-Caveat Lector- >New Statesman [www.newstatesman.co.uk] >8 January 2001 > >Cover story - The New Statesman Essay - Markets 'R' Us > >Business is the new religion; in an extraordinary historical reversal, >those who oppose it are arrogant elitists, frustrating the people's >will. > >By Thomas Frank > >In 1998, a commercial for IBM's Lotus division danced across American >television screens to the tune of REM's Nietzschean anthem, "I Am >Superman". As throngs of humanity went about their business, a tiny >caption asked: "Who is everywhere?" In response, IBM identified itself >both with the people and with the name of God as revealed to Moses: >the words "I Am" scrawled roughly on a piece of cardboard and held >aloft from amid the madding crowd. The questions continued, running >down the list from omnipresence to omniscience and omnipotence - "Who >is aware?", "Who is powerful?" - while scenes of entrepreneurial >achievement pulsated by: an American business district, a Chinese >garment factory, a microchip assembly room, and the seat of divine >judgement itself, the trading floor of the New York Stock Exchange. "I >can do anything," sang a winsome computer voice. > >If there was something breathtaking about this particular bit of >corporate autodeification, there was also something remarkably normal >about it. Americans had already made bestsellers of books such as God >Wants You to be Rich and Jesus, CEO. "The Market's Will be Done" was >the title that Tom Peters, guru of gurus, chose for a chapter of his >bestselling 1992 management book, while the techno-ecstatic Kevin >Kelly, in his Out of Control (1994), referred to his list of "new >economy" pointers as "The Nine Laws of God". > >What the term new economy really describes is not some novel state of >human affairs but the final accomplishment of the long-standing agenda >of the richest class. 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, >American opinion leaders seem convinced that democracy and the free >market are simply identical. There is little that is new about this >idea, either: for nearly a century, equating the market with democracy >was the familiar defence of any corporation in trouble with union or >government. 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 belief among opinion-makers that there is something natural, >something divine, something inherently democratic about markets. > >Wherever one looked in the 1990s, entrepreneurs were occupying the >ideological space once filled by the labour movement. It was >businessmen who were sounding off against the arrogance of elites, >railing against the privilege of old money, waging a relentless war on >hierarchy. They were market populists, adherents of the most powerful >political mythology of the age. > >Their fundamental faith was a simple one. The market and the people >were essentially one and the same. By its very nature, the market was >democratic, perfectly expressing the popular will through the >machinery of supply and demand, poll and focus group, superstore and >internet. In fact, the market was more democratic than any of the >formal institutions of democracy - elections, legislatures, >government. The market was infinitely diverse, permitting without >prejudice the articulation of all tastes and preferences. Most >importantly of all, the market was militant about its democracy. It >had no place for snobs, for hierarchies, for elitism, for pretence. > >As the Newsweek columnist Robert Samuelson said in 1998, "the market >'R' us". Whatever the appearances, it acted always in our interests, >on our behalf, against our enemies. This is how the New York Stock >Exchange, long a nest of privilege, could be understood in the 1990s >as a house of the people; how any niche marketing could be passed off >as a revolutionary expression - an empowerment, even - of the >demographic at which it was aimed. > >Market populism was just the thing for a social order requiring >constant doses of legitimacy. It builds all manner of populist >fantasies: of businessmen as public servants, of industrial and >cultural production as a simple reflection of popular desire, of the >box office as a voting booth. By consuming the fruits of industry, we >the people are endorsing the industrial system, voting for it in a >plebiscite far more democratic than a mere election. > >As business leaders melded themselves theoretically with the people, >they found powerful arguments against those who sought to regulate or >control private enterprise. Since markets express the will of the >people, virtually any criticism of business could be described as >despicable contempt for the common man. According to market populism, >elites were no longer those who spent their weekends at Club Med or >watched sporting events from a skybox or fired half their workforce >and shipped the factory south. Since the rich - particularly the new >rich - were the chosen of the market, they were the very emblem of >democratic modesty, humble adepts of the popular will. Elitists were >the people on the other side of the equation: the labour unions and >Keynesians who thought that society could be organised in any way >other than the market way. Since what the market