Excerpt from Thomas Frank, One Market Under God: Extreme Capitalism, Market Populism and the End of Economic Democracy (Random House, 2000), p 15-17, 23-29

It is the argument of this book that "destroying the old" and making the world safe for billionaires has been as much a cultural and political operation as an economic one. Consider for a minute the factors--weak trade unions, a declining regulatory apparatus, and the outright repeal of the welfare state under presidents Reagan and Clinton--that distinguish the United States, with its "New Economy," from the other industrialized nations. Aside from the technological advances of recent years (which may or may not live up to the world-historical importance we routinely ascribe to them), very little of the "New Economy” is new. What the term describes is not some novel state of human affairs but the final accomplishment of the long-standing agenda of the nation's richest class. Industries come and industries go, but what has most changed about America in the nineties is the way we think about industries, about economies. Once Americans imagined that economic democracy meant a reasonable standard of living for all--that freedom was only meaningful once poverty and powerlessness had been overcome. Today, however, American opinion leaders seem generally convinced that democracy and the free market are simply identical. There is precious little that is new about this idea, either: For nearly a century, equating the market with democracy was the familiar defense of any corporation in trouble with union or government; it was the standard-issue patter of corporate lobbyists like the National Association of Manufacturers. What is "new" is this idea's triumph over all its rivals; the determination of American leaders to extend it to all the world; the general belief among opinion-makers that there is something natural, something divine, something inherently democratic about markets. A better term for the "New Economy" might simply be "consensus."

Writing a history of an intellectual consensus sometimes feels like a patently un-American undertaking. Even to assert that consensus exists is to challenge one of our fondest notions of ourselves. If there's anything that defines us as a people, we believe, it's our diversity, our differentness, our nonconformity, our frontier individualism. In the nineties this rage for differentness became such an orthodox bit of "New Economy" theory that it was transformed into one of those quasi-economic "laws" that the computer industry so loved to toss about. As the awestruck British writer Geoff Mulgan summarized what he called "Kao's law," "the power of creativity rises exponentially with the diversity and divergence of those connected into a network." America had done the fantastic things it had, Mulgan continued, because it had chosen "dissonant" voices over "consensus."" Back home in the land where theorists sought to make nonconformity into a universal economic "law," our most valuable corporations led us in elaborate sponsored fantasies about "changing everything" and "thinking different"; even the notorious utility conglomerate Enron, a high-profile donor to both political parties, was running TV commercials celebrating the subversive power of those who "ask why," which was said to be "the chosen word of the nonconformist.”

But however nineties America professed to love differentness, there was in fact less difference in certain reaches of the nation's public sphere than there had ever been in its history. It was a decade of many spectacular avant-gardes, to be sure. And yet however we celebrated our ethnic diversity or the dynamic variety of the Internet, America was in the grip of an intellectual consensus every bit as ironclad as that of the 1950s. In a manner largely unprecedented in the twentieth century, leaders of American opinion were in basic agreement on the role of business in American life. Daniel Yergin, a great celebrator of the laissez-faire way, called the new conviction that government had almost no legitimate place in economic affairs the "market consensus"; in interntional monetary dealings it was referred to as the "Washington consensus.” Luttwak exaggerates only slightly when he remarks that, "At pregont, almost all elite Americans, with corporate chiefs and fashionable economists in the lead, are utterly convinced that they have discovered the winning formula for economic success-the only formula-good for every country, rich or poor, good for all individuals willing and able to heed the message, and, of course, good for elite Americans: PRIVATIZATION + DEREGULATION + GLOBALIZATION = TURBO-CAPITALISM = PROSPERITY." As a description of attitudes among computer and Internet elites this statement was clearly correct. In 1998 "virtual reality" pioneer Jaron Lanier looked back at the preceding five years and marveled at how "the libertarian view of capitalism has become so exalted among tech types and bright young people that it isn't even contested anymore-it is just the common air we breathe." A little later that year Thomas Friedman, the New York Times columnist whose beat was "explaining globalization," found occasion to express his own wonderment at the accomplishment of the same intellectual goal among people who would ordinarily be inclined toward some kind of role for government in the economy--those left behind by the "New Economy," he gloated, no longer had any political recourse at all! While once people thought there were ways to order human affairs other than the free market, those options just no longer existed. "I don't think there will be an alternative ideology this time around," Friedman wrote. "There are none."

