Tales of a New America

by Robert B. Reich

  To the extent our domestic economy is animated by this new version of the tale, the central problem of economic policy becomes less how to discipline drones or tease the last ounce of genius out of lone entrepreneurs, but rather how to create the kinds of organizations in which people can pool their efforts, insights, and enthusiasm without fear of exploitation. As the earlier discussion of economic gridlock suggested, this is far from a simple task. What kinds of economic arrangements can infuse a broadly shared sense of responsibility throughout productive organizations and build mutual confidence and trust? One possible approach to this problem is to encourage some version of worker ownership and participation.6

  This may be seen as an old answer to a new question. Employee ownership has been widely advocated on largely ideological grounds. It has been just as widely condemned as inefficient. Different groups of employees—like younger and older workers—will often have different interests in immediate wages and dividends versus long-term growth, for example. Potential outside investors may suspect the motives and doubt the accountability of worker-owners and refuse to invest their funds. Talented and diligent workers risk being exploited by the incompetent and lazy. And all worker-owners, if most of their wealth is tied up in the firm, bear more risk than if each owned a diversified portfolio of investments.7 If there were nothing to the notion of collective entrepreneurialism, if productive organizations were simply the sum of their fungible parts, it may well be that worker ownership would be a bad idea. But if our future prosperity does depend on ongoing learning through collective efforts, then some kind of worker ownership may be an important device for generating shared experience, cementing common aims, and building trust. It may be sufficiently promising as such a device to warrant considerable efforts to overcome its inherent problems. Indeed, when its purpose is framed this way, it may itself help to overcome some of these problems.

  A direct ownership stake can go a long way toward creating a sense of collective responsibility. Employees would reap the benefits of effort and innovation. Honing their firm-specific skills instead of basic skills that could be peddled anywhere would be a less risky strategy. Each worker would have a direct interest in training his colleagues, rather than jealously guarding expertise lest his own position become less secure. Workers would monitor one another, and managers, to guard against lapses of judgment or diligence.

  The virtues of employee ownership would not be solely motivational. It would also allow the enterprise more flexibility. When sacrifices were needed to make it through lean times or develop new products or processes, worker-owners would be more ready to accept austerity, knowing they would reap the eventual rewards and not be shouldered aside once they had made their contributions.8 Secure in their place in the organization, they would not need to fear new technologies or endeavors.

  The point is that some form of employee ownership and control could provide a superior context for forging joint commitment and fostering trust. Reciprocal dependencies would be clearer. Relationships would be longer-term, and reputations correspondingly more important; the slacker and exploiter would bear the burden of their actions. Such arrangements could go far to reduce the appeal of opportunism and increase the perceived advantages of collaboration, and thus lessen the dilemmas that give rise to economic gridlock.

  5

  The American fable of the Benevolent Community is increasingly adrift from the actual American system of social benevolence. Here, what is required is both an adaptation of the stories we tell one another, and a greater appreciation of what is actually occurring with our social insurance and welfare programs. I have suggested that we should stop making “the poor” into the objects of our compassion or suspicion, recognizing instead the pervasiveness of our system of social benevolence and the crucial importance of mutual responsibility for sustaining it. In the revised tale, altruism would be replaced by solidarity.

  Social policy, if informed by such a vision, would dispense with the two parallel schemes we now have (one dubbed social insurance; the other, welfare) and institute instead a single, inclusive system of common insurance against misadventure. In broad outline: We would eliminate oddities like the tort liability system, which enriches lawyers predictably but compensates victims only erratically and with whimsical inconsistency, in favor of universal disability insurance.9 Unemployment insurance and many types of welfare would be merged into a single set of programs for the economically dislocated. Benefits would come in large part in the form of training and retraining services, training stipends, and (for those least ready for regular jobs) temporary wage subsidies. No able citizen would be simply supported in idleness, but at the same time no willing worker would be left stranded.

  At the same time, we would strengthen and enforce the reciprocal obligations of beneficiaries as members of the community. No aspect of social insurance would come as an “entitlement,” delivered irrespective of individual behavior. The community must stand ready to guarantee each member against misery. But each member, in turn, must be induced to take responsibility for those factors within his control that determine his fate. As earlier sections suggested, this is a difficult balance to strike. But our national community will be better off by applying the principle of reciprocal responsibility more stringently—or, to be more accurate, for the first time—to those programs that benefit all of us. Eligibility for subsidized health insurance would require a preventive program of health maintenance; absent fathers would be required to pay a portion of their paychecks to support their offspring; teenage mothers would receive aid only if they remained in school. One generic device for inducing greater responsibility may be channeling benefits through intermediary groups that have the capacity and can be given the incentive to help monitor and enhance their members’ vigilance against mishap. The models for this are the health maintenance organization and, in the area of tax-subsidized indirect social insurance, the corporations that provide such benefits to their workers. The model may be capable of extension to other intermediary groups, perhaps including, in different ways and varying situations, civic organizations, churches, neighborhoods, and even the family.

