T HE

FUTURE
OF
S UCCESS
Working and Living in the New Economy

RO B E RT B . R E I C H

  
     , . S
  R
 FIRST VINTAGE BOOKS EDITION, JANUARY 

Copyright ©  by Robert B. Reich

All rights reserved under International and Pan-American Copyright Conventions.

Published in the United States by Vintage Books, a division of Random House, Inc.,
New York, and simultaneously in Canada by Random House of Canada Limited,
Toronto. Originally published in hardcover in the United States by Alfred A. Knopf,
a division of Random House, Inc., New York, in . Published in this
Vintage edition with a revised introduction.

Vintage and colophon are registered trademarks of Random House, Inc.

The Library of Congress has cataloged the Knopf edition as follows:

The future of success / Robert B. Reich.—1st ed.
p. cm.
Includes bibliographical references and index.
ISBN --- (alk. paper)
. Work . Information society—United States.
. Quality of work life—United States.
. Work and family—United States.
. Title.
HD..R 
.'—dc -

Vintage ISBN: ---

Book design by Robert C. Olsson

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Printed in the United States of America

R          
 Introduction
to the Vintage Edition

T his book is about making a living and making a life, and why it not
only seems but actually is getting harder to do both. It’s also about
the choices we face, both as individuals and as members of a society, in
pursuit of a better and more enduring balance.
The world we now inhabit feels precarious. A horrifying terrorist
attack demonstrates we can never be secure. It undermines our confi-
dence about what’s permanent and predictable. Personal worries that
had been large before the attack suddenly seem trivial.
At the same time, the economy is far more turbulent than it was just
a few years ago. Money moves faster. New businesses are created, they
flourish, and then are gone in a blink. Jobs are here, then they’re not.
New ideas capture the imagination and are instantly replaced by newer
ones. There’s more speculative frenzy leading to bubbles that quickly
expand and then just as suddenly pop, like the dot-coms that litter Silicon
Valley and other beleaguered locales whose inhabitants a short time
ago dreamed of instant riches. Ideas, gossip, buzz, hot money, “new
new things,” celebrity, and crazes of all kinds swirl around the world,
gathering momentum along the way, until they dissipate, like hurri-
canes moving ashore.
As I write this, America is trying to regain a semblance of normality
after the shock of an assault by terrorists on an unprecedented scale.
Meanwhile, the economy is sputtering. By the time you read this, the
economy may be roaring back with an exuberance that some will term
irrational because that boom, too, will move sharply upwards before it S
plunges sharply down. Yet to describe these mood swings as irrational R
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    
misses an essential truth: We are dealing with a new kind of economy,
founded on quick innovations and on surges in demand. Investors and
consumers aren’t irrational because they engage in more heated rounds
of speculation than before, or move their money faster, or exercise
wider choice, or lurch from one thing to another at whirlwind speeds.
The new economy invites all this.
The turbulence is increasing. In order to survive, every major busi-
ness is trying to shift the risks of uncertainty from itself to others. One
shift is to smaller subcontractors. The other is to employees. When
business is good, employees feel wealthier than before—their stock
options, commissions, bonuses, overtime pay, billable hours, and
profit-sharing plans all swell. When business is bad they feel relatively
poorer, because all of these shrink, and some employees lose jobs per-
manently. In these ways, every up-tick or down-tick in profits quickly
disseminates outward to large numbers of people.
The same ups and downs ricochet globally. One nation’s exports
and imports surge or plummet depending on upheavals in a major
trading partner. Financial capital flees from one place to another
depending on which currencies are rising or falling or where profits are
being made or lost. Swings in the balance sheets of foreign subsidiaries
bring the volatility even more directly home.
Whether this increasing turbulence is justified by higher rates of
productivity, faster growth, and greater flexibility in the economy as a
whole has been the subject of much debate. But the larger issue has
eluded consideration: Whether, on balance, this new economy enables
us to have better lives. A strong economy is not, after all, an end in
itself. Likewise, a society does not exist in order to strengthen its econ-
omy. An economy should be judged by how well it supports and
enhances the deepest values of a society.
The question is how to benefit from the new economy while at the
same time preserving or enhancing values we cherish, such as peace of
mind, family, and community, all of which are now imperiled. Perhaps
a temporary downturn is conducive to such reflection. Not long ago,
when the economy was steaming ahead, Wall Street promised that
almost anyone could get rich quick. One notable advertisement fea-
tured a happy truck driver who bought a South Pacific island with the
proceeds of his capital gains. After the economy soured, the Street
turned to more basic virtues. A recent ad for Merrill Lynch features a
R man who is fishing. “I’m tired of going up and down, up and down,” he