In the world of politics, certainly, Friedman's assessment was an accurate one. Here the nineties were the age of the great agreement, as leaders of left parties in the US and the UK accommodated themselves to the free market faiths of their predecessors, Reagan and Thatcher. As both Clinton and Tony Blair made spectacular public renunciations of their parties' historic principles, the opposition literally ceased to op- pose. In the service of the market and to safeguard its supposedly end- less array of choice, they ensured that voters would have no choice at all over the larger direction their nations took. Americans traded their long tradition of electoral democracy for the democracy of the supermarket, where all brands are created equal and endowed by their creators with all sorts of extremeness and diversity. . . .

. . . the corporate cause has never been very popular. The conservative politicians who are the heroes of the market order--the people who transferred power from government to business--were never able to win elections on that basis alone. Not even the inflation of the 1970s, the event routinely identified by "New Economy' enthusiasts as the straw that broke the back of the liberal order, ever really turned the public finally against the labor movement, social security, or the regulatory state established by the New Deal. In fact both Reagan and Clinton found it useful to present themselves as in- heritors of the Roosevelt mantle, not as the undoers of his legacy. What beat the left in America wasn't inflation and uppity workers, it was the culture war. Starting with the Nixon campaign in 1968 and continuing up through the Gingrich years, the American right paid the bills by handing out favors to business, but it won elections by provoking, organizing, and riding a massive populist backlash against the social and cultural changes of the 1960s.

To speak of pro-corporate populism is to raise one of the great political enigmas of the last thirty years. Historically populism was a rebellion against the corporate order, a political tongue reserved by definition for the non-rich and the non-powerful. As historian Michael Kazin summarizes it, populism contrasts an immensely idealistic conception of the nation and the common people with visions of a malevolent, scheming elite. As the "common people" were once easily defined as the working class and the "elite" as the owners and managers of industry, populism first arose as the vernacular of a series of insurgent labor movements (the Farmers'Alliance, the CIO). Populism was the American language of social class.

But beginning in 1968 this primal set piece of American democracy seemed to change its stripes. The war between classes had somehow reversed polarity: It was now a conflict in which the patriotic, blue-collar “silent majority: (along with their employers) faced off against a new elite, the "liberal establishment" and its spoiled, flag-burning children. This new ruling class-a motley assembly of liberal journalists, liberal academics, liberal foundation employees, liberal politicians, and the shadowy powers of Hollywood--earned the people's wrath not by exploiting workers or ripping off family farmers, but by showing contemptuous disregard for the wisdom and the values of average Americans. The backlash erected an entire new social hierarchy according to which the "normal Americans" were at the bottom as usual-but the people at the top weren't the millionaires or the owners, they were those sneering kids who dodged the draft, along with their liberal parents and the various minorities and criminals those parents seemed so determined to pamper. Enunciated memorably in the speeches of Spiro Agnew and in the movies of Clint Eastwood, backlash populism proved immensely powerful, and for thirty years American politics seemed mired in the same imagery and cultural questions, with right-wing populists forever reminding "normal Americans" of the hideous world that the "establishment" had built, a place where blasphemous intellectuals violated the principles of "Americanism" at every opportunity, a place of busing and crime in the streets, of unimaginable cultural depravity, of epidemic disrespect for men in uniform, of judges gone soft on crime and politicians gone soft on communism. The backlash became a fixture of the American scene as our never-subsiding mad-as-hellness elected wave after wave of conservative politicians who warred on the liberal media, the welfare queens, and the "countercultural McGoverniks."

The thirty-year backlash brought us Ronald Reagan's rollback of government power as well as Gingrich's outright shutdown of 1995. But for all its accomplishments it never constituted a thorough endorsement of the free market or of laissez-faire politics. Barbara Ehrenreich, one of its most astute chroniclers, points out that the backlash always hinged on a particular appeal to working-class voters, a handful of whom were roped into the Republican coalition with talk of patriotism, culture war, and family values. Both Reagan and Nixon spoke of blue-collar "middle America" even as they kicked its ass, and Wallace, in some ways the most ferocious backlash figure of was an out-and-out liberal on economic issues. Appealing to class for Republicans as long as it was restricted to cultural issues; when economic matters came up the culture-war compound grew unstable very quickly. Lee Atwater, an adviser to Presidents Rea- gan and Bush, warned his colleagues in 1984 that their new blue-collar constituents were "liberal on economics," and that without culture wars to distract them "populists were left with no compelling reason to vote Republican." As if to warn his colleagues to stay away from the stuff, Pat Buchanan, one of the inventors of the backlash strategy, spent the mid-1990s using the language of populism to embarrass his fellow Republicans for their pro-business politics."

