7#s . *@jj x  "I*s  I:IIsIIIIIIShock Wave (Anti) Warrior For twenty-five years, Alvin Toffler has been shocking us with his descriptions of the future. From Future Shock to The Third Wave, Toffler has argued that we are involved in nothing less than a change of civilization - as profound as that from hunter-gatherer to agricultural, from agricultural to industrial. Now back with a new book, War and Anti- War, Toffler is as provocative as ever, as he examines the increasingly bloody consequences of cultures in collision as the Digital Revolution gathers force. A conversation with Peter Schwartz ------------------------------------------------------------------------ The most successful futurists don't predict the future. They make their fortune by interpreting the present in a new way - a way that makes more sense and seems more conventional the farther into the future one goes. Alvin Toffler made his fortune by explaining the strange dread people were beginning to feel about rapid technological change in the late 1960s. The official future was supposed to be groovy, but few felt that way. In 1965, Toffler called the dread "future shock" and then so christened his soon-to- be best-selling book in 1970. A decade later Toffler followed up with another best-selling study of the present time, called Third Wave. It painted a portrait of a world being reconstructed by information. Powershift appeared the next decade - which late 1980s Toffler saw in a new global perspective where knowledge begot the Haves while ignorance begot the Have Nots. It's now 1993. Change has accelerated and Toffler has published his once-a- decade blockbuster book three years into the decade. Called War and Anti- War, it is co-authored by his wife, Heidi Toffler, who also co-authored the earlier books. Their new book is about learning from war, and about how we can engineer peace with the same technology we are using to make money and war. At one time, both Heidi and Alvin Toffler worked in grimy factories and on assembly lines in the Midwest. This, they said, "provided a graduate course in reality after our university years." Since the success of their earlier books, they have had access to most of the world's leaders. Late this past summer Alvin Toffler spoke to futurist Peter Schwartz on assignment from Wired. Schwartz, co-founder of the Global Business Network, advises the Pentagon and large corporations on how to adapt to the new realities of an information-based world. Toffler, quiet but confident, listened as much as he talked. As he tried to describe this moment in history, he seemed to always have in mind Joe and Jane Sixpack, confused by the present and worried about their jobs. - Kevin Kelly PETER SCHWARTZ: You've been writing publicly about the future for a quarter of a century. It's almost exactly 25 years since Future Shock. I recently had my 25th college reunion, and I was asked to give the speech. So I looked back and asked, "What did we expect was going to happen, but didn't?" If you look back now, what were the important things that really surprised you? I mean, the really big things that you didn't anticipate? ALVIN TOFFLER: When we go back to Future Shock, the central errors that we can find are (a) it was not radical enough, although it was seen as extremely radical at the time, and (b) we made the mistake of believing the economists of the time. They were saying, as you may recall, we've got this problem of economic growth licked. All we need to do is fine-tune the system. And we bought it. We said, quite correctly, that the period we are moving into is not the period of the crisis of communism or the crisis of capitalism, but the general crisis of industrialism. We were right However, we did not yet see the tremendous economic upheavals that implied. We thought, okay, we've got that problem solved, let's go on to other problems. We were young, and still willing to listen to linear economic extrapolations. I'm not sure everybody got the basic argument of Future Shock. We were not only saying that accelerating change is hard to adapt to, but that acceleration itself has effects on the system. The ability to adapt isn't dependent entirely on whether you're going in what you would regard as a happy direction or an unhappy direction. It's the speed itself that compels a change in the rate of decision making, and all decision systems have limits as to how fast they can make complex decisions. That takes us to the computer. The early assumptions were that the giant brain was going to solve our problem for us, that it was going to get all this information together and that therefore life would be simplified. What it overlooked was the fact that computers also complexify reality. And of course this was a great disappointment to the Soviets because they were going to centrally plan their thing with a big computer. PS: There were three big things that surprised my reunion class: the collapse of the Soviet Union, the rise of the role of women in society, and the fact that powerful computers became personal computers. AT: And the demise of space. PS: Definitely. Look, I'm an astronautic engineer by education. I was going to go to work in the space program. I wanted to be an astronaut. So this is particularly painful to say, but space turned out to be a bore. Pretty pictures from Jupiter, that's about it. After that it goes downhill pretty fast. AT: It's not over. PS: It's pretty close to over AT: Think longer, longer, longer. PS: Very long, yes. But for the next half-century or so, space means telecommunications. Space hotels is another story. AT: I once had a class of 15-year-old high school kids and I gave them index cards, and I said, "Write down seven things that will happen in the future." They said there would be revolutions and presidents would be assassinated, and we would all drown in ecological sludge. A very dramatic series of events. But I noticed that of the 198 items that they handed in, only six used the word "I." So I gave them another set of cards, and I said, "Now I want you to write down seven things that are going to happen to you." Back came, "I will be married when I'm 21," "I will live in the same neighborhood, I will have a dog." And the disjuncture between the world that they were seeing out there and their own presuppositions was amazing We thought about this, and concluded on the basis of just guesswork that the image of reality that they're getting from the media is one of high-speed rapid change, and the image that they're getting in their classrooms is one of no change at