A Future Perfect: The Challenge and Promise of Globalization

by John Micklethwait

  Meanwhile, the downside for the educated is as nothing compared with the downside for the uneducated. Even a full-time contingent worker in America is paid typically only 80 percent of what a regular, full-time employee earns—and the benefits are often minimal. Manufacturing jobs may be getting more interesting, but the same can seldom be said of basic service jobs, such as delivering pizza. New technology often brings bad tidings for the poor, sometimes literally so. In 1999, an Oklahoma firm, Commercial Financial Services, set a first of sorts by using e-mail to tell its 1,450 workers that they had lost their jobs because it was declaring bankruptcy.

  What should be done about this? In an article for the Harvard Business Review in 1999, Peter Drucker complained that “every existing society, even the most individualistic one, takes two things for granted, if only subconsciously: that organizations outlive workers, and that most people stay put. But today the opposite is true. The need to manage oneself is therefore creating a revolution in human affairs.”[11] Even allowing for a little bit of exaggeration, this seems a fair point, and one that poses challenges both for society as a whole and for individuals.

  Government’s habitual inflexibility is often at its most damaging when it comes to employment policy. Most countries devised their job rules at a time when the main aim was to tide their citizens over from one stable if fairly undemanding job to another. That old social contract has plainly broken down, partly for political reasons (it left politicians at the mercy of militant interest groups) and partly for business ones (firms increasingly need to shed workers even when they are doing well). Now, institutions need to be redesigned with a view to keeping workers employable rather than employed.

  In most countries outside America, transferring your pension from one employer to another is difficult. In most Continental countries, getting rid of full-time employees is both expensive and immensely time-consuming; employers predictably choose to expand by hiring part-time workers, putting the entire burden of economic adjustments on the shoulders of the young. By contrast, Japan has equally absurd rules mostly designed to prevent the young from getting temporary work. In 1998, only about a third of Japan’s college graduates were able to find full-time jobs, and yet temporary agencies were still forbidden to offer work to anyone within a year of graduation. Many categories of jobs are off-limits to temporary agencies. There are even rules to stop temporary workers from sneakily evolving into full-time ones.

  p. 323 Although America has the advantage of fairly flexible labor laws, its problems come in other disguises. One is the ever-growing number of fraudulent employment and discrimination lawsuits: Nobody wants to hire a potential litigant. Another problem is health care. The difficulty that many portfolio workers find in getting coverage is one reason why so many people stay with their employers until the bitter end. Perhaps the biggest problem in America, however, is education. This land of second chances realized much earlier than other countries that education is a never-ending process, rather than a stage of life that ends when you leave college. Yet such prescience does not make up for the fact that basic education is so lousy. Too many people go to community colleges to learn to read and write rather than to acquire a new skill.

  These are well-worn themes. But in the end, most of the responsibility for “managing yourself” falls on, well, yourself. From the individual’s point of view, the main lesson is fairly stark: Educate yourself, and then reeducate yourself—particularly if you work in a fast-changing business. In Silicon Valley, people will tell you that a twenty-year-old degree in software engineering is less valuable than the ability to play the latest version of Tomb Raider. Even fairly routine industries, such as agriculture, now demand more sophisticated knowledge of things like chemicals and computers. Sensible workers will take jobs only in those organizations that promise not just decent pay but decent chances of giving them the skills they need to jump to a new job.

  But how do you achieve this wonderful thing called employability? Is it just a matter of relying on your own initiative? Or do you need to bond with other people? And if so, who should organize the bonding? One way to frame the argument is to listen to two women who have thought about globalization a great deal: Hang Tran, a student at Stanford Business School, and Amy Dean, a trade unionist.

  A Tale of Two Women

  Hang Tran’s argument that people should pull themselves up by their bootstraps is rooted in her experience. A young Vietnamese American in her final year at Stanford Business School, Hang is one of those people who have the gift of electricity. Despite her slight build, she fills the room with her personality, rattling off a relentless series of pointed observations of the sort that might give Margaret Thatcher’s cabinet ministers an uncomfortable sense of déjà vu. She even seems tough on herself: “I think I have the ability to bep. 324come a CIO or COO but not a CEO.” But she makes up for it with an infectious sense of optimism, a fixed belief that the angels will smile on her.

  Hang’s parents came to Texas in 1975, frightened and destitute, refugees from a disintegrating Vietnam. The family avoided the “little Saigons” that were springing up around America at the time because they wanted their children to say rice rather than wice. They ended up living in the suburbs of San Antonio and put every penny they earned into sending their children to private school. Hang went to a local university, Saint Mary’s (“I was too much of a mommy’s girl to leave home for a fancy eastern school,” she says, a little defensive of her Ivy-free c.v.), where she captained the running team and excelled in her studies. She then got the safest niche she could find: a job as a chartered accountant at Arthur Andersen.

