Wednesday, April 23, 2008

The Great Silence: Our Gilded Age and Theirs

The Great Silence: Our Gilded Age and Theirs

By Steve Fraser

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Google "second Gilded Age" and you will get ferried to 7,000 possible sites where you can learn more about what you already instinctively know. That we are living through a gilded age has become a journalistic commonplace. The unmistakable drift of all the talk about it is a Yogi Berra-ism: it's a matter of déjà vu all over again. But is it? Is turn-of-the-century America a replica of the world Mark Twain first christened "gilded" in his debut bestseller back in the 1870s?

Certainly, Twain would feel right at home today. Crony capitalism, the main object of his satirical wit in The Gilded Age, is thriving. Incestuous plots as outsized as the one in which the Union Pacific Railroad's chief investors conspired with a wagon-load of government officials, including Ulysses S. Grant's vice president, to loot the federal treasury once again lubricate the machinery of public policy-making. A cronyism that would have been familiar to Twain has made the wheels go round in these terminal years of the Bush administration. Even the invasion and decimation of Iraq was conceived and carried out as an exercise in grand-strategic cronyism; call it cronyism with a vengeance. All of this has been going on since Ronald Reagan brought back morning to America.

Reagan's America was gilded by design. In 1981, when the New Rich and the New Right paraded in their sumptuous threads in Washington to celebrate at the new president's inaugural ball, it was called a "bacchanalia of the haves." Diana Vreeland, style guru (as well as Nancy Reagan confidante), was stylishly blunt: "Everything is power and money and how to use them both ... We mustn't be afraid of snobbism and luxury."

That's when the division of wealth and income began polarizing so that, by every measure, the country has now exceeded the extremes of inequality achieved during the first Gilded Age; nor are our elites any more embarrassed by their Mammon-worship than were members of the "leisure class" excoriated a century ago by that take-no-prisoners social critic of American capitalism Thorstein Veblen.

Back then, it was about masquerading as European nobility at lavish balls in elegant hotels like New York's Waldorf-Astoria, locked down to forestall any unpleasantness from the street (where ordinary folk were in a surly mood trying to survive the savage depression of the 1890s). Today's "leisure class" is holed up in gated communities or houseoleums as gargantuan as the imported castles of their Gilded Age forerunners, ready to fly off - should the natives grow restless - to private islands aboard their private jets.

The Free Market as Melodrama

At the height of the first Gilded Age, William Graham Sumner, a Yale sociologist and the most famous exponent of Herbert Spencer's theory of dog-eat-dog Social Darwinism, asked a good question: What do the social classes owe each other? Virtually nothing was the professor's answer.

As in those days, there is today no end to ideological justifications for an inequality so pervasive that no one can really ignore it entirely. In 1890, reformer Jacob Riis published his book How the Other Half Lives. Some were moved by his vivid descriptions of destitution. In the late nineteenth century, however, the preferred way of dismissing that discomfiting reality was to put the blame on a culture of dependency supposedly prevalent among "the lower orders," particularly, of course, among those of certain complexions and ethnic origins; and the logical way to cure that dependency, so the claim went, was to eliminate publicly funded "outdoor relief."

How reminiscent of the "welfare to work" policies cooked up by the Clinton administration, an exchange of one form of dependency - welfare - for another - low-wage labor. Poverty, once turned into the cultural and moral problem of the impoverished, exculpated Gilded Age economics in both the nineteenth and twenty-first centuries (and proved profitable besides).

Even now, there remains a trace of the old Social Darwinian rationale - that the ascendancy of "the fittest" benefits the whole species - and the accompanying innuendo that those consigned to the bottom of the heap are fated by nature to end up there. To that must be added a reinvigorated belief in the free market as the fairest (not to mention the most efficient) way to allocate wealth. Then, season it all with a bravura elevation of risk-taking to the status of spiritual, as well as economic, tonic. What you end up with is an intellectual elixir as self-congratulatory as the conscience-cleansing purgative that made Professor Sumner so sure in his cold-bloodedness.

