your problem. In a Third Wave economy, you have a million people unemployed, you do the same thing, and you succeed in creating ten million jobs, but these people can't do those jobs. So the problem of unemployment has gone from quantitative to qualitative. It's a question of skill matching.

So that's why the Clinton administration says we need to have retraining. There's several problems with that; one is it overlooks acceleration. By the time you're trained, the skill requirements may be changed again. And secondly, it implies a much better forecasting capability than we have as to what skills will be required.

Indeed, we now know that it isn't just people without skills who are unemployed, it's tens of thousands of rocket scientists with the wrong skills. It's not a question of education or no education, training or no training; you've got to hit a moving target.

That says to me that we're going to be living with structural unemployment for a long time, and that that is going to include large numbers of educated middle-class people who will at least go through a few months of unemployment, and maybe, with luck, some retooling during that time, and maybe, with luck, be able to get back into it.

That will change the politics of unemployment. It's no longer just Those People down in the ghetto or the barrio or the poor part of town who are potential victims of unemployment, but it's us. I think that will force political attention to the problem, and hopefully we'll get some fresh ideas out of it.

My own view 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 within the constraints of the current Second Wave notions of economics.

It's a garbage-in, garbage-out situation.

Yes. You have to know who is really productive in the economy. And the definition of "productive" isn't what it once was.

Exactly. The economists' definitions of production are hopelessly anachronistic and very, very narrow. Because they start with "the only thing that matters is something that involves an exchange of money," basically.

But we now know that mothers raising kids, how they raise their kids, has a big impact on productivity in the economy.

So you have to redefine all the economic terminology, the categories that we have--what is efficiency, what is productivity? Forget GNP or GDP, and so on. This is going to require an intellectual revolution in economics. I think we're beginning to move in that direction. Nevertheless, governments are still listening to these Merlins, people with supposedly magical skill to manipulate.

One of the first lessons of the new economics, which is true in the old as well but has been radically ignored, is that you can do all the macroeconomic manipulation you want, but people don't live in the macroeconomy, they live in the microeconomy.

Take Latin America. Mexico, Brazil, Argentina, they're all patting themselves on the back for having licked inflation and for having begun to privatize and for having begun to carry out what is in effect the International Monetary Fund formula. And indeed, people are making money--until the Mexican peso collapsed, but leave that aside, even.

The fact is, if you talk to the cab drivers, they're not doing so terrifically. You talk to the ordinary people, they're not doing so terrifically. We've had that experience for many, many years.

One of the reasons for our misestimating what's happening in these places is we pay too much attention to the macroeconomy and not enough to the microeconomy. This is why a lot of investors got stuck in Mexico, and why they will get stuck in other countries, because they read the same Wall Street Journal articles, they read the same financial information, drawn from Newtonian models, and they think that's an economy.

Heidi and I believe that if you want to understand an economy, you've got to understand culture. You've got to understand social institutions. You've got to understand politics. You've got to understand a lot of things other than how the money is flowing through the system.

So I think the next major intellectual revolution has to be in economics. That will make a great many people very unhappy.

What are the winners going to look like?

My hunch? They'll have short lives. [laughs] Just because everything is more ephemeral.

Like the computer business--the people who were the gods ten years ago are mostly gone.

Right. And I think that is, in fact, a consequence of acceleration. You live in an accelerated environment, that's the nature of the game.

I can't tell you what technology or what business is going to succeed, but I think it's important for people to understand that the Third Wave is not just happening in the United States, nor is it just happening in Singapore and Japan and these newly industrialized countries. Cells or little implantations of Third Wave technology and Third Wave people are popping up in the strangest parts of the world, from Brazil to Bangalore. We're buying software from India, and India is buying software from Vietnam.

On the one hand the complacence on the part of the United States and Japan and other countries is going to do them in. And on the other hand, the obsolete kind of third-worldism that we saw in the '70s and '80s, the south-against-the-north rhetoric, is going to hurt the poor countries, to the degree that they're still thinking along those lines.

I think we're going to see amazing technological breakthroughs, which I cannot forecast, popping up in the most amazing places.

What should the smart little country be doing right now?

I'm going to make a cynical statement. The smartest thing a small country can do is get rid of its peasants. That's exactly why Singapore is Singapore.

Singapore never had to deal with a First Wave population. When Malaya was broken up in the early '60s, Singapore may have felt that it was being cheated of population at the time. But the best thing that ever happened to it was it didn't have to deal with an impoverished First Wave peasantry.

I'm being cynical and being facetious about it, but the fact of the matter is that countries saddled with large First Wave peasant populations, especially if those peasants are uneducated, obviously have the worst drag on the system. Those countries that have an at least reasonably educated population have a better chance, if we still think in terms of countries.

What if we think in terms of Microsoft, which is bigger than countries? I'm just using that as an example, but you could say Apple, or Hewlett-Packard...

Well, let's say AT&T, because that's the case I know something about.