all. The collapse of the Soviet Union was not among the big surprises for us. The economist Ludwig von Mises wrote in the 1920s that the Achilles heel of socialism was what he called the problem of "calculation," which we would translate today to mean information or knowledge. Basically he was saying it was not possible for them to know everything they needed to know to centrally plan the economy. The early stage of industrialization - which usually involves heavy investment and the production of capital goods - is the easy part. The hard part comes when you've got to distribute the goods. For that you need more and more information, but the Soviets created a system which guaranteed the falsification of the information they received. Statistics coming in from every industry in the Soviet Union were a pack of lies. Marx said that a "revolutionary situation" arose in a country when its political and property relations stifled economic and technological progress. And that was exactly what was happening in the Soviet Union. Which is why, as early as 1982 or 1983, we said that the Soviets faced a revolutionary crisis. PS: If you were sitting here 25 years from now, what do you think would really surprise you? You would look back, you'd say, "Oh my, I wish we'd seen that." AT: At one level my guess would be something biological. Something out of the genetics revolution, something that we just can't imagine now. PS: Have you tried to imagine the world on the other side of biological control? Of what it would be like not too far off, maybe in the next 30 years when we're going to be able to control genetic material? AT: I think that our existing political and moral structures are going to explode. There's nothing that remotely prepares us to cope with say, armies equipped with genetically engineered, race-specific weapons or, for that matter, governments capable of practical eugenics. It's going to be a strange world. PS: My wife runs the egg-donor program for in vitro fertilization at Alta Bates Hospital. She plays God every day. She picks women to provide eggs to recipients, and determines their kids from that point. AT: How about the South African grandmother who bore the eggs of her daughter? So she is grandmother and mother of the same child. That just begins to give a pale hint of the possibilities. PS: I'll just give you a really practical example. The other day a donor came in. She was perfect in every way, except her mother had been a serious alcoholic. Is this alcoholism inheritable? Is it genetic? Does she warn the receiving mother? AT: I'll tell you what I think hangs in the balance of all of this. For 300 years we have had a scientific ethos that says "information is good" - and the more we know the better. I believe we're heading into an era when there's going to be enormous pressure to block out, to prevent further development of certain kinds of knowledge. PS: Well, we already have it. The opposition to the mutant tomato is the first hint of that in a very big, big way. AT: It's informational Ludditism. Yet, on the other hand, I can understand the fears that say, do you really want everybody to know how to make a nuclear weapon? I don't think so. PS: Michael Crichton once made the interesting point that to make a nuclear weapon requires a governmental-type infrastructure, but to make a square tomato - AT: Or a biological or genetic weapon, takes zilch by comparison. Third-Wave Change AT: Information, including misinformation, will change the world militarily and economically. If we look at global power, in the broadest sense, the most basic division in the world was not between East and West, but between industrial and nonindustrial powers. Between first wave or agrarian countries, and second wave or industrial countries. That two-way split in world power has dominated the planet for 300 years. What is happening now is a process of what we call trisection. The world system is splitting into three parts - three different layers or tiers - or more accurately three different civilizations. Of course, you'll continue to have agrarian countries and you'll continue to have the mass-manufacturing cheap-labor suppliers, at least for a transitional period. But we are also rapidly developing a chain of info- intensive countries whose economics depend not on the hoe or the assembly- line but on brainpower. The people reading Wired are children of this third wave of change. It is an entirely new civilization that is still in its infancy. We call it a civilization because it's not just the technology that's changing. The entire culture is in upheaval. All the social institutions designed for the second wave - for a mass production, mass media, mass society - are in crisis. The health system, the family system, the education system, the transportation system, various ecological systems - along with our value and epistemological systems. All of them. And the emerging third-wave civilization is going to collide head-on with the old first and second civilizations. One of the things we ought to learn from history is that when waves of change collide they create countercurrents. When the first and the second wave collided we had civil wars, upheavals, political revolutions, forced migrations. The master conflict of the 21st century will not between cultures but between the three supercivilizations - between agrarianism and industrialism and post- industrialism. Each of these have different interests. They need different resources. They view reality from different perspectives. Even their conceptions of time, and of history, differ. We live in an accelerating, almost real-time environment, and it's hard to comprehend the attitudes of the Serbs, say, or the Jews and the Arabs still fighting about wars that took place a thousand years ago. PS: Or the guys who burned the mosque in Amritzar who said, "Well, we finally got even for the Moguls " AT: Yeah, the conception of time is very important, and it's related to the shifts from agrarianism to industrialism and now to third-wave civilization. The reason we chose the phrase "third wave" rather than saying "the information age" or "the computer age," or "the space age," or whatever, is that the changes we denominate as third wave are changes in every aspect of the civilization. We thought that by saying "computer age" or "digital age" we'd be focusing on a single parameter. The second thing about waves is, you can have more than one wave of change moving through a society at the same time. And, if you then extend that idea you can find many countries