Plutocrats in the Free Market

...Moreover, his peculiar take on the country's cyclical experience with wealth and democracy is a telling commentary on his own oddly inflected populism...

...What was self-evident even in Luce's day was that there would be no American Century without the practically unchallengable power of American finance capitalism...

...104 n DISSENT / Fall 2002...

...Alike in many ways, the two periods are distinguished from each other not only by the faux populism but also by what Phillips characterizes as the "collectivization of financial risk" of the contemporary system...

...In the United States especially, this has always been an endangered distinction, now more than ever...

...It is that venerable democratic impulse that reacts against the inevitable economic and social inequities of the marketplace while drawing back from any frontal assault on the market economy itself...

...It is arguable, although Phillips does not make this argument, that the current era is a second "financialization" of the political economy, the first having occurred during the age of J.P...

...Wealth and Democracy is at pains to emphasize that democracy and capitalism are not the same thing...

...It is tempting to equate the new era of Entrepreneurial Man with the rise of Ronald Reagan, but Phillips persuasively argues that the Reaganauts were never taken with the informationage, hip entreprenurialism that flourished during the Clinton years...

...Wall Street quickly acclimated itself to the new environment...

...WEALTH AND DEMOCRACY is marred by its detour into Republican mythography, by allegorical repetitiveness and historical tendentiousness...

...Phillips's lingering Republican past leads him to fantasize about some underground tradition of progressive middle-class Republicanism, which in Phillips's quirky narrative confection embraces the governments of William McKinley, Richard Nixon, and Abraham Lincoln...

...If you want a thoughtprovoking account of how today's plutocracy learned how to exercise the tyranny of the free market, read this book...

...industry, trade deficits, illegal immigrants, and the loss of the country's alleged mid-twentieth-century economic independence is an echo of Populist sentiments more than a century old...

...They were as uninterested in the new visionaries of Silicon Valley as they were in the decrepit remains of the rust belt...

...Most useful and suggestive is the book's attempt to socially dissect the last quarter century of excess...

...The atmosphere of sixties' cultural liberation that hovered over the Clinton administration had more to do with the borrowed anti-hierarchical argot and upscale designer egalitarianism of the new dot-com billionaires than it did with any sixties-era political engagement with the lower orders...

...The evidence for Nixon's labor sympathies seems to consist of presidential invitations extended to the ossified leadership of the AFL-CIO to visit the White House...

...The book's tables and graphs alone make up a numerical "Common Sense" for our own time...

...the book would still be worth its cover price...

...Even Phillips's undercurrent of economic nationalism, his cautionary sermons about the foreign invasion of U.S...

...Phillips's book is a reckoning with that triumph...

...or rather, it is a way of conducting a struggle against privilege without calling into question the nation's underlying class structure and property arrangements...

...Their transparent self-indulgence and criminal proclivities strain popular belief in the ideology of market utopianism that so recently seemed unassailable...

...Notwithstanding the "Great Communicator's" free market lingo, his regime still drew its sustenance from traditional big-time real estate interests, oil corporations, service sector giants, and military contractors, together with the usual suspects from high finance...

...For example, at several points, to illustrate his claim that fundamental technological breakthroughs are followed inexorably by spasms of wild financial speculation and panics, Phillips attributes the crash of 1837 to speculation in railroads when in fact it was old-fashioned, notech land speculation that produced the bust...

...These numbers represent a high-caliber artillery that levels the edifice of people's capitalism that so impressed and enthralled everybody during the dot-corn-bemused nineties...

...He has empire on the mind, writes in the dour tradition of Edward Gibbon, Oswald Spengler, and, more recently, Paul Kennedy, and sees in the current American ascension the prelude to its undoing...

...The masters of our fate in Washington now indulge in the dangerous luxury of imagining themselves invincible, pronounce whole nations evil, or grant absolution as a function of their unilateral will and flirt with Armageddon...

...The Clinton interregnum, conversely, was the outcome of what Phillips calls the first white-collar recession of the early nineties— itself a fitting epitaph to the extreme "financialization" of the Gordon Gekko years— conjoined to the rapidly inflating Internet bubble...

...Phillips's book is first of all a salient response to the last decade's market triumphalism, a vigorous effort to rescue the country from its social amnesia about the fact that wealth and democracy have been at odds throughout most of American history...

...They preside over a grossly inequitable and gallingly iniquitous division of wealth that is both the source of their own political supremacy and the disenfranchisement of the great mass of middle- and working-class Americans...

...Grandiose though he was, Henry Luce could hardly have imagined the fearsome awfulness of the twenty-first-century American imperium when he baptized its birth in the early days of the Second World War...

...if all the attempts at summarizing and resummarizing the cycles of American political and economic history were to vanish...

...However, Phillips more than compensates for these flaws with his empirically rich, shrewd, and thought-provoking analysis of our present condition...

...and FDR most conspicuously...

...Thus the comatose state of their opposition to the Bushites, the only other elite formation more lost in reckless self-regard and menacing fantasies of napoleonic globalism than they are...

