I just finished reading Steve Fraser's masterful The Age of Acquiescence (2014), which compares the popular responses to America's two Gilded Ages, the first from the 1870s to the early twentieth century and the second from the 1980s to the present. Why did the first elicit so much opposition, such titanic popular upheavals and resistance, while the second has been characterized by much more acquiescence? What changed? Well, a lot. Below, I've quoted long passages from the second half of the book where Fraser discusses our own Gilded Age and why the population has been relatively quiescent. (My own comments are interspersed in brackets, in a couple of cases bolded for clarity.)
The first set of selections pertains to a different question, namely the connection between the economy's financialization and its deindustrialization. Fraser makes the important point that the two are integrally connected, in fact that the financial sector has grown fat and rich precisely by parasitizing the "real economy." The more that productive enterprises have been downsized and eliminated, the better Wall Street has done. So Wall Street has, in a sense, been even worse for the American economy than most people realize. The economist Lawrence Summers has, of course, glorified the financial sector as the engine of economic growth (see the quotation below)—and in a certain sense he's right, for the accumulation of colossal levels of debt has been essential to economic functioning in the last forty years—but in a deeper sense, finance has pillaged and destroyed the livelihoods of millions of Americans, extracting value by downsizing their lives.
...Meanwhile, the fastest growing part of the economy has been the finance, insurance, and real estate (FIRE) sector. Between 1980 and 2005, profits in the financial sector increased by 800 percent, more than three times the growth in nonfinancial sectors. During the ten years from 1978 to 1987, profits in the financial sector averaged 13 percent. From 1998 through 2007, they came in at a stunning 30 percent.
Creatures of finance, rare or never seen before, bred like rabbits. In the early 1990s, for example, there were a couple of hundred hedge funds; by 2007, there were ten thousand. A “shadow banking” system consisting of hedge funds, private equity firms, security brokers dealing in credit instruments, and an array of mortgage entities grew up alongside the conventional one to account for half of the whole financial industry before the crash of 2008. A whole new species of mortgage broker now roamed the land, supplanting old-style savings and loan institutions and regional banks. Fifty thousand mortgage brokerages employed four hundred thousand brokers, more than the whole U.S. textile industry. A hedge fund manager put it bluntly: “The money that’s made from manufacturing stuff is a pittance in comparison to the amount of money made from shuffling money around.” Forty-four percent of all corporate profits in the U.S. come from the financial sector compared with only 10 percent from the manufacturing sector. Lawrence Summers, Bill Clinton’s last secretary of the treasury, succinctly summarized where matters stood: “Financial markets don’t just oil the wheels of economic growth; they are the wheels.”
...Too often these two phenomena—the evisceration of industry and the supersizing of high finance—have been appreciated as parallel to but not organically tied to each other. Yet another fable [in addition to the ones already discussed], adorned with the hieroglyphics of differential calculus, tells a reassuring story. Sad it might be that, for some people, towns, cities, and regions, the end of industry meant the end. But that is (as it always has been), so the myth goes, only the unfortunate yet necessary prelude to a happier future pioneered in this latest case by “financial engineers” equipped with a new technical know-how to turn money into more money while bypassing the intermediary messiness of producing anything. And lo and behold: prosperity! This tale, however, contains a categorical flaw.
Actually, the ascendancy of high finance was premised on gutting the industrial heartland. That is to say, the FIRE sector not only supplanted industry but grew at its expense—and at the expense as well of high wages and the capital that used to flow into those arenas of productive investment.
Think back only to the days of the junk bonds, leveraged buyouts, megamergers and acquisitions, and asset stripping in the 1980s and ’90s. What was getting bought, stripped, and closed up—all in order to support windfall profits in high-interest-paying junk bonds and the stupendous fees and commissions paid to “engineer” these transactions—was the flesh and bone of a century and a half of American manufacturing. Wall Street’s renewed preeminence, its own “morning again in America,” was in every way bound up with this midnight vanishing of a distinct species of American economic and social life. For some long time now, our political economy has been driven by “I” banks, hedge funds, private equity firms, and the downward mobility and exploitation of a casualized laboring population cut adrift from its more secure industrial havens.
