Though a lot of us are free-market nuts, and others yearn to build a community that takes care of its members, there's no good reason America can't have free markets and a civil society

The name Yankelovich inevitably brings to mind public-opinion surveys. It was more than 40 years ago that Daniel Yankelovich founded his first research firm; he's been monitoring changes in American public opinion and culture ever since. He has served on the boards of several corporations, including CBS, the Meredith Corp., and U.S. West, and today is chairman of DYG Inc., in New York City.

Yankelovich, who is trained as a social scientist, notes, "We are becoming a society where impersonal economic transactions dominate. In a market economy, impersonal transactions are always important. Our society could not function without them. But increasingly, my firm's surveys of the public show that Americans crave something more satisfying to the spirit. And they know that impersonal transactions cannot substitute for the deeper relationships for which people yearn, relationships based on mutual understanding." His new book, The Magic of Dialogue, from which the following excerpt is taken, is a practical guide to reaching mutual understanding in complex situations, from one-on-one business meetings to the sorts of cultural splits that have been revealed by Yankelovich's decades-long tracking of Americans' opinions and values. It was recently selected by Common Ground as its Book of the Year. --The editors

The nation now finds itself in the early stages of a struggle for the soul of America. It is a struggle between two equally legitimate but one-sided visions of our future: the Vision of the Free Market and the Vision of Civil Society. Underlying the first vision is the conviction that in the new global economy, the free market, driven by technology and entrepreneurship, will shape a more prosperous democracy and a more secure world than we have known before. The conviction supporting the second is that to renew our society and halt the moral decline we must find a way to strengthen the values of community, faith, responsibility, civic virtue, neighborliness, stewardship, and mutual concern for one another.

Those distinct visions, each with its own mix of the positive and the negative, are engaged with each other in epic combat. Choosing one or the other would lead to a dead end. What is needed instead is a way to forge a new vision that transcends the limits of each.

The Vision of the Free Market
"The Long Boom," an article that appeared in Wired magazine in the late 1990s, is a highly idealized expression of the Vision of the Free Market. It conjured up the vision of a United States-led sustained economic boom of 25 years' duration destined to usher in a new golden age of freedom and prosperity for the entire globe--eradicating poverty, stimulating social mobility, reducing crime and violence, reviving family values, easing ethnic rivalries, educating the unskilled, and "forming a new civilization, a global civilization, distinct from those that arose on the planet before."

Despite its utopian tone, the article captures the strand of optimistic idealism that often underlies the gruffest of bottom-line voices. Many of America's leading business executives and political leaders believe that the free market has moral virtues beyond its pragmatic advantages in allocating resources efficiently. It is those moral virtues that give the Vision of the Free Market its ideological and political power.

The most probable scenario for the near future is that some form of that free-market vision will prevail. At the moment, it dominates the American climate of opinion.

No one should minimize the appeal of that vision to the American people or its importance in making the promise of the American Dream a reality. The prospect of greater material well-being serves a purpose that goes far beyond materialism: the American Dream depends on an economy that can deliver rewards for hard work and self-improvement.

But the Vision of the Free Market has its dark side. The late economist Joseph Schumpeter, a strong supporter of free-market capitalism, underscored capitalism's power of creative destruction, with its tendency to act as an uncontrollable force of nature: impersonal, implacable, and in the short run radically disruptive of jobs, skills, and older enterprises.

In addition to those familiar negatives, the market economy has a more subtle drawback. Visionaries of the free market stress individualism, freedom, democracy, choice, flexibility, creativity, openness, adaptability to change, self-improvement, self-discipline, leadership, and responsibility. Somehow they assume that those moral virtues are inherent in the practices of a free market. But I believe that is a fallacy. Economic ideas always come embedded in a matrix of social values. The long-term success of the economy, as well as the well-being of the larger society, depends utterly on those values. But the values themselves do not come from the market economy, and they are not self-sustaining. They need constant reinforcement. If they don't get it from some source other than the market, they wither and die.

It is that false assumption that makes the Vision of the Free Market incomplete. The harsh reality is that the free market is not endowed with those moral virtues. In the end, the market is just a practical mechanism for allocating resources. Some individuals, companies, and governments that wield market power use that mechanism wisely and compassionately. Others use their raw economic power mindlessly and couldn't care less about its human consequences.