...Phillips imagines these regimes as all suspicious of unsupervised wealth and mildly friendly to labor, while nonetheless operating under the dominating influence of the economic elites of their day...

...STEVE FRASER is writing a cultural history of Wall Street...

...Psychologically and culturally as well, the Street became vested in newera hype...

...If all the pages recounting the rise and fall of the West's great commercial empires were expunged...

...It is both a wonderfully concrete examination of the social reproduction of elites and an autopsy of the Democratic Party...

...Yet its deeper meaning is transparently simple: it is a tale of betrayal and degeneracy, of the subversion of democracy by wealth...

...DEPRESSING NEWS indeed for those who cling to a faith in the Democratic Party...

...It is a highly sophisticated, data-laden (again and again Phillips presents the reader with startling and insightful deconstructions of the hierarchies of corporate and individual wealth) rendition of an ancient Jeffersonian jeremiad against the usurping ambitions of a financial or "monied" aristocracy...

...Moreover, Phillips reminds us that all previous eras of technological futurism, such as the recently deceased one, have been accompanied by proclamations of a "new era" promising release from the economic crises of the past and by a Mandevillian literature alchemizing priDISSENT / Fall 2002 n I03 BOOKS vate vices into public virtues...

...As the magnates of imperial Spain, the Netherlands, and the United Kingdom did before them, the overlords of the American 102 • DISSENT / Fall 2002 Empire, in global pursuit of paper wealth, are abandoning the productive industrial wherewithal that once accounted for the country's economic and even moral health...

...First of all, there is Phillips's meticulous and subtle working through of the statistics of rising inequality during the last two decades...

...When applied to McKinley and Nixon the notion verges on the preposterous—industrial workers in 1896 were terrorized into voting for BOOKS the Ohio governor or staying away from the polls, while the whole tenor of the Republican campaign and the McKinley presidency that followed entailed an explicit repudiation of any suggestion of wealth redistribution or government regulation of big business...

...On the domestic front the ruling regime oscillates between crony capitalism and a kleptocracy about which people grow increasingly anxious and angry...

...This is middle-class radicalism, periodically championed by disinterested members of the Brahman upper classes revolted by the vulgar ostentation and social callousness of the rich—T.R...

...Wealth and Democracy is an awkwardly constructed, enormously redundant tome whose organizational logic defies this reviewer's understanding...

...if all the inflated generalizations about the relationship between technology, finance, market utopianism, and imperial decay were elided...

...Phillips talks about "grinds and globalists" supplanting the old skull-and-bones elites, committed to a relentless, de-regulated "securitization" of the universe, transforming customary signs of distress into market-cheering acts of "downsizing," deepening the chasm between the haves and the have-nots at home and abroad...

...As the author demonstrates, only during the Progressive Era, which was half Democratic, and during the New Deal order did the apportionment of national income and wealth swing the other way and were the commanding institutions of the private sector subject to some serious public surveillance and discipline...

...Phillips himself acknowledges that in every case—even in the one that most robustly supports his argument, namely Teddy Roosevelt's reign—the Republicans soon gave themselves over to the most self-interested, money-mad, socially irresponsible fat cats who always peopled the party's inner sanctums...

...Meanwhile, depending on your point of view, we are living at the dawn, high noon, or in the golden afterglow of the American Century...

...It became heavily invested not only financially and not only because the microprocessor transformed the way it conducted its own high-velocity speculations...

...A deep-running, if subordinate, current within American political culture, this argument is our country's middle-class version of the class struggle...

...More significantly, what the author calls the "financialization" of the economy since the time of Ronald Reagan is the occasion for a brilliant analysis of the melding of the newly risen high-tech entrepreneurial elites of the last ten years with the Wall Street elites of an older vintage...

...The characterization might loosely apply to Lincoln's new party, although the great merchant bankers of the antebellum North were the Great Emancipator's loyal opposition, not his natural constituency...

...What Phillips seems to be claiming is that the social metabolism of the party has changed fundamentally, that it has become the captive of a new coalescence of elites whose cultural instincts and experience lack even a scintilla of disinterested social responsibility of the sort that has, on infrequent occasions in the past, contributed to real acts of reform, especially when pressured from below...

...History, however, is not Phillips's strong suit...

...The life-support apparatus of the financial welfare state saves major financial institutions from collapse—as in the savings and loan debacle of the eighties—through heroic transfusions of taxpayer money...

...His is the populism of the "silent majority," which first made his reputation back in the days of Richard Nixon's "southern strategy...

...And the bust was itself no mere speculators' panic like those at the turn of the twentieth century, but a depression that lasted for six long years...

...Broadway Books, 2002 474 pp $29.95 pART ALLEGORY, part compelling empirical truth, Kevin Phillips's latest installment of his ongoing American saga about the historic confrontation between the politically empowered rich and the rest of us couldn't be more timely...

...While the New Deal welfare state was wrapping up its affairs, the new information-age elites were busy putting in place a global corporate welfare system of "financial mercantilism...

...Morgan, a Wall Street suzerainty that crumbled in the Great Depression...