Then, as now, hypocrisy and self-delusion were the final ingredients in this ideological brew. When it came to practical matters, neither the business elites of the first Gilded Age, nor our own "liquidators," "terminators," and merger and acquisition Machiavellians ever really believed in the free market or the enterprising individual. Then, as now, when push came to shove (and often way earlier), they relied on the government: for political favors, for contracts, for tax advantages, for franchises, for tariffs and subsidies, for public grants of land and natural resources, for financial bail-outs when times were tough (see Bear Stearns), and for muscular protection, including the use of armed force, against all those who might interfere with the rights of private property.

So too, while industrial and financial tycoons liked to imagine themselves as stand-alone heroes, daring cowboys on the urban-industrial-financial frontier, as a matter of fact the first Gilded Age gave birth to the modern, bureaucratic corporation - and did so at the expense of the lone entrepreneur. To this day, that big business behemoth remains the defining institution of commercial life. The reigning melodrama may still be about the free market and the audacious individual, but backstage, directing the players, stands the state and the corporation.

Crony capitalism, inequality, extravagance, Social Darwinian self-justification, blame-the-victim callousness, free-market hypocrisy: thus it was, thus it is again!

At the end of the Reagan years, public intellectuals Kevin Phillips and Gary Wills prophesied that this state of affairs was insupportable and would soon end. Phillips, in particular, anticipated a populist rising. It did not happen. Instead, nearly 20 years later, the second Gilded Age is alive, if not so well. Why such longevity? The answer tells us something about how these two epochs, for all their striking similarities, are also profoundly unalike.

Missing Utopias and Dystopias

As a title, Apocalypse Now could easily have been applied to a movie made about late nineteenth century America. Whichever side you happened to be on, there was an overwhelming dread that the nation was dividing in two and verging on a second civil war, that a final confrontation between the haves and have-nots was unavoidable.

Irate farmers mobilized in cooperative alliances and in the Populist Party. Farmer-labor parties in states and cities from coast to coast challenged the dominion of the two-party system. Rolling waves of strikes, captained by warriors from the Knights of Labor, enveloped whole communities as new allegiances extended across previously unbridgeable barriers of craft, ethnicity, even race and gender.

Legions of small businessmen, trade unionists, urban consumers, and local politicians raged against monopoly and "the trusts." Armed workers' militias paraded in the streets of many American cities. Business and political elites built massive urban fortresses, public armories equipped with Gatling guns (the machine guns of their day), preparing to crush the insurrections they saw headed their way.

Even today the names of Haymarket (the square in Chicago where, in 1886, a bombing at a rally of rebellious workers led to the legal lynching of anarchist leaders at the most infamous trial of the nineteenth century), Homestead (where, in 1892, the Monongahela River ran red with the blood of Pinkerton thugs sent by Andrew Carnegie and Henry Clay Frick to crush the strike of their steelmaking employees), and Pullman (the company town in Illinois where, in 1894, President Grover Cleveland ordered Federal troops to put down the strike of the American Railway Union against the Pullman Palace Car Company) evoke memories of a whole society living on the edge.

The first Gilded Age was a moment of Great Fears, but also of Great Expectations - a period infatuated with a literature of utopias as well as dystopias. The two most successful novels of the nineteenth century, after Uncle Tom's Cabin, were Edward Bellamy's utopian Looking Backward and the horrific dystopia Caesar's Column by Populist tribune Ignatius Donnelly. The latter reached its denouement when Donnelly's fictional proletarian underground movement, the "Brotherhood of Destruction," marked its "triumph" with the erection of a giant pyramid composed of a quarter-million corpses of its enemy, "the Oligarchy" and its minions, cemented together and laced with explosives so that no one would dare risk removing them and destroying this permanent memorial to the barbarism of American industrial capitalism.

This end-of-days foreboding and the thirst for utopian release were not, moreover, confined to the ranks of agrarian or industrial trouble-makers. Before "Pullman" became a word for industrial serfdom and the Federal government's bloody-mindedness, it was built by its owner, George Pullman, as a model industrial city, a kind of capitalist utopia of paternal benevolence and confected social harmony.

Everyone was seeking a way out, something wholly new to replace the rancor and incipient violence of Gilded Age capitalism. The Knights of Labor, the Populist Party, the anti-trust movement, the cooperative movements of town and country, the nation-wide Eight-Hour Day uprisings of 1886 which culminated in the infamy of the Haymarket hangings, all expressed a deep yearning to abolish the prevailing industrial order.

