Tales of a New America

by Robert B. Reich

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  All human organization depends on reciprocal obligation and mutual trust that others’ obligations will be fulfilled. Indeed, civilization may be defined as the state where humans have achieved a richer, more secure and convenient existence through some system of mutual obligation; barbarism, where no such system exists and where confrontation prevails because there are no potential gains from cooperation to be lost. Because most of us are so enmeshed in webs of mutual responsibility—because certain rights and responsibilities are so basic to our culture and so universally enforced—we tend to forget that civilization, so defined, is not natural but an accomplishment of culture. When I leave my office to teach a class I can be confident that my students will not greet my lecture with gunfire, even if they are bored or offended by what I say. Similarly, I do not worry that my colleague next door will profit from my absence to steal my computer. When the university pays me for my labors with a piece of paper, I accept it because I know I can convey the check to the bank and through that institution’s agency can acquire things I need by presenting other pieces of paper. My confidence in each of these encounters is rooted in my experience of the culture legitimating and enforcing certain rights and obligations. This allows me to go about my business in the world without the burden of equipping myself with weaponry or my office with booby traps, or carrying around a bundle of goods to trade should I wish to acquire something from someone else. The cultural basis for this kind of confidence is so pervasive that we appreciate it only when we hear of instances where it breaks down, as in Beirut (as of this writing) or the insecurity and organizational chaos of any nation ravaged by war, plague, or thuggery.

  Crucially, the want of social devices to bond responsibilities forces individuals not only to be wary, but to be aggressive. Each party, knowing the other may exploit him, is led to preemptive exploitation.1 The grim state that confronts those who cannot rely on a culture of mutual responsibility is often stylized as the “prisoner’s dilemma.” The basic version: Two suspects, caught with the loot after a bank robbery, are kept apart and interrogated. If they both remain silent, they will each get off with a one-month sentence. But if one agrees to testify against the other, the betrayer will go free, and the other will get twenty years. And if both rat on one another, they will each get five years. Since neither can trust the other not to betray him, they both end up talking, and both receive five-year sentences. Had they had some device for binding trust, their situation would have been far better. Social scientists, nuclear strategists, and game theorists have used the prisoner’s dilemma as a model for endless examples of the breakdown of trust and the resulting mutual losses endured and mutual gains foregone.

  This classic version of the prisoner’s dilemma is deliberately structured (by the police) to be impossible to overcome. The prisoners are forbidden any opportunity to build trust.2 In most analogous situations, however, some such opportunities exist or can be developed. Suppose, for example, that the two prisoners are not petty criminals who met only this morning to plan the heist, but rather a pair of underground French Resistance fighters suspected by the Gestapo. Each will likely know that the other shares a culture, a set of values, and a sense of commitment to a cause that will deter him from betrayal. Each, in turn, can confidently refuse to betray the other. Or suppose the two robbers are old partners in crime who’ve been through the interrogation game many times before, and each is secure the other knows how to handle it.3

  The problem and the approach are quite general. In any circumstance where we require the cooperation of others to achieve what we want or avoid what we fear, we depend on organizational and cultural devices that make trust possible. Where we lack such devices, we fearfully abandon the possibility of joint gains or must accept as inevitable joint losses. Civilization is in large part a blanket term for systems of such devices. Organizations and understandings that let us act together are cultural tools that broaden, enrich, and safeguard our existence.

  This is precisely why the technical changes that increase the integration of global economies and societies pose so urgent a cultural challenge. Global integration ups the stakes. The potential for collaborative gains is greater, as is the threat of losses all around. There are more, and more important, opportunities for profitable collaboration or disastrous betrayal. We have explored several aspects of this global change: National borders are eroding as money, information, goods and services, weapons of destruction, pollution, and immigrants can all slip easily through them. Global corporations are losing connection even with the advanced nations in which they are headquartered. The populations of the Third World are growing rapidly and impatient to find their places in a world system they are ever more intimately aware of. Ongoing technological advances are making it possible to control or liberate the work place, destroy or feed whole continents, bring us immediately closer or terrifyingly apart. The challenge to our capacity to undertake joint endeavors, forge commitments, and cement trust is correspondingly greater.

  These social and economic transformations can be difficult and frightening for many people. As change occurs—industries decline, populations shift, technologies are rendered obsolete, older values are challenged—there is a temptation to dump the burden onto others. The pervasive context of fluidity and uncertainty, moreover, makes it more possible to betray without fear of consequence: Exploiters may not again encounter those whom they betray, and the exploited may not be able to identify the origins of the burdens that fall on them. In such circumstances, trust tends to decay, commitment becomes more perilous, and the odds lengthen for joint gains and shorten for joint losses.

