The Rise of Market Populism
When Richard Hofstadter wrote thirty years ago that "conflict and consensus require each other and are bound up in a kind of dialectic of their own," he was offering advice to historians examining the American past, but he might as well have been describing the culture of the 1990s. If there was anything that defined us as a people, we came to believe in that decade, it was our diversity, our nonconformity, our radicalism, our differentness. It was an era of many and spectacular avant-gardes, of loud and highly visible youth cultures, of emphatic multiculturalism, of extreme sports, extreme diets and extreme investing.
But even as Americans marveled at the infinite variety of the Internet and celebrated our ethnic diversity, we were at the same time in the grip of an intellectual consensus every bit as ironclad as that of the 1950s. Across the spectrum, American opinion leaders in the nineties were coming to an unprecedented agreement on the role of business in American life. The leaders of the left parties, both here and in Britain, accommodated themselves to the free-market faith and made spectacular public renunciations of their historic principles. Organized labor, pounded by years of unionbusting and deindustrialization, slipped below 10 percent of the US private-sector work force and seemed to disappear altogether from the popular consciousness. The opposition was ceasing to oppose, but the market was now safe, its supposedly endless array of choice substituting for the lack of choice on the ballot. Various names were applied to this state of affairs. In international circles the grand agreement was called the "Washington Consensus"; economics writer Daniel Yergin called it the "market consensus"; New York Times columnist Thomas Friedman coined the phrase "golden straitjacket" to describe the absence of political options. While once "people thought" there were ways to order human affairs other than through the free market, Friedman insisted, those choices now no longer existed. "I don't think there will be an alternative ideology this time around," he wrote in August 1998. "There are none."
It is this intellectual unanimity about the nature and the purpose of economies, as much as the technological advances of recent years, that we refer to when we talk so triumphantly about the "New Economy." It is this nearly airtight consensus--this assurance that no matter what happens or who wins in November, a strong labor movement and an interventionist government will not be returning--that has made possible the unprecedented upward transfer of wealth that we saw in the Clinton years, that has permitted the bull market without end, and that has made the world so safe for billionaires.
This is not to say that in the nineties Americans simply decided they wanted nothing so much as to toil for peanuts on an assembly line somewhere, that they loved plutocracy and that robber barons rocked after all. On the contrary: At the center of the "New Economy" consensus was a vision of economic democracy as extreme and as militant-sounding as anything to emanate from the CIO in the thirties. From Deadheads to Nobel-laureate economists, from paleoconservatives to New Democrats, American leaders in the nineties came to believe that markets were a popular system, a far more democratic form of organization than (democratically elected) governments. This is the central premise of what I call "market populism": that in addition to being mediums of exchange, markets are mediums of consent. With their mechanisms of supply and demand, poll and focus group, superstore and Internet, markets manage to express the popular will more articulately and meaningfully than do mere elections. By their very nature markets confer democratic legitimacy, markets bring down the pompous and the snooty, markets look out for the interests of the little guy, markets give us what we want.
Many of the individual components of the market-populist consensus have been part of the cultural-economic wallpaper for years. Hollywood and Madison Avenue have always insisted that their job is simply to mirror the public's wishes, and that movies and ad campaigns succeed or fail depending on how accurately they conform to public tastes. Similarly, spokesmen for the New York Stock Exchange have long argued that stock prices reflect popular enthusiasm, that public trading of stocks is a basic component of democracy. And ever since William Randolph Hearst, newspaper tycoons have imagined themselves defenders of the common man.
But in the nineties these ideas came together into a new orthodoxy that anathematized all alternative ways of understanding democracy, history and the rest of the world. An example of the market-populist consensus at its most cocksure can be found in "Fanfare for the Common Man," the cover story that Newsweek used to mark the end of the twentieth century. The story's title comes from a Depression standby (a 1942 work by Aaron Copland), and its writing recalls the militant populism of that era. Looking back on the events of the "people's century," it occurred to Kenneth Auchincloss, the story's author, that for once in the human experience "ordinary folks changed history." To nail it down he singled out a succession of popular heroes who changed things: Suffragettes, feminists, the antiwar and civil rights movement, and, finally, "the entrepreneurs"--this last group illustrated with a drawing of Bill Gates. Even while hailing the richest man in the world as a champion of the common people, Auchincloss took pains to point out that the New Deal wasn't nearly as wonderful as everyone thought it was. The other hero of the thirties, the labor movement, was not mentioned in the story at all.