Most people in history have not been loners. No one says as a child, “I want to grow up to be a hermit.” Yet modern industrial society has produced tens of millions of couch potatoes: the ultimate loners. Telephones began the process: two-way communications. Radio accelerated the process: one-way communications. Television secured it.

There has been a price paid by each of us for the ease of moving from community into the cocoon of our homes. Do you know the last names of the families two doors down or across the street? When was the last time you got together with each other for dinner? Or even a barbecue?

Across the street might as well be across the globe, socially speaking.

Our occupations give us some communication with others. But the existence of the cubicle points to the same cultural phenomenon: isolation. There is a reason why Dilbert became the comic strip of the 1990s. We may still read Blondie, but that strip is left over from the 1930s. Do you know the name of your mailman? Does the equivalent of Mr. Dithers know the names of employees with the status of Dagwood?

There are various lodges and clubs like the Masons, the Lions, and the Odd Fellows. They are all odd fellows these days. My grandfather was an Elk. I have no idea what this meant, or why he joined. He never encouraged me to join.

Can this process continue? I don’t think so. We are seeing a reversal in the free market. The revolt of the Dilberts has begun.

PRODUCTIVITY

You want to be more productive in your work. Greater productivity usually means higher pay. It also means a greater sense of accomplishment.

How can you become more productive in your occupation? The typical answers are these: additional formal education, additional time spent in private study, weekend seminars and conferences, more systematic budgeting of your time, more feedback from superiors and subordinates. These are all input-related.

There is one reform that does not require greater individual inputs. This reform is known to be immensely fruitful, though expensive to implement: breaking down large organizations into small teams. The Japanese have pioneered team production on the floor of large factories. Instead of individual specialization, teams specialize.

In the non-profit world, the contemporary phenomenon known as the megachurch relies on small groups to make it work. A megachurch is usually defined as a congregation with a thousand or more members. They have identifiable interest groups within the overall program: age groups, singles groups, special-interest service groups. A sense of community is maintained through participation of like-minded people within an organization of like-minded people.

Cubicles can work for certain firms, such as telemarketing firms. But the Dilberts of the world show that they work more effectively in team settings. The division of labor has limits.

The guru of team production in profit-seeking and non-profit organizations was Peter Drucker, who died in 2005. He saw that teams make people more productive.

The most intellectually productive period of my career took place in the 1980s. I was living Tyler, Texas, which was then a city of about 75,000. It is 90 minutes east of Dallas. So, it had a small-town atmosphere, but it was close enough to a major city to give access to those large-capital cultural enterprises that make urban life the preference for most people: universities, concert halls, and so forth.

I was a member of a small church where some very creative people belonged. Several of them were authors. They were innovative thinkers. We were able to discuss new ideas and insights on a face-to-face basis. This was important for our intellectual advancement.

I find that the absence of any similar group effort in my life has made my work more of an extension of previous insights. This is in part due to age. But old men in a competitive intellectual environment are forced to keep pace. The division of intellectual labor provides new material from outside the familiar boundaries.

The college prior to World War II was such an environment, and had been since its creation in the twelfth century. But as academic specialization advanced, and as tax-funded student bodies grew into millions due to the misnamed G.I. Bill of Rights (1944), this collegiality disappeared. Clark Kerr, President of the University of California system in the 1960s, dubbed the new institution the multiversity. He was correct. The cost of academic specialization is fragmentation. There is no longer a shared universe of discourse on campus. Only in a handful of expensive small private colleges, such as St. John’s College, which focuses on the “Great Books,” does the older tradition still prevail. Robert Nisbet’s book, The Degradation of the Academic Dogma, surveys this process.

Today, the existence of members-only websites and teleconferencing software is re-creating that small-group atmosphere. It is possible for like-minded people to interact with each other in closed-membership sites. These on-line communities can be as small as a dozen people or as large as several hundred or more, if the site allows multiple forums and chat rooms.

REAL ESTATE COSTS

The enormous increase in real estate prices in certain cities has made it imperative that companies devise ways to recruit employees in heartland America, where housing prices are a third or a quarter of what they are an large coastal cities. Younger workers cannot afford to buy homes in these high-cost cities. They must indebt themselves heavily for decades, which reduces their mobility when the regional housing bubble finally ends, as it is now ending. They cannot sell their homes in search of better opportunities without taking a loss.

Existing employees live in expensive homes. This entitles them to borrow on their equity, thereby locking themselves into higher payments. It also allows local tax authorities to hike property taxes based on higher real estate assessments. They are rich on paper. But if they stay on the local job, they cannot get their hands on this wealth except by debt.

A creative company’s management understands that replacing employees in the future will become more expensive in boom cities. They will have to be paid higher wages to enable them to purchase homes. Meanwhile, companies that employ Chinese laborers and other Asians are underbidding them. So are companies based in the heartland. The squeeze will increase over time.

Existing senior managers bought their homes cheap. They have no intention of moving. Yet they face growing pressure on profits because of their geography.

To overcome this, they must learn to manage at a distance. But this requires skills that senior managers have not developed. Free market hierarchies have historically involved face-to-face relationships. Teleconferencing overcomes this in theory but not in practice . . . so far.

The cost of real estate is going to force the decentralization of corporate operations. Without decentralization, corporate attrition on the coasts will re-direct productivity to the heartland. Those companies whose managers cling to high-cost corporate real estate will see their market share erode.