  The renunciation of cooperation—either through withdrawal or betrayal—has taken many forms: Advanced nations have tried to seal their borders to immigrants and cheaper goods from abroad; poorer countries have been seduced by the romance of leftist revolutions or military dictatorships, or entranced by xenophobic religious movements. Both sets of responses have pushed the burden of change onto other, similarly resistant members of a linked world system. Advanced nations have tried to impose the costs of their inflation or industrial overcapacity on one another; one superpower has tried to gain a strategic advantage over the other. These moves have generated retaliation, ultimately escalating the potential losses for all. Closer to home, managers and financiers have, on occasion, appropriated economic gains to themselves through paper enterpreneurialism and the manipulation of laws and rules; some workers, convinced that they will not share the gains from improved productivity, have sabotaged the work place through rigid work rules, shoddy workmanship, strikes, and slowdowns. These responses have undermined the productive system. Many Americans, rich and poor, have cynically exploited social insurance or welfare and imperiled the system of social benevolence. Some American businesses have sought to circumvent regulations and impose the burdens of pollution and ill health onto others, and have balked at investing in the skills and knowledge of their workers. Public officials have betrayed the trust of office and sought personal power, convenience, or profit at the expense of their compatriots.

  Such exploitative maneuvers have undermined trust and stalled progress in many spheres. The result has been a tightening gridlock—with our trading partners, the Soviets, the Third World; within our businesses among workers, managers, shareholders, and other stake holders; within the welfare state, among the poor and the rest of us; in the relationship between government and business. Many of our more visible and immediate problems are symptoms of this basic dilemma. Liberal accommodation has offered no answer. Its foundation of principles and priorities has been too weak to define and guard against betrayal. Its assertion of rights without corresponding mutual obligations has too often served to veil exploitation. Thus it has tempted us to the emotionally satisfying toughness and assertion of modern conservatism, and exposed us to the peril of escalating rounds of retaliation and deepening suspicion. The prisoner’s dilemma is played out on a grand scale.

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t we are not bound by the grim logic of distrust and preemptive betrayal. Different aspects of the same broad trends can be turned to our mutual advantage. How well we do depends on our culture’s capacity to create and sustain the organizations that allow collective action, to define and enforce mutual obligation. For example, a more dynamic and adaptable world economy could allow those who gained in the first instance to fully compensate those on whom the burden of change fell heaviest, and restore a broad upward trend in living standards. Domestically, firms that fostered group learning and collective responsibility could generate greater wealth. Public investments in education, child nutrition and care, job training, and public health could lead to a more prosperous economy and society. And a domestic market whose rules were determined explicitly with social “bads” and “goods” in mind, could avoid many heavy-handed government controls. Yet how can we confidently undertake mutual endeavors that inevitably render us more vulnerable to each other? How can common purposes be pursued when they overlap but do not coincide point by point with individual interests? How can we prevent betrayal and exploitation when there are so many opportunities and incentives to renege on trust?

  The only response to the dismal logic of the prisoner’s dilemma is the accretion of common interests, patterns of mutual endeavor, traditions of trust—in short, a political culture that engenders an ongoing search for possibilities of joint gain and continued vigilance against the likelihood of mutual loss. And culture is the creature of mythology. Culture is encoded within the tales we tell one another every day. Hence the importance of these tales, and of their evolution.

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  It is not just geographic isolation that inspired the basic American myth of the Mob at the Gates. America’s earliest settlers were moral dissidents; our nation’s defining documents were expressions of moral theories. The sense of the United States as an ethical exemplar in a deeply flawed world is an abiding aspect of the American mythology. But the current version of this myth has become needlessly exclusive and dangerously insular. We tragically narrow our options when we regard other cultures, until proven otherwise, as parts of a hostile mob that can only be appeased or kept at bay. Our neighbors on the planet vary enormously in the proximity of their values with our values and the consistency of their interests with our interests. Some of them are our natural allies in many spheres, and not even the most extreme manifestations of our mythology have kept us from recognizing and acting on this to some extent. Others will inevitably be opposed to many or even most of our interests, but even with them we share a common concern for avoiding mutual catastrophe. A few groups profess values so repellent that we can only view them as enemies—consider the Nazis of the middle third of the century, or the terrorist groups of the last third, or fascist or Communist butcher regimes. Yet our best response to such true members of the Mob has been and continues to be making common cause with other peoples against them.

  Myths cannot be simply edited nor their evolution forced. But I suggest that a successful adaptation of this mythology would engage us in subtler discriminations among other peoples and greater attention to the forging and shoring up of mutually beneficial relationships. It is increasingly apparent, for example, that the world economic system is coming to require new norms and institutions to enforce mutual responsibility among nations for easing the strains of industrial overcapacity, currency misalignments, incompatible national economic policies, and the flow across borders of dangerous drugs, pollutants, and surges of immigrants. Our role in the formation of such institutions is too often warped by the tendency for our internal debates to turn on the question of being either tough or generous toward “them.” It is difficult to decide what burdens and responsibilities we should accept, as our part of common agreements, when the choice is cast in these terms.