today in which you see multiple waves moving through simultaneously. The primary example is Brazil, where, on the one hand, they're still killing off tribal populations to make room for agriculture. So the agricultural revolution of the first wave is still playing itself out, residually, in Brazil. You also see tremendous traditional smokestack development, and you even see the beginnings of the third wave. It is not conceivable to me that the revolution we're now going through - which is in my view even deeper, and faster, than the industrial revolution - is going to occur smoothly. It cannot. Therefore there is a high potential for conflict between interests with stakes in the different waves, just as the rising industrial, commercial bourgeoisie came into conflict with the feudal, land-based power. Micro-war AT: Much has been made and written about the globalization of technology and the fact that computers are made in six countries, with parts from here and there. We know that certain technologies are getting so big and expensive that they are essentially syndicated out among different regions and countries in order for us to be able to afford them. But not a lot has been said about the counter-process, which is just as important - that an increasing number of sophisticated technologies are increasingly small and cheap. You no longer need national markets to justify them. Siemens had this printed-board circuit with a lot-size of one. We're beyond the age of mass production, into what some call "mass customization." The problem with the term "mass customization" is it applies more narrowly to production. We use the term "demassification" because it applies to all those sectors I talked about before: family structure, communications, and so forth. Mass society was a product of the industrial revolution. As the industrial revolution and industrial institutions collapse all around us, what we're witnessing is the demassification of mass society. I'm not suggesting a sort of magical dematerialization of society - surely we'll need things. But the way we make those things will require so much more symbolic processing - that's where the value comes from. The example we frequently use, and everybody gets right away, is: When I was a kid if you took a snapshot you had to send it to Rochester or to Kodak to have it processed. Now you go to Fotomat on your street corner. That technology has now been decentralized and Polaroid puts it in your hand. Right? So, we went from a technology that required a national market to make it economically viable, to a technology which requires a local market. If we begin to put very powerful, small, cheap technologies into regions and cities to make them economically viable in a way they never were, it might increase conflict. The cultural, ethnic and regional differences, which are now the source of argument, but which are opposed by many on the grounds that they make no economic sense, could very well make economic sense at some time in the future. This is why you might see conflict in, say, Europe. PS: I found the title of your new book intriguing: War and Anti-War? AT: The thesis is very simple. The way you make war is the way you make wealth. If you change the way you make wealth, you inevitably change the way you make war. And if you change the way you make war, you ought to be thinking about changing the way you make peace. War was initiated by the agrarian revolution, or in our terminology "the first wave of change." With the coming of the industrial revolution, particularly the French Revolution and Napoleon, you begin to get mass production, you begin to get mass conscription. You begin to get machine guns for the machine society. With mass production, you get mass destruction - industrialized warfare. And if we are now in the process of transforming the way we create wealth, from the industrial to the informational, or call it whatever you wish, there is a parallel change taking place with warfare, of which the Gulf War gives only the palest, palest little hint. The transition actually started back in the late-1970s, early-1980s, to a new form of warfare based on information superiority. It mirrors the way the economy has become information-dependent. An important part of this will be what we call "knowledge strategies" - social knowledge strategies, national knowledge strategies, and so on. In military terms there will be attempts to coordinate all the knowledge- intensive activities of the military from education and training to high- precision weaponry to espionage to everything that involves the mind - propaganda - into coherent strategies. PS: What about anti-war? AT: The same thing has to happen to the way we make peace. More and more peace will depend on the acquisition, processing, dissemination, and control of knowledge. Whether we're talking about satellite surveillance of troop movements, or brain drains of nuclear scientists, or more refined sensors, knowledge is at the heart of peace. Here's just one example. It took two years for the United States to decide it ought to set up Radio Free Serbia. Instead of debating whether the world should send ground troops to the Balkans, or whether to use airstrikes, we should have been using information and information technology to strengthen the peace forces and moderates that exist in Serbia, Croatia, and Bosnia - but who have no access to the media. PS: So, instead of airdropping food, we ought to be airdropping - AT: We ought to be dropping receivers Transmitters. Laptops. Fax machines. Camcorders. Tape. We could have parked a transmitter right off the coast and bombarded the countryside with peace propaganda or at least moderating information. Or just plain news. Indeed, the question is, where the hell was CNN? Where the hell was NHK? Where was BBC? If they just broadcast into there - PS: Sure. Back in '87 I was interviewing Gorbachev's chief science advisor, Velakoff, and he was saying that his most important priority was getting enough satellite dishes distributed around the Soviet Union so that when the inevitable coup came, Moscow could no longer control the airwaves. And that is exactly what happened Exactly what happened. On the day of the coup in Moscow, they went for the TV station but it didn't matter any more. 