In 1988, George Bush managed to win the presidency by spreading alarm about flag-burning, a nonexistent threat that older voters remembered with horror from twenty years before. This was not a trick that could be repeated too many more times. Even though the culture wars reached their, polarized and outrageous peak in the decade that followed-with all the shootouts between survivalists and the ATF, the bombing of abortion clinics and government buildings, the brief notoriety of gun shows and right-wing militias, as well as with Pat Buchanan's 1992 declaration of war, the righteous fury of the congressional "fresh- men" of 1994, and the impeachment of the president-they also began visibly to subside. It was during the impeachment proceedings that the backlash, clearly overextended and running now on little more than thirty-year-old rage, reached a state of obvious exhaustion. The public was slipping away. In the battle of the focus groups the president was winning easily. Nobody seemed to care anymore about the betrayal of the bureaucrats, about the secular humanists' designs on family values, about the Panama Canal giveaway, about flag-burning kids from the rich suburbs, or even about the communistic professors, trashing the great books and blaming America first. In their desperation the backlashers finally turned on the public itself, lamenting that the dream of a "moral majority” had foundered and declaring that maybe the common people didn’t deserve such noble defenders at all….

…..The language of market populism became particularly noticeable after the landmark Republican electoral triumph of 1994. A collection of conservative essays, published in the flush of victory under the jaunty title Backward and Upward, took great pains to distance the new breed of conservatives from the things with which the right had long been associated-order, deference, the past, "family values - and to proclaim instead the new gospel: That democracy was closely related to the holy acts of buying and selling, and that those who try to control the market are therefore setting themselves against nothing less than the almighty will of the people themselves. Robert L. Bartley, editor of the Wall Street Journal, had news for those conservatives still stuck on the idea of the nation. "The world is ruled not by politicians but by markets," he wrote. "National governments will evolve toward something like state governments today: Each will have its own industrial development program to show why it has the best business and investment climate." Those who truly believe in democracy must learn never to "fight the marketplace, but listen to what it is telling us," must abandon their fanciful ties to the past and throw themselves headlong into the whirling currents of market whim. As for those who do "try to fight the marketplace," Bartley's coauthors had a ready response: They were not only wrong but elitist, arrogant, in the grip of wild delusions of grandeur. In one essay these meddlers with the market, this new "liberal elite," were said to believe "that they are philosopher-kings ... that the people simply cannot be trusted; that they are incapable of just and fair self-government; that left to their own devices, their society will be racist, sexist, homophobic, and inequitable-and the liberal elite know how to fix things." Believing that things can be fixed is, in some way, an offense to popular sovereignty.. .

….The figure who propelled market populism to center stage was Newt Gingrich, in whose person was combined a Jacobin fervor for "revolution" and a faith in the goodness of business so guileless that he would fantasize about achieving a "consumer-directed government" and once recommended that policy-makers settle the big questions by simply asking "our major multinational corporations" what they would have us do.' Gingrich's rise to prominence after the 1994 elections took the world by surprise: Suddenly one of the most powerful country's most powerful figures was this true believer in management theory, in the bizarre futurism of Alvin Toffler, in the Internet, and in the looming obsolescence of all previous history. At first the world gasped, then it mocked, and within a few years Gingrich had fallen prey to the very 11 old" politics he had always derided. However pathetic he would one day seem, though, Gingrich undeniably changed our culture, opened the floodgates of respectability to a new style and even a new species of market messianism. A man who seriously believed that unfettered free enterprise would save the world, Gingrich insisted on recasting the confrontation of the masses and the classes in terms of their relative attitudes toward business. In To Renew America, his 1995 statement of principles, he posited a "democratic entrepreneunsm in which Americans from any social class could "invent their own future"-a spirit that he claimed was lacking in Europe, where "inventions often remained the province of the wealthy and the aristocratic." What's holding the people back is the "credentialing of the professions" and the cynical bad-mouthing of businessmen by the "elite." So deeply did Gingrich believe in this weird class conflict-in which Business Man squared off against the experts, professionals, bureaucrats, and politicians-that he actually declared the "so-called business cycle" itself to be a mere fabrication of expertise-mongering Federal Reserve economists."

But according to market populism the political is a realm of hope- less and unavoidable corruption. The corporate world is where the people’s work is done, where the real power resides, and so it seems only natural that the new idea's greatest theorists arose from business rather than politics. . .