  The proper way to frame the issue is neither as a matter of charity and appeasement nor as a ploy in a competitive struggle, but rather as an expression of a larger and more enlightened self-interest. The new public philosophy would reject the notion—so deeply embedded within both liberal conciliation and conservative pugnacity—that the central competition of our age is over the division of a fixed quantity of global wealth. There are more and less advantageous roles to search for, and some of our perceived rivalries are real. We can do better than we have done in casting such competition not as a struggle for survival, but as a contest in which even the laggards can gain enormously. The faster and less traumatic the transition is for any one group or nation, the smoother and more rewarding it may be for everyone else. Rather than seek to constrain or appease an apparent Mob at the Gates, we would do better to concern ourselves with the ecology of the world economy as it develops and adapts.

  International policies, if informed by such vision, would aim to make manifest interdependencies and build new institutions to manage reciprocal obligations. A few possibilities will give the flavor of policies that might follow from this revised tale (but should not be taken as any considered agenda). In order to avoid global recessions, inflation, or extreme currency swings, the Federal Reserve Board and the central banks of other major economies would attempt to adjust their money targets in light of world liquidity conditions and trends. Similarly, the United States would better synchronize its spending and taxing decisions with those of other key nations. When the productive capacities of the world were being underutilized, we would seek a coordinated expansion; when the world economy was in danger of overheating, we would try to negotiate a reduction in global spending.

  Our trade policies would welcome the transfer of basic industries to poorer nations, steering around the grim choice between deindustrialization and protection. The goal would be to orchestrate a balanced global expansion of wealth creation and exchange; as “they” progressed, so would we. As part of our contribution to this common purpose, we would work to ease the transition of our firms and workers out of low-skilled, standardized businesses of the sort that Third World nations are entering. Simultaneously, through the International Monetary Fund or another international lending agency, we would offer Third World nations access to the kind of long-term financing they desperately need. We would reverse the flow of capital from poor nations to rich, inviting other advanced nations to join us in investing in the Third World. This is far from Utopian; the Marshall Plan, through which America invested in the reconstruction of Europe after World War II, stands as a rousingly successful precedent. The mechanics of such a campaign might involve limiting Third World nations’ debt service payments to a fixed percentage of their export earnings, an arrangement that would give them greater confidence that we would fulfill our commitment to open markets.4

  So far as these and similar measures cushioned the trauma of global change, the Soviets would have fewer opportunities to insinuate themselves into local upheavals. We could feel more secure about reducing our military support to the Third World and would avoid the periodic left-wing reactions that such martial alliances sometimes inspire. At the same time, the world’s poor would have somewhat less reason to uproot themselves and surge across our borders in search of jobs, or to turn to the cultivation and transportation of noxious drugs as a means of livelihood.

  To the extent we solidified our reputation for pursuing our own interests but respecting those of others, for sincerely seeking to identify and act on opportunities for mutual gains, it would become increasingly difficult for our detractors to plausibly cast the United States as either global patsy or global bully. Our hostility to those groups that deserve the label of Mob—terrorists, aggressors, and tyrants of both left and right—would become more respectable, and our appeals to other peoples to join us in closing the gates around such international pariahs would become more credible. By moderating the moralistic fervor and self-righteousness of our rhetoric, we could reclaim true moral leadership in the world.

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  Our prevailing version of the fable of the Triumphant Individual is similarly out of phase with the challenges
our culture faces. The mythology invites us to pose the wrong questions, particularly about individualism in the modern economy, and confounds debate. We wrangle over bids to up the financial reward to lone entrepreneurs and crack down on drone workers on the one hand, or to control enterprise through rigid regulation, constraints on layoffs and factory closings, and union work rules on the other. Neither approach engages the reality that while we may triumph as individuals, in the modern economy we must triumph through teams.

  Personal competence, dedication, and pride in accomplishment—those splendid traditional American virtues—will continue to matter a great deal, but to an increasing extent they are forged and have effect principally in the context of collective endeavor. Interestingly, there is evidence that the stories we tell one another are coming to reflect this understanding. As noted earlier, an ever rising proportion of scientific discoveries are made by groups of researchers, and most Nobel prizes are now shared. When I thought of “science” as a child I would usually envision a wild-eyed genius in a lonely lab; my children are more likely to picture teams of white-coated colleagues arguing, comparing notes, and working together on impressive-looking and no doubt staggeringly expensive devices. Popular culture now depicts groups of people, each with different strengths and temperaments, struggling together to design new computers.5 Stories about Triumphant Teams—composed, like any assemblage of Americans, not of selfless and subservient drones but of creative, idiosyncratic individuals, yet devoted to common goals and committed to reaching them through common efforts—may well already be working their way into our mythology. Triumphant Individuals are being replaced by collective entrepreneurs.