In 1965 we coined the concept "Future Shock," and talked about the need for long-range planning. As a response to that, in about 1968 we got a call from a very high official of AT&T, then headquartered on lower Broadway in Manhattan. I went in to see him, and he said, "I'd like you to come and do some work for AT&T." I said, "What?"

He said, "We've had the same corporate mission for over fifty years--put the same black telephone in every American home. We did it. Since the '50s we've been putting green phones and pink phones and white phones in. But now we've got these things called satellites and computers and stuff, and what should our mission be for the future?"

I said, "Why are you asking me? I don't know anything about the Bell systems and the telecommunications industry."

He said, "That's okay, spend three or four years studying this."

I said, "What's my mission?"

He offered the most platinum-plated consulting assignment I suppose anybody's ever got--he said, "Make a movie. Write a book. Give a report to the board. Write magazine articles. You decide!"

[laughter] What a deal! Especially if you're starving at the time, as we were, not yet having published Future Shock.

So while writing Future Shock we spent three or four years studying the Bell system, interviewing everybody from the chairman on down to engineers and employees. Went to Bell Labs and so on, and then in 1972 delivered a book-length report in six copies to the board of directors.

What it said was, "You're going to have to break up the Bell system."

How many years before Judge Green?

A little over ten years.

"You're going to have to break up the Bell system. But you don't have to break it up the way the government wanted you to"--because the government wanted to break them up ever since the late '40s. The government's position was, "We want to separate manufacturing from the rest. We want you to divest Western Electric. We believe Western Electric is charging you too much for the telephones it's making, giving you the opportunity to jack up your rate base when you go in for a negotiated increase."

This was why the government was after AT&T for all these years.

What we said was, "No, you have to break it up, but not that way. Here's your new mission. The old mission was universal service, all communications for anybody who needs it. Well, we now live in a world in which nobody can provide that. Your new 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, what you would have left--MCI was still a very small speck on the horizon, Sprint didn't exist--that meant you kept long lines, you kept Bell Labs, you kept the high-tech ends of Western Electric. Anybody could stamp out telephones--let somebody else do that.

We didn't have quite the guts to say, "Get rid of the operating companies," but we did say, "You don't need to own them 100%. Own them 20% or some other percentage, but there's no reason you have to completely own and operate the RBOCs. They'd operate better separately, and you could use that capital to do better things with."

And if you put the system back together again today as though it were a single company, it would be a $170 billion corporation.

That's my answer to Microsoft, or to any of the mega-mega giants, that at some point it's going to be more sensible to break up in some way, shape, or form. Maybe you form a corporation which is a kind of federation.

In the book we did based on our report to AT&T--called The Adaptive Corporation--we use the term "constellation." We said AT&T should run a university for its suppliers. AT&T should contract out everything it possibly could.

A good example at that time--we were just coming out of the 1968 riot in the ghettos, and you could not send an AT&T truck into the ghetto without the danger of somebody getting hurt. We said, "Why shouldn't installation be owned by a thousand small companies, including black-owned companies in the ghettos?"

So that was what we said in the report. The day we sent it in, a chill descended on our relationship with AT&T. [laughs] It was as though they had cut off our phone service. The check came in the mail, and that was it. No presentation to the board!

And in fact what happened was a wonderful story. They locked the six copies up, literally under lock and key, and even if you were the president of an RBOC you couldn't get to see it. I think maybe because they were afraid of Uncle Sam seeing it, although no one ever said that to me. So you couldn't lay your hands on a copy--except for one thing.

I had great admiration for the people there. They were very smart, very technically terrific, and believe it or not, they had a certain service ethic. They really did believe they were doing something for the country and it was really important. I had a lot of admiration for them, but I used to tease them mercilessly and say, "You guys are organized like a Soviet ministry."

And as in the Soviet Union, samizdat copies of our report began to circulate. [laughter]

And then one night three years later Heidi and I were in Florida, and I had to give a speech to the board of directors of the then Kraft Food Company. Who should be on the board, but John DeButs, who was the chairman of AT&T. As we walked in to dinner, he put his arm around Heidi and said, "That's a wonderful report."

We knew the Politburo had met and the party line had changed!

Relations warmed after that, and when the company was actually broken up, we asked permission of them to publish the report. They were kind enough to say "Go ahead," and so we published The Adaptive Corporation, which used that report with some updating material.

We thought "nobody will really be interested in this monograph," but this monograph has since been published in virtually every country in the world; every Ministry of Post and Telecommunications knows this book. It won the Golden Key award in China! [laughs]

So again, I'm not pointing this gun at Microsoft; I confess I don't know about the internal life of Microsoft; I haven't spent four years studying it. So I don't know. But just as a starting assumption, there's a point of scale and complexity at which an organization just becomes, as we all know, loggy and less creative and slower to react and so on.

If they can figure out a way to avoid that, more power to them.

Copyright 1995 by Mary Eisenhart and MicroTimes. All rights reserved.