Saturday, June 24, 2006

From 1986: rubes in toyland.

Why not have children design toys?

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link to original piece.

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Where Toys Come From

Selling fun to children is one of capitalism's least predictable pursuits

by David Owen

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The Dimensions of the Business

Ruth Cronk knows more interesting facts about Barbie than most people know about anything. For example: If Barbie were blown up to human size, her measurements would be 39-21-33. Barbie and Ken, her boyfriend, were named after the real children of Ruth Handler, Barbie's creator, the wife of one of the founders of Mattel, Inc., and the driving force behind the company for many years. When Ken was introduced, in 1961, Handler wanted him to be what is referred to nowadays as "anatomically correct," but Mattel's (male) marketing department said no. When you rotated the arm of Growing Up Skipper (1975), her breasts got bigger. When you pulled apart the legs of Guardian Goddess, a sort of outer-space Barbie introduced in 1980, her arms flew up and her clothes fell off (Mattel, unlike Ruth Cronk, does not include Guardian Goddess in the Barbie family). If all the Barbies ever sold were laid end to end, they would span so many football fields that you would soon realize that more than 250 million Barbie-family dolls have been sold.

Cronk is a contagiously cheerful middle-aged housewife from the Bronx. She is also the president of the International Barbie Doll Collectors Club, the editor and publisher of the International Barbie Doll Collectors Gazette, and one of the world's leading authorities on the world's leading fashion doll. She is giving a lecture titled "The Barbie Family" to about a dozen members of a doll-collecting club in the basement of Brooklyn's St. James Evangelical Lutheran Church. Spread out on the table before her are numerous Barbies, Kens, Midges, Francies, and other dolls, along with a broad sampling of their furniture, dogs, horses, automobiles, and, of course, clothes. (Mattel says that Barbie's vast wardrobe has made the company the world's largest producer of women's wear.)

Ruth Cronk owns more than 3,000 Barbies. She has an original 1959 Barbie (along with the box it came in), worth perhaps a thousand dollars. She has Barbies with Western features that are sold in Japan. She has Barbies with Asian features that are sold in the United States. She has Tiffs. She has Kelleys. She has a discontinued black friend of Tutti's (Tutti is Barbie's tiny sister, fraternal twin of Todd) that was sold only in Germany.

Barbie was not an immediate hit when she was introduced to the toy trade twenty-seven years ago. Buyers thought, among other things, that she was too small and too busty to catch on with little girls and their staid, Ike-loving moms. Sears, Roebuck and Co. didn't order any of the dolls at all. But the ones that did make their way into stores were snapped up so fast that Mattel had trouble supplying replacements.

Since then the Barbie trade has been everything that the toy trade in general has not. While Barbie and her family have been a sturdy, reliable success, the business of keeping children amused has been volatile. Fads have come and gone, and companies have followed. Mattel's own history reflects the whimsicality of the entire enterprise. Since its founding, in 1945, the company has risen from obscurity to become the world's largest toy manufacturer, plunged to near bankruptcy, and pulled itself back together.

In the midst of all that jumping around, the industry as a whole has grown dramatically, generating $12 billion in retail sales last year, up from $7 billion in 1980. This growth has had several sources. Various demographic trends have conspired to make today's children more likely to be given more toys by more people who have more money to spend. (Notably, the increase in the number of remarriages following divorce has increased the ratio of grandparents to children, which has increased the ratio of presents to birthdays.) Also, the flourishing of Toys R Us and other so-called toy supermarkets has helped extend the toy-selling season beyond the traditional Thanksgiving-to-Christmas crush. A boom in licensing has made it possible for children to own their favorite characters in the form of not merely toys but also wallpaper and breakfast cereal. Perhaps most important, toy manufacturers have become vastly more sophisticated (some people would say insidious) at marketing their products. Television in particular has become a marketing tool, with the effect that most new TV programs for children are extended commercials for toys. Major toy introductions are now minutely planned campaigns in which tens and even hundreds of millions of dollars are at stake.

Barbie and her friends haven't just been standing around letting their arms fly up while this upheaval has been taking place. Ken is still a goody-goody and Barbie's feet are still shaped for high-heeled shoes, but a lot of other things about the dolls have changed. This year, for example, Barbie has acquired a brand-new glow-in-the-dark evening gown, a brand-new glow-in-the-dark (single) bed, a brand-new glow-in-the-dark vanity, and a brand-new pet tropical bird with reversible wings. She has also acquired her very own rock band, called the Rockers. ("Don't ask me to comment about their makeup," Ruth Cronk says.)

What is Barbie, the most steadfastly unhip, eleven-and-a-half-inch person in America, doing in a rock band? The answer has to do with something else Barbie acquired this year: her first serious competitor in a long time. This competitor, whose name is Jem, also has her very own rock band, called the Holograms. When Jem's manufacturer, Hasbro, Inc., invited little girls to enter a contest by dialing 1-800-ROCKGEM and singing the Jem theme song ("Jem is truly outrageous, truly, truly, truly outrageous ... "), so many of them did that the phone company had to put in extra lines.

Nobody, including Jem's creators, thinks that Jem is going to render Barbie obsolete. But some observers think that Jem might give Barbie a run for some of her money. How the competition turns out will depend on the vagaries of one of the least predictable pursuits in all of capitalism: selling fun to children.

I n the olden days children had no toys per se but played with pine cones and lumps of coal. This made them happier, smarter, and better behaved than today's children, and everyone, except today's children, would like for the olden days to return.

Eventually, a few rudimentary playthings came into being: Erector sets, Tinkertoys, Lionel trains, Lincoln Logs. The children of the twenties and thirties, looking like miniature, black-and-white versions of their present selves, played with these primitive amusements, covered them with the interesting-smelling dust of history, and handed them down to their children. I remember playing with my father's Lincoln Logs, happily building and rebuilding the same small rectangular structure, for about five minutes. Then the Lincoln Logs became lost. (Actually, Lincoln Logs are still popular enough to consume four carloads of Ponderosa pine trees from Oregon every month. They were invented in 1916 by John Lloyd Wright, a son of the famous architect, and were inspired by a Japanese technique for constructing earthquake-proof buildings.)

The first great watershed in the development of toys as we know them was the end of the Second World War. The Great Depression had made it impossible for most people to buy a lot of toys. The war had the same effect. When prosperity returned and the people now known as Yuppies began to be born, the modern toy industry was born as well. Propelling it toward maturity were the two great engines of post-war American culture: television and plastic.

Today the toy business is dominated by a handful of companies, the largest five of which—Hasbro, Mattel, Coleco Industries, Kenner Parker Toys, (which consists of Kenner and Parker Brothers, a venerable game manufacturer), and Fisher-Price—accounted for more than 45 percent of all toys sold last year. Of these five only Fisher-Price began—in 1930—as a toy company. The others entered the business by peculiar routes. Kenner began in 1947 as a soap and soft-drink manufacturer; a premium called the Bubbl/Matic Gun, which came in boxes of Kenner soap, was so received that the company switched businesses. (One-hundred-and-three-year-old Parker Brothers has always been what it is today, primarily a manufacturer of games.) Coleco started in 1932 as the Connecticut Leather Company, a wholesale distributor of shoe-repair supplies; it became a toy company in the early 1950s, when it began selling the Official Howdy Doody Make It Yourself Bee-Nee Kit and other leathercraft items for children. The first products of Mattel—whose name consists of syllables from the names of the founders, Harold Matson and Elliot Handler—were picture frames and miniature furniture made of polyurethane left over from the manufacture of airplane nose cones. Hasbro started out in 1923 as Hassenfeld Brothers, purveyors of textile remnants.

Representatives of these companies and roughly 700 others can be found each February at the American International Toy Fair, a ten-day trade show in New York City. The first Toy Fair, in 1902, consisted of ten or so underfed salesmen trying to catch the attention of wholesale buyers passing through New York on their way to and from Europe, the major source of toys at the time. Today America is not only the principal market for toys, consuming a third of all the playthings produced in the world every year, but also the principal source. The 1986 Toy Fair featured 871 exhibitors, 832 of them American, and attracted some 15,000 buyers from more than sixty countries.

These people had a pretty good time. They were squirted by battery-powered squirt guns, greeted by Jem's secretary, and briefed in a tent by an anti-terrorist commando. Among the most talked-about toys were Party Animals, hand puppets from Axlon, Inc., that make electronically produced sounds when their mouths are opened; Ohio Art Company's Etch-A-Sketch Animator, an electronic version of the old favorite; Coleco's line of licensed Rambo action figures, billed as the Force of Freedom ("He'll fight the good fight for flag and country, but it's the freedom of the individual that really counts"); numerous interactive games designed for video-cassette recorders; Mattel's Popples, which "can be changed from fluffy balls to furry friends" (and have established a new category of toy, called "transformable plush"); a wonderful battery-powered mask called the Voice Modulator, which turns human speech into electronic robot talk; and a seemingly endless procession of talking teddy bears (category name: "electronic plush").

The surprise hit of this past Christmas season was a talking bear named Teddy Ruxpin, manufactured by a hitherto unknown company called Worlds of Wonder, Inc. This year at the Toy Fair, Worlds of Wonder was hot. Teddy Ruxpin now rides herd over a vast number of noisy toys, among them Smarty Bear ("the Talk-A-Tronic you can bare all to"); Gabby Bear; Heart-To-Heart Bear; Pete, Repeat, Hello Hippo, and Rappin' Rabbit; Billy Bob ("accurately synchronized to software in the movements of its mouth and positioning of the head, body, and arms"); Spunky (a doll that "laughs, tells stories, sings songs, tells riddles, and does tongue twisters"); Dreebles ("they purr when touched); Blabber Bear, Blabbermouth, Blabber Mouse, and Blabber Phone; Bingo Bear and P. C. McChip; Petster, Pupster, Petster Puppy, RoboPup, Talkabot, Spybot, Sting Mosquito, Dippity Dolphin, Darwin Gorilla, Silly Goose, Tetrazzini Turkey, and A. G. Bear.

Not all these toys really talk. A. G. Bear, for example, responds to sounds in a sort of electronic mumble that its manufacturer, Axlon, calls Bear Talk. The mumble is produced by a little black box in the toy's back that takes sounds from the outside world, distorts them electronically, and repeats them in garbled form after a delay.

A. G. Bear strikes me as being exactly the right kind of talking toy. It responds to a child, but not with canned pronouncements. And it leaves room for the imagination, a child's most important plaything. When I was in grade school, a classmate took an electric barber's razor and shaved some little rectangles on his head—parking spaces for his Matchbox cars. His mother was apoplectic, but the parking lot was his to keep until his hair grew back.

What's on the Shelves

Until the mid-1970s as many as 70 percent of all toys sold at retail each year were sold during the six weeks before Christmas. According to the usual pattern, buyers ordered these toys at the Toy Fair, received them in the summer, and paid for them in December, a practice known in the business as "dating." Often the new toys were not put on the shelves until mid-autumn. By the first of the new year the toy year was over.

Today Christmas sales account for only about half of the year's toy business. The Toy Fair has declined slightly in importance as the selling season has lengthened; new toys are now introduced year-round. By this Christmas many of the season's most popular toys will have been on the shelves (not to mention on the tube) for months.

The person most responsible for loosening Santa's grip on the toy business was born in the back room of a Washington, D.C., bicycle shop in 1923. "I was a quiet, introspective child," Charles Lazarus says. His father bought broken bicycles, rebuilt them, and sold them. Young Charles learned to ride and walk on roughly the same day. "I always wondered why we didn't sell new bicycles," he says. "My father said it was because the big chain stores could sell them so much cheaper than we could."

Engraving these words on the inside of his skull somewhere, Lazarus went off to the Second World War, where he served as a cryptographer. After the war he felt too old (at twenty-four) to go to college. He took over the family store, got rid of the bicycles, and filled the place with baby furniture. It was a good business; returning soldiers were having large families. Over the course of several years, though, Lazarus noticed something interesting: people who bought one crib seldom bought another. Baby furniture didn't wear out. He began to think about merchandise that would. "Toys are a great kind of thing to sell, because they don't last that long," he says today. Lazarus switched to the toy business and named his store the Children's Supermart. To increase name recognition, he printed the Rs backward.

As Lazarus expanded his business, he decided that his signs didn't look right. If two long words were to fit on a sign, the letters had to be small. Shorter words, bigger letters. He set out to find the shortest possible name that would convey what he was selling. He settled on Toys R Us, retaining a backward R.

The whole structure of retailing was under renovation in the 1950s as Lazarus was hammering out his strategy for selling toys. The age of discounting had arrived. Lazarus retrieved his father's pronouncement from his cranium and studied the experience of the cut-rate chain E. J. Korvette. The key to success, Lazarus decided, was offering name-brand merchandise at less than list price. In 1966, having opened three additional outlets, Lazarus sold his business to a company called Interstate Stores for $7.5 million. Lazarus himself was part of the package, staying on to manage his stores. Over the next eight years he added forty-three new outlets.

While Toys R Us prospered, though, the rest of Interstate gradually fell apart, finally filing for bankruptcy in 1974. The company was reorganized in 1978, under the Toys R Us name, with Lazarus as its chief executive officer. The new company's early days were difficult, but toy manufacturers extended extremely generous credit terms to keep Lazarus in business. Toys R Us quickly entered a period of rapid growth that made it, in the words of a recent research report from the international banking and brokerage firm Goldman, Sachs & Co., "one of the outstanding companies in all of retailing." From 1975 to 1985 the company's annual revenues grew from a little over $200 million to a little over $2 billion.

Toy manufacturers were willing to back Lazarus because they believed that Toys R Us was the key to what they yearned for: year-round toy sales. Unlike traditional toy retailers, Lazarus didn't cut his stocks back dramatically in the off-season. Nor did he pick and choose among manufacturers' offerings; he usually ordered the entire catalogue and he put at least one of everything out where customers could see it.