 Introduction
says wearily. Supposedly, with Merrill Lynch guarding his savings
against the riskiness of the market, he can lead “a simpler life.”
In fact, the deepest anxieties of this age are not solely economic. They
concern the erosion of our families, the fragmenting of our communities,
and the challenge of keeping our own integrity intact. These anxieties are
no less part and parcel of the emerging economy than are its enormous
benefits: the wealth, the innovation, the new chances and choices.
Terrorism has brought a new level of anxiety. Witnessing an act of
mass murder and knowing such a thing can happen again is causing
many to reassess their priorities. Family, friendship, and community
seem closer to the core of our lives than career, wealth, and status.
My goal in these pages is to invite a debate that’s larger than the admo-
nition to “slow down and get a life.” To view the struggle for a better bal-
ance between what we do for a living and what we do with our lives only
as a personal one, waged in private, is to ignore the larger trends that are
tipping the scales. It’s not just a personal choice; not simply a matter of
personal balance. It’s also a question of how the economy should run,
how work within it should be organized and rewarded. It’s a question of
how to create a more humane economy and a more balanced society.

D   tumult, most of us are living better in material

terms than we (or our parents) did a quarter century ago, around the time
when some of the technologies on which the new economy is based—
the microchip, the personal computer, the Internet—first emerged. But
here’s the central puzzle: You’d think, then, it would be easier, not harder,
to attend to the parts of our lives that exist outside paid work. Yet by most
measures we are now working longer and more frantically than before,
and the time and energy left for our non-working lives are evaporating.
Why should this be? If what we do for pay is earning us a decent liv-
ing, why are our personal lives growing poorer? Futurists of the 1950s
and 1960s pondered what we’d do with all the free time that technology
surely would allow us in the next century. Even the British economist
John Maynard Keynes, writing in 1930, during the darkest days of the
Great Depression, cheerfully predicted that in a hundred years England
would be eight times better off economically, so that its people would
choose to work only fifteen hours a week. Their material needs satisfied,
they would see the love of money as “one of those semi-criminal, semi- S
pathological propensities” that affluence had cured. Keynes probably will R
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    
be correct about most people being far better off materially in 2030, but
incorrect about their working fewer hours, at least if Britain keeps going
the way of the United States, and we keep going the way we have been.
Of course, not everyone is far better off materially than a quarter
century ago. Some aren’t better off at all. And many people are work-
ing harder because they have to. But here’s the strange thing: The
richer you are, the more likely it is that you are putting in long and har-
ried hours at work, even obsessing about it when you’re not doing it. A
frenzied work life may or may not make you better off, but being better
off definitely seems to carry with it more frenzy.
Consider some counterintuitive statistics: In America, college grad-
uates earn on average 70 to 80 percent more than do people with only a
high-school diploma, which is twice the premium accorded to a college
degree twenty-five years ago. So you might suppose that people who
have graduated from college would feel they have to work somewhat
less intensely than high-school grads. You’d be wrong, of course. It’s
the college-degree holders who are working the longer hours. And
maybe you’d also think that, with the college premium having dou-
bled, college students themselves would be somewhat less concerned
about being well-off financially than they were twenty-five or thirty
years ago. But you’d be wrong about that, too. Surveys show they’re far
more focused on financial success than ever before.1
What’s happened? Have college grads become greedier, more
obsessed by money? Maybe, but there’s no good reason to assume so.
Has our national character changed in just a few decades? It seems
unlikely; the character of a people doesn’t alter so quickly.
The typical American works 350 more hours a year than the typical
European, more hours even than the notoriously industrious Japanese.
You might then suppose that more Americans would prefer to work a
bit less, sacrificing some earnings. But only 8 percent of them say they
would prefer fewer hours of work for less pay, compared with 38 per-
cent of Germans, 30 percent of Japanese, and 30 percent of Britons.
Do we have a workaholic gene that the citizens of other advanced
nations lack? Or is work so much more satisfying and enjoyable here?
Both seem doubtful. We didn’t used to work that much harder than
they did, decades ago. Why have we started to?
We hear a rising chorus of American voices resolving to slow down.
Yet more of us seem to be speeding up. We say with ever more vehe-
R mence that we value family. So why are our families shrinking and fam-