'Cause you could get CNN everywhere. But there's another side to all this, though, in terms of the war/anti-war issue. If you look around the world today, you can list approximately 51 significant conflicts going on somewhere at any given time. US military forces are active in about five places. But big conflict, big war seems to be a thing of the past. Are we in a new era of lots of persistent low-level conflicts, what could be called the "era of chaos wars"? AT: Well, look at it this way. We're going through a structural transformation - which you can call postmodern, post-industrial, "the third wave," whatever - and one of the characteristics of that change is the demassification of production. We go from "everything has to be the same" to custom production, small-run niche production. If you look at the marketplace, we go from mass distribution and mass markets to niche markets. And if you look at war we're going to niche economies and niche warfare. PS: But then if you carry the idea of niche wars further - AT: But, let me say we do not accept the idea that that means big wars are finished. And we do not accept the common assumption that there is a kind of zone of peace - that democracies don't fight. First of all, who says they stay democracies? And second of all, democracies in the past have fought and democracies could fight in the future. PS: But, let's carry the metaphorical line of niche wars that you've laid out there a little further. One of the phenomena we see with the advent of information technology and markets is the ability to deal with smaller and smaller and smaller niches until we have what we think of as the segment of one. AT: That's right And that segment of one will have his own nuke. PS: Well, so my question is, do we end up going the other way in the sense we won't target a country, we won't target a division, but we do target a military leader? AT: Exactly That's exactly what we say we didn't do vis-a-vis Saddam, but what we will do. In fact there is a kind of dialectic here. We've always believed that many of the changes that we identify as carrying us into a third-wave civilization, or whatever, actually re-create preindustrial conditions on a high-technology basis. And what you then see is individual assassination. That's the way the Medicis did it It creates a scary world, certainly not a serene and stable world. And it does look a lot more like chaos theory than it does like equilibrium. One of the key concepts which should give every member of Congress and the President pause is the dominant belief that the US is and will remain the sole global military superpower. After the Gulf War it looked as though the US would have a 10- to 15-year lead. But the fact is, the more knowledge- intensive military action becomes, the more nonlinear it becomes; the more a small input someplace can neutralize an enormous investment. And having the right bit or byte of information at the right place at the right time, in India or in Turkistan or in God knows where, could neutralize an enormous amount of military power somewhere else. So it is no longer necessary to match battalion with battalion, tank with tank, in order to neutralize the other guy. PS: But that implies a level of sophistication on the part of the governments, the intelligence and military organizations, even the media organizations involved, that in most countries is rare. AT: Don't think in terms of countries. Think in terms of families. Think in terms of narco-traffickers. And think in terms of the very, very smart hacker sitting in Tehran. PS: Well, as you know, the Pentagon has become concerned with information war, but I think they've defined it fairly narrowly. AT: Yes, that's our thesis. But there is an untold history here. If you look at all of our big companies, they're trying to restructure like crazy. Not terribly many have been dramatically successful in going from demoralization to peak performance, but the US military has. It's gone from the pits of post-Vietnam, drug-drenched, corrupt, bloated bureaucracy into an elegant force. The Revolt of the Rich PS: My company [GBN] just completed a major study on the future of Asia. And one of our conclusions was that China figures so largely in whatever happens, you can't understand the future of Asia without understanding the future of China. AT: If that is the case, I think the future is very dire. PS: Dire in what sense? AT: Well, there is current euphoria about the growth of the Chinese economy. As I'm sure you know, The Economist recently did this 20-page pullout on China as the superpower of 2020. But our view is that linear trend extrapolation is the most treacherous form of forecasting. China-as- economic-superpower overlooks significant political, ethnic, and other issues. China's rise to superpowerdom might be the most probable future, but one must never ignore improbable futures. If an improbable future has massive impact, you'd better not ignore it just because it seems improbable. PS: Exactly. That's my business. AT: With the art of the long view, we should not look at China as it is today. And we should not assume that the transformation of China is a 2-, 3-, 4-, 5-year proposition. It took 10 years after the death of Tito for Yugoslavia to explode. We cannot expect China (or the Soviet Union ) - so much larger, much more complex - to settle down into some kind of stable political economic order in 10 years. We're looking at a really long period of potential instabilities. Potentially serious instabilities. Look at China. The most rapidly growing regions like Guangdong are becoming electronically plugged in to Taiwan and Singapore. The third wave is there, and it's beginning to spread. You also have a lot of second wave muscle- based manufacturing still going on, and in agrarian regions like Guizhou you still have kids with swollen bellies. Like India and Brazil, China has all three civilizations within it pulling in different directions. And you have Beijing trying to keep control. Now, if I were sitting in southern China, and I spoke Cantonese and not Mandarin, just like the Taiwanese and the Singaporeans and the overseas Chinese, and some bureaucrat in Beijing said, "You're going to have to do such-and-such," I would say "Screw you " Which is in fact what they are saying Any attempt by Beijing to impose meaningful central control will lead to an explosion, and that could take many different forms. PS: Do you think that's a necessary thing? AT: No. I regard it as a low-probability scenario, but one that would be a terrible mistake to ignore. PS: Well, you know, if you look at Chinese history, one of the ways to see it is a kind of rhythm of control between Beijing and the provinces, over centuries of centralization and decentralization, not by design, but just simply by the accretion of power and