“Deindustrialization” is antiseptic terminology for social devastation. In fact, it marked a fundamental overturning of a whole way of life, transforming the country’s economic geography and political demographics, bearing with it enormous social and cultural ramifications. Whole towns, regions, unions, churches, schools, local businesses, and community hangouts, political alliances, venerable traditions, and historic identities went down with the smokestacks. Feelings of despair, loss, and resentment filled the emptiness.
In their landmark 1982 book The Deindustrialization of America, Barry Bluestone and Bennett Harrison plotted this fateful interconnection. Deindustrialization, as they saw it, entailed the diversion of capital “from productive investment in our basic national industries into unproductive speculation, mergers and acquisitions, and foreign investment.” This did not occur by happenstance; it was because the rate of profit in American industry began a long-term decline in the 1970s in the face of heightened competition from the reconstructed, postwar economies of former enemies and allies alike.
For the first time in nearly a century the country bought more than it sold on the international marketplace. Trade deficits became a permanent fixture of the U.S. economy. Signs of decline mounted. The U.S. share of global GDP fell from 34.3 percent in 1950 to 24.6 percent in 1976; American oil production declined from 50 percent after the war to 15 percent; steel from 50 percent to 20 percent. Japan captured the home electronics market (TV, video, numerically controlled machine tools) as well as big chunks of the car, textile, and shoe businesses. Germany did the same in metalworking. The American share of the world market in manufactured goods shrank by 23 percent. Productivity growth slowed and even shrank by the end of the 1970s. During the next decade, the Bureau of Labor Statistics estimated that between 1.5 and 2 million jobs evaporated each year as factories and ancillary businesses shut down.
...Remedies of various kinds were applied. Some, like compelling international rivals to raise the value of their currencies relative to the dollar, helped save or enlarge American export markets temporarily. Corporate profits could also be sustained artificially by cutting taxes, by loosening the constraints of government regulation, by floating ever-larger budget deficits in part to finance a vast expansion of the arms industry. Forcing down costs, especially labor costs and the social costs of the welfare state, would lessen the pain by increasing it. This made union busting and cuts in social programs and infrastructure maintenance and replacement a fixture of public life. Slicing away at the accumulated fat of corporate middle-level management and the rusting productive facilities they managed became part of the tactical repertoire.
None of this could in the long term solve the underlying, intractable problem of depressed profit rates, overcapacity of production, and the paucity of enough lucrative outlets for new investment. Only depressions performed that kind of radical surgery, with great thoroughness and ruthlessness. By denuding the economic landscape of less remunerative enterprises, those that survived such deep downturns could start afresh, buying up cheaply bankrupted assets, and paying needier workers a fraction of what they once earned...
Asset stripping and financial deregulation in particular thus worked in tandem. Amending, paring down, and repealing a slew of financial prohibitions and supervisory agencies did not cause capital resources to move away from production into various forms of financial speculation. Instead, these measures expedited an outflow of capital already under way, thanks to the dilemma of profitability in American industry.
...[T]he freeing of finance unleashed it to leech away the values accumulated over generations in American industry. Arguably the strategic goal of neoliberal policy was to liberate the powers of finance (while suppressing the social wage). The idea was to expand the mechanisms and techniques for originating, mobilizing, and marketing debt through the ingenuity of financial engineering at the expense of tangible resources while calling on the government (that is, the rest of us, free market ideology notwithstanding) to assume the moral hazard and social risk when default beckoned. Marx observed long ago that “all this paper actually represents nothing more than accumulated claims, or legal title, to future production.”
Tithing the underlying economy in this way left it anemic and vulnerable. Under the regime of lean-and-mean, which remains with us to this day, hurdle rates for profits remained so high that the only way to meet them was to reroute capital out of long-term commitments (to research and development as well as to plant and equipment) and into portfolio investments in commercial and residential real estate, buying up companies (often for resale), or in stock trading or currency hedging that generated short-term earnings...
Not greed but rather the rigors of a survivalist competition to stay ahead of the profit curve produced a kind of economic brinksmanship. As the time horizon for realizing earnings grew shorter, capital was misallocated into financial manipulations, unproven technologies, and real estate, all of it heavily leveraged, its risks camouflaged. Little was added to the net stock of productive resources (except in the telecommunications industry, where too much was added and for the same speculative purposes.) But as a consequence, a lot was added to the bank accounts of traders, brokers, bankers, and top managements who psyched out the market correctly.