 Introduction
ily ties fraying—fewer children or no children, fewer marriages, more
temporary living arrangements, more subcontracting of family func-
tions to food preparers, therapists, counselors, and child-care givers?
We talk more passionately than ever about the virtues of “commu-
nity.” And yet our communities are fragmenting into enclaves filled
with people who earn similar incomes—the wealthier, walled off and
gated; the poorer, isolated and ignored.
Are we engaged in mass hypocrisy? Mass delusion? Probably neither.
Most Americans seem genuinely to be seeking more balanced lives.
The problem is that balance between making a living and making a life
is becoming harder to pull off because the logic of the new economy
dictates that more attention be paid to work and less to personal life.
Here is my argument, in brief:
The emerging economy—turbulence and all—is offering unprece-
dented opportunities, an ever-expanding choice of terrific deals, good
products, excellent long-term investments, and great jobs for people
with the right talents and skills. Never before in human history have so
many had access to so much so easily.
Technology is the motor. In communications, transportation, and
information-processing, the new technologies that gained momentum
in the 1980s and 1990s are now racing ahead at blinding speed. They are
making it easier to find and get better deals from anywhere and allowing
us to switch instantly to even better ones. These technologies are radi-
cally sharpening competition among sellers, which in turn is provoking a
staggering wave of innovation. In order to survive, all organizations
must dramatically and continuously improve—cutting costs, adding
value, creating new products. The result of this tumult is higher produc-
tivity—better, faster, cheaper products and services of every description.
Economically, measured over the long term, all of this is to our great
and unequivocal benefit. But what it means for the rest of our lives—
the parts that depend on firm relationships, continuity, and stability—is
acutely problematic. There’s no diabolical plot here, no trap cunningly
devised by evil corporations and greedy capitalists. It’s a matter of
straightforward logic.
The easier it is for us as buyers to switch to something better, the
harder we as sellers have to scramble in order to keep every customer,
hold every client, seize every opportunity, get every contract. As a
result, our lives are more and more frenzied. S
The faster the economy changes—with new innovations and oppor- R
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    
tunities engendering faster switches by customers and investors in
response—the harder it is for people to be confident of what any of us
will earn next year or even next month, what they will be doing, where
they will be doing it. As a result, our lives are less predictable.
The more intense the competition to offer better products and serv-
ices, the greater the demand for people with insights and ideas about
how to do so. And because the demand for such people is growing
faster than the supply, their earnings are pushed upward. Yet the same
competition is pushing downward the pay of people doing routine
work that can be done faster and cheaper by hardware and software, or
by workers elsewhere around the world. As a result, disparities in earn-
ings are growing steadily larger.
Finally, the wider the choices and easier the switches, the less diffi-
cult it is for people to link up with others who are just as well educated,
wealthy, and healthy as they are—within residential communities, busi-
nesses, schools, universities, and insurance groups. And the easier it is
for them to exclude the slower, less educated, poorer, sicker, or other-
wise more disadvantaged, all of whom have greater needs. As a result,
our society is becoming more fragmented.
In short, the rewards of the new economy are coming at the price of
lives that are more frenzied, less secure, more economically divergent,
more socially stratified. As buyers and investors switch ever more easily
to better deals, all of us have little choice but to work harder to attract
them. As our earnings become less predictable, we leap at every chance
to make hay while the sun shines. As the stakes rise—toward greater
wealth or relative poverty—we’ll do whatever we can to be in the win-
ner’s circle and to get our children safely there as well.
For all these reasons, most of us are working harder and more fran-
tically than we did decades ago when these trends were just beginning,
and than do citizens of other modern nations where these trends are
not as far along.
The price may be worth it. The terrific deals are benefiting all of us
in myriad ways. But even if the price is acceptable today, will it still be
worth it in the future as the stakes continue to rise?

I  from personal experience, and conviction. A few years ago I had
a job that consumed me. I wasn’t addicted to it—“addiction” suggests
R an irrational attachment, slightly masochistic, compulsive. My prob-