the challenges against it. And that this may be a period where the power is moving away from Beijing and back out again. AT: I don't deny that pulsing at all. You can have this pulsing back and forth between centralization and decentralization in organizations, companies, countries, and cultures. The difference is this: It's not just Beijing and the provinces now. The provinces are now allied with Vancouver, and Los Angeles, and Indonesia, and so on. So, it doesn't work the same way. There was, we were told, a novel by a Chinese author (who we believe is now in prison) that lays out the following scenario: Southern coastal China finds itself held back by Beijing and attempts to secede, allying itself with Taiwan and the overseas Chinese. That then leads to war, indeed nuclear war, as Beijing insists on maintaining its power. The elites in the West have spent a century or two worrying about the revolt of the poor. But the next period is going to see a revolt of the rich. Look at what happened to the Soviets. Ask yourself, who wanted to become independent and who wanted to stay? The regions and republics that wanted out were the Baltics, the Ukraine - those regions that were the most highly industrialized, the most developed, and the richest. Who wanted to stay? Kazakhstan, Turkistan, etc., etc., etc. The poor wanted in because Moscow was redistributing wealth to some degree, and the rich wanted out. They felt that Moscow was preventing their economic development. That is happening in Brazil today. You've got secessionist movements in the south, based in Porto Alegre. The southerners are saying, we produce more of the GNP, we pay more of the taxes. Who needs the rest of Brazil? And I believe that we're going to see that replicated in China. PS: So if China is not careful, the future of China will be the rich seceding from the poor in the rest of the country. What advice would you give the Chinese leadership now on how to manage this transition to the third wave with minimum stress? AT: I would say, keep your hands off the growing regions. They've got a very difficult and almost contradictory task. They've got to keep the peasants' situation improving and keep their hands off the growing parts of the economy. I think these are contradictory requirements. That was the magic of Deng Xiao Ping. When he first came in and talked about reform he said, we're going to pay off the peasants. Agricultural reform was Number One, allowing them to market some part of their goods. That made him extremely popular. Only then, after he had enormous political support from the peasantry, did he then say, and now we've got to cut down the military. Gorbachev began to cut down the military without having a base. He never had an agricultural policy that won him support. He never had an industrial policy. He had an anti-vodka campaign, which turned everybody against him! But there's the whole underside of China, which is underreported and which is violent, which is seething with unrest, and which we never see because it's frequently out in the boondocks. There's a big invisible China. There are local provincial governments that are in the business of making rugs. And the way they do this is to create a barracks, and put 5,000 girls in the barracks. And the girls work seven days a week, and they do not get paid. They get a bed and they get three lousy meals. I'm not talking about prison labor. I mean, this is slavery. The tendency is for the Western media to write about the success stories and the parts of China that they have easiest access to, and the part that they understand the best. We all know that Asia is the driving force of the world economy. But what would happen if Asia stopped growing economically? What would happen to Europe? What would happen to the United States? It would be disastrous Therefore, it is in our basic interest to maintain the continued economic and technological development in Asia. It's also good for the human race, because it means we have the possibility to bring a billion people out of poverty. But from a narrower interest, it's in our immediate economic interest to keep that going. PS: What could stop it? AT: The primary thing that could stop it would be "managed trade" - geo- economic manipulation - that leads to protectionist wars. The second thing that could stop it could be political instability. And, the third is military upheavals of one kind or another. Now, very few people have taken the trouble to notice that from Kazakhstan, to Pakistan, to India, to China, to Russia and possibly to North Korea, there is a nuclear ring around the Pacific. That's the most nuclear-encircled region of the world. It has many centers of potential and actual instability, starting with India and Pakistan at one end of the arc, all the way over toward China on the other side, not to mention small places like the Philippines. And this is the moment when the United States contemplates reducing its military presence in the region, which is the only thing that has prevented arms races from exploding all over Asia at an even more rapid rate. PS: My impression is that this thinking has been taken very, very seriously, by Clinton, by Powell, and by Aspin. In fact a central question has become, "How we can help assure the stability of the region?" For example, I believe the Navy base in Subic Bay is going to move to Singapore, so there will be a base in Singapore. I think that will happen. So the Soviet Union falls apart and maybe China too. What other countries are ready to spin off their rich? AT: If we're talking about potential spinoffs, imagine Quebec finally taking the plunge. PS: They say, "We've had it with the English. We're outta here." AT: It's not implausible. When Quebec goes, British Columbia and Alberta, say, "Well, there are a couple things we could do. We could try to join the United States, and become the 51st and 52nd states. But what's so great about the United States? They've got troubles. Who needs all that? What we want to do is form a federation with the northwestern states: Oregon, Washington, and Alaska. If we do, we have the following: We have the basic ports for trade with Asia. We have oil, nuclear, lumber, fish, wheat, Boeing, and Microsoft. We immediately have the world's biggest trade surplus." It's got a lot going for it. PS: A decade ago California could only go up. Now, California can only go down. Everybody's very pessimistic about California. Immigration, crime, LA, environment, everybody's leaving, the tax is too high, the government's broke. You can come up with