Being Virtual: Character and the New Economy

This review of Richard Sennett’s The Corrosion of Character: The Personal Consequences of Work in the New Capitalism originally appeared in the May 1999 issue of the Harvard Business Review.

Every day we’re told that companies need to be flexible, adaptable, agile. Faced with impatient investors, capricious customers, and unpredictable competitors, they have to be in a constant state of regeneration, shucking off old strategies and structures, shedding old products, developing new skills. In the new economy, any business that stands still is finished.

We’re also told that all of us who work in business—whether as executives on the top floor or as clerks on the sales floor—have to embrace the turbulence. We have to go with the flow, slipping from assignment to assignment, from team to team, from company to company, without ever hesitating or looking back. And we have to take charge of our careers, reinventing ourselves as free agents, or “e-lancers.”

These changes can all sound exhilarating. But, if truth be told, they can all seem distant as well. For most of us, the freewheeling new economy remains more theory than fact. We read about companies that have turned themselves inside out, but when we arrive at our own places of work every morning, our jobs look pretty much the way they did when we left them the evening before. We sit at the same desks or stand at the same machines. We use the same skills to do the same tasks for the same bosses. Our companies sell the same sorts of things to the same sorts of customers in the same sorts of ways. We may hear slogans about empowerment and change, but the old hierarchies still look fairly solid, and commands and rewards still flow down well-worn channels.

It might be tempting to dismiss all the shouting about the new economy as hype. But that would be a mistake. Although work hasn’t yet changed dramatically for most of us, it will. The global spread of unfettered capitalism, combined with the inexorable advance of computer processing power, is changing the economic calculus that determines the way companies organize themselves. In the new calculus, the cost of coordinating work is dropping as fast as the cost of delaying work is escalating.

The old industrial model of organization—big groups of people doing specialized tasks with centralized coordination—made economic sense for most of this century. But it’s making less and less sense today. It’s too costly and too unwieldy. Letting work shuttle freely between small, temporary teams that can organize and coordinate themselves in response to market stimuli is much more efficient. The pressure to be virtual—to produce real products and deliver valuable services without a lot of fixed assets—is becoming too strong to resist.

In the face of the new economics, it makes sense for companies to pursue ever greater levels of flexibility. But does it make sense for human beings? Do we really want to hop from job to job? Do we really want to be free agents? Many business pundits claim that we do. They see in flexibility the promise of liberation, as every individual becomes the CEO of a business of one. They proclaim, to paraphrase one newspaper columnist, a harmonic convergence of capitalism and humanism—the dawn of a golden age.

Richard Sennett begs to differ. In The Corrosion of Character, Sennett, a sociologist and well-known social critic, lays out a far different and far darker vision of the new economy. His vision, if correct, bodes ill for us as individuals and as a society.

How Flexibility Corrodes Character

Sennett defines his terms meticulously—a rare trait in an author of a book concerning business. He points out that “flexibility” means something very different now than it once did. Flexibility used to denote a capacity to adapt temporarily to changing conditions without losing one’s essential shape—like a tree that bends in the wind and then snaps back to its original uprightness. Today flexibility means the capacity to move swiftly from one shape to another, to be always in flux—to have no essential shape at all.

To be flexible in this sense is to lack attachments. The flexible company must be always ready to abandon its strategies, its products, its people, and even its customers in order to move into a more lucrative market or adopt a more efficient way of doing business.

The avatars of the new economy—Bill Gates, Andy Grove, Michael Dell—thrive on this kind of flexibility. They have, as Sennett puts it, “the ability to let go.” If it makes economic sense for Microsoft to junk its core product, the Windows operating system, then that’s exactly what it will do—no matter what hardships that decision might create for customers or other software developers. If Dell Computer finds a way to assemble and ship its products with half the people it needs now, you can bet the excess employees will be on the street in short order. To make this observation about how the new economy’s leaders operate is not to criticize them. These men know that if they don’t do it—if they don’t constantly tear apart their own companies, as Grove would say—somebody else will.