did - no matter how >whimsical, irrational or harmful - was the will of the people, any >scheme to operate outside its auspices or to control its ravages was >by definition a dangerous artifice, the hubris of false expertise. > >This fantasy of the market as an anti-elitist machine was couched in >the language of social class. Businessmen and right-wing politicians >have always deplored the use of "class war" by their critics on the >left; during the 1990s, though, they happily used the tactic >themselves, depicting the workings of the market as a kind of >permanent social revolution in which daring entrepreneurs were >endlessly toppling fat cats and snatching away the millions of the >lazy rich kids. The new economy was a narrative of class warfare: >wherever its dynamic new logic touched down, old money was said to >quake and falter. Opera-going chief executives were giving way to >those who wore goatees and fancied the rhymes of the street; the >scions of ancient banking families were finding their smug selves >wiped out by the new-jack trading of a working-class kid; the arrogant >stockbrokers of old were being humiliated by the online day-traders; >white men were getting their asses kicked by women, Asians, Africans, >Hispanics. > >Market populism encompasses such familiar set pieces as Rupert >Murdoch's endless efforts to cast himself as a man of the people beset >by cartoon snobs such as the British aristocracy; or Detroit's >long-running use of Americans' liking for cars to depict even the most >practical and technical criticisms of the automobile industry (seat >belts, airbags, fuel efficiency and so on) as loathsome expressions of >a joyless elite. When the public began to sour on the big American >cars of the 1950s, according to the culture critic John Keats, >"Detroit decided . . . that the criticism was nothing but a lot of >nittering and nattering emanating from a few aesthetes and >intellectuals from the effete East - from the kind of people who drove >Volkswagens and read highbrow magazines just to show off". > >In the 1990s, these fantasies flowered spectacularly. Not only was the >new economy, that vision of the market unbound, believed to be >crushing the privilege of inherited wealth, but it was also said to >constitute a standing refutation of the learning of traditional >elites. Its stock market valuations, so puzzling to economists and old >brokerage hands, were crystal clear to the little guy. New economy >companies were doing without entire layers of experts and bureaucrats; >they were turning their backs on standard methods of teaching and >learning; they were tearing up the carefully designed flow charts and >job descriptions of old. > >Historically, populism was a rebellion against the corporate order, a >political tongue reserved by definition for the non-rich and the >non-powerful. The "common people" were the working class: the "elite" >the owners and managers of industry. > > >From 1968, this primal set piece of American democracy changed its >stripes. The war between the classes 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 - liberal journalists, liberal academics, 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 values of average >Americans. Backlash populism proved immensely powerful and for 30 >years right-wing populists were 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 crime on the streets, of unimaginable >cultural depravity, of disrespect for men in uniform, of judges gone >soft on crime and politicians gone soft on communism. > >In 1988, George Bush managed to win the presidency by spreading alarm >about flag-burning, a now non-existent threat that older voters >remembered with horror from 20 years before. This was not a trick that >could be repeated too many more times. Even though the culture wars >reached their outrageous peak in the decade that followed - the >bombing of abortion clinics and government buildings, the brief >notoriety of gun shows and right-wing militias, the impeachment of >President Clinton - they also began visibly to subside. It was during >the impeachment proceedings that the backlash, running now on little >more than 30-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 any more about the >betrayal of the bureaucrats, about the secular humanists' designs on >family values, about the flag-burning kids from the rich suburbs, or >even about the communistic professors, trashing the great books and >blaming America first. Clearly, something new was needed. > >This was where market populism came to the rescue. Backlash populism >had envisioned a scheming liberal elite whose members thought they >knew what was best for us - bussing, integration, the coddling of >criminals. Market populism simply shifted the inflection. Now the >crime of the elite was not so much an arrogance in matters of values >but in matters economic. Still, those elitists thought they were >better than the people, but now their arrogance was revealed by their >passion to raise the minimum wage, to regulate, oversee, redistribute >and tax. > >But there were other critical differences. While the backlash had been >proudly square, market populism was cool. Far from despising the >1960s, it broadcast