BEYOND COMMUTING DISTANCE

Here is an example of the process of attrition. The Ludwig von Mises Institute is a non-profit educational foundation located in the university town of Auburn, Alabama. The town is two hours from Atlanta. You can buy a nice middle-class home in Auburn for $150,000. It is a clean, attractive town. The university provides most of the cultural events that educated people like. Yet they can drive to the Atlanta airport in less than two hours because the airport is on the south side of town.

The Mises Institute can hire bright Ph.D.s for less than think tanks in New York or Washington, D.C. can. It can offer a better lifestyle for its employees. Most people who can afford to move into the suburbs do so. Between 2000 and 2004, most large American cities experienced net out-migration.

The presence of a large university within walking distance of the Mises Institute’s headquarters is another major magnet for scholars.

It costs less to house students for its week-long seminars.

It ties up less of its capital in its real estate.

I was on the Board of Trustees of a comparable organization in the early 1990s. The organization had millions of dollars tied up in its aging physical facility. It could have moved to a college town in the heartland, or even four hours away from its existing location. It could have sold the facility, pocketed millions, and used the money for recruiting new supporters.

I recommended that the organization keep its P.O. box address in the old location for public relations’ sake, but move the actual operations to a college town. Instead of buying a building large enough to house students for its seminars, it could rent dorm space cheap in the summer.

My pleas fell on deaf ears. The board was filled with old timers who were not entrepreneurial, which is the fate of most board on non-profit organizations. They clung to tradition.

The organization still exists in its old location, but it is essentially invisible today. Its management did not see the Internet coming. Its seminars are not attended by the best and the brightest students. It does its work in the same old ways, but the same old ways were geared to the 1950s. It is in attrition mode. The Mises Institute has replaced it as far as readers are concerned.

THE QUEST FOR COMMUNITY

That was the title of a 1953 book by Robert Nisbet. Nisbet became the most famous conservative sociologist after 1964. Of course, there were only half a dozen known conservative sociologists back then.

He argued in his book that the modern world works against community. It undermines traditional authorities. It scatters people. Families live far apart. Face-to-face relationships are mostly economics-based and are therefore subject to erosion by the competitive free market.

Men want community. In the twentieth century, totalitarian political parties offered a sense of community to isolated individuals.

Today, those parties are gone. They were gods that failed. In their place are regional college sports teams, city-wide professional sports teams, and armed resistance movements, or what has been called 4th-generation warfare.

Peaceful team efforts today come in two forms: sports teams and work teams. There are organized teams of specialized athletes. Then there are Little League, soccer leagues, and other local team sports that provide some sense of community for that minority of families with athletic children in the restrictive age brackets.

Work teams are the business world’s response to the loss of community in the adult world.

For the rest of us, the book title by Harvard political scientist Robert Putnam sums it up: Bowling Alone. This book extends Nisbet’s insights. More than ever, teams have disappeared. Here are some statistics about our habits of interaction.

Attending club meetings: down 58%Family dinners: down 33%Having friends over: down 45%

But there is a countervailing phenomenon: virtual community.

VIRTUAL COMMUNITY

Newsletters link people to each other indirectly.

They know that others are reading the same material.

Websites allow forums and chat rooms. This increases the sense of community.

We are familiar with the old saying, “If the mountain cannot come to Mohammed, then Mohammed must go to the mountain.” But the digital mountain can come to Mohammed today. This is forcing major changes — mostly unwanted — on organizations that must adjust to this new situation.

It is one of those oddities that the oldest and most bureaucratic organization offers a workable model. The military has always had a central command, but it has also had decentralized regional operations. A rigid top-down system of authority ensured obedience of subordinates in distant locations. The senior staff knows that its orders will probably be obeyed, even though there is no face-to-face communication.

To make this system work, local officers in the field have to be given flexibility during combat. There is greater flexibility in wartime than in peacetime. This is why the U.S. Army put up with George S. Patton only while the Germans were still shooting back. He could not survive in peacetime. After Germany surrendered, Eisenhower put him in charge of a virtual army — of typists.

The free market produces a bottom-up chain of command. Money flows upward from consumers. The free market is constantly adding competing firms, constantly forcing adjustments. Companies that do not adjust to the new realties of virtual communities and on-line ordering are not going to survive. A company that maintains high prices on the assumption that buyers cannot find a lower price on Froogle or some similar search engine is in attrition mode. It is not long for this world.

CONCLUSION

Is your employer actively seeking to implement programs that extend authority to teams? Do employees get the sense of participating as team members in an organization that serves a larger, meaningful purpose? Is the company taking advantage of the Internet to establish intra-agency communications and participation? That is, does the company have an intranet?

For investors, these issues should be guiding lights. Some companies, such as 3-M, are legendary for fostering entrepreneurship. The Post-It note is a lasting testimony to this corporate culture: an invention of one of its employees. The company spun of a new branch run by the inventor.

The fate of Ford and GM points to the attrition phenomenon. They have not matched the team production structure of the Japanese automobile producers.

Anything you can do to participate in team efforts will benefit you. The more meaningful the effort, the greater the personal benefit.

November15, 2006

Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 17-volume series, An Economic Commentary on the Bible.

Copyright © 2006 LewRockwell.com