Not clear whether Steve Fraser's TomDispatch essay
Great Silence is an excerpt from his new Wall Street book
or an advance from a future book on "The Two Gilded Ages." But it's
worth quoting at some length. The two gilded ages theme also has a
prominent place in Paul Krugman's The Conscience of a Liberal.
The most obvious connection is the similar degree of economic inequity,
especially in contrast to the middle class-oriented period coming out
of the New Deal.
Here's a set of quotes, highlights from the essay:
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
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).
Missing Utopias and Dystopias
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
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.
[ . . . ]
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 neutered . . . or worse.
The Myth of Democratic Capitalism
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.
[ . . . ]
"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
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
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.
[ . . . ]
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.