 Introduction
lem was that I loved my job and couldn’t get enough of it. Being a mem-
ber of the President’s cabinet was better than any other job I’d ever had.
In the morning, I couldn’t wait to get to the office. At night, I left it reluc-
tantly. Even when I was at home, part of my mind remained at work.
Not surprisingly, all other parts of my life shriveled into a dried
raisin. I lost touch with my family, seeing little of my wife or my two
sons. I lost contact with old friends. I even began to lose contact with
myself—every aspect of myself other than what the job required. Then
one evening I phoned home to tell the boys I wouldn’t make it back in
time to say good night. I’d already missed five bedtimes in a row. Sam,
the younger of the two, said that was O.K., but asked me to wake him
up whenever I got home. I explained that I’d be back so late that he
would have gone to sleep long before; it was probably better if I saw
him the next morning. But he insisted. I asked him why. He said he just
wanted to know I was there, at home. To this day, I can’t explain pre-
cisely what happened to me at that moment. Yet I suddenly knew I had
to leave my job.
After I announced my resignation, I received a number of letters.
Most were sympathetic, but a few of my correspondents were angry.
They said my quitting sent a terrible message; it suggested that a bal-
anced life was not compatible with a high-powered job. Many women
on the fast track were already battling a culture that told them they
were sacrificing too much—and here I was, they said, essentially telling
people the same thing. Others complained that while it was easy for me
to leave my job and find another one that paid about as well while giv-
ing me more room for the rest of my life, they didn’t have that choice.
They had to work long hours, or the rent wouldn’t get paid and there
would be no food on the table. So I was sending the wrong message to
people like them, too. Still others wrote to inform me indignantly that
I shouldn’t think myself virtuous. Hard work was virtuous, abandon-
ing an important job to spend more time with my family was not.
Perhaps I should have expected that my career decision would carry
symbolic weight—I had, after all, been the Secretary of Labor. In fact,
I’d had no intention whatsoever of sending a message about how other
people should lead their lives. Certainly I didn’t think there was any-
thing virtuous about the choice I’d made. But until that time I had been
making a different choice, an implicit one, without acknowledging
it. That was the problem. The wake-up call my son requested was a S
wake-up call for me to make an explicit choice, and make it consciously. R
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    
The experience made me notice a lot of things I hadn’t seen before,
even though I’d spent most of my adult life examining work and the
economy. It focused my attention on the struggles most of us are hav-
ing over paid work and the rest of our lives—men as well as women,
young people setting out on their careers, middle-aged people who in
years past would have already resolved these matters—including choices
that sometimes are posed starkly, but more often are subtle and appear
in various guises. And it caused me to want to put together what I’ve
observed about the large-scale changes occurring in the global econ-
omy with these small-scale personal dramas. This book is the result.
There is, undeniably, much to celebrate about the new economy.
Despite its turbulence and uncertainties, American capitalism is tri-
umphant all over the world, and with good reason. Neo-Luddites who
claim that advancing technologies will eliminate jobs and relegate most
of us to poverty are wrong, even silly. Isolationists and xenophobes
who want to put up the gates and reduce trade and immigration are
misguided, often dangerously so. Paranoid populists who say global
corporations and international capitalists are conspiring against the
rest of us are deluded, possibly hallucinating. We—you and I and most
Americans—are benefiting mightily from the new economy. Despite
the ups and downs, we continue to reap the gains of its new inventions,
its lower prices, and its fierce competition.
And yet . . . As wondrous as the new economy is, its volatility and
attendant insecurities are profoundly affecting the rest of our lives—
aspects of our family, our friendships, our communities, ourselves.
These losses closely parallel the benefits we’re gaining. In an important
sense, they are two sides of the same coin. And both the gains and the
losses are likely to increase in the years ahead. Working ever harder in
order to compete within a system where competition is growing
fiercer; selling ourselves with increasing determination within a system
that’s turning almost everyone into a self-promoter; sorting by wealth,
education, and health in a system that’s making it ever easier to sort—
these phenomena are self-propelling. The more people join in, the
more imbalanced the situation becomes, and the harder it becomes for
any individual to choose a different path.
In the pages ahead, I explore these trends and their implications in
detail. Part One of the book is about the new work. In it, I explain how
new technologies are changing the way work is organized and rewarded.
R Part Two is about the new life. There, I explore the consequences of

 Introduction to the Vintage Edition
the new work for ourselves, our families, and our communities. Part
Three is about the personal and social choices all of this implies.

The trends I discuss are powerful indeed—but they are not irreversible,
or at least not unalterable. We can, if we wish, reassess our standard meas-
ure of success. We can affirm that our life’s worth isn’t synonymous with
our net worth; that the quality of our society is different from our gross
national product. We can alter priorities suddenly jolted in the face of
mass tragedy, such as a terrorist assault, and acknowledge that relation-
ships with family, friends, and community give life its core meaning.
We can, if we want, choose fuller and more balanced lives, and we can
create a more balanced society. It is time for us to do so.

S
R
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