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CHAPTER 1SPEARHEADING WEALTH This book is about the future of wealth, visible and invisible--a revolutionary form of wealth that will redesign our lives, our companies and the world in the years now speeding toward us. To explain what that means, the pages ahead will deal with everything from family life and jobs to time pressures and the mounting complexity of everyday life. They will grapple with truth, lies, markets and money. They will cast surprising light on the collision of change and anti-change in the world around us--and inside ourselves. Today's wealth revolution will unlock countless opportunities and new life trajectories, not only for creative business entrepreneurs but for social, cultural and educational entrepreneurs as well. It will open fresh possibilities for slashing poverty both at home and around the globe. But it will accompany this invitation to a glowing future with a warning: Risks are not merely multiplying but escalating. The future is not for the fainthearted. Today e-mails and blogs bombard us. EBay makes marketers of us all. Corporate megascandals burst into the headlines. Drugs are launched to help cure breast cancer, multiple sclerosis and dozens of different diseases. Other drugs are belatedly pronounced too dangerous and yanked off the market. Robots go to Mars and land with exquisite precision. But computers, software, cell phones and networks constantly fail. Warming warms. Fuel cells beckon. Genes and stem cells trigger bitter controversy. Nano is the new techno-grail. Simultaneously, criminal street gangs from Los Angeles roam across Central America and build a quasi-army, and thirteen-year-old aspiring terrorists depart France for the Middle East. In London, Prince Harry dresses as a Nazi even as anti-Semitism re-rears its disgusting head. AIDS wipes out a generation in Africa, while strange new diseases in Asia threaten to sweep across the world. To escape--or at least forget--what appears like chaos, millions turn to television, where "reality TV" fakes reality. Thousands form "flash mobs" and gather to beat one another with pillows. Elsewhere, players of online games pay thousands of dollars in real money for virtual swords that their virtual selves can use to win virtual castles or maidens. Irreality spreads. More important, institutions that once lent coherence, order and stability to society--schools, hospitals, families, courts, regulatory agencies, trade unions--flail about in crisis. And it is against this background that America's trade deficit soars to unprecedented levels. The national budget staggers drunkenly. The world's finance ministers wonder out loud if they should risk triggering a global depression by recalling the billions they have lent to Washington. Europe celebrates itself for expanding the European Union--but German unemployment hits a fifty-year high and the French and Dutch overwhelmingly reject the proposed E.U. constitution. Meanwhile, China, we're told--again and again--is certain to become the next superpower. The combination of economic high-wire acts and institutional failures leaves individuals back home face-to-face with potentially devastating personal problems. They question if they will ever receive the pensions for which they have worked, or whether they can afford the rocketing costs of gasoline and health care. They agonize about appalling schools. They worry about whether crime, drugs and an anything-goes morality will destroy civil life. How, everyone wants to know, will this seeming chaos affect our wallets? Will we even have a wallet?FAD OF THE MONTH Not only do ordinary mortals find it hard to answer these questions, so do the experts. Corporate CEOs succeed one another like passengers pushing through a rush-hour turnstile: merging, divesting, kowtowing to the stock market; pursuing core competence one month, synergy the next, the latest management fad a month later. They study the most recent economic forecasts, but many economists themselves are befuddled as they wander around in a cemetery of dead ideas. To decode this new world we need to cut through the chatter of rear-window economists and business pundits who prattle about "business fundamentals." We need to probe below the obsolete obvious. In these pages, therefore, we will focus on the unexplored "deep fundamentals" on which the so-called fundamentals themselves depend. Once we do, things look different, less crazy, and previously unnoticed opportunities pop out of the shadows. Chaos, it turns out, is only part of the story. And chaos itself generates new ideas. Tomorrow's economy, for example, will present significant business opportunities in fields like hyper-agriculture, neurostimulation, customized health care, nanoceuticals, bizarre new energy sources, streaming payment systems, smart transportation, flash markets, new forms of education, non-lethal weapons, desktop manufacturing, programmable money, risk management, privacy-invasion sensors that tell us when we're being observed--indeed, sensors of all kinds--plus a bewildering myriad of other goods, services and experiences. We can't be sure when these will or will not turn profitable or how they will converge. But understanding the deep fundamentals will reveal the existence, even now, of new needs and previously unidentified industries and sectors--a huge "synchronization industry," for example, and a "loneliness industry." To forecast the future of wealth, we also need to look not just at the work we do for money but at the unpaid work all of us also do as "prosumers." (We'll explain later, but it might shock most people to learn just how much unpaid output we all produce every day.) We'll look, as well, at the invisible "third job" that many of us hold without even knowing it. Because prosuming is set to explode, the future of the money economy can no longer be understood, let alone forecast, apart from that of the prosumer economy. The two, in fact, are inseparable. Together they form a wealth system. And once we understand this--and the channels by which the two feed each other--we gain piercing insights into our private lives now and into the future.LOOSENED CONSTRAINTS New wealth systems don't come often, and they don't travel alone. Each carries with it a new way of life, a civilization. Not just new business structures but new family formats; new kinds of music and art; new foods, fashions and standards of physical beauty; new values; and new attitudes toward religion and personal freedom--all of which interact with and shape the emerging new wealth system. America today is spearheading just such a new civilization built around a revolutionary way of creating wealth. For better and worse, billions of lives around the world are already being changed by this revolution. Nations and whole regions of the globe are rising or declining as they feel its impact. Today millions of people around the world dislike or even hate America. Some fanatics wish to incinerate the United States and everyone in it. The reasons they give range from its Middle East policies and its refusal to sign various international treaties to what they regard as its imperial ambitions. Yet even if peace reigned in the Middle East, even if all the world's terrorists turned pacifist and democracies flowered like dandelions, the rest of the world would still view the United States with trepidation at best. This is because the new wealth system the United States is