the list. AT: They've missed one thing. California is on the Pacific. PS: You think that's the big thing? AT: I think that's the big thing. The population of California is Asianizing. I think this is really healthy and really positive. I also think that you have a much more diverse economy there than you have in most other places. I think California is getting a bad rap from the mainstream - Eastern - media. PS: When I was at Shell Oil, we studied the future of a number of Latin American countries in 1985, shortly after the debt crisis. Mexico would not have been at the top of anyone's list of countries to successfully engage in economic reform. At that time, you might have said Brazil had a greater potential for it. (And you would have been wrong, if you had.) Mexico is now seen as one of the real modern success stories of successful economic reform. But the political system hasn't changed very much, the social costs are very high, and now NAFTA is at hand. Maybe. So, right now everybody has been very high on Mexico. Do we have an overwhelming and naive enthusiasm here as in China? Or is there something more? AT: I think there is something more there. It has to do with the military security of the American Southwest. Mexico has had a low level of internal terrorism and violence ever since the revolution in 1910. If there's civil war in Mexico, it's going to be in Los Angeles, San Diego, and Texas as well. It is in our national security to improve the Mexican economy in any way we can. It will save us not only lives, but billions. And for that reason, irrespective of the immediate short-term economic consequences of NAFTA, NAFTA is a good idea. The question is, how can you make it least painful to the American workers who are dislocated? How can you help the communities that might be hurt? And surely you ought to be concerned about the ecology. But there are larger, longer-term consequences that we should be thinking about. If we do go ahead with NAFTA, the idea that northern Mexico is just going to be maquiladoras is baloney. Instead we would be creating another quasi-nation between Los Angeles and Monterey with a culture of its own. We have been asked in Mexico, in China, in Chile, everywhere around the world, "Can we become third wave and still stay Mexican, Chinese, or whatever?" Our answer is, "You can have a unique culture, but it ain't gonna be the one you had before." You will be a Mexican of the future, not a Mexican of the past. The cultural reality that seems not very far off is 500 or 1,000 channels of television bringing in images Fiji or Kazakhstan, automatically translated into my own language, carrying along ideologies and religions that blow the mind, and that create in every country a configurative culture, in which elements have been adopted from elsewhere in the world. Tie that together with what my wife and I call microtrade and microcapital. That's an idea I'd like to expand on. All of the assumptions of the economic geniuses who attended the G-7 economic summit presuppose large- scale movements of bulk commodity products. They still think in terms of macro-trade. Niche Economics Some years ago after a dinner in Bogota, Colombia, our host offered us a fruit. It was delicious. He said, you know, this is only place in the whole world, here outside Bogota, where this is grown. You can't get this anywhere else. And it occurred to me: You can't supply the world with that fruit, but you could supply a suburb of Chicago. Why isn't it possible for microproducts - small-scale trade - to take place? The answer is that the cost of finding the market and connecting it to the product is very high, and that is a cost that computers and databases are going to drive down. PS: There is a food company in LA that does this - Frieda's. Frieda Caplan introduced kiwis to America, and her whole business is finding those little produce items around the world, the small niche produce, and finding a market here and there. They have very elaborate computer systems now for managing this whole process. AT: Okay. Now, multiply that to pharmaceuticals, food, products of all different kinds. To make that work you've got to drive down the cost of the money system. For the inefficiency of a money exchange system makes money very expensive, quite apart from interest. We need to create micro investment. Microcapital is what we call it. You should be able to link microcapital to microtrade to micromarkets to microtechnologies, and get a global economic system which is much more finely granulated than the coarse system that we now have. I spoke with a financier friend of mine. I complained: Look, if you want to invest or to lend money to a small company, you've got to do due diligence, you've got to find out if their books are kept in order, how likely is it that they're going to pay. What we have to do is find a system based on probability. He said, "We've already got that. It's called credit cards." There are simple mathematical probabilities that they take into account when they give credit. So, if you can extend credit to millions of people on credit cards, why can't you do that to millions of small enterprises all over America and the developing countries? There is a husband-and-wife team who run a wonderful organization on small computers out of their home called Trickle Up. Trickle Up makes microcapital available to developing countries in the form of US$50, to a village or to a family. They create a little tiny business in that village. The money is paid back. They've got over 100,000 such investments that they've made around the world. So, what I'm saying is, computers are going to drive down the cost of the money system. Computers are going to make possible microtrade, they're going to make possible microinvestments, and microcultures. The dangerous and difficult part of this is that it also makes possible micro-weaponry. Changes cannot happen without intense conflicts as power shifts in the world. PS: But now we come to paradox on a really fundamental level. The thing that makes all this possible is the increasing elaboration and integration of information networks. Okay? But the very consequence of that integration is precisely the kind of social and cultural fragmentation that you're suggesting. AT: Yes. It's so ironic. When I grew up, thinking about the future as a kid, I read Buck Rogers and the comic strips and Huxley and Orwell. But Huxley and Orwell pictured a world of massification. They were geniuses, but they extrapolated in linear fashion from industrialism. To them more