TO THE DOT-COM STATION
Rebranding Britain with American quackery

By Thomas Frank

Discussed in this essay:

Connexity, by Geoff Mulgan. Harvard Business School Press, 1997. 268 pages. $14.95.
Living on Thin Air, by Charles Leadbeater. Viking, 1999. 244 pages. £17.99.
The Independents: Britain's New Cultural Entrepreneurs, by Charles Leadbeater and Kate Oakley. Demos, 1999. 76 pages. £9.95.
Britain™: Renewing Our Identity, by Mark Leonard. Demos, 1997. 75 pages. £5.95.
The Creative Age: Knowledge and Skills for the New Economy, by Kimberly Seltzer and Tom Bentley. Demos, 1999. 91 pages. £9.95.
Tomorrow's Politics: The Third Way and Beyond, edited by Ian Hargreaves and Ian Christie. Demos, 1998. 148 pages. £7.95.

American Anglophiles, at least the few whom I have known, always impressed me by their dedication to an England that was more of a media projection‑Masterpiece Theatre, Brideshead Revisited, the films of Merchant Ivory‑than it was a living country. I am sorry to report that the reverse is also true. The current crop of British Americanophiles, many of them ensconced in government, have decided to import from us the most debilitating intellectual disease of recent years: enthusiasm for the idea that nothing matters economically but services, software, and a devotion to all things dot‑com. To judge by the works of Demos, the think tank that has supplied Prime Minister Tony Blair with so many of his big, bad ideas, they now have a much worse case of "New Economy" disorder than we do. In the United States our pragmatic instincts keep people like George Gilder, with all his laws of the future and his explosive fury at liberal treason, safety circumscribed and well away from the children. Americans know to cross to the other side of the intellectual street when they see Tom Peters approaching. (I quote from his book The Circle of Innovation: "B‑I‑G IDEA: It's easier to kill an organization than to, change it. Big idea: DEATH!") But through some tragic combination of cluelessness and misplaced reverence for America's economic "achievement," these very writers, as interpreted and amplified by the bright young lads at Demos, have emerged as the great thinkers of Britain's "New Labour" revolution. They are to Blair, one imagines, what Montesquieu and Locke were to Jefferson. But whereas we got a pretty good separation of powers out of that deal, all Britain has to show for its leaders' obsession with American business theory is a notable upsurge in poll‑taking, an infantile faith that the IPO Santa Claus will soon be showering riches on their entire country, and a "Millennium Dome," whose exhibits are so choked with corporate sponsorship that even the most ardent believers in the benevolence of business turn away from it in disgust.

Stranger yet is the fact that Demos's two brightest stars, Geoff Mulgan and Charles Leadbeater, come from exactly the kind of background that would probably send George Gilder into a red‑seeing rage. Both men were contributors to the Communist Party magazine Marxism Today and to the 1989 New Times anthology that foreshadowed the periodical's termination. Martin Jacques, an editor of both magazine and anthology, helped found Demos in 1993, leaving journalism for the more exalted calling of think tankery. Mulgan, who came with him from Marxism Today, served as the organization's director until 1998; his colleague Leadbeater is its reigning deep thinker, producing practical‑looking policy booklets whose titles suggest a mystic link between entrepreneurship and national identity (Civic Entrepreneurship, The Rise of the Social Entrepreneur, The Independents: Britain's New Cultural Entrepreneurs, and Britain: The California of Europe?). Both men have written much‑celebrated works on the standard "New Economy" themes. The authors and the think tank generally have enjoyed an astounding success in the springtime of "New Labour": Demos holds seminars at 11 Downing Street, Mulgan has become a member of Blair's "policy unit," and Leadbeater, who was rumored last year to be the prime minister's very favorite political thinker, boasts blurbs from Blair as well as Peter Mandelson, the notorious "New Labour" spinmeister, on the dust jacket of his book. Demos is very much the work model of the day, if not of the future.

As they did in their Communist days, the Demos authors speak here with an authority that seems to arise from intimate familiarity with the massive, overwhelming forces that are remaking our world and determining our fates. The favorite label today, "New Economy," is slightly more specific than the old "New Times," and the grand historical themes that the Demos writers summon up‑entrepreneurship, technology, and the market‑are quite different from the big picture of 1989. Instead of Marx and his dialectic they have Moore's Law, which describes the irresistible force of nature by which computer power becomes cheaper and more compact every year.

