(FORTUNE Magazine) – Individualism is a calm and considered feeling which disposes each citizen to isolate himself from the mass of his fellows and withdraw into the circle of family and friends; with this little society formed to his taste, he gladly leaves the greater society to look after itself . . . individualism at first only dams the spring of public virtues, but in the long run it attacks and destroys all the others too and finally merges in egoism . . . a vice as old as the world. -- Alexis de Tocqueville Democracy in America, 1835 IF TOCQUEVILLE could come back to America at the twilight of the 20th century, his first comment might well be ''I told you so.'' Considering our behavior over the past 30 years, he'd have a point. Individualism, an American ideal championed by Jefferson and Franklin, has evolved from the exuberant ''do your own thing'' ethos of the Sixties, to the self-absorption of the ''Me Decade,'' to the all-consuming ''galloping greed'' of the Eighties. Such glib monikers oversimplify, of course, but they do call to mind the French writer's warning that unbridled individualism -- perhaps the most hallowed of American virtues -- can foster not only personal opportunity and upward mobility but also civic complacency and collective decline. Some contend we have become so obsessed with individual freedom that the entirety of our society now suffers from not-so-benign neglect. Who doesn't bemoan the killing fields of the South Bronx and Watts, the grimy, homeless waifs panhandling on Main Street, the widening gulf between rich and poor? What fair-minded person isn't bothered by the stridency and divisiveness of single-issue politics? Who doesn't fret that the ineptness and inequities of America's public schools will just make things worse? We all lament CEO salaries that climb in the midst of wrenching layoffs, and the paralysis of local, state, and federal governments -- too broke, despite high taxes, to achieve much social improvement anyway. Least inspiring are the politicians, born followers all, their positions spoon-fed to them by pollsters. No wonder most of us feel too jaded to lift a finger, other than to change channels with the remote control. Is this, then, where our vaunted individualism has brought us? To seek shelter in isolated lives, surrounded only by those who share our immediate personal, cultural, and economic interests, while the larger society atrophies? What about our other ideals, such as concern for the community, religious and ethnic tolerance, equality before the law, thrift, and respect for hard work? Have they become irrelevant? Might we not strike a new balance in the Nineties, one that could redirect toward bettering our society more of the selfish energy that spurs people to work, entrepreneurs to create, yuppies to acquire, and corporations to streamline? These are crucial questions, especially as America struggles with the possibility of slower growth, increasing social stratification, and an ever more competitive world economy. And they raise uncomfortable issues, not unlike those that former President Jimmy Carter surveyed in his famously unpopular ''malaise'' speech of 1979. Carter chastised Americans for not recognizing that ''consuming things does not satisfy our longing for meaning.'' Back then the last thing people wanted to hear was a sermon. The Nineties are different, though. America has a hangover from the excesses of the Eighties. Indeed, many sense something more serious than a headache the morning after: They believe that the country's moral fabric is fraying. Polls say so, academics say so, and now so do business leaders. Listen to Steven Jobs, 36, the Porsche-driving co-founder of Apple Computer and currently CEO of Next Inc.: ''I don't think we know what our values are anymore. I don't think anybody's asked us these questions in decades. How else could we have inner cities the way they are or an educational system in the condition it is? What do we care about? What do we stand for? What are our priorities? We simply don't know, and we're already paying the price.'' Even President Bush has begun preaching values in his own opaque way. During a speech in Philadelphia in September, he intoned: ''People think the problem in our world is crack, or suicide, or babies having babies. Those are symptoms. The disease is a kind of moral emptiness.'' American values have grown steadily more self-centered since World War II, and for good reason. As the only industrial power not wrecked by the war, America wallowed in a great economic and social windfall. Right through the Sixties, our industries supplied the world, our standard of living climbed, and our opportunities for upward mobility multiplied. We became so accustomed to being No. 1 that unvarnished egoism became a national value, somehow co- existing with New Deal social compassion. But in the Seventies and Eighties, as times got tougher, self-interest got the better of us. Here's how Charles Peters, editor of the Washington Monthly, describes the shift: ''We experienced a tremendous collapse of faith in idealism, public endeavor, and the notion that government was good and noble work. Part of what brought it on was a combination of the Vietnam war and Watergate, two episodes that proved the fallibilities of our leaders. Just as important, however, was the loss of our three most inspiring leaders in the Sixties -- the Kennedy brothers and Martin Luther King Jr. We haven't had leadership of that moral stature since, and the result is that the common man turned inward.'' NOW WE CALL what we did ''cocooning'' -- withdrawing into comfortable private worlds, not unlike what Tocqueville predicted 150 years ago. Furthermore, technology and popular media only make it easier to stay home. Personal computers let us avoid the distractions of the office, not to mention the time and frustration of commuting. Cable TV brings us dozens of channels tailored to particular tastes. Or we can rent movies to view in our dens, rather than fight the crowds at theaters. James Fallows, Washington editor for the Atlantic and author of a book on American values titled More Like Us, notes that today's movies, books, and magazines reflect our more selfish concerns. Says he: ''There have always been informal moral brakes on the great American pursuit of happiness -- religion or other traditional icons of how Americans were supposed to be. Remember the old Frank Capra movies like It's a Wonderful Life, in which the common mythology and ideology of the good life suggested something other than pushing self-interest to the hilt? Well, today we don't have a Frank Capra.'' Instead, we have -- what? Careerist fantasies like Working Girl or cynical satires of yuppie immorality like The Bonfire of the Vanities? Meanwhile, our increasingly mobile society