Such groups weren't just angry; they weren't merely resentful - although they were that, too. They were disturbed enough, naÃ̅ve enough, desperate enough, inventive enough, desiring enough, deluded enough - some still drawing cultural nourishment from the fading homesteads and workshops of pre-industrial America - to believe that out of all this could come a new way of life, a cooperative commonwealth. No one really knew what exactly that might be. Still, the great expectation of a future no longer subservient to the calculus of the marketplace and the capitalist workshop lent the first Gilded Age its special fission, its high (tragic) drama.

Fast-forward to our second Gilded Age and the stage seems bare indeed. No great fears, no great expectations, no looming social apocalypses, no utopias or dystopias - just a kind of flat-line sense of the end of history. Where are all the roiling insurgencies, the break-away political parties, the waves of strikes and boycotts, the infectious communal upheavals, the chronic sense of enough is enough? Where are the earnest efforts to invoke a new order which, no matter how sketchy and full of unanswered questions, now seem as minutely detailed as the blueprints for a Boeing 747 compared to "yes we can"?

What's left of mainstream populism exists on life-support in some attic of the Democratic Party. Even the language of our second Gilded Age is hollowed out. In a society saturated in Christian sanctimony, would anyone today describe "mankind crucified on a cross of gold" as William Jennings Bryan once did, or let loose against "Mammon worship," condemn aristocratic "parasites," or excommunicate "vampire speculators" and the "devilfish" of Wall Street? If nineteenth century evangelical preachers once pronounced anathema on capitalist greed, twenty-first century televangelists deify it. Tempers have cooled, leaving God, like many Americans, with only part-time employment.

The Great Silence

I exaggerate, of course. Movements do exist today to confront the inequities and iniquities of our own Gilded Age. Wall Street bandits are, once in a while, arrested by a sheriff. Some ministers, even born-again ones, do still preach the Social Gospel. But all this seems a pale shadow of what was. Something fundamental about the metabolism of capitalism has changed.

Perhaps the answer is simple and basic: The first Gilded Age rested on industrialization; the second on de-industrialization. In our time, a new system of dis-accumulation looted American industry, liquidating its assets to reward speculation in "fictitious capital." After all, the rate of investment in new plant, technology, and research and development all declined during the 1980s. For a quarter-century, the fastest growing part of the economy has been the finance, insurance, and real estate (FIRE) sector.

De-industrialization has set off an avalanche whose impact is still being felt in the economy, in the country's political culture, and in everyday life. It laid the industrial working class and the labor movement low, killing it twice over. This, more than anything else, may account for the great silence of the second Gilded Age, when measured, at least, against the raucous noise of the first. Labor was mortally wounded by direct assault, beginning with President Reagan's decision in 1981 to fire all the striking air traffic controllers. His draconian act licensed American business to launch its own all-out attack on the right to organize, which continues to this day.

In itself, however, resorting to coercion to deal with the opposition hardly distinguishes our own gilded elite from the first one. If anything, we live in less savage times, at least here at home. More fatal by far was the arrival of a new mode of capital accumulation, starkly different from the one that had prevailed a century ago. It eviscerated towns, cities, regions, and whole ways of life. It demoralized people, hollowed out popular institutions that had once offered resistance, and stoked the fires of resentment, racism, and national revanchism. Here was the raw material for mean-spirited division, not solidarity.

Dis-accumulation transformed the working class into a disaggregated pool of contingent labor, contract labor, temporary labor, and part-time labor, all in the interests of a new "flexible capitalism." Ideologues gussied-up this floating workforce by anointing it "free agent" labor, a euphemism designed to flatter the free market homunculus in each of us - and, for a time, it worked. But the resulting reality has proved a bitter pill to swallow. To be a "free agent" today is to be free of health care, pensions, secure jobs, security in every sense. In our gilded era, downward mobility, lasting a quarter-century and still counting, has marked the social trajectory of millions of people living in the American heartland.