Visiting a Toys R Us store for the first time is quite an experience. The stores look like warehouses. Toys are stacked nearly to the ceiling, and the customers push shopping carts. The selection—more than 18,000 different toys in every store—is almost inconceivably vast. "There's an enormous opportunity in America if you're willing to make a commitment to inventory," Lazarus says.

Like striped toothpaste, seedless grapes, and many other great ideas, the present-day Toys R Us concept is relatively simple. The most important element is central control. Toys R Us managers never place orders; new toys simply arrive. A computerized merchandise-tracking system links every cash register in each of the 233 American Toys R Us outlets with corporate headquarters in Rochelle Park, New Jersey. If the Toys R Us, in Christiana, Delaware, is running low on Immortals of Change Attack Probes, this information is noted at the nearest distribution center and Attack Probes are shipped to the store.

Decisions made at Toys R Us affect every aspect of the toy business. Before Lazarus, dolls were kept in closed boxes behind toy counters. Now toy packaging is designed according to how it will look (and whether it will fit) on the shelves at Toys R Us. Because Toys R Us stacks toys high into the air, virtually all packages are made to stack.

Toys R Us has become important to the success of most toys, and manufacturers generally check with Rochelle Park before they go into production. "By early December," Lazarus says, "we've seen nearly everything that will be introduced at the Toy Fair. In fact, we've seen more, because some goods get dropped along the way." Very often the goods that are dropped are goods that didn't appeal to Lazarus and his staff. Some toys are even tested in the stores before a final production decision is made. A company planning a new toy for Christmas of 1987 might make a few samples and ship them to Toys R Us as early as September of 1986.

Toys R Us has been so successful that the rest of the retail toy business has had to change in order to survive. The company has given rise to imitators, including Child World, Lionel Leisure, and a host of regional chains. Even more significant, it has forced existing stores either to act like Toys R Us or to get out of the toy business. Big discount chains like Kmart and Caldor used to run their toy departments the way Macy's did, expanding them for Christmas and contracting them during the rest of the year. Now the discounters and even Macy's have discovered that if they don't maintain competitive toy departments all year long, their customers defect to Toys R Us during the off-season and don't come back for Christmas. In the meantime, many traditional department stores have essentially stopped selling toys.

Toys R Us customers are very loyal. The chain has a no-questions-asked return policy that grew out of a discovery Lazarus made when he was starting out in business. "I noticed that the customer who raised his voice generally got his purchase taken back anyway, regardless of the merits," he says. Toys R Us also carries a selection of children's clothing and other non-toy merchandise—most notably disposable diapers, which the company buys by the megaton and sells below cost. Many customers come to Toys R Us to stock up on Huggies, and then spend the savings on toys. (The company has also found that its customers buy toys with the money they save buying other toys; people generally come to Toys R Us planning to spend a certain amount of money, not to make specific purchases.)

All in all, the strategy has been astonishingly successful. Close to 16 percent of the money Americans spend on toys is spent at Toys R Us, and analysts say that the figure could eventually go as high as 40 percent, a market share unprecedented in retailing. Almost everywhere Lazarus looks, he sees trends that make him smile: parents are having fewer children and spending more money on each one; working mothers are feeling guilty about not seeing their children and making it up to them with toys; in 1990 there will be 15.1 percent more children between the ages of five and nine than there were in 1983.

Lazarus also likes what he sees overseas. There are now Toys R Us stores in Canada, the United Kingdom, and Singapore, and many more stores are planned in Europe and elsewhere. Any country that has supermarkets, Lazarus says, is a potential home for Toys R Us. That goes double for any country with commercial TV. Here at home the company has been expanding the number of its outlets at a rate of roughly 18 percent a year.

I n a world where people disagree about almost everything, it's reassuring that there is a single, universally accepted standard for judging toys. This standard can be stated simply: A toy is appropriate for my child if I had either it or something almost exactly like it when I was growing up.

My favorite toy when I was growing up was a smallish set of Lego building blocks. Lego is not an American toy. It is the product of Interlego A/S, a privately held multinational corporation based in Billund, Denmark. The company began in 1916 as the Billund Woodworking and Carpenter's Shop. The proprietor was a young joiner named Ole Kirk Christiansen. One of his biggest projects was rebuilding the Billund Woodworking and Carpenter's Shop, which two of his sons accidentally burned to the ground in 1924. When the Depression hit, Ole began making ironing boards and stepladders. Then, to save scarce raw materials, he began making miniature ironing boards and stepladders. He sold them as toys.

The toy business was good to Ole, and gradually he devoted his full attention to it. One of his biggest sellers was the Yo-Yo, a toy that reached Denmark in the early 1930s. (It was introduced in the United States in 1929 by Donald F. Duncan, Sr., who also invented the parking meter.) Then, abruptly, the market for Yo-Yos vanished. Ole unfortunately had a warehouse full of them. Facing ruin, he was suddenly inspired: he sawed the Yo-Yos in half and used them as wheels on toy trucks.

In 1934 Ole offered a prize to the employee who suggested the best name for the company. The winner was Ole himself, who thought of Lego, from the Danish words leg godt, meaning "play well. " After the Second World War plastic was incorporated into the line. One of company's first plastic toys, introduced in 1949, was a product originally called "automatic binding bricks." These were small plastic bricks that had round studs on top, enabling them to be snapped together.

In the 1950s control of the company gradually passed to Ole's son Godtfred, who is usually referred to by his initials, GKC. (Today the company is run by GKC and his son Kjeld Kirk Kristiansen, who changed the spelling of his last name.) In 1954 GKC devised what are now known as "The 10 Lego Characteristics." These include "unlimited play possibilities"; "enthusiasm to all ages"; "always topical"; "safety and quality"; "more Lego-multiplied play value"; "imagination, creativity, development." To translate somewhat, GKC decided that the ideal toy was one that both left and suggested much to the imagination, that was not limited in its appeal, and that could be expanded indefinitely, creating the possibility of multiple sales.

GKC concluded that only one of the company's 200-plus products satisfied all of these requirements. Thenceforward, he decreed, the company would concentrate on plastic bricks, renamed in 1955 the Lego System of Play.

What GKC conceived in 1954 was the blueprint for a toy line that need never go out of style. The company continued to manufacture a few wooden toys until 1960, but GKC was convinced of the soundness of his vision. The years have borne him out. Today Lego bricks are sold in 125 countries, including the Soviet Union and Israel (which boasts the highest per capita Lego sales in the world). They can be found in roughly 40 percent of American homes with children under the age of fifteen, and have the second highest "coverage" of any toy (the first-place coverer is Crayola Crayons). In some European countries Lego's coverage is close to 85 percent. Some 68 million children around the world spend five billion hours a year playing with Lego bricks.

When the Lego System began, the bricks were aimed primarily at five- and six-year-olds. Over the years the target market has been extended both up and down. There are now Lego products for children as young as three months old. The upper age limit is officially given as fourteen years, but the bricks are very popular with older children and even with adults, who, when bitten, tend to buy enormous quantities. My daughter loves her Duplo blocks, outsize Lego bricks intended for pre-schoolers. (Some of the smaller bricks present a choking hazard for children under three.) Consistent with GKC's notion of a system of play, Duplo bricks, though eight times the volume of standard Lego bricks, can be snapped together with their smaller cousins. The innovation that makes this possible, hollow studs on the Duplo bricks, came to GKC in a dream.

In Denmark, GKC is a figure of Disneyesque proportions. His Legoland amusement park is one of the country's major tourist attractions. Almost everything at Legoland is made of Lego bricks. Popular attractions include models of Mount Rushmore (1.5 million Lego bricks), the space shuttle Columbia (410,000), the Port of Copenhagen (3 million), and Egypt's Abu Simbel temples (265,000). There is also a Wild West town, called Legoredo, where the cowboys eat "twists of tenderfoot bread," speak Danish, and wear clogs. More than 14 million people have visited Legoland since it opened, in 1968.

That Lego has been as successful in the United States as it has been is a tribute more to the fundamental soundness of the toy than to the way it has been marketed here. Executives in Billund like to believe that Lego should sell simply because it's Lego, a notion that runs against the very grain of American civilization. Some toy-industry analysts tend to believe that the company could sell a lot more bricks in this country if it puts its mind to the task.

The Influence of Television

I f the Danes ever decide to take a crash course in American toy marketing, a good teacher would be Bernard Loomis. Loomis is a great big man who wears glasses and likes to play tennis. He has been associated with the largest toy company in the world, at the moment it became the largest toy company, on three separate occasions. Almost every time the industry has taken a major, controversial step in the past twenty-five years, Loomis has been in the neighborhood.

Bernard Loomis was born in the Bronx in 1923. His father was a Russian immigrant who dabbled in show business and generally failed to make a living as an itinerant salesman of woolen goods. "Ours was a family whose economics were always confused," Loomis says. There was no money for toys; among young Bernard's few playthings were a Lionel train catalogue, which he knew backward and forward, and a vivid imagination. One year he played a full American League baseball season using a deck of cards. He had developed an elaborate system in which every card he turned over meant something specific: a ball, a strike, a double, a pop fly. In fat notebooks he kept track not only of scores but also of pitching records and batting averages. By the time the World Series rolled around, he had played every game in the schedule.

Loomis attended New York University at night and held down a succession of dead-end jobs. "I fooled around in a lot of things in some kind of search that even I didn't understand," he says. By the late 1950s he was working in New York as a toy manufacturer's representative, having lately retired from the hardware business. At the 1961 Toy Fair he met Ruth and Elliot Handler, of Mattel (who had bought out Harold Matson and now ran the company together). He liked the Handlers and their colleagues immediately and accepted the offer of a job.

Mattel was a small company at the time, but it was on the verge of becoming the driving force in the industry. "Much of what the toy business is today started with Mattel in the late 1950s, " Loomis says. "That was when the industry changed from being a customer-driven business, where the customer decided what he wanted, to being a consumer-communication business."

In a word, television. The first step had come in 1955, before Loomis arrived, when Mattel had bought half a million dollars' worth of commercial time on the new Mickey Mouse Club show. It was, according to lore, the first time that toys—beginning with an item called a Mouse Guitar—were advertised on national television. (The first toy advertised on local TV may have been Hasbro's Mr. Potato Head, which was pitched in California in 1952.)

Television expanded the market for new toys and made it possible for manufacturers to spend more money on new products. It also enabled retailers to cut their prices, since the increased customer traffic permitted narrower profit margins. The new way of life evolved further in 1960, with the introduction of Chatty Cathy, the world's first talking doll and a toy whose marketing strategy Loomis helped devise. Chatty Cathy could never have been produced in the days before television; the potential market would have been too small to justify the cost of developing the doll's talking mechanism. With television, the demand for Chatty Cathy was so great that some retailers began to sell it at less than cost in order to steer the crowds into their stores—a radical step in a business where merchandise had traditionally sold for double its wholesale price.

In 1969 Loomis and others at Mattel undertook what would eventually be seen as an epochal step in the marriage of toys and television. Mattel had introduced a line of miniature cars called Hot Wheels. Instead of simply advertising them on television, why not give them an entire show of their own? The thirty-minute Hot Wheels cartoon show joined ABC's Saturday-morning lineup. The show, developed in close collaboration with Mattel, featured cars from the Hot Wheels line.

The new show didn't catch the attention of children only. It was also noticed by Topper Corporation, a now defunct competitor of Mattel's. Topper complained to the Federal Communications Commission that Hot Wheels violated FCC regulations concerning the separation of programming and advertising. The FCC agreed, and asked stations to log part of the show as advertising time—a move that seemed to deter the formation of any similar alliances between broadcasters and toy companies.

Loomis and Mattel, it turned out, had merely been ten years ahead of their time. During the decade it took their time to catch up, Loomis left Mattel to become the president of the foundering Kenner Products, which was owned by a division of General Mills. Loomis turned the company around with a string of hit toys, including a licensed "action figure" (as most dolls for boys are known) based on the television series six million dollar man.

The six million dollar man doll was a big success, and Loomis began looking for other properties to license. One day in 1976 he noticed a brief item in the Hollywood Reporter about a movie that was being made. Loomis had never heard of the director, but he liked the title: star wars. "I circled the item and sent a copy to a man in our marketing group, and I said, 'Find out about this.'" A short time later he and Twentieth Century Fox Film Corporation signed an agreement giving Kenner exclusive rights to manufacture crafts, games, and toys based on the motion picture.

The agreement didn't cost much. Toys based on movies had seldom sold well, and outer space was thought to be a poisonous theme. But Loomis wasn't interested in the movie; all he cared about was the characters. "I contend that George Lucas is one of the world's great toy designers," he says today. Kenner's line wasn't scheduled to appear until roughly a year after star wars had been released. The characters, Loomis assumed, were strong enough to stand alone.

He never had a chance to find out if he was right. From the day it opened, star wars was a phenomenal success. Children were sitting through it a dozen, two dozen times. "We had a tiger by the tail," Loomis says today. Christmas was just around the corner, and Kenner wouldn't be able to ship toys until spring; the star wars line had been planned for the following Christmas. The toys were being manufactured overseas, and there was no way to speed up production. Could anything be done?

Loomis pondered the problem for a long time, and then had an idea: why not sell the toys before they existed? Kenner could print a certificate promising to deliver toys by a certain date and package it with a picture of the star wars characters. Parents would have something to put under the Christmas tree, and kids could at least hang the picture in their rooms until spring. Loomis presented the idea to his staff. They all thought it was crazy.