  Hang thrived at Andersen, twice earning accelerated promotions and ending up, by her mid-twenties, with a six-figure salary, a couple of secretaries, an expense account, and a gold-plated future. But her work seemed empty. She transferred to the firm’s consulting side. Yet she was still frustrated by the idea of having to “wave good-bye” to a problem that she would rather have solved herself. When her boss told her that “this was as good as it gets”—that if she was not happy now she never would be—she screwed up her courage and left for a job at Enron, then a much admired employer.

  Hang’s decision to quit Andersen scandalized her parents. How could their dutiful daughter swap a dream job for an uncertain future? Hang understands why refugees who make their livings in the uncertain world of small businesses put such a premium on security. But she had developed a radically different view of her future: She wanted something that interested her rather than just something that paid her a safe salary; and she was not convinced that big companies provided any security. That came only from increasing your own marketability.

  For her, Stanford, which she joined from Enron, is a way to get her “international business driving license,” an M.B.A. Her time at Enron had taught her the importance of being at the center of a business cluster—“the person next to you on the treadmill might be a great contact”—and there is nowhere closer to the heart of modern business than the Valley. Her time at business school is providing her with a chance to “hang around and learn something” from people such as Scott McNealy and her particular hero, Steve Jobs. Every conversation in Starbucks eventually turns to the question of making a buck out of the new technology. Hang thinks that most of her classmates will end up as millionaires.

  Already, Hang has a job at L’Oréal to go to, but she will stay with the p. 325 French cosmetics company only as long as it continues to upgrade her skills and provide her with challenges. (One of her dearest wishes is to get a foreign posting—particularly in her native Vietnam.) She expects that L’Oréal will be only the first of a succession of employers. But in the long run she shares the dream of most of her classmates of starting her own company. Wealth would give her time to indulge her hobbies (she is an aspiring pastry chef and antiques collector) and her taste for philanthropy. But the main incentive to go it alone is that it would allow her to be the architect of her own destiny.

  If
you had to teach a course in global career planning for young cosmocrats, Hang would be one of the first exhibits. But what about people with less ambition and less talent? Or people who lament rather than scorn some of the certainties of the old career structure? Two of Hang’s passions are philanthropy and the introduction of more competition into America’s public-school system—to set more people free so they can make themselves employable. By contrast, another woman just a few miles away from the Stanford Business School, in a nondescript low-rise building on the outskirts of San Jose, thinks that employability has to be a more communal aim.

  For Amy Dean, the leader of the local branch of the AFL-CIO, the same forces that are setting Hang free will eventually send other people scurrying back to trade unions. In Silicon Valley, trade unionists are about as thick on the ground as manual typewriters. But as Donna Quixotes go, Dean has an impressive record. She is part of the new labor movement: young (in her late thirties); well educated (a degree in sociology and economics would have led to postgraduate work had she not been seduced into the International Ladies Garment Workers Union); and plugged into the new economy (her husband works for a software start-up).

  When she took over the South Bay branch of the AFL-CIO, it was little more than a blue-collar rest home. Now it is humming, housed in what looks like a high-tech hatchery, staffed by bright young things, and elaborately “networked,” along the best Silicon Valley lines. A sister group, Working Partnerships USA, which Dean set up in 1995, does research, trains local activists, and cultivates relations with universities. Dean’s organization not only trounced the bosses’ candidate in a brutal battle for a seat on the San Jose City Council (“I was up against the single most powerful political machine in the Valley,” grumbled the loser) but also won its campaign to force San Jose to adopt a “living wage” for all municipal contractors. San Jose now has the highest minimum wage in the country, almost twice the mandatory level of the State of California.

  p. 326 Dean points out that temporary workers are often miserable workers. The worst-paid live hand-to-mouth existences without medical or other benefits. Even many of the best paid are fearful of the future and envious of those on the permanent payroll, as Microsoft discovered when some “permatemps” won a class-action suit against it. Dean has set up a temping agency of her own, Together@Work. The agency not only pays its workers better than its rivals pay theirs but also gives them medical benefits, pensions, and, above all, training.

  The main problem with the idea that trade unions might become points of stability in the new labor market is the unions themselves. Even Dean’s modernized trade unions seem much happier with reintroducing old rigidities than with responding to new flexibilities. (It is notable that Dean’s power base is in the public sector and that her biggest success has been fixing a minimum wage for city-hall employees in San Jose.) If you go to countries where unions still have power, they tend to use it in inflexible ways. For instance, German unions have used their influence over training programs to defend old jobs rather than prepare people for new ones.

  On the other hand, as firms become more nimble, many workers will want to look somewhere for things that make life secure and increase their employability. Pulling yourself up by the bootstraps is all very well, but sometimes you need a little help putting the boots on your feet. In the nineteenth century, unions grew out of the need for security and training: When people wanted a carpenter, they went to the union. In some areas of the new economy, notably Hollywood, unions still play that role. If you are a screenwriter, the screenwriters’ guild provides you with various benefits and also negotiates some minimum standards with the studios. The organizers of the Five O’Clock Club are looking at the notion of providing health-care plans to the club’s members. There are too many Willy Lomans out there for some organizations not to emerge.