...Corporations in trouble, no longer able or willing to finance themselves with retained earnings, needed to please Wall Street to keep afloat. And they did so for two decades and more by...ferocious cost-cutting [e.g., laying off workers]... Stock prices invariably soared as the mayhem descended...
Investing in mergers and acquisitions was an appealing alternative [to manufacturing] only because the underlying assets of the companies being commingled or bought could then be pared down or liquidated, and pensions and health insurance obligations could be defaulted on, with the costs passed on to the public treasury. Devalued assets could in turn be picked up at bargain-basement prices and resold. Indeed, the point of most transactions was to buy in order to sell, which tended to leave long-term investment out in the cold...
Disaccumulation thus waged war against capitalism on behalf of capitalism. Absorbing or discarding the plant, equipment, and human resources locked up in manufacturing and other enterprises enriched the financial sector by eviscerating these other forms of capitalism. This should not be confused with what happened during the long nineteenth century. Big corporations and trusts then did drive smaller competitors into bankruptcy or take them over. But the net effect, looking at the situation strictly from the standpoint of production, was to enlarge the productive wherewithal of the nation’s capitalist economy.
...As one analyst has described it, the modern corporation has now diffused into a nexus of contracts in which shareholder value is served first of all and last of all by managements acutely sensitive to that constituency alone. American industry was melted down to provide a vast pool of liquid capital that could be rechanneled into purely speculative trading in paper assets—stocks, bonds, IPOs, mortgages, derivatives, credit default swaps, structured investment vehicles, collateralized debt. And that covers only the relatively humdrum. What about trading bundles of insurance contracts for the terminally ill? Securitization was the alchemist’s stone of dispossession. Tangible assets got liquefied and turned into bundles of tradable intangibles.
...This withering away and erasure of the very notion of ruling classes [in the last fifty years or so] carries profound political consequences. Having an aristocracy to kick around [during the Gilded Age], even an ersatz one like the American version [which in the 1880s etc. was fond of publicly acting like an aristocracy], was politically empowering; lacking one is disorienting. It may generate anxieties. Confronting the realities of power and wealth [absent an easily identifiable, self-consciously aristocratic ruling class] threatens the understructure of private property in a way that challenging the undemocratic, elitist practices and pretensions of an alien nobility did not. To question the inherent rationality and rightness of the prevailing way wealth is made, distributed, and controlled is a taboo not easily violated. To acquiesce may be less disquieting and at the same time cater to the evergreen hope that the road to self-enrichment remains open.
Populist plutocracy [in the neoliberal era] reconfigured the age-old problem of legitimacy, of the underlying sources of consent on the part of subordinate classes to the rule of tiny, wealthy elites. The new plutocrat makes a convincing case that he is of the people, expresses their deepest desires and aspirations, and governs in their name. So, for example, the Herrenvolk democracy over which the George W. Bush administration presided epitomized this marriage of corporate elitism to blue-collar, white-skinned cowboy populism. Without an establishment to overthrow, resisting the rule of the déclassé feels like pushing on a string.
Moreover, this new plutocratic milieu is far less defined by a shared ethnic genome [than the one of the first Gilded Age]; cultural beliefs, social clubs, school ties, even geography are far more diverse, as is its basic demographic profile. These traits, or rather the lack of a common set of shared traits, comes with the territory; it’s a world in constant motion, rootless, as mobile as the capital flows streaming here and there that define it. Consequently, the profile of the plutocracy becomes ever more indistinct. Its disappearance becomes part of the general leveling down of cultural distinctions that constitute the age.
...[By the 1950s,] America had discovered the antidote to class warfare [namely, material abundance, mass consumption—which still exists today, made possible by consumer debt]. If the material gratifications on sale were made widely accessible and alluring enough, it would temper the social resentments of the past. It would deliver a rough approximation of the country’s egalitarian credo. And it would cultivate a sense of individual autonomy and self-reinvention that would neuter earlier quests for freedom aimed at dismantling the prevailing hierarchies of power and wealth.
...The all-consuming selves we take for granted today are “merely empty receptacles of desire.” Infinitely plastic and decentered, the modern citizen of the republic of consumption lives on slippery terrain, journeying to nowhere in particular. So too, nothing could be more corrosive of the kinds of social sympathy and connectedness that constitute the emotional substructure of collective resistance and rebellion.