Dis-accumulating capitalism also undermined the political gravitas of poverty. In the first Gilded Age, poverty was a function of exploitation; in the second, of exclusion or marginalization. When we think about poverty, what comes to mind is welfare and race. The first gilded age visualized instead coal miners, child labor, tenement workshops, and the shantytowns that clustered around the steel mills of Aliquippa and Homestead.

Poverty arising out of exploitation ignited widespread moral revulsion and a robust political assault on the power of the exploiters. The perpetrators of the poverty of exclusion of our own time have been trickier to identify. In his 1962 book The Other America, Michael Harrington noted the invisibility of poverty. That was half a century ago and misery still lives in the shadows. Helped along by an ingrained racism, poverty in the second Gilded Age was politically neuteredÂ… or worse.

Decline, dispossession, and marginalization: a grim scenario. Yet the new political economy of finance-based dis-accumulation also announced itself as the second coming of democratic capitalism. And in the realm of the collective imaginary, if not in reality, it convinced millions.

The Myth of Democratic Capitalism

Aristocrats don't exist anymore, but it is remarkable how long they lasted as major actors in the country's political dramaturgy. Franklin Delano Roosevelt was still denouncing "economic royalists" and "tories of industry" at the height of the New Deal. The struggle against the counter-revolutionary aristocrat, seen to be subverting the institutions of democratic life, piling up unearned riches, supplied the energy powering American reform for generations. In real life, the robber baron industrialists and financiers of Wall Street were no more aristocrats than my grandma from the shtetl. They were parvenus.

For their own good reasons, however, they actively conspired in this popular misperception by playing the aristocratic role for all it was worth. In hindsight, what looks like one of the silliest utopias of the first Gilded Age was enacted by these nouveaux riche, performing in tableaux vivant at gala balls dressed in aristocratic drag, or cavorting in the castles and villas they had transported stone by stone from France and Italy, or showing off at the weddings of their daughters to the offspring of bankrupt European nobility, or parading to New York's Metropolitan Opera in coaches driven by liveried servants and embossed with their family's "coat of arms," complete with hijacked insignia and faked genealogies that concealed their owners' homelier origins.

We may laugh at all this now. Back then, for millions, these aristocratic pretensions confirmed an ancient Jeffersonian suspicion: Capitalists were nothing more or less than camouflaged aristocrats. And mobilizing to rescue the republic and democracy from such a danger was practically an indigenous instinct. However, pushing beyond this horizon of political democracy in the direction of social democracy is a different matter entirely, arousing anxiety about threatening the understructure of private property which is, after all, also part of the American dream. Having an aristocracy to kick around, even an ersatz one, can be politically empowering.

Minus the oddball exception or two, the new tycoonery of the second Gilded Age does not fancy itself an aristocracy. It does not dress up like one or marry off its daughters to fortune-hunting European dukes and earls. On the contrary, its major figures regularly dress down in blue jeans and cowboy hats, affecting a down-home populism or nerdy dishevelment. However addicted to the paraphernalia of flamboyant excess they may be, the new capitalist elite does not pretend these are the insignia of ruling class entitlement.

Once upon a gilded time, the lower orders aped the fashions and manners of their putative betters; today it's the other way around. Indeed, it is no longer even apt to talk of a "leisure class," since our moguls of the moment are workaholics, Olympians of the merger-and-acquisition all-nighter.

Although the economic and political throw-weight of our gilded elite is at least as great as that of its predecessors in the days of J.P. Morgan and John D. Rockefeller, an American fear of a moneyed aristocracy has subsided accordingly. Instead, from the Reagan era on, Americans have been captivated by businessmen who took on the rebel role against a sclerotic corporate order and an ossified government bureaucracy that, together, were said to be blocking access to a democracy of the bold.

Often men from the middling classes, lacking in social pedigree, the overnight elevation of people like Michael Milken, Carl Ichan, or "greed is healthy" Ivan Boesky, flattered and confirmed a popular faith in the American dream. These irreverent new "revolutionaries," intent on overthrowing capitalism in the interests of capitalism, made fun of the men in pin-striped suits.