Civil Society as a countervision
The vision of civil society arises from different sources. Since the late 1980s, in meetings and conferences throughout the nation, leaders from the worlds of politics, religion, local communities, foundations, and universities have engaged in a lively conversation about how to renew the bonds of civil society. The conversation is just beginning to clarify what is meant by civil society, how we can strengthen it, and how in doing so we can confront the threat to our nation's social morality.

In effect, the leaders of the civil-society movement are busy shaping a countervision, not only to the vision of the Free Market but also to the long-dominant pro-government liberal ideology. They see the threat to our society coming from the encroachments of government as well as from the abuses of our market economy.

Many advocates of civil society also view with alarm the prevailing version of individualism in our popular culture. They fear that it accentuates the egoistic, short-term, and narcissistic aspects of self, rather than the long-term altruistic aspects. In their view, the preoccupation of baby boomers with "me," "my needs," and "my rights" has weakened social bonds, social trust, and moral norms. An earlier American ethic also focused on individualism but explicitly linked the individual to the larger society. We are all familiar with the traditional American value of "enlightened self-interest," the idea that in serving their own interests, farsighted individuals also contribute to the interests of the larger community. In contrast, the new individualism often takes the form of unenlightened self-interest, the pursuit of selfish goals that serve no larger societal interest.

If the utopianism of the Vision of the Free Market points toward an idealized future, that of the Vision of Civil Society points toward an idealized past. Most leaders of the civil-society movement are searching to recover something they believe our nation once had and now has lost. They emphasize the importance of rebuilding the nation's "social capital" (the total of the goodwill, volunteer engagement, social activity, and civic virtue of American citizens) and of restoring the old balance between rights and responsibilities.

Some leaders of the civil-society movement romanticize the idea and ideal of community as a place where people automatically belong, where stable extended families live side by side as neighbors who cherish one another and come to one another's aid in times of crisis, a familiar and comfortable place in which to bring up children, develop roots, and practice civic virtue.

The Vision of Civil Society also has a dark side inherent in its close link to the idea of a community. In today's America, the connotations of community are all warm and fuzzy. But historically, tight community bonds have also been associated with narrowness, bigotry, mistrust of outsiders, prying eyes, and stultifying social conformity. In the United States today, there are radical groups whose conceptions of community threaten the individual freedoms and choices we most cherish.

What's at stake
When I say that those two visions are engaged in a struggle for the soul of America, I do not mean that the struggle is one between good and evil in which we must be cheerleaders for the good side and implacable foes of the evil one. The struggle is far more ambiguous. Indeed, our worst fate might be for one of the two visions to so overwhelm the other that it disappears without a trace. Rather, the struggle is between two radically incomplete visions, each of which highlights a desirable aspect of the good society but also builds a false utopia out of that single feature.

I have characterized their encounter as a struggle for the soul of America. Why such melodramatic language? I believe the struggle is fateful for our civilization because the two visions so desperately need each other, because for one to triumph over the other would take us down a wrong track from which we might not recover, and because the right sort of synthesis between them has the potential to lift our civilization to new heights of creativity and individual fulfillment.

The Vision of Civil Society is a major source of the moral values that must contain and support the thrust of our market economy. But it limps along far behind the Vision of the Free Market in vitality, enthusiasm, and power. The only reason the Vision of Civil Society has a fighting chance to influence the future is the intensity of the human yearning for the values it symbolizes, such as community, civility, and spirituality. Those values are not inherent in a free-market economy and are in some ways antagonistic to it.

But businesses and other organizations are not just economic institutions. They also include people who work side by side every day and who share a common fate that depends on how well the organization functions. In that respect a business is also a community, as is a school, a church, a symphony orchestra, a magazine, a hospital, a branch of science. All our organizations and institutions have two roles to play: at one and the same time, they serve a practical purpose, but they are also expressions of community and civil society. If they sacrifice the second role, they inevitably slip into mediocrity or worse.

In serving their practical functions, those organizations can to some degree exist in isolation from one another. But as parts of a community and a civil society made up of many communities, they cannot exist as isolated fragments. They must communicate with one another, understand one another, trust one another, identify with one another. And to do all that, they cannot rely exclusively on the values of the marketplace or on the entitlements and legalisms associated with big government.