...Implicit in a consumer economy floating on a great reservoir of debt is that if you’re having some trouble gratifying your desires, or just getting by, neither the problem nor the solution is social, but simpler and more personal than that: borrow. Life is about now. Between 1979 and 1997 the rate of personal bankruptcy rose by 400 percent. Moreover, shifting the search for meaning and release inward would devalue the political experience, which after all inherently happens in public...
...An economy and way of life invested in the hunt for endless novelty corroded moral faculties that already rested on less evanescent foundations. Aesthetics supplanted ethics, appearances and images took the place of narrative meaning. In this brave new world—without the anchorage of tradition, without the imagined and vivid intricacies of kinship, without the past living on in the detail of everyday life—meaning became a scarce social commodity. Living in what one commentator called “the windowless room of the current event” erased historical memory (or replaced it with kitsch nostalgia), without which a society has a hard time figuring out not only where it came from but where it might be or should be heading.
...For all of American history, the political universe was occupied by work-related groups: laborers, farmers, businessmen, and so on. After World War II, these “identities,” while still operative, tended to diffuse— particularly workers and farmers—and carried less social weight. Consumer culture created new identities based on lifestyles so that, for example, the working class became a group first of all concerned, like all others, in levels of material possessions and social status. After all, they shared in the same media of popular culture as everyone else and tended to identity anyway as “middle class” based on their levels of consumption and the ubiquity of middle-class values. “Quality of life” supplanted concerns about power, and the political coherence of a working-class interest subsided accordingly.
Lifestyle politics encouraged alliances based on tastes, appearances, and identities that could be tried on and discarded. Punk and goth, for example, became faddish experiments in a kind of noir urban romanticism for East Village bohemians. These were then taken up by white suburban teenagers as the costumes of antic cultural rebellion. Working-class young people of color did the same with hip-hop...
Flexible capitalism [of the neoliberal variety] encouraged this political dissolution. At every turn, that economy undermines trust and stability and lives in the moment. Like consumer culture, it is inherently hostile or at best indifferent to the sphere of social welfare, which is premised after all on recognizing our mutual dependence and obligations. Neoliberalism could be embraced as a kindred emancipation, one in which the unencumbered free market released the individual from social constraints. Emancipation could converge on digestion. It might be found in the streets but could also be found in the kitchen or in all the erogenous zones of the stimulated psyche. Embracing this new world’s egoism and its distracted, pleasured passivity left the organs of civic mobilization anemic from disuse.
“People have come to accept that they’re on their own—that the traditional sources of security and entitlement no longer exist or even matter.” Today, unlike the sturm und drang of the industrial era, layoffs, downsizing, and other rigors of the free market provoke “no picket signs, no demonstrations, not a peep from the politicians... We simply accept that there is no corporation or institution that will take care of us—that we are truly on our own.” Uncertainty is the new normal... [Fraser also discusses how essential the crushing of the labor movement has been as a precondition for the mood of acquiescence among the populace. And then there's identity politics, premised on division rather than solidarity. The older economic politics has succumbed to a postmodern cultural politics.]
The [Democratic] political migration from economic to cultural politics [between the 1970s and 1990s] caused no discomfort in corporate boardrooms, which were ready to view these new identities as so many lucrative niche markets. By 1990 one-half of the Fortune 500 companies employed a full-time staff to manage diversity. But the social liberalism of identity politics also set in motion a logic of fragmentation that could chisel away at the fragile solidarity of an earlier era, especially as that solidarity had itself always carried within it latent fissures and inequities of race and gender and work hierarchies. And after all, the immersion in identity politics was by definition a recognition and a celebration of difference, a huddling together of the same in contradistinction to the not-same, a solidarity premised on division.
...Betrayed and abandoned, cut adrift or superannuated, coerced or manipulated, speeded up, cheated, living in the shadows—this is a recipe for acquiescence. Yet conditions of life and labor as bad as or even far worse than these once were instigators to social upheaval. Alongside the massing of enemies on the outside—employers, insulated and self- protective union leaders, government policy makers, the globalized sweatshop, and the globalized megabank—something in the tissue of working-class life had proved profoundly disempowering and also accounted for the silence.