further isolates those who hop from job to job and community to community in search of higher pay and faster- appreciating real estate. The upshot: We don't know our neighbors, much less participate in community life the way we used to. Observes Todd Gitlin, who has written several books about American society and teaches sociology at the University of California at Berkeley: ''One on one, Americans are as passionate and open-hearted as anyone. But we've fallen into a dangerous feedback loop: The more people withdraw energy from their public lives, the more unsatisfying it becomes to participate.'' Now we face a recession that won't go away, and it's hitting us where we live. Investment bankers and lawyers are pawning their luxury cars and praying they won't get pink slips. Conspicuous consumption is declasse. Suddenly we realize we might need each other more than we had suspected. Warns conservative humorist P. J. O'Rourke: ''Because the enormous uncertainty of life has been so padded for so long, we've forgotten not only what it's like to be poor, but that there's a lot to fear in a free society. And let's not kid ourselves: An economic pinch doesn't bring out the best in anybody.'' So how do we get out of this bind? Is the only answer to cast individualism aside and replace it, root and branch, with a different set of values borrowed from the more cohesive, cooperative societies that continue to gain ground on us -- countries like Japan, South Korea, and Germany? Frances Moore Lappe, author of Rediscovering America's Values and founder of the Institute for the Arts of Democracy in San Rafael, California, doesn't think so. Her organization's goal is to prod individuals to break out of their cocoons and participate in democracy, either in government, political parties, single- issue advocacy, or community service groups. Says she: ''Even though the Eighties will go down as the greed decade, I don't believe that we are worse people. What has really changed is that our schools, cities, government and social institutions, and big businesses seem more and more out of our reach, and we feel powerless to change them. What we need to do as a society is get beyond the hand wringing and finger pointing and reclaim our power as active citizens.'' In other words, roll up your sleeves and get involved again, America. That doesn't mean canceling your health club membership, marching down to your local Republican or Democratic party headquarters, or quitting your job and joining the Guardian Angels. No, what we need to find are new ways to influence the social institutions that are important to us. We can do it in small ways, like voting, or attending PTA meetings, or joining civic groups that don't seize on a single issue or grievance but care about the community's overall health. The point is to hear and be heard and to talk with one another. In the Nineties perhaps the best place to pitch in is at work. The business world and workplace have replaced the church and locality as our primary social arenas. That's where we meet people, spend most of our time, and form many of our opinions and values. As social institutions go, businesses set the standard for responsiveness and efficient management. The legions of small businesses are the backbones of local communities. Our biggest industries hold great sway over government and directly touch the lives of millions. Why shouldn't they play a larger, more responsible role in society, reflecting the concerns of the people who give them life? SOME COMPANIES, especially smaller enterprises, demonstrate how social responsibility can even be profitable. A good example is Just Desserts Inc., a San Francisco gourmet bakery that employs 240 people. Last year co-founder Elliot Hoffman, 44, teamed up with the San Francisco County Jail to turn a vacant lot adjoining his bakery into an elaborate organic garden tended by parolees, the homeless, and other folk. Just Desserts and Chez Panisse, a well-known Bay Area restaurant, buy the produce, and the 80 gardeners share the proceeds. Best of all, five parolees have landed full-time jobs at the bakery after proving themselves in the garden, and dozens of others have so far escaped the treadmill back to jail. Now, like good entrepreneurs, Hoffman and several other San Francisco businessmen are plotting how to open new gardens and sell produce to supermarkets. Indeed, in the decade ahead small businesses, precisely because they so ! closely reflect the values of their founders, may well hold out the prospect of best balancing old-fashioned individualism with a renewed commitment to the community. Says Hoffman: ''If business is to be the dominant social institution of the future, we have to mix social goals with business goals. The bottom line should include whether you hired more people and that you improved your products, your workplace, and your community -- not just your profit.'' This kind of enlightened entrepreneurship could be our best hope for a more productive and satisfying decade. Some captains of corporate America agree that small business is where it's at in the Nineties. Says John Sculley, CEO of Apple Computer: ''Encouraging small business investment should be a top priority of our government for one big reason: It's where most of the jobs are created.'' That doesn't get big business off the hook, though. Says Hoffman: ''Big shots like Sculley should be calling up George Bush and giving him an earful about how shortsighted government is. They should criticize the government openly and talk directly to the public about how a healthy business climate that encourages long-term investment can improve everyone's lives.'' In recent decades America has given progressively shorter shrift to the long run, which has traditionally been a mainstay concern not only of communitarians but also of any responsible individualist. Says Paul Saffo, a research fellow at the Institute for the Future in Menlo Park, California: ''If you think about it, the bad things about the Eighties -- the federal budget deficit, leveraged buyouts, huge consumer debt -- all are bad because they borrow off the flesh of coming generations, and that is morally wrong.'' Saffo thinks big business can help government act more responsibly by taking a more long range view itself. Think of our national values not just as a recipe for a healthy society but as the ingredients of one. A little too much emphasis on one element can sour the whole rich stew, as America is now discovering. But that doesn't mean we need to look for new ingredients; we just have to alter the mix. The twin pillars of American idealism -- rugged individualism tempered by civic-minded compassion -- helped us weather the Civil War, the Great Depression, and both world wars. Properly blended for the Nineties, they can save us again.