its fantasies to the tune of a hundred psychedelic >hits. Its leading think-tanks were rumoured to pay princely sums to >young people who could bring some smattering of rock'n'roll street >cred to the market's cause. And believing in the market rather than >God, it had little need for the Christian right and the moral >majority. It dropped the ugly race-baiting of the previous right-wing >dispensation, choosing instead to imagine the market as a champion of >the downtrodden. Market populism abandoned the "family values" of >Ronald Reagan; it gave not a damn for the traditional role of women or >even of children. The more who entered the workforce, the merrier. > >This change has been difficult for many to grasp. For writers schooled >in the culture wars, the most important conflict was and will always >be the one between the hip and the square, the flag-burning and the >church-going, the hippie and the suit. But as the 1990s progressed, as >jeans replaced suits in the offices of America and as the ultra-hip >culture of cyberspace became the culture of the corporation generally, >business increasingly imagined itself on the other side of the >equation. > >For the majority of American workers, wages in the 1990s either fell >or barely kept pace with inflation. But for top corporate executives >these really were years in which to stand up and say "I Am". Between >1990 and 1999, chief executive income went from 85 times more than >what average blue-collar employees got to around 475 times more. In >Japan, meanwhile, that multiple stood at about 11 times, and in >Britain - the country most enamoured of new economy principles after >the US itself - 24 times. > >Market populism, and the concept of the new economy, have helped to >legitimise all this. They add up to a set of beliefs that, once >enacted into public policy, has permitted an upward transfer of wealth >unprecedented in our lifetimes; it is a collection of symbols and >narratives that understand the resulting wealth polarisation as a form >of populism, as an expression of the people's will. > >It is a fraud. The formula "one dollar, one vote" - invented by the >influential New York Times columnist Thomas Friedman - is not the same >thing as universal suffrage, as the complex, hard-won array of rights >that most Americans understand as their political heritage. Nor does >it mitigate the obscenity of wealth polarisation one whit when the >richest people ever in history tell us they are "listening" to us, >that theirs are "interactive" fortunes, or that they have unusual >tastes and work particularly hard. Markets may look like democracy, in >that we are all involved in their making, but they are fundamentally >not democratic. We did not vote for Bill Gates; we didn't all sit down >one day and agree that we should only use his operating system and we >should pay for it just however much he thinks is right. We do not go >off to our jobs checking telephone lines or making cold calls or >driving a forklift every morning because this is what we want to do: >we do it because it is the only way we can afford food, shelter and >medicine. The logic of business is coercion, monopoly and the >destruction of the weak, not "choice" or "service" or universal >affluence. > >"Democracies prefer markets but markets do not prefer democracies," >writes the political scientist Benjamin Barber in Jihad vs McWorld, >one of the most thoughtful recent books on the new capitalism. "Having >created the conditions that make markets possible, democracy must also >do all the things that markets undo or cannot do." Markets are >interested in profits and profits only; service, quality and general >affluence are different functions altogether. The universal, >democratic prosperity that Americans now look back to with such >nostalgia was achieved only by reining in markets, by the gargantuan >effort of mass, popular organisations such as labour unions and of the >people themselves, working through a series of democratically elected >governments not daunted by the myths of the market. > >The thinkers behind market populism have a word for this argument: >they call it "cynicism". One comes across denunciations of this >cynicism constantly from journalists, advertising executives, >futurists, management theorists, stock market gurus. The correct >intellectual posture, they admonish, is the simple faith of childhood. >Indeed, children of the most exaggerated guilelessness turn up >everywhere in the corporate speech of the 1990s, hailing the glory of >the internet, announcing corporate mergers, staring awestruck at new >computers, clarifying the bounds of history, explaining the fantastic >surge of the Dow, and raising their winsome voices to proclaim the >unanswerable new management logic that showed - as all previous >management logics had also shown - just why it was that labour must >submit to capital. > >The masters of the new economy may fancy themselves an exalted race of >divinities, but they counsel the rest of us to become as little >children before the market. > >Copyright 2000 Thomas Frank > >Thomas Frank is a founding editor of the American magazine The >Baffler. 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