  But there is one daunting problem to using intermediate groups as agents of community benevolence: Many of our most chronically needy compatriots are either isolated from the most promising kinds of intermediaries, or concentrated within enclaves of poverty and despair. They are poor not only in resources but in organization. So long as this condition holds, it will be difficult to develop systems of mutual responsibility; social benevolence for “the poor” will be apt to again degenerate into special programs funded by the charity of the rest of “us”—unaccompanied by either expectations or esteem. Hence, a somewhat radical proposal: In order to universalize our instruments of community, disperse chronically poor Americans more widely among the rest of us. Laws against housing discrimination should be mercilessly enforced. Zoning ordinances that effectively bar the disadvantaged from more prosperous areas should be challenged. Small clusters of low-income housing should be built in high-income neighborhoods. Current patterns of economic segregation make a self-fulfilling prophecy of the claim that the poor are not like the rest of us.

  Finally, we should take seriously the bromide that the future depends on our children. The potential public return warrants substantial public investments in prenatal care, preschool learning, basic education, and abundant opportunities for training and retraining thereafter. Here again, the immediate beneficiaries would be made to understand that these expenditures entailed reciprocal responsibilities. Failure to accept the obligations they implied (by, for example, disrupting or vandalizing a schoolroom) would properly result in whole or partial exclusion.

  6

  This brings us, finally, to the fable of the Rot at the Top. Looking on the powerful with a jaundiced eye is not a uniquely American trait, but the nature and degree of our suspicion distinguish us from other cultures. This aspect of our mythology is, in a broad sense, healthy.
Yet its current manifestations, once again, convey lessons inappropriate to the problems we face. It is undeniably important to guard against the perennial tendency toward venality, corruption, and arrogance in our public and private institutions. But I suggest the most threatening danger—most threatening because we are so little vigilant against it—is irresponsibility. America faces a crisis of stewardship. Rapid changes in the world, and in our place in it, have undermined traditional assignments of responsibility. For many of the purposes most important to us, there is nobody clearly, accountably in charge.

  The cycles of righteous fulmination—against business and government in turn—distract us from the need to enforce joint responsibility for our collective prosperity. When we succumb to a distrust of business, we neglect the imperative to keep up with the quickening pace of global development. When we indulge in contempt of government, we perilously neglect the public sector’s role in ensuring that such economic activity is aligned with the long-term interests of our citizens. There are ever fewer automatic links between technology, capital, and corporations of American origin and the interests of American workers; increasingly, these links must be forged by policy. The current version of our mythology of the Rot at the Top, and the sharp division between business and government it assumes and encourages, undercuts any rational assignment of these responsibilities. Business has no clear mandate of stewardship for the development and employment of our workers; government alone lacks the competence to take on the task.

  Stewardship will never be enforced solely by laws and regulations. Consider the miasma of regulation that confounds efforts to achieve far simpler public goals when business feels bound only by the letter and not the spirit of the law. Business executives must attend to the cultural norms and expectations that lie behind the law. Government leaders, in turn, must recognize their limited capacity to dictate specific economic outcomes and tend to their responsibility for designing the market in accordance with social priorities.

  Such stewardship can be propelled only by political culture. We will know our mythology of the Rot at the Top is evolving appropriately when we tell fewer stories that sweepingly denounce either the greed of businessmen or the meddlesomeness of government—the chaos of markets or the scourge of planning—and when our scorn falls instead on private power that is willfully unmindful of the public interest and public power that neglects the importance of harnessing private initiative.

  7

  These suggestions are meant only to illustrate what the new tales might inspire, not to sketch out an agenda for action. They exemplify a common theme. Throughout the areas this book has discussed, the central question is not how or how much to discipline or accommodate some other group, but how to enlarge the sphere of “us.” How can we create the conditions for confident engagement in joint endeavor? How can we build patterns of trust that serve the pursuit of mutual gain and cut the risk of mutual loss? The generic predicament stylized as the prisoner’s dilemma is especially pernicious in eras like the present, in which old norms and traditions are breaking down under the weight of rapid change, national borders do not hold, the burdens of change seem to fall randomly and unfairly, and notions of membership (within a firm, a nation, a trading or diplomatic system) seem ever more contingent and temporary.