Loomis says that he was taken aback. "But I believed that one of my duties as head of a toy company was to lose at least a million dollars a year on things that didn't happen," he says. "So I went ahead." The promotion turned out to be a huge success. Children were happy to receive the pictures. When their toys finally arrived by mail, they took them to school and sent jealous friends rushing to toy stores. star wars eventually generated more than $750 million in toy sales.

star wars confirmed what the six million dollar man had first shown, which was that licensed characters could be the basis for very lucrative toys. But star wars also showed that the logistics of producing such toys could be complicated: there were many factors beyond the toy company's control. If only it were somehow possible to manage the package from beginning to end.

By 1978 Loomis had become the head of the General Mills Toy Group (which included Kenner and Parker Brothers). One day he met with representatives of American Greetings Corporation, a maker of greeting cards. American Greetings owned the licensing rights to a popular cartoon character called Ziggy and wondered whether Loomis might be interested in producing a Ziggy toy.

Loomis said no. Ziggy was already established in the marketplace, with greeting cards, a syndicated comic strip, and other tie-ins. Loomis wasn't interested in simply tagging along. "But I told them, sort of casually, 'If you ever have a project where you want a partner from day one, come back and see me again.'" As it happened, the men had copies of the American Greetings line for the following year. Loomis flipped through the cards, and then stopped. There was a character on one greeting card that looked promising. Loomis pointed to the picture and said, "Mark the time and date. We're going to make history."

Actually, there are several versions of this story. In another one, Jack Chojnacki, who was the director of licensing for American Greetings, discovered that an element common to a lot of successful greeting cards and other products was strawberries. An art director heard this and remembered that one of American Greetings's most successful cards featured a little girl with strawberries on her bonnet. He had an artist add more strawberries. Then a doll was made. Chojnacki and Ralph Shaffer, the director of new-product development, took the card and the doll to Loomis, who looked at them and said, "This is going to be the next major phenomenon in merchandising."

All versions of the story have the same ending: the little girl in the greeting card became a bustling industry called Strawberry Shortcake. What was remarkable was not the character—just a little girl with berries on her clothes but the marketing plan built around it. Loomis had been thinking about the uncertainties of the toy business and had decided that the way to protect against them was to concentrate on lines of toys rather than on individual products. An important reason that Barbie was successful year after year, he believed, was that Mattel had made the doll part of an imaginary environment that, with careful management, could be extended indefinitely. The key was giving the customer a reason to keep buying.

What Loomis had discovered was, in a sense, the 10 Lego Characteristics. Like GKC, he believed that the secret of producing a successful toy lay in finding a concept broad enough for more than one season. Such concepts tend to be simple: plastic building blocks, a dress-up doll, stick-on faces for vegetables. Of course, Lego, Barbie, and Mr. Potato Head (now thirty-five years old) were created through inspiration and luck, not the application of a formula. But the formula could be a useful guide in the development and marketing of humbler toys. Every toy a company produced, Loomis believed, could be a line; indeed, it should be.

For Strawberry Shortcake, Loomis, Shaffer, and Chojnacki envisioned just such a line, with lots of characters and a story tying them together. (Strawberry Shortcake's friends have names like Lime Chiffon and Raspberry Tart; they live in Strawberryland and join together to combat a limited form of evil that manifests itself in things like disappointing fruit crops.) Loomis also wanted to involve the entire Toy Group. The girl on the greeting card would be translated into toys, games, television shows, and hundreds of licensed products, and everything would be created from scratch and centrally controlled. Loomis's idea about the importance of lines would quickly become the conventional wisdom of the industry.

T he first Strawberry Shortcake television special, which aired in 1980, revived a controversy that many believed had been laid to rest. Welcome to the World of Strawberry Shortcake was as much a program-length commercial as the old Hot Wheels had been. But the regulatory mood in Washington had changed, and the Strawberry Shortcake special opened the way for what sometimes appears to be the transformation of children's television into a promotional arm of the toy industry.

There are now about twenty toy-based television series. A recent Saturday morning lineup included shows based on GoBots, Wuzzles, Snorks, M.A.S.K., Popples, and others. The shows are typically financed directly by toy companies or their licensing partners, who also control the scripts. Last year the FCC in effect gave its blessing to the new shows by refusing to hold hearings on product-based TV for children.

Shortly after the FCC decision Peggy Charren, the president of a consumer group called Action for Children's Television (ACT), told Newsweek, "We think the FCC has now completely disowned the nation's children." Charren, whose name is almost invariably preceded in print by adjectives like indefatigable, has been fighting broadcasters, breakfast-cereal manufacturers, toy companies, and others since the late 1960s. Her organization has been instrumental in bringing about a number of changes in children's television, including a reduction in the number of minutes devoted to advertising in programs aimed at kids.

ACT's main argument against the toy-based shows is that young children draw no distinction between commercial and editorial content and are thus easy targets for manipulative marketing. Toys based on popular movie and television characters have been around for years (for example, Mickey Mouse dolls); but in the past, ACT has said, the movies and programs always came first. Now the toys often precede the programs, whose scripts are conceived of as promotional tools. Furthermore, according to ACT, the toy-based shows have prevented better programming from reaching children.

ACT has proposed a number of remedies over the years, including the banning of toy advertising from children's television, and the banning of all advertising from children's television. More recently, as the prospects for new regulation have dimmed, ACT has retreated to a much tamer demand—that toy-based television shows be sprinkled with announcements reminding children that they are being pitched.

The toy companies more or less concede that their new programs are commercials; boastful sales pitches to retailers describe the shows in almost the same terms that Peggy Charren uses. When criticized, though, the toy companies also say that being on TV doesn't guarantee success for a toy; three of the most popular children's shows at the moment are the three segments of the ninety-minute cartoon series Smurfs, yet Smurfs toys don't sell well. Toy companies also say that toys are such a big part of the lives of children that there isn't all that much else to make shows about. Furthermore, they say, the question of which comes first, the toy or the show, is irrelevant.

There are many, many other arguments and counter-arguments. The ones cited just sketch the general outline of the debate. In that debate right-thinking people tend to come down fairly quickly on the side of ACT: who can help but be appalled by all that crass commercialism? But the real issues are not as simple as Charren and her supporters make them out to be.

First of all, ACT's proposed reforms seem naive. Banning advertising from children's shows has a certain surface appeal, but the idea is unrealistic. Why not also require toy companies to give their products away? Removing all the money from children's television would not prompt producers to create better shows. ACT's proposal last January that toy-based shows be required to contain disclaimers identifying them as promotions seems counter-productive. If young viewers really can't distinguish between shows and commercials, then the toy companies could probably increase sales by reminding kids that the toys they're watching can also be bought.

Another possibility might be to prohibit toy companies from creating television programs. But how do you banish Strawberry Shortcake and Care Bears without also banishing Muppets? The Muppets' creator, Henson Associates, is on almost everyone's (including Peggy Charren's) list of top-quality producers, but the Muppets support a profitable stable of more than 500 licensed products, many of them toys. Henson even has its own New York toy store, called Muppet Stuff. Henson Associates, whatever else it is, is an extremely successful toy business, and Henson's shows, whatever else they are, are program-length commercials. Children's Television Workshop, home of the widely acclaimed series Sesame Street, earns back two thirds of the show's production costs from the licensing of toys and other products.

Nor is it possible to make meaningful distinctions according to whether the toys or the shows were thought of first. To young viewers, Mickey Mouse and Strawberry Shortcake are contemporaries. What's more, there's no pattern to the order in which toys and shows appear. Companies now often find it profitable to introduce toy-based shows well in advance of the toys on which they are based.

The real question has to do not with toy companies but with the quality of children's television, which is abysmal. Sitting through a full Saturday or Sunday morning of kidvid, as I dutifully did several times in the course of researching this article, is a pretty horrifying experience. "Speaking of Girza, it's time to move on to Bandasar and take care of Tormac," and so on and so on, hour after hour. Much of ACT's support, I suspect, comes from people who feel the same way: the kids' shows are horrible, so let's do something about the people who make them.

But program quality is a quicksand subject for people who, like Peggy Charren, believe in the First Amendment. ACT's January petition to the FCC, Charren has stressed, "does not seek to ban or impede the presentation" of the toy-based shows but merely to make explicit to young viewers the programs' commercial intent. ACT has also been quick to condemn various right-wing groups that periodically call for the elimination of television shows they find offensive. To confront directly what is genuinely bothersome about children's television—its mindlessness—is to come, uncomfortably close to advocating censorship.

ACT addresses the quality issue only obliquely, by claiming that having to satisfy the requirements of toy manufacturers stifles the creativity of the producers and that children's programming would improve if the toy companies cleared out. In an article last year in PTA Today, ACT's director of development quoted a television producer as saying, "I would love to create shows rather than have someone come in and say, 'This is the golden ashtray everyone's buying; give me a show about it.'" Charren has said, "It's a shame we don't have diversity of producers for children's TV. Certainly they'd like to be there, but it's the money powers that are playing the ratings game who keep them out.

"Money powers" and "ratings game" are buzz phrases calculated to heat the blood of caring persons, but unless one rejects the idea of commercial TV, there's nothing sinister about the people they signify (respectively, advertisers and viewers). In fact, commercial television is one of the few truly democratic institutions around: viewers "vote" by watching, and the shows that don't get enough votes don't stay on the air. Charren has said that the networks could field better programs if they wanted to, because "broadcasters know what quality programming is." Good programs, she says, "are the ones they submit for awards." This is a specious argument. Book publishers must know what good books are (the ones they submit for awards); why don't they print more of them?

The solution to the kidvid problem—the real kidvid problem—is simple: if parents prevented their children from watching the shows, they wouldn't be on. Parents complain about the quality of the shows but don't prevent their children from gluing themselves to the boob tube. In the end, the garbage on TV is probably a fairly accurate representation of what the audience (parents included) really wants. There was a vast outpouring of public protest when CBS canceled Captain Kangaroo, in 1981, but the show's ratings had been microscopic for years. No one wanted to see it go, but no one wanted to see it, either.

The well-known discrepancy between what parents say and what they do arises in this case from a deep ambivalence about television. On the one hand, almost everyone at least pays lip service to the idea that watching a lot of TV is bad; on the other hand, television has become a sort of national babysitting service. According to the A. C. Nielsen Company's 1986 Report on Television, children between the ages of two and five watch an average of twenty-eight hours and fifteen minutes of television a week. Their most active viewing period is weekdays between ten in the morning and four-thirty in the afternoon. Busy parents (or the sitters they hire) are using television to keep their children quiet. This is a great tragedy. But the responsibility for it belongs to parents.

Most of the toy-based shows are crummy, but so are most of the other shows. Scooby Doo, a cartoon show created before the toy companies invaded Saturday morning, is not a better program than Snorks. Sesame Street is reflexively admired by almost everyone, but I suspect that adults would praise it less if they watched it more. Sesame Street may not be schlock, but kids often watch it the way they watch schlock: like zombies. Four hours of television a day is much too much, even if it's Bert and Ernie. ACT for years has paradoxically called upon the networks to provide more television shows aimed at children during more hours of the week. Kids might be better off if broadcasters got rid of children's shows and substituted the one kind of programming most kids can't stand: news.

To fail to be appalled by the connection between toy companies and children's television is not to endorse the shows. But it is possible to find a few nice things to say about them. First, toy-based programs at least encourage children to spend some of their waking hours away from the television set: a child who wheedles his parents into buying him a toy he's seen on TV will presumably play with it once in a while. Second, the new shows have a number of features missing from a lot of other shows—particularly widely admired cartoon "classics" such as Popeye and Tom and Jerry: for example, racial balance, uplifting sentiments, and, for the most part, a conspicuous lack of violence. Third, the substantial cost of creating television shows has encouraged toy companies to favor products that are well thought out, well designed, and not likely to disappear overnight: fad toys don't earn back multimillion-dollar television investments. Fourth ...

Well, three is pretty many.

Staying Power

I f Bernard Loomis helped invent the strategy of concentrating on expandable lines of toys, Hasbro has come close to perfecting it. In an industry where violent, unruly expansion and contraction is the rule, Hasbro's rise to pre-eminence has been impressive. The company has lately become a darling of the nation's financial analysts and business magazines, which have praised it for unusually sound management.

Most observers give credit for Hasbro's success to the company's young chairman, Stephen Hassenfeld. Hassenfeld, forty-four, and his brother, Alan, thirty-seven, who is Hasbro's president, represent the family's third generation in the toy business. Unlike Charles Lazarus and Bernard Loomis, Stephen and his brother had lots and lots of toys when they were growing up. Their father, Merrill, was widely admired in the industry, and executives of other companies often showed their affection by showering the Hassenfeld boys with their toys. The head of the company that manufactured Lionel trains even added young Stephen's name to his list of salesmen, which meant that every time a new train or accessory came out, Stephen received a sample. Directing one of the world's most spectacular toy trains around his basement, he knew from a very early age what he wanted to do when he grew up.

Over the past ten years or so Stephen has gone far toward making Hasbro what all toy companies yearn to be: a rational enterprise. Selling toys has always been a fashion business. Companies have scored inebriating successes, alongside sobering failures, all subject to the largely unpredictable whims of children. The goal, seldom achieved, has been to minimize the failures without killing off the creativity that produces successes.

Hasbro's strategy for growth without trauma has focused on diversification within the toy industry. It has done this partly by acquiring other companies (it bought the Milton Bradley Company and its Playskool subsidiary, in 1984, for $350 million) and partly by expanding steadily into new toy categories. The strategy is now nearly universal, or universally aspired to, in the industry. Tonka Corporation, formerly known only, as an unflashy manufacturer of high-quality toy trucks, now offers a greatly expanded selection that includes GoBots, a Cabbage Patch-inspired line of stuffed dogs called Pound Puppies, and Rock Lords, transformable figures described on their cartoon show as "powerful living rocks." Tonka's expansion has been successful. As of last year the company was the sixth-largest toy manufacturer in the country.