Work itself had lost its cultural gravitas. What in part qualified the American Revolution as a legitimate overturning of an ancien régime was its political emancipation of labor. Until that time, work was considered a disqualifying disability for participating in public life. It entailed a degree of deference to patrons and a narrow-minded preoccupation with day-to-day affairs that undermined the possibility of disinterested public service. By opening up the possibility of democracy, the Revolution removed, in theory, that crippling impairment and erased an immemorial chasm between those who worked and those who didn’t need to. And by inference this bestowed honor on laboring mankind, a recognition that was to infuse American political culture for generations.
But in our new era, the nature of work, the abuse of work, exploitation at work, and all the prophecies and jeremiads, the condemnations and glorifications embedded in laboring humanity no longer occupied center stage in the theater of public life...
...Manual labor is disrespected in favor of what is depicted as “real” creative work, often abstract, done in an office, numerical, image-laden, and paper-bound. A world once highly visible, wretched, and inspirational all at the same time has dropped beneath the horizon of our common consciousness.
In this postindustrial world not only is the labor question no longer asked, not only is proletarian revolution passé, but the proletariat itself seems passé. And the invisibles who nonetheless do indeed live there have internalized their nonexistence, grown demoralized, resentful, and hopeless; if they are noticed at all, it is as objects of public disdain. What were once called “blue-collar aristocrats”—skilled workers in the construction trades, for example—have long felt the contempt of the whole white-collar world. For these people, already skeptical about who runs things and to what end, and who are now undergoing their own eviction from the middle class, skepticism sours into a passive cynicism. Or it rears up in a kind of vengeful chauvinism directed at alien others at home and abroad, emotional compensation for the wounds that come with social decline...
What is most pernicious about the recent ascendancy of free market thinking is perhaps not so much the triumph of its public policies. Rather, it is how its spirit of self-seeking has exiled forms of communal consciousness, rendered them foolish, naïve, woolly-headed, or, on the contrary, sinful and seditious. A cultural atmosphere so saturated with these suspicions is a hard one in which to maintain or create movements or institutions built on oppositional foundations.
[Conservative populism, the kind of thing that has led to Trump, has had its own part to play in furthering the cause of Acquiescence. For, of course, such populism doesn't signify real resistance to capitalism; it signifies the opposite. Fraser tells a fascinating history of how far back it goes, all the way back to Henry Ford, or even earlier. Even the authentic, revolutionary Populism of the 1890s had certain ingredients that conservatives would take up later, such as a tendency to anti-semitism, conspiratorial thinking, and a hostility to the cosmopolitanism and decadent urbanity of Wall Street. No form of populism has ever been totally free of such tendencies, although in left-wing varieties of populism they've been subordinated to the fight against the economically powerful. What's happened since the 1950s, since the Cold War and McCarthyism—though it was already starting to happen with Ford's anti-semitism and the Ku Klux Klan of the 1920s—is that populism has increasingly embraced its uglier, seedier, cultural side and shed its left-wing side. This is what the "New Right" was, and is, about. Trump represents the triumph of this long-germinating conservative populism, this hundred-year-old underbelly of the American political tradition.
[Fraser conceptualizes American populism, including the 1890s' variant, in terms of "family capitalism" fighting against something more gigantic and corporate, faceless, bureaucratic, like the "managerial capitalism" that began around the turn of the 20th century. Despite his massive wealth, Henry Ford was one of these "family capitalists" who espoused an ideology of producerism and feared and loathed Wall Street, the supposed international Jewish conspiracy, and Bolsheviks, all of whom he thought were somehow in league together. They constituted, he thought, "a singular threat to the continued existence of the American Volk, to that whole integrated universe of private property, the patriarchal family, and God—the bedrocks of bourgeois society." Cosmopolitanism, cultural liberalism, Hollywood, decadent modernism—these were Ford's enemies, as he made clear in a series of articles called "The International Jew." Thus we see the Fordian seeds of fascism, and of the conservative American populism of our own day.]
Ford’s conspiratorial sense of history—an active element of populist cosmology long before the automaker arrived on the scene—has remained a live idea ever since. But during the 1930s, there began a portentous shift in Conspiracy Central from Wall Street and the City of London to Moscow— and even New Deal Washington. Anticommunism, already a vital element of Ford’s politics of fear and paranoia, lent an especially toxic ingredient to the populist politics of family capitalism...