The head‑swimming effect is the same as ever, though, with the Demos gang nimbly dismissing "the logic of organizations found in the industrial age" and tossing about end‑of‑everything‑you've‑ever‑known concepts like "the knowledge economy" and "weightless work." The reader reels before the outrageous facts that are rattled off to show the obsolescence of the material world: the stock‑market valuation of Microsoft, the number of computers in a car, Nike's massive subcontracting network. (They don't make the shoes themselves!) The "old economy" is not only "old"; it is as dead and gone as the Five‑Year Plans of the Thirties. We can never go back.

It sounds intimidating. But if you read far enough into these books, you will discover that what the authors have actually done is simply round up various clich6s from popular management literature and, adopting a tone of extreme historical righteousness, recast them as political advice. Take the flattened, ant hierarchical corporation they claim to be the model of the future that we will all have to get used to and that governments will have to learn to foster: this is the business‑school idea of the decade, a thought that recurs everywhere in the works of Tom Peters and Peter Senge. Leadbeater tries to make the notion seem original by including in Living on Thin Air a chapter trashing Taylorism, the "scientific" management philosophy of old, but that, too, turns out to be a standard maneuver borrowed from management textbooks. In point of fact, the revolt against Taylorism. has been under way in corporate literature since the 1950s.

Or take the Demos people's enthusiasm for the "learning organization," which they foresee replacing the horrible militaristic corporation of bygone times: this is in fact an elaborate management subgenre all its own, the subject of several books by Peter Senge alone. Or the importance of "networks," which Mulgan and Leadbeater argue will replace top‑down chains of command: this is one of Tom Peters's most successful concepts, given added theoretical weight in recent years by Kevin Kelly. One can also detect the influence of the big stories from leading management magazines. When Leadbeater finds something really significant in his own career as a freelancer, he is reprising the Fast Company cover story of December 1997/january 1998 that hailed a generation of "free agents." When he gets excited about learning from mistakes, he is paying homage to another Fast Company big idea, this one from the October/November 1997 issue. When he thumps the rub for corporate "cannibalism," he is referring to a pseudo‑threatening idea that graced the pages of

Yet the most remarkable meeting of these minds of the left with those of the management guru community comes on the topic of "branding," the hottest and the headiest of all today's management ideas. Not surprisingly, the Demos crew have latched on to "branding" as the solution to nearly everything that ails the U.K. "Branding" is what justifies companies' bizarre stock‑market valuations, and "branding" is what will survive as material industry dissolves into insignificance in the, "weightless" years to come. In yet another famous 1997 Fast Company article, Tom Peters even counseled readers to think of themselves as brands. In that same year Demos launched its best‑known proposal to date: that the U.K. "rebrand" itself‑purposely set about altering the world's perception of the country the same way that, say, Oldsmobile has tried to shake off its association with wealthy oldsters. As difficult and misguided as this may sound, we are assured that there is neither cause nor room for worry: "branding" is now something of a science; and, what's more, building brands just happens to be what the British people are good at!

Given the extreme‑left background of so many of the Demos thinkers, it is surprising to see them lapse again and again into an almost childlike innocence about the institutions and personalities of American‑style capitalism. Silicon Valley, which repeatedly draws Leadbeater's worshipful attention, is actually described in the Demos booklet The Independents as a place where visitors can be convinced that "anyone is capable of anything." Similarly, stock markets are said to be engines of magical wealth creation that respond precisely to the wacky rules of the "New Economy." Leadbeater advises British culture entrepreneurs to "create products that can become ubiquitous quickly, for example by being given away in a global market, thereby attracting huge stock market valuations." (My emphasis.) Mulgan, for his part, offers a vision of the Internet that rivals those of Gilder, Gingrich, and Thomas Friedman for its wild optimism, larding his narrative with deep thoughts about ancient cultures in order to further swell its already distended pretensions to profundity and timelessness. And‑do I need to say it?‑the Demos people just love Bill Gates, even (pointlessly) taking his side in the Microsoft antitrust suit.

Mixing high‑state seriousness with the inanity of management literature sometimes yields some pretty stupid stuff. In Living on Thin Air, Leadbeater illustrates certain aspects of the rise of the "New Economy"‑‑speedy entrepreneurs versus slow‑moving big companies; cool brands versus square brands‑by comparing it to Princess Diana's struggle with the Windsors (you know: cool aristocrat, square aristocrat), and then taking an entire chapter to work out every absurd angle of this preposterous analogy. In The Independents, Leadbeater and his coauthor have written a document that could easily pass as self‑parody: noting how important young creative rebels are to the British economy the British music industry alone, another pamphlet notes, is the country's "strongest export sector"‑they judiciously lay out a program by which cities can plan and develop thriving urban bohemias, "rebranding" themselves in an attractive manner and replacing dying heavy industry with colonies of profitable nonconformists. As if this spectacle of authorized dissidence weren't enough, the pamphlet ends by soberly reporting a truly world‑class bit of market idiocy: like American towns bidding for a peripatetic NFL franchise, one dying northern city is finding its efforts to attract bohemians to its run‑down former industrial district undermined by the even more aggressive plans of another dying northern city only forty miles away!