Stephen Hassenfeld's first big hit was the 1982 reintroduction of G. I. Joe. Originally marketed, in 1964, as a Second World War-era infantryman, G. I. Joe was turned into a cadre of quasi-military "adventurers" in 1970. In succeeding years the line was expanded to include a figure with what Hasbro called a "Kung-Fu grip," a bionic warrior, a superhuman, and a spaceman. The line was discontinued altogether in 1978, when it was done in by a combination of high oil prices—which made its large plastic body and accessories expensive to manufacture—and a proliferation of smaller, less expensive action figures. When G.I. Joe resurfaced four years later, the line had shrunk (from just under a foot to just under four inches, a size made popular by star wars toys); changed its slogan (from "a fighting man from head to toe" to "a real American hero"), and multiplied itself into an anti-terrorist "strike force" consisting of sixteen separate characters (one of which was female and none of which was actually called G. I. Joe).

The redesigned toy did $49 million in business in 1982, and became the nation's best-selling toy in the second half of the year. Hassenfeld's first reaction to the toy's success was one of joy; his second was one of concern. Forty-nine million dollars represented 36 percent of Hasbro's revenue at the time, making the company dangerously vulnerable to a drop in the toy's popularity. Perhaps the most important lesson Hassenfeld had learned during his lifelong tutelage in the toy business was that profit often goeth before a fall. The mistake that other toy-makers had habitually made, he felt, was in believing that they were immune to the syndrome of booms going bust.

This is not to say that Hassenfeld abandoned his popular new toy. Quite the contrary. But he made plans for the future of the company which didn't depend on G.I. Joe's continued success. Profits from the toy's first year were reinvested in the company's future, primarily as part of the package that financed the Milton Bradley acquisition.

As it happens, G.I. Joe has shown no sign of weakness. The line brought in $86 million in 1983, $132 million in 1984, and $136 million in 1985. But at the same time Hasbro has grown so much that by last year $136 million represented just 11 percent of its total business. The toy's profitability had increased while simultaneously becoming less important.

As sound as it may seem from the sidelines of the toy business, Hassenfeld's healthy skepticism about the longevity of best-selling toys has sometimes not been in evidence in the management of other toy companies. The fastest-selling toy of all time, Coleco's line of Cabbage Patch Kids, surprised almost everyone by remaining a hit toy for three full years (and bringing Coleco more than $1.2 billion in sales from 1983 to 1985). But by the end of 1985 Cabbage Patch still accounted for an astonishing 74 percent of Coleco's business. Last spring analysts were predicting that Cabbage Patch sales for 1986 might decline by as much as 35 percent of what they had been in 1985. Since Coleco's 1986 catalogue is still weighted heavily toward Cabbage Patch, the company could be in serious trouble.

Coleco's hopes for 1986 and beyond may hinge on the performance of its latest excursion into the now crowded male-action-figure category, where it will compete with G. I. Joe, Masters of the Universe, and many, many others. Coleco's entry is a licensed line of toy soldiers based on the R-rated Rambo movies, in which Sylvester Stallone plays a vengeful Vietnam veteran. Coleco has toned down the movie character in the cartoon it has created (the cartoon Rambo doesn't kill anyone), but, like the movie, the cartoon and the toy line appeal to the nation's recent anxiety about terrorism.

Parents and others sometimes complain about the prevalence of lines, and the emphasis on repeated purchases, in the toy business today. Yet the modern way has much to recommend it. Nothing looks more forlorn to the person who bought it than a toy that is used a time or two and then forgotten. For a toy line to remain viable year after year, children have to continue playing with it. When line extensions predominate at the Toy Fair, it means the playroom is safe from revolution for another year. Nobody throws away Lego. The emphasis on lines can help keep prices down, by giving manufacturers longer to earn back their investments. It also helps keep quality up. A line doesn't last simply because it's a line. Children go back for more only if the central concept appeals to them in some enduring way.

Enduring appeal is an idea that covers a lot of territory, of course. Whereas Cabbage Patch sales may slip considerably this year, Barbie may have her biggest year ever, after more than a quarter of a century on the shelf. Toy analysts wonder if her new competitor, Jem, will have anything like that staying power.

Hasbro executives discovered Jem, or rather ur-Jem, several years ago, when an independent toy designer showed them a male rock-star doll. The doll looked promising, and Hasbro took an option on the rights.

MTV, the rock-music television channel, had grown enormously popular. MTV is aimed primarily at teenagers and young adults, but Hasbro knew that a lot of younger kids were watching it as well. Rock videos had introduced little girls to a whole new way of thinking about fashion: eight-year-olds were asking their moms if they could dye their hair pink and cut holes in their sweatshirts and do a lot of other things that Barbie didn't do. It occurred to people at Hasbro that there might be a market for a fashion doll that looked less like Barbie and more like the people on MTV.

The Hasbro executive most responsible for keeping the project going was Maurene Souza, the vice-president of marketing for girls' toys. One of the first things that Souza did was work out a "back story" for the new doll. When my wife was growing up, she had a favorite doll she called Leprosy—the most beautiful-sounding word she had encountered up to that point. Nowadays dolls come not only with ready-made names but also with full-blown biographies. In time the optioned male rock star became Jem/Jerrica, "a woman with a mysterious dual identity," to quote from Hasbro's publicity:

She's Jerrica Benton, a savvy Eighties career woman, co-owner of Star Light Music Company and benefactor of Starlight House, a shelter for homeless girls. But, with the magic of "Synergy," a super-holographic computer that filters power through her Jem Star earrings, Jerrica becomes Jem, a truly outrageous rock singing sensation. With the help of little sister Kimber and friends Aja and Shana, the four become "Jem and the Holograms," the hottest girl group since the Supremes. Exciting adventures unfold as Jerrica competes for control of Starlight [sic] Music against evil co-owner Eric Raymond, while Jem and the Holograms come up against the mischievous "bad-girl" rock band, "The Misfits."

There's also Rio, Jerrica's boyfriend, who, unlike Barbie's Ken, has a snappy wardrobe (the Miami Vice look) and combable hair.

"Changing from Jem to Jerrica gives the toy a great deal of depth," Souza says. "There are clothes for being Jem; there are clothes for being Jerrica. There are things Jerrica can do; there are things Jem can do. Barbie has really been locked into the mainstream American life-style. Jerrica is part of that too, although she's more a woman of the world. Jem becomes the fantasy. It gives us a lot of places to go with both of them." "Synergy" is Jem's key to longevity. If MTV goes out of style, the holographic computer can change Jerrica into something else: Jem, attorney-at-law.

To spread the word about Jem, Hasbro began including seven-minute Jem segments in its syndicated Sunday-morning cartoon show Super Sunday. The segments were so successful that Jem was spun off into her own regular series. Each show contains original songs presented in the form of "videos."

Mattel's response was immediate. Before the Toy Fair, and long before Jem's debut on Super Sunday, Hasbro had begun to run teaser ads of the "Jem—Coming Soon" variety in the trade press. Not long after the first ad appeared, Mattel introduced Barbie and the Rockers (featuring Dee Dee, Dana, Diva, and Derek) and prepared to slug it out. Hasbro had been expecting a rock band, but they hadn't been expecting Barbie to be a member. Truly outrageous! Mattel says that it thought of Barbie and the Rockers before it heard about Jem and the Holograms, but most people I talked to were skeptical. Mattel has always rejected the idea of a cartoon series for Barbie, whose principal strength is that she is Everygirl, but who knows?

Hasbro's hopes for Jem are fairly modest. "We want a piece," Souza says. "There's no way we're going to put Barbie out of business."

I can't make up my mind about Jem. She's a bit taller than Barbie (they can't wear each other's clothes), and she's significantly smaller in the bosom. Rio is more appealing than Ken, who has molded plastic hair and what looks like a thyroid problem. Jem has a radio in her Rockin' Roadster, but Barbie has a shower. Hmmmm.

Then again, it isn't up to me, is it?

Gun or rope?

A Tyrant Boss, Even Without the Y Chromosome

By BENEDICT CAREY

THE cold stare, the caustic insult and the bug-eyed explosion are among the most easily accessible techniques for male bigwigs to humiliate and frighten underlings. Each method is in keeping with alpha behavior, and fits of rage in particular are expected of bosses in many organizations. You can't be Zeus without hurling some lightning.

But the nasty boss in the movie "The Devil Wears Prada," which opens on Friday, sets up an attack on a would-be employee with a particularly mean-girl jab: "You have no style or sense of fashion."

"I think that really depends on —— ..." the young woman stutters in response.

"No, no," the boss, played by Meryl Streep, cuts in. "That wasn't a question."

Anyone who has worked in the fashion racket or at a glossy magazine recognizes this kind of cruelty, and the types who perpetrate it, from their Chanel suits down to their pointy Manolos. They are in part products of a corporate culture that demands both a sense of design and a boxer's killer instinct to stay ahead.

Yet female tyrants can spread a different brand of misery than the more common male variety, and research provides some clues to how those differences arise, and in what circumstances they are most apparent. The very tensions women encounter as they rise through an organization — and the techniques they use to do so — give them weapons they can use to promote others, as well as cut them down.

"If women navigate skillfully, not only do they advance but they leave a positive mark on the entire culture of the organization," said Debra E. Meyerson, an organizational behavior researcher at Stanford University and author of the book "Tempered Radicals," about outsiders who change organizations from within. "But if they don't navigate well, they get frustrated, and stalled, and often wind up reinforcing the values they had hoped to challenge."

Social scientists doubted for years whether there was any significant difference between men and women leaders. The overwhelmingly masculine culture of most workplaces, at least through the 1970's, shaped behavior in similar ways among those who rose through the ranks.

According to this view, the only variety was in individual personalities. Some women would display the combativeness of Margaret Thatcher, some men the grace of Abe Lincoln.

But today women run about a quarter of the country's small and midsize firms, and research suggests that gender roles can account for slight differences in their leadership styles, as compared with men.

In an authoritative 2003 analysis of 45 studies in a wide range of organizations, from schools to hospitals to financial companies, Alice Eagly of Northwestern University and Marloes van Engen of Tilberg University in the Netherlands found that women managers tended to be — on average — more collaborative than men, more encouraging to subordinates, more likely to include them in decisions. Men were more likely to lead by top-down command, or to be strictly hands off, distant.

"The differences are small and of course individuals vary," Dr. Eagly said, "but women score higher on transformational leadership, modeling good behavior, working with people, letting people know when they are doing a good job."

BUT these instincts break down in certain circumstances, studies suggest, namely when women feel insecure because they are a token minority whose competence is in question, said Theresa Vescio, a psychologist at Penn State University.

"In these conditions, women tend to treat the lowest-ranking female workers as poorly as men do," Dr. Vescio said. The social skills that allow many women to be effective leaders also give them access to valuable information that hands-off or dictatorial types don't have. Collaboration not only engages colleagues but also helps expose them as possible allies or rivals. Helping others manage their careers and home life brings out gossip about hidden vulnerabilities and relationships in the organization. A manager, as she ascends, may use this information to protect others — or to keep them in check. (As in: "Can you take this job, given your family situation?")

In a study of more than 200 Fortune 500 leaders, Calvin Morrill, a sociologist at the University of California at Irvine, found that almost all of the small number of women bosses — 23 — had cultivated a powerful male mentor.

"The men had mentors, too, but for some reason were likely to split with them," Dr. Morrill said. "But the women kept these guys in their pockets, and their ability to mobilize these partisans made some of them more confrontational."

Anyone can pull on a pair of Prada loafers and throw a fit. But the women who become tyrants — whether they are successful leaders or awful ones — often have a lot more ammunition in reserve than the tough-guy boss down the hall.

Copyright 2006 The New York Times Company

Premature programming.

link to original piece.

Extreme Parenting

Does the Baby Genius Edutainment Complex enrich your child’s mind—or stifle it?

by Alissa Quart

.....

Common wisdom holds that it is wholesome and American to give children the best chance for success: to fill their rooms with lush playthings, to adorn their walls with bright alphabet letters and their plates with mercury-free salmon. Lately, however, the pursuit of advantage has taken an extreme turn. Not long ago, words like gifted and precocious were applied mainly to older kids who read a lot, calculated in their heads, or took more than the average number of after-school classes. (I was one of them.) But in recent years, as a new child-enrichment business has marched into babyhood, right through infancy, and even into the womb, it sometimes seems as though any parent who doesn’t aspire to have his or her child show early evidence of “talent” is somehow being less than fully American.

The vast giftedness industry has expanded to include such disparate phenomena as the teaching of baby sign language, the IQ testing of toddlers, and the proliferation of video programs like the Baby Einstein series. (Never mind that Einstein himself was a late bloomer; he didn’t speak until he was three, and no one thought him “gifted.”) Specialized camps and competitions are now enrolling the youngest of children; classes include soccer for three-year-olds and Broadway Babies for starlets of only six months.

I call it the Baby Genius Edutainment Complex, the first stage of the American passion for making gifted children. It reflects a faith that if babies are exposed to enough stimulating multimedia content, typically in tandem with equally stirring classes, bright children can be invented.

Parents who press their children to succeed do so in hopes of preparing them for an adulthood of high achievement. Economically anxious, many parents see their children’s accomplishments as a sort of insurance against the financial challenges of old age; high-achieving kids, this logic goes, will become high-earning adults, and therefore be better able to help Mom and Dad pay for the assisted-living facility in a few decades. And, of course, kids can be a handy vehicle for combating status anxiety: even if your net worth is failing to keep up with the Einsteins’ next door, you can still take solace in the fact that while the Einsteins’ son is barely speaking in complete sentences, your son is already reading Heidegger.

But with so much competition for everything from preschool to summer camp to college, children must work harder and train more extensively than ever to out-achieve their equally avid young rivals. It’s into this nexus of anxiety and aspiration that these new brainy-baby products have flooded, promising scientifically demonstrated mind enrichment for your children. But the line between activities that nurture and those that merely waste time (and money) is not always so clear. Which raises the question: Whose purpose does all of this aggressive early learning serve?