  We will never be able to enlarge the sphere of “us” to encompass everyone. The interests of some groups are simply too sharply opposed to our own; some others are simply too anarchic, devious, or even irrational. But if hostility and intransigence were as pervasive in the world as some aspects of our mythology seem to suggest, we would never have been able to achieve the quiet marvels of coordination and mutual confidence that our culture now enjoys. The challenge is to create settings in which obligation and trust can take root, supported by stories that focus our attention on discovering possibilities for joint gain and avoiding the likelihood of mutual loss—stories of the ecology of the world economy, of collective entrepreneurialism, of social solidarity, and of stewardship.

  8

  A central tenet of this book has been that the most important function of political culture is not the crafting or evaluation of new solutions, but rather the act of defining core problems. This function is generally submerged and implicit, perceptible only indirectly in the debates that fill the editorial pages and the nightly news. The level of public discourse that ultimately determines the shape of our laws and the results of our elections consists of the metaphors that inform our hopes and fears, and the stories we tell one another. Here data, analysis, and theory matter less than political mythology. This volume is no brief against extended metaphor. A greater abundance of fact provides no guarantee of wiser policy; analytic virtuosity, no deeper insight into the values that animate our collective life.

  The problem comes when a changing environment outpaces the political culture. When we become so enchanted with our fables that we wall them off from the pressures for adaptation, the stories may begin to mask reality rather than illuminate it. Instead of cultural tools for coming to terms with the challenges we face, they become means of forestalling them. A living political mythology, while retaining its roots in the same core themes, is constantly incorporating new stories that manifest basic values and beliefs in new and more fruitful ways.

  If the broad line of reasoning I present is sound, this evolution of our mythologies is urgent and overdue. If my hopes and speculations are sound as well, the evolution may be already underway. In the years ahead the stories Americans tell one another will haltingly, gropingly, continue to change. Current liberal and conservative variants of our core mythologies, both of them accepting the conventional borders between “us” and “them,” will gradually give way to new versions oriented to a subtler assumption of interdependence. These new stories will speak less of triumph, conquest, or magnanimity, and more of the intricate tasks of forging mutual responsibility and enforcing mutual obligation. There will be fewer triumphant loners among the heroes, and more talented teammates and dedicated stewards. The villains will be found not in broad categories of malevolent others, but in the cynical betrayers of trust found even close by.

  Such tales are by no means foreign to the American mythology. Indeed, it is just possible that Americans already are telling one another these sorts of stories, and are only waiting for a new set of leaders to give them clear voice.

  NOTES

  1. FOUR MORALITY TALES

  1. Carl J. Friedrich et al., Problems of the American Public Service (New York: McGraw-Hill, 1935), 12.

  2. Scholars of American history and politics disagree about whether these deeper premises have endured, essentially unchanged through time (see, for example, Louis Hartz, The Liberal Tradition in America [New York: Harcourt, Brace and World, 1955]; Richard Hofstadter, The American Political Tradition and the Men Who Made It [New York: Alfred A. Knopf, 1948]), or have repeatedly cycled back and forth between periods of experimentation and consolidation (Arthur M. Schlesinger, Sr., Paths to the Present [Boston: Houghton Mifflin, 1964], 89–103; Arthur M. Schlesinger, Jr., The Cycle of American History [Boston: Houghton Mifflin, 1986], chap. 2). There is ample evidence to confirm either view, depending upon whether one regards the extremes of the cycle as representing fundamentally distinct worldviews or merely the ends of a rather truncated and predictable spectrum. As the reader will shortly discover, my own view departs somewhat from both of these positions.

  3. In this book I use the terms “myth,” “parable,” and “morality tale” interchangeably, but they are not exactly the same. Myths are almost unconscious; they are woven into our very language in the metaphors, allusions, and analogies we use to express ourselves. See, for example, Ernst Cassirer, Language and Myth, Suzanne Langer, trans. (London: Dover Publications, 1946), 83–97. Parables, or morality tales, are more deliberate attempts to teach lessons through narrative. In between the two categories are found folktales, fairy tales, epic poems, and a broad range of heroic adventures. The entire spectrum
can be understood as means through which cultural values are transmitted and understood. As the philosopher Alistair MacIntyre has written, “man is in his actions and practice … essentially a story-telling animal.” Our personal narrative histories are embedded in the stories of our time, our people, and our collective strivings. It is through narratives that we come to understand the actions of others. After Virtue: A Study in Moral Theory (South Bend, Indiana: Notre Dame University Press, 1981), 197, 201.

  4. The best of these tales, illuminating the universal joys and longings of mankind, still resonate in cultures far removed in time and space from those that first took the stories as their own. Consider The Epic of Gilgamesh; the tales of Lao-tse, Buddha, Mohammed, and Zoroaster; the Illiad and the Odyssey; the tragedies of Aeschylus or the novels of Tolstoy.