But most of us are not like Bill Gates. Once we establish an attachment—to a person, a place, a company—we don’t like to break it. In fact, as Sennett reminds us, our capacity to form and maintain attachments defines our character. “The character of a man,” he writes, echoing the Roman poet Horace, “depends on his connections to the world.” By breaking those connections, the new flexibility corrodes character. It sets us adrift, leaving us uncertain of who we are or how we should act. In the aggregate, it erodes the foundations of society. We don’t bond with others; we “team” with them. We don’t have friends; we have contacts. We’re not members of enduring, nurturing communities; we’re nodes in ever-shifting, coldly utilitarian networks.

As our attachments loosen, time begins to take on a very different meaning in our lives. The long view ceases to concern us; our sights become fixed on the here and now. We come to think of ourselves as temporary workers, whether we’re employed by a big company or running our own business. Arguing that “no long term” has become the governing logic of the new economy, Sennett quotes an AT&T executive: “We have to promote the whole concept of the work force being contingent, though most of the contingent workers are inside our walls. ‘Jobs’ are being replaced by ‘projects’ and ‘fields of work.’”

The loss of the long-term perspective removes, in Sennett’s view, another underpinning of human character: our ability to place ourselves in a narrative, to see continuity in our lives. Without a narrative “to give shape to the forward movement of time,” we lose our sense of personal development. The past and the future become discontinuous with the present and thus immaterial. The old work ethic, which taught us that today’s sacrifice would bring tomorrow’s reward, becomes meaningless. If everything’s going to change overnight, why worry about tomorrow? Our lives become unending cycles of reinvention as we struggle to adapt to new, unforeseeable conditions. But every time we reinvent ourselves, we erase the meaning that our past experiences granted us. In place of an ethical sense of ourselves as people with clear attachments, we are left with an ironic sense of ourselves as fabrications. We become unreal, virtual.

Sennett, who’s a novelist as well as a sociologist and critic, brings his argument to life by introducing us to a series of memorable characters, all based on actual people but heavily disguised. Each is an artfully drawn portrait of professional malaise. There’s Rico, the prosperous consultant who struggles to craft a personal identity out of his peripatetic work life. There’s Rodney, the Jamaican foreman of a large Boston bakery who’s alienated from his highly automated workplace and despises the lackadaisical workers who labor under him. There’s Rose, the middle-aged barkeep who makes a quixotic attempt to break into the New York advertising world. And there are the patrons of the River Winds Café, a small group of laid-off IBM programmers who while away their days mulling over the meaning of their disrupted careers.

Rico’s story is the most emblematic of the lives of flexible-economy workers. He and his wife, Jeannette, married while they were attending business school together. Both have thrived in their careers, Rico as a technology consultant and Jeannette as an accounting executive. In the 14 years since they earned their M.B.A.’s, they have moved four times, pursuing better jobs and better neighborhoods. But Rico, despite all his success and prosperity, feels he has little control over his life. His career feels fragile, his work leaves him at the beck and call of his clients and, because of his family’s succession of moves, he has no sense of belonging to a community. He fears, Sennett tells us, “that the actions he needs to take and the way he has to live in order to survive in the modern economy have set his emotional, inner life adrift.”

Sennett compares Rico’s life to that of Rico’s father, Enrico, whom Sennett had interviewed years ago for an earlier book. A union man with close ties to fellow Italian-Americans, Enrico spent his entire career as a janitor. His job didn’t change from day to day, but it enabled him slowly and steadily to build a more comfortable life for his family. His “achievement,” as Sennett puts it, “was cumulative.” He and his wife, Flavia, “checked the increase in their savings every week, measured their domesticity by the various improvements and additions they made to their ranch house.”

For all the boredom inherent in his work, Enrico had a concrete sense of the progress of his life. “He carved out a clear story for himself in which his experience accumulated materially and psychically,” Sennett writes. “He became the author of his life, and though he was a man low on the social scale, this narrative provided him with a sense of self-respect.” Enrico’s life had a unity from which his identity as a man emerged. Rico, in contrast, is unable to draw any sense of identity from his career. His work, while exciting in its endless variation, provides him with “no fixed role.” He “has to tack one way and another in response to the changing whims” of his clients.