U ntil 1997, there was no such thing as Baby Einstein. Six years later, one American child in three had watched a Baby Einstein video, seeing such ostensibly mind-developing scenes as the one, in Baby Van Gogh, where a puppet called Vincent van Goat trots through the six primary colors as they appear in van Gogh’s Starry Night and Wheat Fields With Reaper at Sunrise. Some parents may have also exposed their children to competing products: the So Smart! two-disk set, suggested for infants of nine months and up, features interactive alphabet games an infant can play on the TV screen, using the remote control, while the V.Smile video game system promotes itself for toddlers with the slogan “Turn game time into brain time.”

DVDs with characters like Vincent van Goat may be cute, but their selling point is that they offer their young viewers a great deal more than entertainment. The Baby Prodigy DVD claims to give your child “A Head Start in Life!” The disc’s back copy reads: “Did you know that you can actually help to enhance the development of your baby’s brain? The first 30 months of life is the period when a child’s brain undergoes its most critical stages of evolution … Together we can help to make your child the next Baby Prodigy!”

Walt Disney, Warner Brothers, and other studios have spent the last decade developing children’s programming with an educational component (Disney owns Baby Einstein). Toy companies have also entered the fray: Fisher-Price, for example, a major DVD producer, is a subsidiary of Mattel. Videos and DVDs for preschool-age children earned $500 million in 2004—and overall sales of educational toys increased by 19 percent. As Dennis Fedoruk, president of Brainy Baby, says, “There’s a bumper crop of new kids each month, after all.”

T he Baby Genius Edutainment Complex owes its explosive growth to more than just savvy marketing; it also has roots in actual scientific research. The popularity of DVDs with classical music, pinwheels, and colorful imagery was incited by infant-development theories that became fashionable in the early 1990s. As Liz Iftikhar, founder and president of Baby BumbleBee, puts it, the kid-vid biz emerged on the back of the “Mozart Effect.”

In 1993, Gordon Shaw and Frances Rauscher—researchers at the University of California at Irvine—conducted a study in which a group of college students listened to ten minutes of a Mozart sonata, a relaxation tape, or silence. Then the groups took a paper-folding-and-cutting test. Those who had listened to Mozart reportedly performed better than those who had not. Shaw and Rauscher concluded that listening to Mozart improved the students’ short-term spatial thinking. In 1995, a slightly different study by the same researchers yielded similar findings.

It wasn’t long before someone proposed that the results could apply to infants. (Zell Miller, then governor of Georgia, pushed his state to send a classical-music cassette or CD to every newborn.) Video companies seized on the idea that classical music played to infants, or even to fetuses, would improve their ability to reason. In 1995, they started to make videos for babies, usually with a classical-music component, and touted them as beneficially stimulating. One music impresario, Don Campbell, trademarked the term Mozart Effect and used it to sell what he called “educational” CDs for infants and books.

But here’s the catch: according to the effect’s doubters, no psychologist or musicologist has been able to persuasively duplicate the result that Shaw and Rauscher described. Kenneth Steele, a professor of psychology at Appalachian State University, was one of the scholars who tried several times and failed. He eventually became the notion’s greatest critic, publishing half a dozen papers debunking it, chief among them “Prelude or Requiem for the ‘Mozart Effect’?” in Nature magazine in 1999. To date, the Mozart Effect has failed to be replicated in scientific settings on at least a few dozen occasions. Even Rauscher, although she stands by her findings, has been amazed by the appropriation of her work for corporate ends. In a 1999 television debate, Rauscher agreed with Steele, saying, “There’s no scientific data suggesting that playing Mozart to babies is going to make them ‘smarter.’”

None of this, however, has stemmed the spread of the Baby Genius Edutainment Complex—far from it. The complex has only expanded since the mid-1990s, building on the claim that the creation of infant prodigies can now begin in the womb. Brent Logan, the president of BabyPlus and author of Learning Before Birth: Every Child Deserves Giftedness, promises that his prenatal sound-delivery system, a speaker unit that a pregnant woman wears in a fabric pouch strapped to her abdomen, will produce a higher-than-average IQ. The key to his pitch appears to follow the logic of inversion: infants in Romania who are deprived of stimuli suffer as adults, he notes, and thus infants in America who are stimulated by a product like his will blossom. “Babies and children enriched with BabyPlus,” his company’s ads claim, “are more relaxed at birth, with eyes and hands open, crying little”; they “reach their milestones earlier” and “have longer attention spans.” The pitch preys on parents’ fears that their children might not hit milestones early, or even at the “normal” time.

The claims made by the producers of these DVDs and similar products may seem absurd, but the impulses that drive parents to purchase them are understandable. The wish to raise flourishing children is as old as humankind. Today’s Baby Genius Edutainment Complex yokes together two concepts of infant betterment: first, that parents can help a child develop many skills and aptitudes that are not inborn; and second, that if the child isn’t launched on the route to super-achievement in the first years of life, he or she will be doomed forever to mediocrity or worse. As this notion of a compressed time frame for baby-genius cultivation has become more widespread over the last ten years, parents have become much more susceptible to sales pitches for flash cards, DVDs, toys, and games that promise to provide “just the right level” of stimulation.

Educational stimulation has not always been the primary aim of children’s playthings. Until the twilight of the nineteenth century, what few toys children had were made at home, usually by hand. Diminutive replicas of babies, women, and furniture enabled children to engage the larger world at their level, that of small bit players. Such toys were meant to help pass the time, not to create genius.

The turn of the last century saw a rise of mass-produced toys designed for solitary play. Milton Bradley (founded in 1864), Parker Brothers (1888), and Playskool (1928) were the first three toy companies to specialize in “education games.” The teddy bear emerged in Brooklyn in 1902 and soon became faddish; it was thought to spur children’s emotional growth. Lincoln Logs (invented in 1917 by John Lloyd Wright, son of the architect Frank), Crayola crayons (first produced in 1903), and Erector sets (introduced in 1913) all signaled an increase in time spent indoors by the children of newly prosperous families. A notion of playthings that helped children grow up was on the rise, but these toys did not claim to promote a child’s acuity. (In an article in a toy trade magazine in 1927, dolls were termed an “Antidote for Race Suicide,” in that they would encourage white girls to reproduce.)

Around this same time, the educator Maria Montessori designed toys to teach math concepts and declared that pupils would learn willingly if their schoolwork were more like play. Montessori’s ideas caught on among some educators, but also sparked much debate about the nature of toys. Academics championed free play and urged industry executives to make better-quality toys that appealed to the imagination.

But many toys still left little for young minds to conjure with. By 1957, the cultural critic Roland Barthes was decrying his era’s playthings as products of “chemistry not nature.” He was horrified that there were “dolls which urinate” and other toys “meant to prepare the little girl for the causality of housekeeping, to ‘condition’ her to her future role as mother.” These toys, Barthes wrote, “are meant to produce children who are users, not creators.” He was enunciating what was to become a central tenet of scholars of play: self-directed play is superior, and toys that invite children to improvise and imagine are better than those that are passive and preprogrammed.

The study of toys reached a high point during the seventies with Erik Erikson’s books Childhood and Society and Toys and Reason. Erikson created a developmental timeline, starting with “autocosmic play,” in which infants play with their own bodies, and going on to a toy “microsphere,” followed by the “macrosphere” of play with other children. Erikson underlined that playing with toys is a part of identity formation, and insisted that a child’s world of manageable toys should be interfered with as little as possible.

By the 1950s, toys had become short-term and expendable: Davy Crockett hats and the like—spin-off gear from television shows or children’s movies. This isn’t to say that the “maturational” function of toys vanished. Lego won a large following as an “instructive game” in the late fifties and early sixties, and when the ultimate maturational television program, Sesame Street, debuted in 1969, a line of educational toys followed in its wake. The lessons of Sesame Street were strongly influenced by Maria Montessori’s educational philosophy, and from the beginning the show’s producers, the Children’s Television Workshop, worked hard to connect with young children and their families in low-income areas. In fact the show was viewed as an extension of the 1960s War on Poverty, and was funded in part by the Department of Health, Education, and Welfare.

Some of the early debates that swirled around Sesame Street are echoed today in the debates over the Baby Genius Edutainment Complex. The program’s critics argued that young children benefit from playing inventively on their own, rather than watching television. But there is a crucial difference between edutainment DVDs and Sesame Street: the TV show was not intended for babies, while today’s DVDs are made explicitly for children two and under. And now even Sesame Street has an infant DVD line.

M any infant DVDs are hawked with dubious information about time-limited opportunities for learning. Some products prey on parental fears, invoking the specter of infant brain-cell death. Charles Zorn, a neuropsychological education specialist, told me that he often has to reassure parents that brain-cell counts are not a measure of a child’s intelligence, knowledge, or ability to learn. The brain deliberately makes too many, then lets a bunch wither; which ones wither depends on the environment the newborn encounters. Cell death is actually part of the development process. “When you learn to read, you are killing cells to create a pathway,” Zorn says. Indeed, reducing infant brain-cell death is counterproductive; cell death is a way the nervous system refines its circuits.

But nervous parents are not inclined to make such fine distinctions. And the industry does its best to blur these distinctions anyway. “Parents know about that preschool window of opportunity—it’s very narrow,” says Dennis Fedoruk of Brainy Baby. “Parents want to maximize results in their children without causing their children trouble. Listen, you can’t turn back the hands of time. Once they enter kindergarten, they can’t have the window of opportunity any longer. It’s too late.”

Karen Foster, CEO and founder of Athletic Baby, points to Tiger Woods as she tells me that her Athletic Baby Golf and Athletic Baby All-Star DVDs help parents give their kids a head start. “Everyone has heard about Tiger’s imprinting from an early age by his father,” she says. “The earlier the age, the more successful they will be.” Foster gives the standard edutainment-complex line: if infant deprivation yields negative effects, these “enriching” products must inversely produce a positive effect.

“BabyPlus helps with imprinting,” claims Brent Logan, CEO of BabyPlus. “And soon, the imprinting window shuts off for the pre-infants.” These pitches could make most any parent nervous. (“I do believe that the brain has a certain clump of neurons firing, and that by the time [my baby] is five, it will be too late,” one woman, an educated professional who consumes these products avidly, told me. “It sounds panicky, I know, but if those neurons are dying off … You have to get in there during the first three years. If my baby doesn’t use it, with a stimulating game or class, he is going to lose it.”) But are these pitches accurate? To start answering this question, one needs to separate the popular ideas of “crucial stages” and “imprinting” and “brain plasticity—which is today’s scientized buzzword for “ability to learn—from the science and cultural history underlying them.

A mericans have long sought to control natural processes, demonstrating both our faith in the human ability to harness nature and our obsession with using time shrewdly. When the Swiss psychologist Jean Piaget toured American universities in the 1950s, describing the cognitive stages children pass through as they mature, audience members wanted to know how they could make their children go through those stages faster. (Piaget was not pleased.) In the last decade or so, this emphasis on early development has been touted by celebrity foundations like Rob Reiner’s Parents’ Action for Children, whose slogan is “The first years last forever.” This, coupled with the findings of several studies and an aggressive federal information campaign, has generated rising awareness of the crucial zero-to-three period.

But recently scholars have cast doubt on this time frame as an absolute. William Green­ough, whose much-publicized studies of brain development in rats in the eighties helped pave the way for the current obsessions with sensory stimulus in infants, is a vehement critic of the new overemphasis on early learning. His research supports the idea that the brain continues to be plastic—still developing—after infancy. Indeed, many neuroscientists now deny that even adult brains lose plasticity.

“It’s important to point out that windows of development do not slam shut, as the earliest versions of [Parents’ Action for Children] and the Birth to Three movement suggested,” says Bradley Schlaggar, a pediatric neurologist at Washington University in St. Louis. One implication of that claim, he says, is that “when the development windows are thought to slam shut, parents may feel that the case is closed, and must try again with the next child.”

Schlaggar and many of the other neurologists, cognitive scientists, psychologists, and child-development specialists I spoke with questioned the idea that educational toys or DVDs accomplish what their makers claim. In a study by a University of Massachusetts researcher, a sample group of infants learned to use a puppet from a live teacher, while another group studied a video. The tots who had a teacher learned to use the puppet immediately, but the infant video-watchers had to view the instruction six times before they learned the same skill. As Charles Nelson, a professor at Harvard Medical School and a preeminent scholar of the infant brain, puts it, “There is no proof of the value of the early-enrichment toys and videos in terms of brain science.”

A number of scholars also argue that the idea of hard-and-fast “critical periods” is overplayed. For one thing, there is a difference between brain functions that are “experience-expectant” (which are bound by critical periods), and those that are “experience-dependent” (which are not). For instance, the brain requires that the eyes be exposed to light so that vision can develop properly. This must take place at a particular point in the development of all infants—it is experience-expectant. Experience-dependent learning, by contrast, is environmentally conditioned—learning a language or an instrument, or making a dumpling. This sort of learning is less governed by time. As John Bruer, an education consultant and the author of The Myth of the First Three Years, puts it, “critical periods are less likely for traits and behaviors … that are unique to the experiences of individuals, social groups, or cultures.”

According to Fred Dick, a developmental cognitive neuro­scientist and a lecturer in psychology at the University of London, starting early to learn a second or even third language can be a good thing. But “early” doesn’t mean in infancy. Furthermore, language-study DVDs tend to offer only disconnected words, and typically a child must be exposed to a language continuously to acquire it. Teaching a language to two or more children in person, at any age, may well be preferable to using videos, because a normal environment with another child “holds more information than any multimedia film,” Dick says. Studies have shown that the ability to learn the grammar of a second language doesn’t begin to decline until puberty—quite a while after the age of three.