  Back to the Future

  Many people outside California probably regard this sort of futuristic debate between aggressive individualism and what might be termed flexible collectivism as at best eccentric, at worst irrelevant. Most non-Americans shudder when they hear people talking about “adding to their portfolio of skills.” And most European trade unionists think that the best way to deal with the new, flexible economy is to fight it tooth and nail. As we have seen, figures about jobs can be interpreted to show how little is really changing as well as how much.

  p. 327 But anyone who wants to bet on a static view of the future ought to remember two things. The first is Charles Handy’s conversation with his official guide in Soviet Russia, which now seems to belong not just to a different decade but to a different world. The second is the story of the Argentine ant and the Hawaiian silversword. The silversword’s future has not been planned by anybody, least of all the ant. But a string of unintended consequences may end up robbing the plant of its one chance to reproduce.

  Hang Tran is right that each person needs to take his or her fate firmly in hand. But Amy Dean is equally right that they may need help in doing so, even if she puts far too much faith in trade unions. The point is that all sorts of institutions, from colleges to companies, will have to put more emphasis on making people employable; and all sorts of people, even the most comfortable and conservative, need to realize that in an interconnected economy even the tiniest new arrivals can end up changing their world for good. If you doubt that, consider the silversword.

  Conclusion – The Hidden Promise: Liberty Renewed

  p. 328 SOMETIMES AN IMAGE seems so contrived that you hesitate to mention it, for fear of arousing the suspicion that you are the one who has done the contriving.[1] Beneath a daunting plinth with the carved, solemn words “Workers of all lands unite” stands not just a freshly cut bouquet of red roses but also an empty bottle of Johnnie Walker Scotch and a crumpled packet of Silk Cut cigarettes. It is tempting to imagine that these endearing symbols of global commerce are regularly left there as part of some rite of passage for the young traders in the distant towers of the City of London, but the lady at the gate seems surprised (“We do get couples here sometimes”), and a subsequent visit reveals only another bunch of flowers.

  Karl Marx’s tomb in Highgate Cemetery is a sorry place. The sculpture of his great bearded head is sometimes soiled with pigeon droppings; the army of celebrated intellectuals and communist dignitaries that used to come to pay its respects to the master has dwindled into a tiny band of eccentrics. In one way, this is a pity. As a prophet of socialism, Marx may be kaput; but as a prophet of “the universal interdependence of nations,” as he called globalization, he can still seem startlingly relevant.

  For all his hatred of the Victorian bourgeoisie, Marx could not conceal his admiration for its ability to turn the world into a single marketplace. Some of this admiration was mere schadenfreude, to be sure, born of his belief that in creating a global working class the bourgeoisie was also creating its very own grave diggers; but a surprising amount of this respect was genuine, like a prizefighter’s respect for his muscle-bound opponent. In less than a hundred years, Marx argued, the bourgeoisie had “accomplished wonders far p. 329 surpassing Egyptian pyramids, Roman aqueducts and Gothic cathedrals”; had conducted “expeditions that put in the shade all former exoduses of nations and crusades”; and had “created more massive and more colossal productive forces” than all preceding generations put together. In achieving all this, it had begun to transform an agglomeration of warring nations and petty principalities into a global marketplace.[2]

  Marx was at his most expansive on globalization in The Communist Manifesto, which he cowrote with Friedrich Engels, a factory owner turned revolutionary, and published in 1848, a year in which ancien régimes were tottering throughout Europe.

  The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.

  The bourgeoisie has through its exploitation of the world market given a cosmopolitan char
acter to production and consumption in every country. . . . In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant land and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal interdependence of nations.[3]

  Even Marx’s final resting place is, to some extent, a vindication of this great insight. Opposite him in Highgate lies William Nassar Kennedy, a colonel of the Winnipeg Rifles who was “called home” in 1885 while returning to Canada from Egypt, where he was in command of the Nile Voyageurs. A little further down there is John MacKinlay and his wife, Caroline Louisa, “late of Bombay.” Highgate Cemetery is strewn with the graves of Victorian soldiers, bureaucrats, and merchants who devoted their lives to turning the world into a single market.

  What would Marx make of the world today? Imagine for a moment that the prayers of the faithful were answered and the great man awoke from his slumber. Having climbed out of his mausoleum, dusted himself off, and taken a frustrated sniff at the bottle of scotch, what would Marx find? There would, of course, be the shock of discovering that, on all the big issues, he had been proved hopelessly wrong. It was communism that succumbed to its own internal contradictions and capitalism that swept all before it. But he might at least console himself with the thought that his description of globalization remains as sharp today as it was 150 years ago.

  p. 330 Wandering down Highgate Hill, Marx would discover the Bank of Cyprus (which services the three hundred thousand Cypriots that live in London), several curry houses (now England’s most popular sort of eatery), and a Restaurante do Brazil. He might be less surprised to find a large Irish community. But the sign inviting him to watch “Irish Sports Live,” thanks to a pub’s satellite-television linkup, might intrigue him. On the skyline, he would soon spot the twin towers of Canary Wharf, built by Canadian developers with money borrowed from Japanese banks and now occupied mostly by American investment banks.