technology meant more massification, more bureaucracy, more regimentation, and less individualization. All turned out to be wrong. PS: I work a lot in the computer industry. Right now there's a big fight over standards, over things not talking to each other, over the difficulties of integrating computer systems. If we are at the same moment fragmenting the culture, the basic belief systems, the aspirations, the dreams of people, at the very moment that we are depending upon the integration of systems to make that possible. . . . AT: There are two ways to integrate systems. One is to impose uniform standards. Which is what the big fights are all about. The other is, not to integrate, not to have integrative standards, but to have very smart adaptors. That's what automatic translation is, basically. You don't need everybody to speak the same language. What you need to have - as we have in human form - are translators and interpreters to cross that barrier. A French writer pointed out that there are two kinds of products. There are products that are stand-alone and products that are systemic - that is, they do not work unless something else is there. An automobile is systemic. You need highways and gas stations and so on. What's happening is, systemic products are multiplying. We have systems within systems within systems. Where you have that, you either need a standard or you need some kind of adaptor to make the connections possible. If we get cleverer about adaptors, then the insistence that everybody shares the same standard will be reduced. Bypassing Experts AT: I think the main failure of culture is the failure of imagination. It's very hard to think outside the boxes - cultural box, institutional box, political box, religious box - that we are all, everyone of us, imprisoned in. PS: So, How do you break out that box yourself? What strategies do you use? AT: Well, for one thing, we travel everywhere. Second, we try as much as possible to read outside our culture. If it's published in English in a foreign country, we want to read it. We try to meet interesting people. And we mistrust the experts when they talk about their own disciplines. There were some interesting Delphi studies that led us to believe that if you asked a panel of experts in a field when something was going to happen, they were much more conservative than a counter-group of experts from another field outside the topic because the outsiders were less tied up in the immediate problems. They could see the bigger picture. And I think that that is true. So, the most interesting things I hear about economics do not come from economists, they come from psychologists, or from geneticists. And the same thing would be true in reverse. The most interesting things economists say have little to do with economics. I believe that we're moving toward a work world of multiple careers, which means that we may eventually branch out after many years in one field. Instead of a lifetime of specialization in a single topic we shift to another. We may lose the benefits of deep specialization but we will gain the advantage of creative insight and analogy from one field to another. PS: Doesn't this go against your idea of everything going to niches? AT: Well, that's a good question. Because, of course, one of the issues of the information technologies that we have today is the question of serendipity. If you only get the information you start out looking for, you're going to be pretty stupid. So that is an issue worth really pondering. How do you get serendipitous information if you are sort of linearly driven, single-mindedly driven? PS: The publisher of The Oakland Tribune wanted to test custom newspapers delivered by fax, and I was offered one as a test customer. I said, "I'm worried about this problem of filters being too good." And he said, "No problem: We're going to put in a random generator and just pluck at random some articles every time that you didn't ask for. You're just going to get them - the Little League scores in Arkansas." Cross-linked Government AT: The place we need really imaginative new ideas is in conflict theory. That's true with respect to war and peace, but also it's true domestically. The real weakness throughout the country is the lack of conflict resolution methods other than litigation and guns. As you increase social diversity, you do two things simultaneously: You increase potential trade-offs, and also potential conflicts. The trade-off possibilities are so complex that the institutions that we rely on to make those, to broker the deals, are overwhelmed. One of the functions of a legislature is to negotiate compromises among various constituencies. Well, the constituencies today are so numerous, their demands are so complex, and the rate of change in their demands and in the constituencies is so high that nobody in Congress represents anybody anymore. They represent themselves. Because their constituency changes from day to day. And as a consequence, their ability to broker out differences to arrive at compromise is more limited than it was. Why are all of our institutions and systems suddenly in simultaneous crisis? Because they were all designed for the mass industrial society that treats people in large numbers rather than in smaller, more defined and more changeable groupings. Constitutional constraints make it impossible for them to adapt in order to serve small grouplets and to provide niche services. The real big crisis that faces this country is a constitutional crisis. In 1976 during the Bicentennial we wanted to get Americans thinking about a constitution for the 21st century. Rather than waiting for a constitutional crisis to strike because of some very narrow issue, such as abortion or tax limitation, we should be coming up with mock constitutions, and pilot constitutions of all kinds. PS: I said this in '76 too. AT: The original is 200 years old. Time to take another look. PS: But, you know, the opposition to this idea, the fear of opening it up is so great. . .I will say that I was very strongly in favor of this 20 years ago. But in the era of Pat Buchanan, I worry about it because Pat may get in charge of the Constitution and write me out! AT: Yes, exactly, exactly The fears are justified. But the question is, do you think we can get by without such a rewriting of the Constitution? How long can we go? Another 10, 20, 30, 50 years? We believe we're going to have a constitutional convention or constitutional crisis whether we like it or not. It is better therefore to anticipate it, and at least