Academics who study cognition also question the value of prenatal enrichment products. Gary Marcus, a professor of psychology at New York University and the author of The Birth of the Mind, says that while it is possible to learn something in the womb, it isn’t good to give a fetus too much stimulation. And given the paucity of long-term research on the subject, it’s hard to gauge what would be overstimulating: “We don’t know enough about early brain development to say.”

It’s one thing if these products are ineffective. But what if they’re actually damaging? A number of scholars have started to investigate whether children who have grown up watching educational videos have actually been hurt by their intense orientation to television. (In May, a child advocacy group filed a complaint with the Federal Trade Commission, arguing that Brainy Baby and Baby Einstein product labeling should include the American Academy of Pediatrics’ warning that children under two shouldn’t watch any TV.) One study found that today’s high level of indoor activity and play—even if it involved “learning—harmed children’s young bodies and minds. (The study was financed by Wisk Laundry Detergent—perhaps in an effort to promote grass stains.)

D espite these negative findings, and for all the fuzziness of the product-makers’ claims, even the most sophisticated parents can be drawn to edutainment for babies.

“There are some guarantees with these products,” says Lynne Varner, a forty-two-year-old newspaper columnist who lives in Seattle. “My son may not see all the colors in the prism every day. He may go outside and see a green tree one day and a roaring bus the next day, but I have to hope that nature and life offer everything to him. I want our child to always be doing something that stimulates him. And so does everyone I know.”

Varner’s accumulation of educational toys started with Baby Einstein and grew to include Baby BumbleBee toys purchased at the Imaginarium and the now-defunct Zany Brainy. The stores and products made reassuring promises that her kid was going to be smart, she says: Baby Einstein markets itself this way to the “über-parents” she knows.

On Amazon.com, parent reviewers likewise emphasize that displaying these videos is part of their responsibility to adequately stimulate their children. “My 1-year-old is growing into a Brainy Baby,” writes one. “How many [babies] can tell you what an orangutan is, or the difference between a circle and an oval, or that the color of our van is ‘silver’? My son could—from watching these videos!”

Of course, many parents don’t entirely trust the pitches from the companies. Lynne Varner recognizes that they aim to capitalize on her worst fear: that her child will fall behind. But she still buys the products. Many parents, like Varner, buy them even as they remain skeptical about their claims. They don’t want to fail to do the right thing for their kids. They want them to have every edge.

I t seems to me that the Baby Genius Edutainment Complex also arises from a simpler fear than those about lost brain cells and missed opportunities. The edutainment products are, at bottom, meant to reduce unproductive time—to prevent idleness and stave off boredom. But what exactly is boredom for a child? “One of the most oppressive demands of adults [is] that the child should be interested,” writes Adam Phillips in On Kissing, Tickling and Being Bored, “rather than take time to find what interests him. Boredom is integral to the process of taking one’s time.”

Some experts even argue that a certain amount of boredom is important for children’s development. Fred Dick, the developmental cognitive neuroscientist, says an infant’s caregivers should obviously attend to a child but not feel obliged to provide constant stimulation. But in the new, improved infancy, taking one’s time—waiting for desire to awaken—goes against the grain.

One specialist in educating gifted children suggests that for an infant, watching a waving adult finger or playing with a set of keys can be just as stimulating as the whirling dervish of rainbows on a Baby Einstein DVD. Such simple pleasures, which adults find boring—and this is part of it: we can’t remember how easily we were once entertained—are often just what infants need.

In the Baby Genius Edutainment Complex, the palliative for child boredom is always a new product, and it can seem that price is no object. In effect, these products are mostly intended for the reasonably well-off. The Leapster Multimedia Learning System is $70. BabyPlus runs to $150. The by-now-classic Baby Einstein videos—Baby Mozart, Baby Bach, Baby Beethoven, Baby Einstein Language Nursery, and Baby Einstein Language Discovery Cards—come as a special boxed set at $69.99.

Like other elements of childhood for the precociously gifted—private or home schooling, overstructured activity, and proto-professional training—edutainment products are part of a system that divides children into haves and have-lesses. The infants inculcated with the early-reading DVDs and flash cards are supposed to deploy their early advantage to get ahead of other reasonably affluent children. For those who can afford them, the DVDs and toys are just the beginning. After all, the educational-toy-and-video industry is a gateway into the larger giftedness culture; it’s the start of the voyage on which America shapes its children into champions.

The URL for this page is http://www.theatlantic.com/doc/200607/parenting.

Do I really mean it?

If It's Good for Philip Morris, Can It Also Be Good for Public Health?

By JOE NOCERA

"We don't make widgets," Steve Parrish likes to say, and that acknowledgment strikes me as a good place to start this story. Parrish, whose title is senior vice president for corporate affairs, is a highly paid executive at Altria Group, a New York-based holding company that is the 10th-most-profitable corporation in America. If the name of the company doesn't strike you as terribly familiar, that's because a few years ago the company changed its name. It used to be called Philip Morris, a name that still attaches to two of its holdings, Philip Morris USA and Philip Morris International. (Altria also owns Kraft Foods.) So, yes, let's stipulate right up front: Steve Parrish represents the country's leading tobacco company, whose best-known brand, Marlboro, is so dominant it accounts for 4 out of every 10 cigarettes smoked in the United States. Last year, Philip Morris USA alone made $4.6 billion in profits. What was it that Warren Buffett once said? "You make a product for a penny, you sell it for a dollar and you sell it to addicts." They most certainly don't make widgets.

Let's stipulate a few other things. First, despite everything — the universal knowledge about the dangers of tobacco, the warnings on cigarette packaging, the antismoking public-service ads — lots of people still smoke, and one of every two long-term smokers will die from the habit. In all, more than 400,000 smokers in the U.S. will succumb this year to heart disease, lung cancer, emphysema or other diseases because they smoked. Although the trend has gone steadily downward over the past two decades, some 20 percent of the adult population smokes — that's about 48 million people. John Seffrin, C.E.O. of the American Cancer Society, calls tobacco-related diseases "the single-most-preventable cause of death in the world." Who can disagree?

You'll no doubt recall that in the mid-1990's, there was a huge public outcry about the behavior of the tobacco industry, and efforts were made to bring the cigarette companies to heel. State attorneys general sued the big tobacco companies, and private class-action suits were mounted; Congress held hearings excoriating Big Tobacco, while Dr. David Kessler, the commissioner of the Food and Drug Administration at the time, tried to claim regulatory authority over the industry; whistle-blowers leaked damning documents to the press. It was a moment when the cigarette companies were exceedingly vulnerable, and serious reform could have been imposed by the federal government. But that didn't happen. A reform effort failed in Congress, and 46 states and the industry wound up settling their litigation with something called the M.S.A. — the Master Settlement Agreement — which imposed marketing and advertising restrictions on cigarettes, financed an antismoking ad campaign and transferred a staggering sum of money ($206 billion over 25 years) from the big tobacco companies to the state governments. (Four states settled separately for an additional $40 billion.)

And then the body politic moved on. So, a final stipulation: Cigarettes aren't going away. Nobody is about to ban tobacco, nor is anybody about to put the cigarette companies out of business, much as they might like to. These days, although Philip Morris USA loses the occasional lawsuit, the litigation threat that once seemed so onerous has become quite manageable. And though the M.S.A. has done some very good things — it's the reason you no longer see cigarette billboards — it has both limits and unintended consequences. For one, it has resulted in the rise of about 100 small cigarette companies — with names like Liberty Brands and Virginia Brands — that now undercut the big boys on price. And it has given the states a rooting interest in the continued prosperity of the tobacco companies, because they now depend on M.S.A. money to balance their budgets. All the while, cigarettes remain exactly what they've always been: the most dangerous unregulated legal product in the country.

When you talk to Steve Parrish about all of this, though, he doesn't use the language tobacco executives once used. He doesn't talk about "individual choice," nor does he pretend that cigarettes aren't addictive. On the contrary: "Cigarettes are addictive and cause the disease and death of hundreds of thousands of people every year," he said in one of our conversations. "When you set tobacco on fire and inhale it into your lungs, bad things happen." In another conversation, he said, "If fewer people died from smoking, that would be good for Altria's shareholders." He says that it is important to keep kids from starting to smoke and freely concedes that tobacco can never be viewed as just another product because it is so deadly. It can be quite startling the first time you hear him say these things.

Most amazing of all, Parrish says that tobacco needs to be regulated by the Food and Drug Administration. The industry has long fought such efforts; it waged legal war, for instance, against Kessler's claim of jurisdiction, finally winning in the Supreme Court, which ruled that only Congress could give the F.D.A. the authority Kessler had sought. Yet since 2000, thanks in large measure to Parrish, Philip Morris USA has been calling for the regulation of cigarettes. Two years ago, Altria made a serious, sustained effort to have such a law enacted, which was strongly backed by the country's leading anti-tobacco lobby, the Campaign for Tobacco-Free Kids, as well as all the other big public-health groups, and fiercely opposed by the rest of the industry, including archrival Reynolds American. Although the measure twice passed the Senate, it died in a conference committee.

Among anti-tobacco advocates, Parrish's words are treated with varying degrees of skepticism. "Parrish is different from other tobacco executives in many ways," says Matthew Myers, president of the Campaign for Tobacco-Free Kids. "He is exceptionally bright and skillful. He has been the catalyst for Philip Morris taking a number of positions that surprise public-health advocates and that on their surface are consistent with what public-health advocates have long supported. But having said that, the jury is still out on what he really intends." Myers was quick to add, "One can look at the history here and wonder whether what Philip Morris is doing today is nothing more than a sophisticated version of what they've always done."

Paul Billings, of the American Lung Association, says: "I think Philip Morris is aggressively trying to demonstrate it is changing, but its words don't match its deeds. In Marlboro, they still have the No. 1 brand for kids. I think they are just as despicable as the other tobacco companies."

David Kessler, now the dean of the medical school at the University of California, San Francisco, says: "I believe that Steve believes 100 percent in what he is saying. Steve is genuine. But our job is to decrease the number of people who smoke to the lowest possible level. I'm not sure that's Steve's agenda yet."

But in the months I spent talking to him and others at Altria, I came to a different view. In his own way, Steve Parrish really is trying to solve the cigarette problem. Without question, he is doing so in a way that will allow Altria and Philip Morris USA not just to survive but also to thrive — and there are many in the public-health community who view any such solution as abhorrent. But that doesn't mean that his central idea is wrong. When you dig into it, you discover there are good public-health reasons to embrace regulation — and compelling business reasons for Philip Morris USA to embrace it, too. "This isn't social work," says Michael Szymanczyk, Philip Morris USA's chief executive.

I also came to believe that Parrish has another motivation. He is 56 years old. He has been with the company for 16 years. He's not going to be doing this all that much longer. And before he moves on to the next phase of his life, he'd like a little redemption — for his company, and for himself.

This is not the first time Steve Parrish has been featured in this magazine. Twelve years ago, Philip Morris made a decision to cooperate with an article by the writer Roger Rosenblatt that examined what it was like to work for a tobacco company. The article ran in March 1994. The cover read, "How Do They Live With Themselves?" The opening photograph was of Parrish, wearing a double-breasted suit and looking warily into the camera.

Parrish no longer smokes, but he did then, as Rosenblatt pointed out. He noted that Parrish grew up in the small town of Moberly, Mo., the son of a railroad cop, and wanted to be a Democratic politician before veering off into law. As a lawyer in the late 1980's, he defended Philip Morris in the Cipollone case, famous as the first trial in which a tobacco company was ordered to pay damages to a smoking victim. (The judgment, later overturned, was against another cigarette company, Liggett, not Philip Morris.)

Parrish explained to Rosenblatt that when he was approached about working for Philip Morris, he didn't have any big moral qualms; having represented the company in the highly publicized trial, he knew the issues, and he also knew he liked the people who worked there. He conceded that it was painful to be described as "a merchant of death," and he sometimes worried that he rationalized what he did for a living because of his "nice salary." ("I don't think I do," he concluded.) None of these thoughts were terribly different from the ones I heard recently when I plowed the same ground in my own interviews. Parrish is a thoughtful and articulate man, but there are clearly places he doesn't want to go.

He also said this to Rosenblatt: "A year or two ago, my daughter came home from school and said: 'I have a homework assignment I need you to help me with. Tomorrow we're going to talk about drugs like marijuana, cocaine and alcohol. We're also going to talk about cigarettes and whether they're addictive. I want to know what you think about cigarettes.' And I told her that a lot of people believe that cigarette smoking is addictive, but I don't believe it. And I told her the surgeon general says some 40 million people have quit smoking on their own. But if she asked me about the health consequences, I would tell her I certainly don't think it's safe to smoke. It's a risk factor for lung cancer. For heart disease. But it's a choice. We're confronted with choices all the time. Still, I'd have to tell her that it might be a bad idea. I don't know. But it might be."

His daughter was 11 at the time of that conversation, and when I asked him not long ago about that quote, he seemed stricken that I had brought it up. In fact, he told me, that is not what he had said to his daughter. "As long as I can remember," he says now, "I thought smoking caused lung cancer, and I said that internally. And I said it was addictive and we should say that." But when Rosenblatt asked him what he said to his children about smoking, he used the opportunity to lapse, as he puts it, into "corporatespeak." "It was one thing to convey the company's position, even if I didn't agree with it. But to do it through a conversation with my daughter — that was awful." He adds: "I said a lot of things back then that make my blood curdle now. But of all the things I did and said back then, that's the one I'm most ashamed and embarrassed about."

Rosenblatt's article was one of the early markers of the tobacco wars of the mid-1990's. A few weeks earlier, the ABC newsmagazine "Day One" accused the big tobacco companies of adding nicotine to cigarettes. (Nicotine, of course, is the ingredient that addicts smokers.) Five days after the article, Kessler testified before Congress that he believed that he had the authority to regulate cigarettes as "nicotine-delivery systems." A few weeks later, the chief executives of the seven largest tobacco companies went before a Congressional committee and famously denied that smoking was addictive. And a month after that, the attorney general of Mississippi filed the first of the states' multibillion-dollar lawsuits against the big tobacco companies.

