Thomas Frank’s The People, No, is an amazing guide to our political milieu, tracing the history of populism from the 1890’s to the era of Trump. Frank examines not only the history of populism but that of anti-populism, especially as it transforms from an ideology of wealthy conservatives to that of elite liberals. However, I feel that he could have made the more obvious connection to the ideology of neoliberalism and how it strengthens this modern anti-populism bent.
The stock market crash of October 1929 and the onset of the Great Depression destroyed much of the wealth of the top one percent and discredited capitalism for generations. In the financial crisis of 2008-2009, by contrast, the Bush and Obama administrations, and the Federal Reserve, pulled out all the stops to prevent Wall Street and financial interests from losing, by pouring $29 trillion in the banking and financial systems.
In the 1930’s FDR epitomized the populist sentiment of trusting the people while rejecting the expertise of economic orthodoxy, famously condemning the malefactors of great wealth and welcoming the hatred of Wall Street. Barack Obama did the opposite, proclaiming that Jaimie Dimon and his Wall Street cohort were the smartest guys in the room.
From 1933 to 1971, global capitalism was centrally managed and planned under different versions of the New Deal, that included the War Economy and the Bretton Woods system. Following the demise of Bretton Woods in the early 1970s, capitalism returned to a version of the 1920s: Under the ideological guise of neoliberalism the bankers and financial interests again took over the role of planning the economy.
Neoliberalism represents the power of the capitalist class with their “free market” ideological cheerleaders. Indeed, the return to a “new-liberal” capitalism was an intellectual endeavor. Businesses-owners and the wealthy conducted a very successful class war against workers, particularly organized labor whose negotiations provided an anchor for both other blue collar and white collar wages and working conditions.
In a Mont Pelerin Society tract dated 1949, Friedrich Hayek, funded by the Foundation for Economic Freedom among others, wrote, “the question of how the powers of the trade-unions can be appropriately delimited by law as well as in fact is one of the most important of all the questions which we must give our attention.” Corey Robin has revealed how Hayek and his collaborator, Ludwig von Mises, both shared and were shaped by, Friedrich Nietzsche’s contempt for Europe’s workers, and enchantment with European aristocrats, in whose image they molded the mythical hero of the capitalist “entrepreneur.”
In the process of this new turn towards capital, the Democratic party went from representing workers to coddling Wall Street. These “New Democrats” respected education and credentials, internalizing Margaret Thatchers admonishment that “there is no society”, only individuals striving to maximize their human capital. The ultimate value system should be the market–one that inevitably is dominated by financial fortunes, banks and property owners.
And now, with the aid of the intellectually smitten “New Democrats” these interests have regained control of economies, opposing public regulation by waving the flag of free-market individualism. Idealizing greed without concern for how this affects the public good, these financial interests have hollowed out our economy through looting. The economy is seen as a market to grab as much as you want by whatever means required, not as a social system regulating property, credit and debt to prioritize social stability and rising living standards.
In The People, No, Frank does make abundantly clear the political costs of the Democrat’s neoliberal turn towards rule by a credentialed elite. The American people, rightfully, see this elite not as the “smartest guys in the room” but as colossal fuck-ups, who looted the country and destroyed their livelihoods.
On that note, I’ll let Mr. Frank have the last word.
“Most non-elite Americans, however, because they have, at this point in our history, endured over two generations of breathtakingly spectacular meritocratic failures — including the unending trillion-dollar wars that the elites never fight in and never win, including the elites’ financialized ransacking of the once-industrial American heartland, including the elites’ perversion of medical care and higher education into grotesque unaffordable rackets — would, if asked, give a more precise answer to the intriguing question of class nomenclature — Liberal Class? Creative Class? Learning Class? — by describing the ascendant meritocracy as our gleefully parasitic Fuck-Up Class.”