[Following World War II,] populism became ever more restorationist and ever less transformative, ever more anticollectivist and ever less anticapitalist. “Parasitism” remains a key word in the populist dictionary but was now deployed to skewer the poor when once it excommunicated the rich. What were subordinate themes in the old-style populism—religious rectitude, racial and ethnic homogeneity, national chauvinism, and the politics of paranoia—now sounded the dominant note.
...McCarthyism and the Cold War marked a decisive turning point in the transmigration of economic to cultural populism. In the global war against communism, after all, hostile talk about capitalism was virtually verboten. McCarthy emphasized instead the mortal dangers of the New Deal state, infected at its root with Communist-inflected collectivism... The domestic cold war, whose real enemy for many was the New Deal much more than it was the Soviet Union, left behind many casualties. It committed a kind of cultural genocide, purging and proscribing whole families of languages—not only populism—whose deep grammar had once interrogated capitalist injustice, exploitation, and amorality. [Then there was Barry Goldwater, hater of the supposedly liberal elite running the Republican Party.] As the Goldwater opposition [in the 1960s] sunk its grass roots into the lush soil of the Sun Belt and the South, its desire to restore an older order of things was palpable. The senator’s followers were quintessentially middle-class congregants of the church of family capitalism. Yet they were oddly positioned rebels. Unlike the declining middling sorts attracted to Father Coughlin and others in the 1930s, they came mainly from a newly rising middle class, nourished by the mushrooming military-industrial complex: technicians and engineers, real estate developers, upscale retailers, military subcontractors, owners of construction companies, middle managers, and midlevel entrepreneurs who resented the heavy hand of big government while in fact being remarkably dependent on it...
George Wallace, Alabama’s segregationist governor, accelerated this transformation of the economic populism of yesteryear into the cultural populism of the late twentieth century. Wallace inveighed against gilded know-it-alls using their levers of power over the government, the media, the judicial system, the universities, and the philanthropic foundations to upset the prevailing order of things: “Do we have an elitist government?... They’ve decreed it’s good for the people to do certain things. And even though the people don’t like to do it, they must do it because this super-elite group is so determined.”...
Precariously positioned blue-collar workers, beleaguered by taxes, inflation, and the collapse of the racial, sexual, and moral old order of things, hunkered down [in the 1960s and '70s] to defend the value of their mortgaged homes [against Blacks moving to the neighborhood], the autonomy of their local schools and their ethnically and racially familiar neighborhoods. This was a kind of proletarian version of family capitalism—claiming territorial space as its communal property—that enlisted race as another medium of class struggle.
Wallace’s racial antistatism became a worksite for conservatives and segregationists fashioning a common political identity and logic. Soon enough, it would no longer be taken for granted that conservatives were natural-born elitists. On the contrary! Wallace, a new kind of populist conservative, was an outlier, an outlaw for law and order [like the white supremacists of today]...
[Why has this cultural hostility to the so-called liberal elite been so durable, from Ford to the present? It has to do with the impressive resilience of old-fashioned "family capitalism"—generally the capitalism of small business—which tends to be even more conservative than managerial, bureaucratic capitalism.] While there was a sharp decline in small-sized manufacturers at the turn of the twentieth century, that had slowed by midcentury, when such firms accounted for 25 percent of total manufacturing employment. During World War II, the war economy incubated new industries and new companies in newly industrializing regions of the country like Texas, California, and the southwest—Arizona and its capital, Phoenix, particularly. The southland’s countryside and burgeoning suburb/cities ardently wooed business to resettle there. The region was an entrepreneurial paradise of no unions, low wages, free land, tax abatement, and subsidies... All of this served the needs of big business but also as a hothouse for ancillary businesses [including in the service sector]. By the end of the 1970s, 40 percent of service workers were employed by small firms with fewer than twenty employees; it was even more so in retail.
Impressive as these numbers are, they can’t capture the social and psychological implications. Petty business relies first of all on personal capital and on personal, familial labor. Its economic tolerance for the needs and desires of wage labor can often be low. The smallholder artisan populism of the nineteenth century drew local petty producers and their working-class neighbors and customers close together. That is far less so today. In the age of lean-and-mean, keeping labor unions restrained and labor costs repressed means survival. Keeping government agencies out of business affairs is something big corporations can handle with their flotillas of lawyers. But the small businessman has to live with it...