The Vision of the Free Market is a powerful ideology. If it comes to monopolize our culture, it will inexorably undermine the values of civil society. Concepts such as profit maximization, short-term profitability, reliance on part-time temporary workers, shareholder value, and downsizing, as well as the accelerating tempo of competition and the ever-widening gap between well-educated, well-paid elites and the majority of citizens, will prevail. Ultimately, Oscar Wilde's description of the cynic who "knows the price of everything and the value of nothing" will come to describe our market-driven culture.

On the other hand, our individualism is too deeply ingrained for us suddenly to become fully civic-minded. We probably never were as virtuous civically as our nostalgia for an early America might suggest. As a practical matter there is no chance that in the struggle between the two visions, the Vision of Civil Society will prevail over the dynamism of the free-market vision. Nor do the American people want it to do so.

The role of dialogue
What the majority of Americans do want is to "civilize" our market economy: to curb its destructive consequences, to find a way to balance enterprise with the spirit of community, and to realize our deepest spiritual values.

Dialogue can perform that function in two ways, one indirect, the other direct. I hew closely to Webster's definition of dialogue's purpose--"seeking mutual understanding and harmony"--straying from it in only one respect: I put less emphasis on harmony because that is not always the outcome of dialogue. In fact, as a consequence of dialogue you may come to understand why you disagree so vehemently with someone else; there will be better understanding but not necessarily more harmony.

As an indirect influence, the very process of dialogue has a civilizing influence. Dialogue binds us together as communities. If the values of reciprocity, stewardship, responsibility, citizenship, civic virtue, and love describe various facets of how we take care of one another in a civil society, it matters a great deal whether we like, respect, trust, and understand one another or stereotype, distance, distort, and mistrust one another. Civil society stands or falls on that foundation of feelings. The magic of dialogue is that it really does enhance respect and acceptance of others. Without dialogue, people stereotype one another in a manner that prevents mutual understanding and acceptance. With dialogue, the stereotypes melt away, more often than not replaced by goodwill and deeper understanding.

The other way in which dialogue can civilize the Vision of the Free Market is more direct. An ideal use of dialogue is to reconcile conflicting systems of social values. What I have called the Vision of the Free Market and the Vision of Civil Society are high abstractions, remote from people's daily lives and concerns.

One of the many things dialogue can do is permit us to focus our imagination on what kind of society we really want. Participants in such a dialogue would offer their unique perspectives on the two visions as they relate to their own everyday world of bringing up children properly, strengthening personal relationships with family and friends, pursuing happiness and quality of life, doing useful and self-fulfilling work, maintaining dignity and self-respect throughout life's vicissitudes, and keeping faith with beliefs that transcend the mundanities of everyday life. When people engage one another, formally or informally, in dialogue about such concerns, they are seeking truths to live by, and through dialogue they have a good chance of finding them.

Am I expecting too much from mere talk, however special and disciplined it may be? Do we need to do a great deal of work over and above dialogue to achieve those kinds of results? Upon reflection I have concluded that at this particular juncture in American history, I am not overstating the case for dialogue. My studies of the public reveal an immense pool of goodwill and good faith all over the country. Americans are hungry for enhanced quality of life, for deeper community, for endowing our communal life with spiritual significance. In other words, they are ready to accomplish the goals I claim can be accomplished through dialogue. They are ready to accept truths beyond those of science and technical expertise without discarding their immense contributions. They are ready to endow their own lives and those of others with a larger meaning.

As a policy wonk, I am all too aware of the heavy paraphernalia that ordinarily accompanies policies and action: laws and regulations, large outlays of capital, a high degree of organization, testing of results, moral and even physical coercion. As a society, we know about those things; we are adept in them. What we don't know very well, and what we are surprisingly awkward at and not at all adept in, are the arts of listening with empathy, setting aside status differences, and examining with open minds the assumptions that underlie all the old scripts we all live by--in a word, dialogue.

At the risk of overstating the case, I believe that dialogue has the magic to help our civility--and our civilization--to advance a giant step.

Daniel Yankelovich, chairman of DYG Inc., in New York City, has spent more than 40 years tracking changes in U.S. culture and public opinion.

From The Magic of Dialogue: Transforming Conflict into Cooperation, by Daniel Yankelovich. Copyright © 1999 by Daniel Yankelovich. To be published this month by Simon & Schuster Inc. Printed by permission.