What role did Parrish play in the tobacco wars? In the beginning, he led the charge against tobacco's enemies. In the wake of the "Day One" broadcast, Parrish was put in charge of something called the Action Team to orchestrate the company's response to its mounting problems. The first decision the company made was to sue ABC for libel. Philip Morris documents from that era include a draft of a presentation Parrish made to the board describing a Tobacco Strategic Attack Plan that included lawsuits and aggressive ad campaigns. He also commissioned polls and focus groups to figure out which countermessages would work best.

And more often than not, he delivered the message himself. For instance, after Kessler asserted jurisdiction over tobacco, Philip Morris and the other companies quickly filed their lawsuit to block him. Parrish then did a video presentation for the company's employees to denounce the F.D.A. commissioner. His language was strident and unapologetic. "Dr. Kessler has asserted that nicotine is addictive," he said, his jaw clenched angrily. "It has been called addictive because the concept of addiction has been expanded to include sex and exercise. We believe that it does not meet the common-sense notion of addiction. We believe that Dr. Kessler has described nicotine as addictive to further his own political agenda, so that he can regulate and possibly ban cigarettes." In other appearances, Parrish routinely described Kessler as a "neo-prohibitionist" — a description he says he also now regrets.

Strange as this may sound from the previous paragraph, Parrish is a likable man, with an easy laugh, a gracious manner and a desire to be liked by others. Lashing out did not come naturally, he told me. He mentioned several times how struck he is now, looking at old tapes of himself engaging in angry debates with tobacco's enemies, at his own body language. He appears distinctly uncomfortable. But of course, he was saying things he didn't believe, denying the terrible toll cigarettes take.

But why? Why didn't he just quit and find work at a company that sold something besides cigarettes? Parrish told me that he never thought seriously about quitting. But no matter how often I pressed the point, his reasons always struck me as pat and unsatisfying; this was one of those places, I wound up thinking, where he could go only so far. He still thought of himself as an advocate, just as he'd been during his career as a defense lawyer, he told me. He thought Philip Morris was a great company full of good people and felt a duty to help them. He respected the people within the company who were insisting that cigarettes weren't addictive, and he understood their reasoning even if he disagreed with it. He figured he had a better chance of changing their minds by staying than by walking away. And, of course, the longer he stayed at Philip Morris, the more his own career ambitions were tied up with the company itself, where, it must be said, he has done very well for himself. (Last year, for instance, Parrish's compensation package, including salary, bonus and restricted stock, was valued by the company at more than $14 million.) To the outside world, nothing could be more obvious than the fact that cigarettes were addictive; John Reed, a former C.E.O. of Citibank and an influential Altria board member, recalls one of his own sons telling him that the industry had its head in the sand. But if you were in the tobacco bunker, it was easy to feel misunderstood, beleaguered, unfairly attacked. Parrish felt that, too.

Eventually, his role in the tobacco wars changed: he helped bring them to an end. By the spring of 1997, the tobacco industry had begun secret negotiations with the states' attorneys general. It did so not because it suddenly saw the light about the evils of cigarettes, but because it had no choice. The state suits posed an enormous threat to the companies, and the documents coming to light repulsed the country. "Today's teenager is tomorrow's potential regular customer," began one 1981 Philip Morris memo, "and the overwhelming majority of smokers first begin to smoke while still in their teens." By the mid-1990's, Reed and several other board members were telling Philip Morris management that if it continued to stay in the bunker, it risked "having society take away our license to operate."

Parrish played a key role in the negotiations with the states, and it was the turning point of his career. Once he got in the room, his essential self kicked in; he liked the people on the other side of the table, and he wanted them to like him. As he listened to what the attorneys general and their negotiators were saying, he saw how wrong Philip Morris — and he — had been in fighting the obvious: "All we knew was our own rhetoric." The people in the room weren't neo-prohibitionists; they were trying to solve a terrible public-health problem, and they were justifiably angry with the tobacco industry's historic tactics of denial, obfuscation and trench warfare. They believed the industry needed to be punished for its behavior. To his surprise, Parrish found himself agreeing with much of what they said. He also began to feel ashamed about his earlier role in the tobacco wars.

Parrish became the tobacco executive most committed to ensuring that a deal was cut, and he took huge risks to make it happen. Matthew Myers, of Tobacco-Free Kids — the one public-health advocate involved in the secret talks — was also taking a giant risk; when word leaked out that he was one of the negotiators, he was roundly condemned by many anti-tobacco advocates, who insisted that their side should never sit at the same table as Big Tobacco. There was one moment, Myers would later recall to Michael Pertschuk, who wrote a book about the settlement talks, when he felt that negotiations had nearly reached a stalemate. "Don't quit," Parrish pleaded with him, his hands shaking. "There are people on our side of the table who have staked their careers on these talks succeeding, who don't agree with the position the industry is now taking."

The deal, announced on June 20, 1997, should have been one of the great public-health triumphs in American history. The industry agreed to be regulated by the F.D.A., which could, among many other things, set manufacturing standards that could include the lowering of nitrosamines, an established carcinogen; mandate bigger and bolder warnings on cigarette packages; virtually eliminate tobacco marketing and advertising; and take other measures that might reduce the long-term harm tobacco causes. It agreed to pay financial penalties if youth smoking didn't decline by a certain percentage. And it agreed to pay $368.5 billion, over 25 years, to the states and the federal government, some of which would be earmarked for smoking-cessation programs, antismoking research, antismoking advertising and other national programs to reduce cigarette consumption and, over time, perhaps eliminate the culture of smoking. In return the industry received an explicit guarantee that the F.D.A. would not ban cigarettes outright. And it was granted relief from most liability — not just the state lawsuits but private litigation as well. At long last, the country would have a national tobacco policy.

But it wasn't to be. Both the F.D.A. and liability-relief provisions required that Congress pass a new law, and once the settlement reached Capitol Hill, all hell broke loose. Even though the agreement embodied far more than public-health advocates had ever dreamed of, once they saw how much they had gotten, they wanted more. The money figure starting climbing, until it exceeded $500 billion. And the liability relief was gradually stripped away. Many of the deal's opponents believed that the industry needed to be punished further by the courts. But once the liability relief was out of the bill, the tobacco industry, including Philip Morris, withdrew its support, and the deal died. After which, the two sides went back to the drawing board and came away with the Master Settlement Agreement. Without the federal government's involvement, though, the new deal no longer represented a national tobacco policy; it was merely a contractual settlement with a group of aggrieved plaintiffs.

One way to think about what Parrish has been doing ever since is trying to get to back to that place he and Philip Morris were on June 20, 1997, a place that could both reduce the harm caused by smoking — and rehabilitate his company.

Shortly after the tobacco wars ended, Kessler contacted Parrish through an intermediary. Kessler left the F.D.A. in early 1997, but he remained a powerful anti-tobacco voice; he was a key opponent of the 1997 deal, in large part because of the liability-relief provision, which he maintained should not be a quid pro quo for a public-health measure. Now, as he was preparing to write a memoir of his time at the F.D.A., he wanted to interview Parrish. Parrish quickly agreed.

"We were supposed to just meet and say hello that first time," Parrish recalls. "But we sat and talked for hours. And I had the same reaction I'd had during the negotiations: this guy I always thought was a fire-breather was really a pretty neat guy. I remember talking to him about how it felt for him when we were calling him a neo-prohibitionist. And as we talked, I started to understand a lot better why he had done the things he'd done."

Sure enough, a relationship developed. "I consider David Kessler a friend," Parrish says now; Kessler, for his part, agrees that they became close. Kessler, who had become the dean of the Yale University Medical School, invited Parrish to speak at Yale. Parrish apologized for all the invective he had once hurled at Kessler. They had a number of long talks about the past. And as Philip Morris began to change its long-held positions, Parrish made a point of getting in touch with Kessler, to apprise him personally and solicit his input. He became a one-man outreach program to anyone on the other side willing to talk to him.

After the M.S.A. was signed, Parrish had a new stature inside Philip Morris. With the blessing of the company's C.E.O. at that time, a tough-talking tobacco man named Geoffrey Bible, Parrish began to assert himself more forcefully. In the beginning the battles were fierce; the place was still filled with old-timers who clung to their traditional view that they shouldn't give an inch. Some of them accused Parrish of coming down with Stockholm syndrome; another once told him, "Let's not get carried away with this good-guy stuff."

In 1999, for instance, Parrish used the creation of Philip Morris's new Web site to reopen the internal debate over whether the company should acknowledge that cigarettes were addictive and caused disease. This time, he largely won that debate, but to placate the old-timers, he accepted a compromise. When the Philip Morris Web site went live, it said that cigarettes were addictive — "as that term is most commonly used today." After the change in policy, Parrish went on "Nightline" to promote the company's new position — only to be raked over the coals by Ted Koppel for the weaselly sounding language.

But over time, as it became increasingly clear that Parrish had the support of the company's board and chief executive, Parrish's job got a little easier. In early 2000, Parrish was invited to a tobacco-control conference in California, where he sat on a panel with David Kessler, who had encouraged the conference organizers to invite him. That is the venue he chose to make the announcement that the company favored federal regulation — this time without the condition of liability relief for the tobacco industry. A few months later, Parrish was being deposed in a tobacco case in New York State. When he was asked whether cigarettes were addictive and caused disease, he responded, "Yes." Was that the company's position? "Yes, it is," he replied. When he got back to the company's headquarters, he saw to it that the weaselly language was erased.

Over the intervening years, Altria has taken a number of similar steps. It stopped fighting local smoking-ban ordinances in 2004. It has chosen not to make candy-flavored cigarettes, even though Reynolds makes such a product. Unlike Reynolds, it runs no magazine advertising. The company says it has pushed the farmers from whom it buys tobacco to cure it somewhat differently so that the nitrosamine levels are lower. Recently, the tobacco companies got into a dispute with the states over whether their payments could be reduced under the terms of the M.S.A.; Philip Morris USA was the only company to make the full payment anyway, even though an arbitrator issued an initial ruling that sided with the industry. Inside Altria, there is a palpable feeling of pride — a feeling that the company is trying hard to get it right, even as it continues to make, market and sell cigarettes. Parrish is the person who is given most of the credit for this cultural shift. "Steve has taken a number of courageous positions," says Louis Camilleri, the company's current C.E.O.

Yet, of course, it does continue to make, market and sell cigarettes, and for many people that remains the core issue, and always will. It is why virtually no one in the public-health community is willing to concede that the company has changed in any fundamental way, no matter what Steve Parrish says or does. "I feel they are belatedly admitting to what is factually accurate, and they decided that it was in their own best interests to own up," says John Seffrin of the Cancer Society, who wholeheartedly supports F.D.A. regulation. "But I don't believe there is any responsible tobacco company today." Like many public-health advocates, Seffrin specifically mentioned another of Altria's operating companies, Philip Morris International, which accounted for 45 percent of the company's income in 2005. (Philip Morris USA accounted for 26 percent of its income.) The international business is buying foreign tobacco companies and working to build its market share — it currently has 14 percent of the world tobacco market — with no apparent qualms, in some of the world's poorest countries.

And, as Myers, points out, the company is tirelessly building market share in this country too: "Altria is the most successful marketing juggernaut in history." Indeed, what the company has done since the signing of the M.S.A. has been to market Marlboro primarily by offering price discounts — two packs for the price of one, for example — even though it is widely known that there is a direct correlation between cigarette prices and youth smoking: the higher the price, the less likely a kid will buy it. Myers continued: "If you know that your brand Marlboro is the No. 1 brand for boys and girls, and you understand discounting, have you really discouraged tobacco use? Have you really changed?" In the years since the signing of the M.S.A., Marlboro's market share has increased 5 percentage points.

Partly, the refusal on the part of the public-health establishment to acknowledge any difference between Altria and, say, Reynolds, which, to judge by its actions, seems to enjoy being an in-your-face tobacco company, is rooted in a moral judgment about making cigarettes — and it doesn't matter which company makes them. "If they had a shred of ethics, they wouldn't be in business," says Stanton Glantz, a professor at the Medical School of the University of California, San Francisco, and perhaps the most uncompromising anti-tobacco activist in the country.

Partly, it is strategic. Since the country lacks a national tobacco policy, the efforts to bring down smoking rates is largely conducted as a kind of guerrilla warfare — local smoking-ban fights, battles to enact excise taxes, efforts to put pressure on the tobacco companies at every turn. Blasting the tobacco companies and refusing to differentiate among them is part of that ongoing warfare. During the tobacco wars, the companies became demonized, and there is a sense in the public-health community that they need to stay that way to keep the product demonized in the mind of the public. If they eased up on Altria, wouldn't that mean they were also easing up on cigarettes?

Finally, though, this position stems from Big Tobacco's sordid history. After 40 years of denying reality, deceiving the public and working to undercut every effort to reduce smoking rates in the United States, tobacco companies simply have no credibility. Indeed, there is a school of thought within the public-health community that holds that if a tobacco company comes out in favor of something, that fact alone is enough to signal that there must be something wrong with it. It has to be some kind of trick. Which is why those among tobacco's enemies who've come to know Steve Parrish still worry about his motives. Including David Kessler.

In the memoir he published in 2001, "A Question of Intent," Kessler recalls his astonishment when Parrish first told him he thought that he, Kessler, had been right to want to regulate tobacco. Yet, in a later conversation, when Parrish told Kessler that the company would publicly support federal regulation, Kessler found himself questioning the effort he had once fought so hard for. On the one hand, he writes in his memoir, "all of our studies told us that regulation could cut rates of youth smoking." On the other hand, "I was nervous to learn that the tobacco companies themselves now wanted regulation."