Such are the risks of forging a brave new social critique.

I like to imagine the Demos folks discovering the exotic literature of American management theory the way they once discovered the works of Gramsci or Foucault or Althusser, sitting up all night over a copy of The Circle of Innovation, writing intense notes in the margins of The Fifth Discipline, passing around an issue of Fast Company that someone's older brother procured in the San Francisco airport on the way back from a fact‑finding trip to the land of the future.

In America the spectacle of leftists changing sides, coming around to the virtues of the business civilization, is a political set piece of great symbolic significance. Not only do we reward leftist apostates from Whittaker Chambers to David Horowitz to the authors of The God That Failed with undying literary fame and lifelong ideological sinecures but we find in their movement from left to right an especially satisfying confirmation of the goodness of the corporate order. Having fought the market (wrongly and misguidedly) on behalf of the common people, on behalf of the workers, on behalf of equality, they now constitute living proof that the market is the true and correct protector of those noble causes. Their enthusiasm for capitalism is thus a special enthusiasm, an enthusiasm that somehow ranks above that of the poolside loungers at the country club and the traders in the Merc's pork‑belly pit.

Demos offers a curious twist on this classic narrative. What they bring to the market isn't so much the blessing of the workers, or even the sacred cause of equality, as the aura of "radicalism" itself. The appeal of this should be immediately obvious in a commercial climate like our own, where "radical," "subversive," and "extreme" are terms of approbation in everyday commercial use. just as Diana was a different sort of royal than the Queen, it is a different thing entirely when "radicals" approve of the market system than when Tories do. Demos's affirmations are worth something because Demos is cool. The Demos people like rock bands, they refer to techno scenes, they know in which neighborhoods and even in which bars the cool people of Glasgow, Sheffield, and Cardiff can be found. It is never very convincing when Tories talk about the creativity that is required for entrepreneurship; it is considerably more so when former leftist Leadbeater calls for a "constitution which encourages experimentation, diversity and dissent." And it is infinitely more credible when a genuine revolutionary salutes the "revolutionary business model" of the hot advertising agency du jour than when Advertising Age does the same.

Demos's deployment of this advantage comes into high relief in Leadbeater's discussion of "entrepreneurship," the quality he is betting on to secure the future of his country. In Living on Thin Air he narrates for us the story of a biotech entrepreneur who bought his way into a painless injection technology, came to the brilliant realization that it "had to become a brand, not just a device," struck a deal with a potential competitor, and scored many millions with an 1PO‑‑all while failing to win regulatory approval for the machine or even to turn a profit. Perhaps sensing that these last facts would incline readers to a certain skepticism about the tale, Leadbeater instructs us to harbor no such doubts: "It is only by treating people like [this man and his partner] as heroes for creating wealth from knowledge that Britain will develop a fully fledged entrepreneurial culture." He further discredits doubts about the social usefulness of entrepreneurship by describing doubters as lingering remnants of "the orthodox left and right," neither of which really understands the "New Economy." Real radicals, apparently, have put the old politics behind them, have launched a war on hierarchy, and have recognized entrepreneurs as comrades in arms, thriving only in a climate of "dissent, dispute, disrespect for authority, diversity and experimentation."

Here in America, at least, entrepreneur worship is as well established an element of "orthodox" culture as are, say, cars and suburban homes. Here those who trumpet the heroism of entrepreneurs aren't doing some sort of funky "New Politics"; they are ... Republicans, taking a timeless Republican line and serving age‑old Republican goals. Think of Gingrich: a similar heroization of "entrepreneurial free enterprise" was one of the cardinal principles of his program for "Renewing American Civilization." Or Gilder, whose 1984 book, The Spirit of Enterprise, ranks as the twentieth century's most full‑throated celebration of entrepreneurship. Neither figure is very cool, true, but there is certainly no ambiguity about where either of these men stands politically. They are on the right, the "orthodox" right.