Is the Tea Party the latest iteration of family capitalism at the barricades? Its preoccupation with fiscal probity and especially its niggardly obsession with minimizing its own tax burden and starving the welfare state are certainly suggestive. Surveys demonstrate the presence of many small business owners in party ranks. They tend to be wealthier than average and driven as much by their sense of moral and cultural exile as by their economic circumstances. By the election of 2010, 40 percent of elected Republicans came from the world of small business, and of those newly elected that year, 74 percent hailed from that world. Plenty of others, however, are drawn from the ranks of hard-pressed lower-middle-class and working-class people who drive cabs, do work as subcontractors, take care of children, fix cars, paint houses, and live on two credit cards and second mortgages. Many struggling workers imagine escaping hard times through a bootstrap start-up and sometimes even manage to do so...
Moreover, it is noteworthy that heavyweight funders of Tea Party organizations tend to come from the ranks of newly minted robber baron family dynasties like the Coors family or the Koch brothers. Dynastic outsiders may sound like an oxymoron, but the cases of Henry Ford and the ardently anti–New Dealer William Randolph Hearst suggest otherwise. Nourished especially in the newer economies of the Sun Belt, privately held enterprises in oil, natural gas, real estate, regional finance, and service businesses outside the orbit of eastern corporate capitalism retained a traditional Protestant piety averse to the cosmopolitans of the old order. Dynastic capitalism [as opposed to the more impersonal "managerial capitalism"] can confront the world like small business on steroids. Nixon’s visceral hatred of the Establishment, although he had to deal with it, meant his administrations were increasingly peopled by Babbitts from Main Street and country-club deal makers. Their road to wealth and power was the dynastic one. It did not depend on climbing the morally indifferent hierarchies of corporate America [which they hated and resented]. They carried with them instead old prejudices, a provincialism, and patriarchal passions that set them apart from the world of the "limousine liberal."
...[Later,] flexible capitalism, the term used to describe the new system of decentered corporations and casual labor markets, did in fact open up new frontiers of petty entrepreneurship; indeed, the era’s lean-and-mean business machine demanded it. Megacorporations downloaded a range of functions once performed internally. Outsourcing, subcontracting, and licensing production, communication, distribution, marketing, and other activities to outside concerns meant that the universe of small and medium- sized businesses expanded considerably. Think Joe the Plumber and all those who bought into the dream of free agent self-employment. The military’s insatiable appetite continued to jump-start ancillary businesses, especially throughout the Sun Belt. With the booming of the financial sector itself, all sorts of boutique consulting, accounting, legal, research, software, and other essential undertakings nourished entrepreneurial ambitions and ideology. So too, the worlds of retailing and service/entertainment opened up space for specialty small-scale niche businesses and franchises. New business formations doubled and self-employment rose nearly 25 percent alongside the downsizing of American industry, in part because of it. As noted earlier, corporations found it increasingly easy to off-load functions once performed internally, thanks in part to the information/communications technical revolution, which facilitated the coordination of far-flung operations. Modern and “archaic” labor systems and firms lived in side-by-side symbiosis.
[All these small businesses provide some of the mass support for conservative populism.]
...Collusion between big business and big government infuriates the world of the little man. But enthusiasm for capitalism is something the Tea Party shares with the bipartisan power elite.
Yet there are genuine areas of serious acrimony. How else can one explain the nasty exchanges within the Republican Party over the last several years about such matters as NAFTA and immigration? What about the brinkmanship of Tea Party politicians in debates over resolving the debt ceiling, which pitted zealots on the right against the Chamber of Commerce and otherwise powerful business and financial lobbies? When Tea Party favorite Texas senator Ted Cruz tells The Wall Street Journal, “One of the biggest lies in politics is the lie that Republicans are the party of big business. Big business does great with big government. Big business is very happy to climb in bed with big government. Republicans are and should be the party of small business and of entrepreneurs,” he’s not lying and he’s not entirely wrong. The denunciation of the lifesaving billions received by the titans of finance by Glenn Beck and others can’t be welcome on Wall Street...
[That's an important point. Small business and big business don't always have the same interests, and the Republican Party represents ultra-conservative small businesses in addition to the most conservative of the big businesses. Much of the business community, however, was uncomfortable with the Tea Party and is very uncomfortable with Donald Trump.]