Free Markets, Bumpy Rides, and Necessary Sacrifice

Tom Peters

Of my 422 columns to date, one, on the value of thank-you notes, has garnered several times more letters than any other. Part of me likes that. I devoutly believe the little touches matter in relationships with spouses, children, significant others—and suppliers, distributors and customers. In fact, I’ve spent much of the last decade-and-a-half trying to get busy plumbers, physicians and semiconductor-makers to pay as much attention to these very human actions as to grand strategy. (Which often isn’t very grand if practitioners neglect the small stuff that makes all the difference at stellar concerns like Disney.)

On the other hand, numerous companies that know better have done belly flops of late. They sign off on “close to the customer.” And “total quality.” They croon about worker empowerment. But in practice they fall miserably short, usually choking on bureaucracy.

The past 15 years in business have had their ugly side, no doubt. GM, Sears, AT&T and IBM have been caught with, literally, hundreds of thousands of excess bureaucrats! Thence millions of good folks at big firms have hit the bricks. Marriages have been destroyed in the process. There’ve been suicides, too. Thriving communities have become ghost towns. Corporate and public policy responses to these castoffs have often been inadequate.

And yet we needed the bitter medicine. Still do. Make no mistake, the American economy is far more competitive today than it was 15 years ago: We’ve shed a lot of blood, but many large firms are now close to fighting trim; and we continue to spawn more than our share of entrepreneurs, from software and biotech to speedy parcel service and waste disposal.

While we have miles to go, it now looks like the Germans, Japanese, Koreans, and Swiss may have to experience, in the mid-’90s, the “rightsizing” trauma we’ve endured. I don’t envy them!

I wrote about this issue a little over a month ago, addressing some of the recent upheavals at once invincible, now bedraggled, IBM. I directly acknowledged the terror for IBM workers and their families; but I also added that we’d be better off with a healthy, 200,000-person IBM than a sickly, 400,000-person jellyfish of an IBM. With uncharacteristic xenophobia, I cheered the fact that sprightly U.S. companies such as Dell and Lotus dethroned the heavyweight champ—not Asian or European outfits.

Well, I guess my xenophobia and caveat about IBM’s job cuts didn’t go far enough, at least for one reader. “When you’re spouting free-market system … propaganda,” he wrote, “you’re sickening.” (He allowed that I was “great” when I stuck to thank-you notes! He called the IBM layoffs a “catastrophe.” Then back to me (who “bordered on the insane”): He hoped I’d “choke” on my words while “riding around in your limousine.”

Forget that the limousine on my Vermont farm is an eight-year-old GMC Jimmy. (Falling apart after 50,000 miles, but lovable as a favorite uncle.) The letter made me nervous—for Bill Clinton, and for thee and me.

Nineteen million voters eventually flocked to Ross Perot’s straight talk and calls for sacrifice. But if we can’t countenance the trimming of unspeakable blubber at IBM or Sears, are we really ready for sacrifice? A consumption tax or energy tax with bite Taxes on healthcare benefits? Significant means tests for Social Security? I fear not.

We scream about competitiveness, but the worst chapter in a long recovery may be coming to a close. There will be a lot more layoffs. Huge firms are not likely to be hiring again any time soon. And lifetime employment is effectively gone. (Good riddance, I say. Lifetime employment has usually gone hand in glove with cloying paternalism and mindless loyalty.)

In fact, the dislocation of the past 15 years approaches that of the mass migration of working people from the farm to the city 150 years ago. (This time it’s from Detroit and Green Bay to Austin and Portland.) But born of the suffering wrought by a messy but effective market economy there’s the glimmer of a brave, new, globally competitive American economy. And also thanks to that market economy, we’ve traveled farther, faster than others.

Is my beloved market economy perfect, dear writer who wishes I had limo tracks crossing my back? Of course not! (And besides, United States is tens of thousands of pages of federal regulations farther away from a pure market economy every year—whether a Reagan or a Clinton hangs his hat at 1600 Pennsylvania Avenue.)

But that market economy, warts and all, beats any alternative by a mile. No, I don’t envy folks whose lives are turned upside down by market-induced change in Moscow, Warsaw, Prague, or Jamestown, New York. But mostly I hope, with accompanying churn, strain, and pain, that we keep creating jobs—and limousine-or Harley-riding millionaires like the thousands, mostly age 35 and below, Bill Gates has spawned at Microsoft.