When I spoke to him a few months ago for this article, Kessler practically renounced his old belief in the importance of regulation, fearing that it might give the tobacco companies a legitimacy they don't now have. "As much as I respect Steve," he said, "I am not sure he is really ready to see a world in which the end result is that the American cigarette market goes away." But while many in the public-health community agree with Kessler, others view regulation as the best chance to reduce the harm caused by cigarettes and create a national effort to reduce youth smoking. Just as it was on June 20, 1997.

The public-health case for the regulation of tobacco is pretty straightforward. Imagine a world in which every cigarette company — not just the big ones that have settled lawsuits — have to abide by the same set of rules. Manufacturing standards would be established by the F.D.A., standards that might well, over time, make cigarettes at least a little less harmful. Imagine a world in which advertising and marketing disappears completely, where cigarettes have to be placed out of sight in retail stores, where warning labels on cigarette packs are as big and scary as they are in much of Europe, where smoking in public places is outlawed everywhere, where cessation programs are national in scope and where efforts to reduce youth smoking are no longer sporadic or piecemeal. Imagine a world in which tobacco policy evolves out of a sustained national effort rather than from the vagaries of litigation, the half-measures of the M.S.A. or the attitudes of state officials.

In California right now, the state spends about $100 million each year on antismoking efforts, and the population that smokes is around 16 percent, the second-lowest in the country. Meanwhile, in Mississippi, Gov. Haley Barbour, a former tobacco lobbyist, recently vetoed a small increase in the cigarette tax and has also taken steps that, if successful, could gut the state's antismoking program.

"We know a great deal now about how to reduce tobacco use through public education and public policy," Myers told me. "And through F.D.A. regulation we could learn a great deal more about how it works, and change its marketing. The world we envision is one where, through public-policy change, we discourage tobacco use. If we had government regulation over the product and the marketing of tobacco, we could reach the point where so few people would start smoking that the percentage of smokers would become a very small part of the population." The F.D.A. is far from perfect. Drugs like Vioxx are approved and then have to be withdrawn. It sometimes bends to political winds. But even with its flaws, F.D.A. oversight of so dangerous a product would surely be a better approach than the current mishmash.

Whenever I talked to Steve Parrish about federal regulation, he was in general agreement with many of the goals of the public-health community. But he also happily conceded that he believed regulation would be good for his company. To get a better understanding of why, I traveled to Richmond, Va., where Philip Morris USA has its headquarters.

The company's huge 1.6-million-square-foot manufacturing plant churns out 310 million Marlboros a day, in a process that begins when cured tobacco flows into one end of the plant and ends with packs of cigarette cartons being wrapped for shipping at the other end. Inside the company's headquarters a few miles away, the walls were lined with expensive art. The campus and the building all conveyed a corporation flush with cash.

To spend time there is to be reminded that cigarettes remain a big and profitable business — and that it's absurd to think the company will somehow wake up one day and shamefacedly abandon it. When I put the question directly to Parrish — Why not stop making cigarettes? — he said: "I honestly believe that if Philip Morris USA were to shut down tomorrow, it would not reduce the consumption of cigarettes at all. I think the marketplace would be turned over to the literally hundreds of companies who would be competing overnight for half of the share of the industry." Is that a rationalization? Sure it is. It is true? Undoubtedly. One thing that the M.S.A. has proved is that if there is a market opportunity, new companies will enter the business — even the cigarette business.

During my time in Richmond, I also saw how the company's employees carried themselves with the kind of confidence that comes of being a market leader. That is part of what makes the company so hard to grapple with: it talks about doing right by society, but competing for market share is embedded its DNA. Smoking may be bad for you, but if people are going to smoke, by God, Philip Morris would much rather they smoke a Marlboro than a Camel.

Listening to the Philip Morris USA executives, I recalled something Matthew Myers had told me: "I remember sitting in the room negotiating with the tobacco companies in 1997 and discussing government regulation. It was clear from the behavior of the Philip Morris representatives that their attitude was 'Just tell us what the rules are, and I can beat my competition.' It was equally true of the behavior of the R.J.R. folks that they believed, 'Just tell Philip Morris what the rules are, and they'll beat the pants off us.' " That's one reason that Altria is unruffled by prospect of regulation: it assumes Philip Morris USA can win no matter what the business environment.

But that's hardly the only reason. When I spoke to Szymanczyk, Philip Morris USA's chief executive, he made a point that's easy to miss when you're watching all those people churn out cigarettes: tobacco isn't exactly a growth business. "When I started as C.E.O. in 1997, we had 16,000 people," he said. "Now we have 10,000. We used to have three plants. Now we have two. The industry declines 1 to 2 percent a year. It won't go away tomorrow; it makes a lot of money; it gets a decent return; but it will continue to get smaller."

In any other industry, a market leader in a declining business would begin to branch out while there was still time. It would buy other companies, redefine its basic purpose and take other steps to maneuver into faster-growing businesses. But that is very difficult for Philip Morris USA to do. Although Altria's stock price has performed well in recent years, it should be much higher based purely on its financial performance. But it's not, in part because it owns a tobacco company with a tarnished reputation, under constant attack. As a result, it is much more difficult for Altria to use its stock to buy other companies.

There is no question, then, that Parrish and Philip Morris USA are hoping that regulation could help lead the company to reclaim some legitimacy. From a business perspective, that could result in a higher stock price, which would give the company, as Parrish puts it, the ability "to increase the flexibility that the board and the senior management has in deploying the shareholders' money." He also wants to see the company accepted as having a legitimate seat at the table when tobacco policy is being debated.

As he thinks about how to get his company growing in a declining cigarette market, Szymanczyk has etched out what he calls an "adjacency strategy," pursuing new products that are "adjacent" to cigarettes. It's a common strategy for consumer-products companies — Coca-Cola once sold just Coke; now it sells all manner of carbonated and noncarbonated beverages. During the time I was in Richmond, the company was extremely hush-hush about its plans. But it was very clear that, as a first step, the company wanted to see if it could come up with "reduced harm" tobacco products — smokeless tobacco, perhaps, or less lethal cigarettes, or perhaps products that deliver nicotine, which is relatively benign, without doing so through a lighted cigarette, which is anything but benign. I saw a new $350 million research facility under construction; it will eventually house 500 scientists, engineers and support staff. Much of their work will involve trying to develop reduced-harm products.

In the public-health community, there are huge divisions as to whether reduced-harm tobacco products are possible, or whether it would even be a good thing if they were developed. Stanton Glantz says there is "no scientific evidence" that anyone is ever going to be able to make a reduced-harm cigarette. There are many others who think it is dangerous to begin making any health comparison among different kinds of tobacco products, because it will only encourage people to take up the habit. But another longtime anti-tobacco activist, Scott Ballin, the former chairman of the Coalition on Smoking or Health, says that such products are on the way, and that the public-health community needs to start thinking hard about how to deal with them.

One area that has received a lot of attention lately is smokeless tobacco, especially so-called "pouch tobacco," which doesn't require spitting. Jonathan Foulds, director of the Tobacco Dependence Program at the University of Medicine and Dentistry of New Jersey, School of Public Health, says that the scientific literature is overwhelming that smokeless tobacco is less harmful than lighted cigarettes. According to a review of the literature by epidemiologists published in late 2004, so-called low-nitrosamine smokeless-tobacco products carry a much lower risk of death by disease than regular cigarettes do. "In comparison with smoking, experts perceive at least a 90 percent reduction in the relative risk" of low-nitrosamine smokeless-tobacco use. This makes sense, since it is the 4,000 ingredients in the smoke that make a cigarette so lethal. Or, as the tobacco-policy expert David Sweanor, who teaches law and medicine at the University of Ottawa, puts it, "It's the smoke, stupid."

But if you're a tobacco company with no credibility, how do you introduce such a product? What do you say about it? Who would believe any studies you might conduct?

And what about all the unintended consequences of introducing such a product? Clearly, if nicotine addicts switch from cigarettes to smokeless tobacco, they've done something good for themselves. But these new products are not risk-free, and it is surely better not to ingest tobacco at all. Smokeless products might get kids hooked on nicotine and then allow them to "graduate" to cigarettes. Or smokeless products might serve "to tide smokers over when they are in places they are not permitted to smoke," says Kenneth Warner, the dean of the School of Public Health at the University of Michigan and an author of the 2004 study. "We have excellent research that shows that work sites that prohibit smoking reduce smoking rates." A product that subverted that goal would hardly be a gain for public health.

Clearly, these are not judgments a tobacco company should be allowed to make. The stench of the old "light" cigarette fiasco, in which "low tar" cigarettes were marketed 40 years ago with implicit — but false — health claims, hangs over the whole enterprise. But a regulatory body could make such judgments. In fact, that is very much what the F.D.A. does with pharmaceutical products now. Whenever it vets new drugs, it balances the potential benefit with the potential side-effects. It can order tough language for warning labels. It can — and often does — conclude that a proposed new drug simply doesn't have enough value to be approved. With tobacco, the F.D.A. could mandate the kinds of health claims the industry could and could not make for its products based on scientific evidence. It could make the calculation as to whether a product's potential benefits outweighed its potential drawbacks. Certainly, the F.D.A. process for reduced-harm products wouldn't be perfect, just as it isn't perfect for pharmaceuticals. But can you really argue that it wouldn't be better than the current situation, which is nothing at all?

In May, months after I visited Richmond, Philip Morris USA announced Taboka, its first noncigarette tobacco product. The company made no health claims about the product, a tiny pouch of smokeless tobacco, which a user puts between his gum and cheek, and which it will test-market in Indianapolis next month. Indeed, it will most likely put a warning label on its Web site that says smokeless products can cause disease. But why else would it introduce such a product? And what is the consumer to make of it? All Philip Morris USA would say was that it offers "a new way to enjoy tobacco." In responding to the introduction of Taboka — and a similar product announced earlier by Reynolds — Matthew Myers had another fear: "Absent F.D.A. authority over tobacco products," he said in a statement, "the tobacco companies are free to market their new smokeless-tobacco products in ways that encourage kids to start using tobacco and discourage smokers from quitting tobacco entirely."

And they can.

It is easy to hate Altria, and many people do. It is still, above all else, a company that makes its money from cigarettes. It still has all that history to live down. But nearly a decade after the failure to get F.D.A. regulation, hate may no longer be an emotion we can afford.

Nobody hates the tobacco companies more than Stanton Glantz, for instance. He has been fighting them for more than two decades, leading the charge to pass smoking bans and engaging in grass-roots guerrilla warfare. He says that the way to beat the tobacco companies is through local efforts, and he has utter disdain for federal regulation, which he assumes the tobacco companies would instantly subvert. His office is the repository for the millions of tobacco documents that have been collected over the years, and he takes pride, as he should, in the role those documents played in turning the country against the cigarette companies. He has done truly heroic work. But when I asked him what his ultimate goal was, he didn't say, "to have fewer people get sick and die from smoking." The first words out of his mouth were, "To destroy the tobacco industry."

That's a fool's errand. Philip Morris USA is not about to be destroyed. It's a big, strong, smart company, and the chief weapon its opponents still use as they try to club it into submission — litigation — is a spent force. Right now, one big legal threat facing Philip Morris USA and the other big tobacco companies is a civil-racketeering lawsuit that was tried last year by the Department of Justice. The judge has yet to issue her ruling in the case, but even if the federal government wins, the upshot will be monetary damages that the companies can easily handle, and a series of new remedies that, while helpful, would still fall far short of a true regulatory regime and wouldn't apply to the many cigarette companies that were not defendants in the suit.

Matthew Myers has done plenty of guerrilla warfare against tobacco, but he has also invested great effort trying to get regulation passed in recent years, especially in 2004, when he worked hard to shape a bill that would serve public-health goals. Conferring legitimacy on Altria through regulation is a possibility, he concedes, but by no means a sure thing; it depends on how Altria acts. He doesn't talk about trying to destroy the tobacco companies, because he knows it won't work. "The challenge to me is not to eliminate smoking, but the death and disease from smoking," Myers says. "That should be the end goal. If you had a product that addicted 45 million people and killed none of them, I would take that deal. Then you'd have coffee! I have to believe that if the marketplace incentives were such that over time someone could devise a product that would give the same satisfaction as tobacco but didn't kill them, people would flock to it."

Myers claims that the fractures that were evident in the public-health community a decade ago have largely healed. But that's not quite true. In 2004, Myers had to spend a lot of time persuading others in his camp that the bill was worth supporting. Many felt as Kessler did: that if a tobacco company was in favor of it, then there had to be something wrong with it. One anti-tobacco blogger went so far as to post an angry demand that Myers apologize for supporting something Altria also supported. To this day, Myers cannot admit that he and Steve Parrish have occasional contact and that they are both working toward a common goal: F.D.A. regulation. Such an admission would lead to accusations that Myers was consorting with the enemy rather than trying to fix a terrible problem.

But what does it matter what Steve Parrish and Altria's motives are? "For us, the goal is strictly a public-health one," Myers says. "If we know what we want and for whatever reason a tobacco company wants it, too, we need to be able and willing to embrace that." There is no chance that anyone is going to make another push for F.D.A. regulation this year. But Parrish says that he hopes that next year, once the new Congress is settled in, Altria can make one more run at it. As Myers sees it, the real test of whether Steve Parrish can be believed — and whether Altria has changed — will come only after the federal government begins regulating tobacco. "Would Philip Morris fight meaningful rules?" he asks. "Would it support restrictions on content of the product? These are all unknown at this point. I wish we could find out."

He added, "That's when we'll know if Steve Parrish is truly sincere, or whether he's the most effective spokesman the industry has ever had."

Joe Nocera is a business columnist for The Times and a staff writer for the magazine. His last cover article for the magazine was about hedge funds.

Copyright 2006 The New York Times Company