When the captains of industry and finance lorded it over the country in the late nineteenth century, no one dreamed of calling them rebels against an overweening government bureaucracy or an entrenched set of "interests." There was then no government bureaucracy and tycoons like Russell Sage and Jay Gould were "the interests." They worried about being overthrown, not overthrowing someone else.

Our corporate elite are much more adept than their Gilded Age predecessors were at playing the democracy game. The old "leisure class" was distinctly averse to politics. If they needed a tariff or tax break, they called up their kept Senator. When mortally challenged by the Populists and William Jennings Bryan in 1896, they did get involved; but, by and large, they didn't muck about in mass party politics which they saw as too full of uncontrollable ethnic machines, angry farmers, and the like. They relied instead on the Federal judiciary, business-friendly Presidents, constitutional lawyers, and public and private militias to protect their interests.

Beginning in the 1970s, our age's business elite became acutely politically-minded and impressively well-organized, penetrating deeply all the pores of party and electoral democracy. They've gone so far as to craft strategic alliances with elements of what their nineteenth century predecessors - who might have blanched at the prospect - would have termed the hoi polloi. Calls to dismantle the federal bureaucracy now carry a certain populist panache, while huffing and puffing about family values has - so far - proven a cheap date for a gilded elite that otherwise generally couldn't care less.

Moreover, the ascendancy of our faux revolutionaries has been accompanied by media hosannas to the stock market as an everyman's Oz. America's long infatuation with its own democratic-egalitarian ethos lent traction to this illusion.

Horace Greely's inspirational admonition to "go West young man" echoed through all the channels of popular culture in the 1990s - from cable TV shows and mass circulation magazines to baseball stadium scoreboards and Internet chat rooms. Only now Greeley's frontier of limitless opportunity had migrated back East to the stock exchange and into the ether of virtual or dot.com reality. The culture of money released from all ancient inhibitions enveloped the commons.

"Shareholder democracy" and the "ownership society" are admittedly more public relations slogans than anything tangible. Nonetheless, you can't ignore the fact that, during the second Gilded Age, half of all American families became investors in the stock market. Dentists and engineers, mid-level bureaucrats and college professors, storekeepers and medical technicians - people, that is, from the broad spectrum of middle class life who once would have viewed the New York Stock Exchange with a mixture of awe, trepidation, and genuine distaste, and warily kept their distance - now jumped head first into the marketplace carrying with them all their febrile hopes for social elevation.

As Wall Street suddenly seemed more welcoming, fears about strangulating monopolies died. Dwindling middle-class resistance to big business accounts for the withering away of the old anti-trust movement, a telling development in the evolution of our age's particular form of "big-box" capitalism. Once, that movement had not only expressed the frustrated ambitions of smaller businessmen, but of all those who felt victimized by monopoly power. It embodied not just the idea of breaking up the trusts, but of competing with, or replacing them with, public enterprises.

Long before the Reagan counter-revolution defanged the whole regulatory apparatus, however, the "anti-trust" movement was over and done with. Its absence from the political landscape during the second Gilded Age marks the demise of an older middle-class world of local producers, merchants, and their customers who were once bound together by the ties of commerce and the folk truths of small town Protestantism.

Big-box capitalism, the capitalism of Wal-Mart, still incites local uproars that carry a hint of that anti-trust past, but oppositional forces are divided. The capitalism of which Wal-Mart is emblematic generates a dissonant universe of political and cultural desires. It appeals, first of all, to instincts of individual and family material wellbeing which may run up against calls for a wider social solidarity. Moreover, in its own everyday way consumer culture - more far-reaching than anything imaginable a century ago - channels desire into forms of expressive self-liberation. Grand narratives that tell a story of collective destiny - Redemption, Enlightenment, and Progress, the Cooperative Commonwealth, Proletarian Revolution - don't play well in this refashioned political theater.

The End of the Age of Acquiescence?

However, the wheel turns. The capitalism of the Second Gilded Age now faces a systemic crisis and, under the pressure of impending disaster, may be headed back to the future. Old-fashioned poverty is making a comeback. Arguably, the global economy, including its American branch, is increasingly a sweatshop economy. There is no denying that brute fact in Thailand, China, Vietnam, Central America, Bangladesh, and dozens of other countries and regions that serve as platforms for primitive accumulation. Hundreds of millions of peasants have become proletarians virtually overnight.