begin a kind of social process which involves large numbers of people writing mock constitutions for the future. PS: Why do you believe the crisis is inevitable? AT: Because the present tripartite structure doesn't work. We strongly believe in the separation of powers, but there are multiple ways to separate powers. The idea that they are separated into a legislature, a judiciary, and an executive is only one way of slicing it. You've got to ask yourself what-if questions. What are alternative ways of going about this? Americans seem to think that our system is the only imaginable system. We have argued that there are decisions being made in Tokyo that have a bigger impact on American life than decisions made on Capitol Hill. Therefore we demand seats in the Japanese Diet. But, by the same token, the Japanese would have a right to seats in the American Congress. We have promoted this idea of what we call "cross-national representation." Think about this in a larger sense. The European community is a dumb obsolete dodo, and has been from day one. When the Europeans began to put together the EC, nobody said, "What would a parliament of the 21st-century look like?" What they said is, "What would a good 18th-century parliament look like and let's create it " If you look at the EC model we have a dozen countries, and we create a superstate. At a time when every corporation in the world is trying to flatten the hierarchy, they are extending the hierarchy, adding a level of government. It disobeys what my wife, Heidi, calls the "Law of Congruence." The law says that there must be a congruence between how an economy is organized and how a government is organized. You can't have totally different organizational structures. If companies are becoming less bureaucratic and less hierarchical, there has to be, for an effective society, a parallel development in government. The Europeans are going in the absolutely opposite direction, adding a level of bureaucracy to the existing bureaucracy. The Eurocrats are trying to make Europe more hierarchical. We say if you put Americans into the Japanese legislature and Japanese into the American legislature, you're beginning to create a network. Why not conceive of an Asia-Pacific regional arrangement that is essentially based on a network model, instead of a hierarchical European model? It might take 20, 30 years to build this system. But it is a political model that fits a third-wave civilization. It is anti-hierarchical. Through long years of acquaintanceship with politicians in various parliaments and various political parties, we've come to the conclusion that some of them are very smart. But the institutions are dumb. And they are dumb because they're obsolete. PS: So how do we change? That's the real question. How do we get there from here? AT: Probably by waiting for some horrible crisis. We delude ourselves to assume that it will change in a rational fashion. There's nothing rational about it. I think that it doesn't matter how smart the President is. We who are intellectuals tend to fall in love with politicians who can speak our language. I find it attractive that Gore can talk about national information infrastructure or that he speaks about reinventing government and so forth and so on, but I've concluded two things. Where politicians get their money and where they get their votes will determine what they do irrespective of what they say. PS: So are you saying that there has to be a large constituency for change first? AT: For the United States to make a swift, smart, and smooth transition into the wealth creation of the knowledge-based third wave there has to be a third-wave constituency in America. And the place that has to come from is the knowledge workers and from the third-wave corporations and industries. They've got money, they've got brains. But the core of the "brain-force economy" is politically retarded - it has a low political IQ and has not achieved political self-consciousness. The old smokestack barons and trade union leaders who dominated during the second wave are still running rings around you guys in Washington. That's why Washington passes an "infrastructure" bill that allocates 100 items as much to fixing bridges and potholes as to speeding the creation of the electronic infrastructure. Even the knowledge systems of society are designed to support the old industrial elites and structures. For example, accounting systems are biased against the information and services industries. The financial accounting board which sets the standards, all it does is devalue the intangibles and overvalue the tangibles. As a consequence it puts a brake on the most rapidly developing, fastest growing, most important sectors of the American economy. And they help support the dying industries. How do you raise capital when you don't have a steel mill? PS: Exactly. I run a knowledge company but the knowledge in my workers does not count at the bank. AT: Knowledge is the ultimate substitute. If you have the right knowledge, you can substitute it for all the other factors of production. You reduce the amount of labor, capital, energy, raw materials, and space you need in the warehouse. So knowledge is not only a factor of production, it's the factor of production. And non of the powers that be, in Washington and in the industrial centers of our country, seem yet to fully comprehend it. It scares them. It's threatening. PS: Well, that's why you reach this conclusion that it almost inevitably takes some kind of crisis. The one hope for the future is that, as the good fortune in Russia shows, the crisis can be mostly nonviolent! AT: Listen, if you want to look at amazing things, the human race has built 50,000 to 60,000 nuclear weapons and since Nagasaki hasn't fired one in anger. Some survival instinct has kept the finger off the button. The purpose of our new book, War and Anti-War, is to shift our strategies for war - and for peace - to a third-wave basis. If we don't end the age of mass destruction, along with the age of industrial mass production, that amazing record could be broken. ------------------------------------------------------------------------ WIRED Online Copyright Notice Copyright 1993,4 Wired Ventures USA Ltd. All rights reserved. This article may be redistributed provided that the article and this notice remain intact. This article may not under any circumstances be resold or redistributed for compensation of any kind without prior written permission from Wired Ventures, Ltd. 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