His father’s daily sacrifices to create a better life for his family set an example of personal character for his children. But Rico fears that his own career provides no such standard for his kids. His “deepest worry is that he cannot offer the substance of his work life as an example to his children of how they should conduct themselves ethically.” His rapid upward mobility means little to his kids; they take it for granted. And his job actually devalues sacrifice and commitment. “You can’t imagine how stupid I feel when I talk to my kids about commitment,” he confesses to Sennett. “It’s an abstract virtue to them; they don’t see it anywhere.” By making it impossible to craft a narrative that ties together his work life and his family life, the new economy leaves Rico frustrated and angry—at odds with himself.

Flexibility’s Brighter Side

Sennett makes a strong and disturbing case for the sociological dangers of flexibility. The confusion and angst he uncovers are real. But if his analysis of the big picture is compelling, his arguments become much less convincing when he shifts his discussion to the workings of business. He conflates phenomena that have very different causes, and he misreads the choices available to managers, giving too little weight to the larger economic and competitive forces that set the parameters for business decisions.

In discussing corporate flexibility, for example, he confuses tactical reengineering programs aimed at making work flow more efficiently with broad reinvention initiatives aimed at changing what companies do or how they compete. That confusion leads him to conclude that when companies attempt to make fundamental changes, they are often simply seeking to improve labor productivity—in short, to fire people. He then quotes some familiar statistics about the mixed results achieved by companies that laid off many workers in the downsizing waves of the past decade—an indication, as he reads it, that reinvention programs don’t meet their goals.

In fact, of course, no company tries to reinvent itself simply to gain a tactical advantage, and reinvention is by no means synonymous with downsizing. When a company reinvents itself, it usually does so because it has no choice—because competitors with more attractive products or more efficient production systems are threatening to suck away its profits. If it doesn’t change, it will lose its customers, its investors, or both—the business equivalent of a death sentence. The flexible economy is not, as Sennett sometimes implies, a creation of managers; it is being imposed on them by forces beyond their control just as it’s being imposed on everyone else. Flexibility and change aren’t options; they’re requirements.

A more serious flaw in The Corrosion of Character is the author’s blindness to the opportunities that the new economy is creating for people. The stories Sennett tells about people are revealing and poignant, but they’re not the whole picture. While Rico’s sense of dislocation, for example, is one result of the business world’s demand for flexibility, not all the frustrations in his life can be traced to the new economy. People have always had to move in order to find or hold on to work, and it was Rico and Jeannette’s decision to trade off stability for material gain—no one forced them to uproot themselves and their kids. Moreover, as computer networks grow even more powerful and ubiquitous, people may actually have to make fewer personal sacrifices to sustain their careers. By making workdays more flexible and location less important, the networked economy will give many of us more control over where we live and how we parcel out our time—even if it gives us less control over what we actually do.

The story of the computerized Boston bakery, where bread making is more a matter of tapping icons on screens than of kneading dough, is intended to illustrate the emptiness of much new-economy labor. Detached from the products they produce, the plant’s workers view their jobs as disposable and their careers as, to use Sennett’s word, “illegible.” But such detachment is not peculiar to the new economy; it was characteristic of labor in the industrial economy as well. Although Sennett draws a valid distinction between “smart” computerized machinery and “dumb” traditional machinery, the distinction is specious in the context of many industries. Whether you’re flicking a switch or clicking an icon, you’re at a dangerous psychological distance from the fruits of your labor.