In the land of brands, though, it's the fantasy that matters, and here Demos has the winning combination. While the world's telecom firms, software makers, and online brokerages fight an ideological bidding war, each one striving to top the others' association of the market with freedom and democracy, Demos stands back and provides the theoretical ammunition. The democracy of markets is a fantasy that Mulgan, in particular, has proven skillful in affirming. First he discredits the various traditional betes noires of the business class‑taxation and government economic planning‑by linking them (and quite wrongly, especially in the American case) to "the era of absolute monarchy." He blames what he calls "governmental hubris" for the disaffection of the age. And he informs readers that "the upper classes in England resisted the telephone," thereby setting up new communications technology as a subverter of the power of "the elites."

Ah, but the Internet‑empowered world of "connexity": Here is a place, Mulgan believes, where those hated "absolute hierarchies of culture" disappear along with the "automatic respect" once paid to political leaders and aristocrats. Here is a land where the leftist dreams of yore may actually have been accomplished, where new means of communication "liberate people from the bonds of settled agriculture and industry." In fact, so democratic are the market forces that have given us this wondrous "connexity" that Mulgan finds it useful to reverse the traditional comparison: electoral democracy is only democratic insofar as it operates according to the market principles of choice and competition. (According to those standards, of course, New Labour's much celebrated rapprochement with the market as well as Clinton's "triangulations" could be understood as offenses against democracy itself, since they essentially deprive voters of any real political choice.)

These are arguments that one can find in any Republican National Committee fund‑raising letter, and Americans hardly need the permission of a few former Communists to get riled about "big government." But there is another ideological myth that stands to profit immensely from the affirmations of the Demos crowd: the historical inevitability of the market way. For leading market boosters it's never been enough to assert that the market is a perfect democracy machine; they always need to go further, to understand the market way as God's way. One finds traces of this longing in the curious pop Hegelianism of Francis Fukuyama; in the various computer born laws of nature (those of Moore, of Metcalfe, of Gilder) that are said to have permanently negated the possibility of any kind of government economic intervention; in the crazy valuations of the Internet shares, with everyone scrambling to own a piece as the Dow makes its way to the promised figure of 36,000.

One sees this impulse quite clearly in the works of Demos. A tone of historical smugness seems to be the house literary conceit. Anthologies bear titles like Tomorrow's Politics and Life After Politics; blurbs assert that "to read Mulgan is to read the future"; authors tend to slip nonchalantly into the future tense, to reason that, as "the future" will require this, we'd better do that in order to prepare. For Charles Leadbeater, especially, all arguments about globalization and markets boil down to questions of being in sync with our historical epoch. He begins Living on Thin Air by warning that "we are on the verge of the global twenty‑first century knowledge economy, yet we rely on national institutions inherited from the nineteenth‑century industrial economy"; he drives its narrative by giving us hints of "what the knowledge‑creating company of the future will look like." Strangely, Leadbeater seems also to believe that the heroic entrepreneurs who populate his works share his ability to predict the future. Thus he attributes the success of the great Gates to his powers of "pre-cognition," his ability "to discern the emerging shape of competition ... before everyone else." It's as though the sage of Seattle had been by Leadbeater's side all along, even from the days of the New Times declaration, marching with the People as they advanced to meet their Glorious Future.

A decade ago, the introduction to the New Times anthology noted that new ideas were necessary because "socialism has always claimed to speak for the future." Before it was anything else, according to this view, socialism was the custodian of historical periodicity, the movement responsible for understanding where we were going and what would have to be done when we arrived.

When I first dipped into the Demos books, I marveled at the grip that historical determinism still seemed to hold on the minds of so many otherwise intelligent people. What had become of all the other socialist tenets? Clearly the "New Economy" is not a more equitable social arrangement than the welfare states of old. It's not even a step in the right direction. On the contrary, its very promise arises from the perfection of all manner of new ways to keep the vast majority of the population from partaking in the profits of industry. Instead of fighting, the Demos people simply picked up their dialectics and changed sides, dumping the once beloved working class like so much industrial stag, cheering instead for the "cultural entrepreneurs" as they partied in Ibiza. Was the allure of historical correctness so powerful that they could simply chuck their old commitments and jump from one determinism to another? But I was overestimating the power of consistency. Forget the dialectic, forget history: think NASDAQ. So far have things progressed in recent years that the only power worth considering in our world is the size of the rewards being handed out to the "New Economy" winners‑the McMansions, the overnight 200 percent gains, the seven‑figure bonuses. What the Demos people are doing is simply the intellectual analogue of the mad rush with which the management theorists themselves are abandoning their old consultancies for a shot‑any kind of shot‑at that magic options/IPO combination. These are prizes for which we will gladly surrender anything, sink seventy years of social advance, lock up two million of our fellow citizens, send our heavy industry up in flames‑any thing. just so long as that ticker keeps spiking ever upward.