Here at home, something analogous has been happening, but with an ironic difference and bearing within it a new historic opportunity. One might call it the unhorsing of the middle class.

During the first Gilded Age, the sweatshop seemed a noxious aberration. It lawlessly offered irregular employment at sub-standard wages for interminable hours. It was ordinarily housed helter-skelter in a make-shift workshop that would be here today, gone tomorrow. It was an underground enterprise that regularly absconded with its workers' paychecks and made chiseling them out of their due into an art form.

Today, what once seemed abnormal no longer does. The planet's peak corporations depend on this system. They have thrived on it. True enough, it has also encouraged the proliferation of petty enterprises - sub-contractors, consulting firms, domestic service companies - fertilizing the soil in which our age of democratic capitalism is rooted. But the ubiquity of the sweated economy promises to alter the nation's political chemistry.

Many of the newly flexible proletarians working for Wal-Mart, for auto parts or construction company sub-contractors, on the phones at direct mail call centers, behind the counters at mass market retailers, earn a dwindling percentage of what they used to. Even new hires at the Big Three automobile manufacturers will now make a smaller hourly wage than their grandfathers did in 1948. So too, the relative job security such employees once enjoyed is gone, leaving them vulnerable to the "lean and mean" dictates of the new capitalism: double or triple work loads; or, even worse, part-time work, work always shadowed by indignity and fear; or, worse yet, no work at all.

Meanwhile, the white collar Tomorrowland of "free agent" techies, software engineers, and the like - not to mention a whole endangered species of middle management - lives a precarious existence, under intense stress, chronically anticipating the next round of lay-offs. Yet many of them were once upon a time members in good standing of the "middle class." Now, they find themselves on the down escalator, descending into a despised state no one could mistake for middle class life.

"Flexible accumulation" joins this dispossession of the middle class to the super-exploitation of millions who never laid claim to that status. Many of these sweated workers are women, laboring away as home health care aides, in the food services industry, in meat processing plants, at hotels and restaurants and hospitals, because the arithmetic of "flexible accumulation" demands two workers to add up to the livable family wage not so long ago brought home by a single wage earner.

Millions more are immigrants, legal as well as undocumented, from all over the world. They live, virtually defenseless, in a twilight underworld of illegality and prejudice. Thanks to all this, the category of the "working poor" has reentered our public vocabulary. Once again, as during the first Gilded Age, poverty seems a function of exploitation at work, not only the lot of those excluded from work.

Might these developments augur the end of our second Gilded Age; or rather the end of the age of acquiescence? No one can know. Yet anger and resentment over insecurity, downward mobility, exploitation, second-class citizenship, and the ill-gotten gains of our Gilded Age mercenaries and their political enablers already rippled the political waters during the mid-term elections of 2006. This primary season has witnessed a discernable leftward shift of the center of gravity within even the cowed leadership ranks of the Democratic Party, a shift driven in large measure by the sub-prime mortgage collapse and the ominous rumblings of severe recession.

Anger and resentment, however, do not by themselves comprise a visionary alternative. Nor is the Democratic Party, however restive, a likely vehicle of social democratic aspirations. Much more will have to happen outside the precincts of electoral politics by way of mass movement building to translate these smoke signals of resistance into something more muscular and enduring. Moreover, nasty competition over diminishing economic opportunities can just as easily inflame simmering racial and ethnic antagonisms.

Nonetheless, the current break-down of the financial system is portentous. It threatens a general economic implosion more serious than anyone has witnessed for many decades. Depression, if that is what it turns out to be, together with the agonies of a misbegotten and lost war no one believes in any longer, could undermine whatever is left of the threadbare credibility of our Gilded Age elite.

Legitimacy is a precious possession; once lost it's not easily retrieved. Today, the myth of the "ownership society" confronts the reality of the "foreclosure society." The great silence of the second Gilded Age may give way to the great noise of the first.

Steve Fraser is working on a book about the two gilded ages. A Tomdispatch regular, he is the author of, among other works, the just published Wall Street: America's Dream Palace. He is Editor-at-Large of New Labor Forum magazine.

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