And again, the story is one-sided. If Sennett had spent a little more time exploring Boston and its environs, he would have found many small bakeries where people are producing gourmet breads and selling them to appreciative restaurants and individuals. The proliferation of craft bakeries and similar cottage industries dedicated to producing, say, fine cheeses or to growing unusual plants or to writing elegant shareware, is a recent phenomenon that testifies to the range of possibilities opened up by the new economy. Increases in people’s disposable incomes, combined with their greater exposure to other places and cultures, have created demand for many crafts that had long been dormant or in decline. And the availability of cheap computers, with powerful small-business applications and communication capabilities, makes it easier to launch, market, and manage microbusinesses. Flexibility is expanding, not constraining, the opportunities for people to do work that they love.

In the failed attempt by Rose, the bar owner, to change professions, Sennett sees a model of the personal frustrations inherent in the new economy. To be flexible, people have to constantly take risks with their lives and their livelihoods, and the endless risk taking, in Sennett’s view, further disrupts personal narratives and corrodes personal character. But no one forced Rose to change her career. The bar she had long owned wasn’t about to go under. She decided to take the risk of jumping into a new and very different line of work because, as Sennett admits, “she had the required mid-life crisis.” Whatever its sins, the new economy is certainly not to blame for midlife crises and their consequences.

The story of the former IBM programmers is intended to illustrate the increased incidence and the higher toll of failure in the new economy. Back when jobs were more predictable, people could assume that if they were successful in their jobs today, they’d be successful in them tomorrow as well. Today, when everything changes all the time and we’re constantly challenged to develop and apply new skills, present success holds out little guarantee of future success. Every time we move on to a new assignment, we face the possibility of failure. But if it’s true that our likelihood of experiencing professional failure is higher today than it was earlier in this century, it appears to be equally true that the penalty for that failure is lower. In Silicon Valley, the cradle of the new economy, people take pride in their failures. They view them as opportunities for growth and as evidence of a willingness to experiment. If you’ve never failed, you’re suspect.

Failure in a flexible economy necessarily becomes as provisional as success. You may have messed up your last assignment, but there’s a good chance that your next one will be better suited to your talents. Risk springs eternal, but so does hope. In many ways, in fact, the new economy is itself a product of what Sennett would term “failure.” It emerged from the downsizings of the 1980S and early 1990S. Cut adrift from their “safe” jobs, people learned that they had to take control of their work lives. The result was a burst of entrepreneurial energy, as old organizational assumptions were tossed aside and new, more flexible, and more innovative companies were founded. The downsizings caused pain but also opened up opportunities. People are more resilient than Sennett gives them credit for.

The Spirit of ’68

The fact that Sennett overlooks the benefits offered by the new economy does not mean that his criticism of it is without merit. The Corrosion of Character is a thoughtful and humane book, one that illuminates the world of business by drawing on the broader world of ideas. Sennett is right to remind us that our work lives have a direct, formative influence on our character, and he’s right to point out that flexibility, when carried too far, destroys both character and community. His carefully drawn argument provides a counterbalance to the empty-headed boosterism that characterizes much of the current writing on the new economy.

For all its erudition, The Corrosion of Character is also a very personal book. In fact, the most intriguing character to emerge from its pages may well be the author himself. In a particularly revealing passage, Sennett, the son of radical leftists, tells how he makes a pilgrimage to Switzerland every winter to hobnob guiltily with the business elite at the World Economic Forum. “A kind of familial bitterness has kept me coming back to Davos as an observer,” he explains. “My own generation had to let go of the hopes which enthralled us in 1968, when revolution seemed just around the corner; most of us have come to rest uneasily in that nebulous zone just left of center, where high-flown words count for more than deeds.”

The book is perhaps best read as another product of Sennett’s “familial bitterness,” an homage to his radical forebears and the spirit of 1968. Sennett’s unstated goal is to enunciate a new critique of capitalism, a critique that may help define “that nebulous zone just left of center.” If he falls short of that goal, he nevertheless leaves the reader with a deep unease about the course of the modern economy. Whatever the faults of The Corrosion of Character, its diagnosis of the angst and irony that characterize life in the prosperous West at the close of the century is hard to dismiss. The question the book poses is not one we can ignore: As we spend our days toiling in virtual companies, are we fated to become virtual men and women, efficient and adaptable but without substance?