developing, by its very nature, threatens old, embedded financial and political interests around the world. Moreover, in the United States the rise of the new wealth system has been accompanied by controversial changes in the roles of women, racial and ethnic minorities, gays and other groups. Because America's emergent culture promotes greater individuality, it is seen as a threat to community. Worse yet, because it has loosened some of the traditional sexual, moral, political, religious and lifestyle constraints placed on the individual during earlier economic eras, it is seen as dangerously seducing the young into nihilism, license and decadence. In short, the combination of revolutionary wealth and the social and cultural changes so far associated with it may have more to do with global anti-Americanism than the usual litany of reasons cited by the media. The revolutionary wealth system, however, as we'll see, is no longer an American monopoly. Other nations are racing to catch up. And it is not clear how long the United States will retain its lead.GUITARS AND ANTI-HEROES The roots of revolutionary wealth can be traced to 1956--the year when, for the first time, white-collar and service workers outnumbered blue-collar workers in the United States. This sea change in the composition of the labor force was arguably the kickoff point for the transition from an industrial economy based on manual labor to one based on knowledge or mind work. The knowledge-based wealth system is still called the "new economy"--and for convenience we will at times continue to call it that here--but the first computers, still huge and expensive, actually were migrating from government offices into the business world by the mid-1950s. And Princeton economist Fritz Machlup, as early as 1962, showed that in the 1950s knowledge production in the United States was already growing faster than the gross national product. The 1950s are often pictured as a deadly dull decade. But on October 4, 1957, Russia launched Sputnik, the first artificial satellite to orbit the earth, triggering a great space race with the United States that radically accelerated the development of systems theory, information science, software programming and training in project-management skills. It also promoted an emphasis on science and mathematics in U.S. schools. All this began pumping new, wealth-relevant knowledge into the economy. Culture and politics began to change as well. Just as the industrial revolution centuries ago brought new ideas, art forms, values and political movements, along with new technology, so did the knowledge economy in the United States. Thus the 1950s saw the universalization of television and the introduction of Elvis Presley, the Fender Stratocaster electric guitar, and rock 'n' roll. Hollywood shifted from heroes and happy endings to surly anti-heroes played by actors like James Dean and Marlon Brando. The literary Beats and their hippie followers glorified "doing your own thing"--a precision attack on the conformity valued in industrial mass societies. The 1960s were marked by Vietnam War protests and the rise of movements for civil rights, gay rights and equality for women. By 1966 the National Organization for Women was pointing out that "today's technology has . . . virtually eliminated the quality of muscular strength as a criterion for filling most jobs, while intensifying American industry's need for creative intelligence." NOW demanded the right of women to participate on fair terms in the "revolution created by automation" and the economy generally. While the world's media focused on these dramatic events, almost no attention was paid to the work of top scientists, funded by the Pentagon, on an obscure new technology called ARPANET--a forerunner of what became the world-changing Internet. Given this history, the common belief that the "new" economy was the product of a 1990s stock-market bubble, and that it is going to go away, is ridiculous.GIGGLE NEWS History records endless examples of "revolutions" that replaced old technologies and even governments without significantly altering society itself and the people in it. By contrast, real revolutions replace institutions as well as technologies. And they do more: They break down and reorganize what social psychologists call the role structure of society. Today traditional roles are changing at high speed in many countries transitioning to knowledge economies. The roles of husbands and wives . . . parents and children . . . professors and students . . . bosses and workers . . . in-laws and activists, executives and team leaders all have psychological as well as economic implications. At issue are not merely a person's tasks or functions but the social expectations that come with them. On and off the job, the result is rising ambiguity, high uncertainty, complexity and conflict as tasks and titles are continuously renegotiated. We see stress and burnout as the roles of doctors and nurse practitioners, lawyers and paralegals, police and community workers are challenged and redefined to a degree not seen since the advent of the industrial revolution. Revolutions also smash boundaries. Industrial society set a clear border between life at home and life on the job. Today, for the growing millions who work from home, the line is blurred. Even who works for whom is becoming unclear. Robert Reich, former U.S. secretary of labor, points out that a significant part of the labor force consists of independent contractors, free agents and others who work in company A but are actually employees of company B. "In a few years," says Reich, "a company may be best defined by who has access to what data and who gets what portion of a particular stream of revenues over what period of time. There may be no 'employees' at all, strictly speaking." Academic boundaries are eroding, too. Against enormous resistance, more and more work on the campus is becoming transdisciplinary. In pop music, borderlines between grime, garage, rock, Eastern, hip-hop, techno, retro, disco, big band, Tejano and a variety of other genres disappear in "fusion" and "hybridization." Consumers turn into producers by remixing or "sampling" sounds from different bands, different instruments and different vocals into "mash-ups"--the musical equivalent of collages. On TV in the United States, the once-clear line between news and entertainment is being erased as "giggle anchors" joke between headlines and studio audiences applaud. Advertisers insert their messages and products into the story lines of dramas or sitcoms, thus vaporizing the border between entertainment and marketing. Even sexual boundaries are no longer fixed, as homosexuality and bisexuality blast out of the closet and the small population of transsexuals grows. Just ask Riki Anne Wilchins, a Wall Street computer expert who also happens to be what The New York Times described as a "post-operative male-to-female transsexual." Wilchin heads GenderPAC, a group that lobbies Washington on issues pertaining to gender rights and argues that categorizing people as "he" or "she" is itself oppressive, force-fitting into one of those two roles all those who more accurately fit into neither. Not all the new roles and rights will survive, as still more economic, technological and social changes bombard us. But anyone who underestimates the revolutionary character of today's changes is living an illusion. The world is being transformed, dramatically and irrevocably.