Rage Against the Political Machine

This is the month when pundits and politicians are liplocked to network microphones. Republicans gather in San Diego. Democrats convene in Chicago. Both sides wave signs, wear silly hats, talk through boring speeches, drink bartenders to their knees, and grind out their mechanical nominations. [The men and women creating the new economy won't be watching.]

After the conventions, Bob Dole and Bill Clinton will continue to declare that Americans face a crucial choice. "The differences are profound and fundamental," says Dole. "We now have two very different visions of change before the American people," says Clinton. [The men and women creating the new economy aren't buying it.] "Dole is ossified in his thinking," says Ralph Miller, president and CEO of APX International, an advanced- engineering company that designs prototypes for auto companies around the world. "He's General Motors 30 years ago. Clinton is incredibly bright but totally misdirected and ineffective." Scott McNealy, president and CEO of Sun Microsystems, is even harsher: "It's like one particle of dust touching another particle of dust in the universe. That's the choice we have."

But there is another election -- unofficial and powerful -- taking shape in American business. It is, in many ways, the real election: a debate among business leaders at the vanguard of economic change about the meaning for America of the forces reshaping business. It is an election to define the political order of the next century and the next economy.

This all-business debate doesn't separate along traditional dividing lines. It isn't about Democrats vs. Republicans. "Nobody other than politicians can truly describe themselves as Democrats or Republicans anymore," says Rick Inatome, the chairman of Inacom Corp., a $2.2 billion wholesaler of microcomputer systems. Instead, business is dividing into two proto-parties: Cyber-Libertarians and Techno-Communitarians.

Both sides agree that the promise of faster, cheaper computer technology and the demands of sharper, wider global rivalries have transformed the nature of competition. Both sides believe that the rules that guide their own companies -- decentralized authority, accelerated decision making, rabid innovation -- are the design principles for the nation as a whole.

Political theorists aligned with both sides agree on a final and central point: in American history, the organization of the political world follows the organization of the economic world. In the Agrarian Era of the 19th century, America was governed lightly and mostly locally. In the Industrial Era, mass production encouraged massive institutions: big business, big labor, and a big federal government to balance the interests of the two. Now the incentives of the Information Age point once again toward smaller, more decentralized institutions and less control from the center.

The implications of this transformation for government and society are what divide the two sides. The Cyber-Libertarians, clustered in Silicon Valley, take their inspiration from Ayn Rand, Milton Friedman, and Fredrich Hayek. They see a future in which the decentralizing logic of computer networks allows individuals to reclaim their freedom from big institutions, whether bloated corporations or corpulent government. Their ideal is Jefferson's yeoman farmer with an Internet connection.

To the Cyber-Libertarians, the new economy's premium on diffused authority and rapid decision making renders a death sentence on the federal government as we know it. Their response is straightforward: miniaturize government. For the Cyber-Libertarians, the Republican Congress isn't filled with extremists (as Democrats like to say) but collaborationists who have already conceded too much to the Leviathan. Ask McNealy what impact Newt Gingrich's army has had, and he snorts: "It's kind of like a 747 ripping along and you drop a kid's paper parachute out the back, and it gets ripped up in a nanosecond."

The Techno-Communitarians, like the Cyber-Libertarians, bask in a confident optimism about the possibilities inherent in the new economy. But they worry that, left unchecked, the explosive impact of an economy ruled by creative destruction will produce an America that resembles Mexico or Brazil: a country polarized by widening income disparities, where the info-savvy rich barricade themselves against an increasingly desperate poor and a frustrated middle class.

The Techno-Communitarians see government as part of a team dedicated to building healthy communities. The densest hive of Techno-Communitarian thinking is found in Automation Alley, the nickname for the web of high-tech auto suppliers crisscrossing southeastern Michigan. After nearly collapsing with the Big Three automakers in the early 1980s, the region has revived as an outpost of precision manufacturing, and, along the way, developed a new business and public philosophy.