Economic Myths in a Time of Rupture
Thinking about their lives, their livelihoods, and their identities, Americans have long placed great stock in morally charged economic mythologies. The “land of opportunity,” the “American Dream,” the “pursuit of happiness”—all have survived crushing depressions, civil strife, and global wars to give meaning and value to Americans’ daily strivings. While the growing diversity of the American social landscape has made Norman Rockwell–like depictions of faith and family seem almost obsolete, the equally venerable imagery of the disciplined work ethic has demonstrated far more staying power, with only the occupations and demographics of workers requiring updating. The short-lived coworking space startup WeWork drew attention in 2018 for the pro-work messages inscribed on the produce floating in its watercoolers. “Don’t stop when you’re tired, stop when you’re done,” was just one of the exhortations etched into floating cucumber slices, intended to inspire indefatigable “creatives” beavering away at their MacBooks.
Such mythic notions draw on a different dimension of economics from the one presented in most textbooks. Yet this cultural dimension may ultimately be as vital to the well-being of society as all of the projections and prescriptions derived from highly mathematized models of econometric theory. As Max Weber and other social theorists have shown, the fundamental human need to confer meaning on events, particularly those bearing on livelihoods, makes people depend on mythic frameworks and “webs of meaning” not only to ennoble their daily efforts but to ward off the threat of nihilistic randomness or chaotic disorder. These frameworks serve to make sense of economic success, failure, prosperity, and devastation, not just for individuals but for groups as a whole.
In America, these frameworks have undergone gradual but significant changes. Early colonial settlers viewed their trade and commerce as contributing to the commonwealth and a wider covenantal order, subject to religious and civil authorities alike. Likewise, southern planters and others justified their exploitation of enslaved laborers through frameworks of a racialized hierarchical order and Christian paternalism. It was only toward the middle of the nineteenth century, as the American market economy was being transformed by advances in transportation and technology, that a new and more characteristically modern economic mythology took form. This one emphasized individual effort and reward as the basis of a new covenant, this one with sovereign market forces rather than the sacredly ordained hierarchical order. Adherents to this covenant believed they inhabited an economic world that was controllable, predictable, and largely fair. Provided that individuals were committed to working hard and playing by the rules, they were assured at least a fighting chance to survive the “prevailing gales of creative destruction.”
The 1843 McGuffey Reader confidently pronounced to millions of American schoolchildren that the “road to wealth” was “open to all, and all who will, may enter upon it with the almost certain prospect of success.” This became the “American assumption,” as W.E.B. Du Bois labeled it, which posited that wealth was mainly a result of a person’s effort and that “any average worker can by thrift become a capitalist.” While the relative inequality of American society always left such claims open to doubt and debate, such thinking had at least an aspirational role in the American experience throughout the twentieth century. In his 1992 campaign speeches Bill Clinton would continue to speak of America’s promise, that “if you work hard and play by the rules you should be given a chance to go as far as your God-given abilities will take you.”
But problems can result from tying individual and national identities to economic mythologies, particularly in our age of global capitalism, when extensive economic dislocations and disruptions have created uncertainty and precarity among wide swaths of the population. Since the passing of the postwar era’s “Golden Age of Capitalism” (generally pegged as the time between 1945 and 1973, or what the French have dubbed les trentes glorieuses), many Americans have begun to doubt that the economic system is keeping up its side of the bargain. Stagnant wages since the 1970s alongside instability brought on by oil supply shocks and stagflation were followed by the expanded influence of a profit-hungry financial sector and globalized trade that yielded even greater volatility of wages and employment. The disruptive force of the 2008 recession—and the relatively minimal consequences suffered by those leading the responsible institutions—unleashed new fires of anti-elite populism.
Our present moment finds not only workers but also politicians and business leaders seeking to renew the reigning economic mythologies in a manner that can either make sense of the post-2008 mode of capitalism or successfully counter its costly deviations from its earlier mode. Yet this task now confronts the social realities that were papered over in the simpler times of the McGuffey Reader. The growing recognition of institutionalized inequality and the disproportional power of financial elites seem to counter the doctrine that the road to prosperity is open to all Americans.
Writing about cultural systems and meaning, the anthropologist Clifford Geertz suggested that three sorts of events can send a society’s cultural frameworks into a tailspin: bafflement, suffering, and a sense of intractable ethical paradox. It is at these points that the interpretability of life begins to break down, that individuals lose confidence that they can effectively orient themselves. Societies are then pushed to the limits of understanding and endurance, as “chaos” threatens to “break in” upon them.
The last two decades provide ample evidence that conventional American mythologies have now reached such a breaking point. The rhetoric of populist politicians and surveys of the populace as a whole reveal a common sentiment: that the system is “rigged.” This sentiment has disproportionately taken hold among lower-income workers across both political parties, populations struggling to keep their heads above water as they try to cope with rising health-care costs and the disappearance of benefit-bearing jobs. Many workers in publicly traded corporations also see the stagnation of their own wages in sharp contrast with the relative stability and prosperity enjoyed by their employers.
But extending well beyond these populations is a more general skepticism toward institutions tasked with leading the economic and financial sectors and overseeing their well-ordered functioning. The last ten years have seen a growing suspicion that the “invisible hand” of global capitalism does not appear to be disbursing the spoils of free trade in a fair manner. Where the old economic mythologies preached submission to “the system” because of its essential fairness, a new politics of resentment now draws attention to those not-so-invisible hands that seem to have weighted the scales to favor the wealthy few. This has raised the possibility that perhaps the American Dream is not actually dying a peaceful death, the victim of job automation and declining American economic hegemony, but is instead being killed off and replaced with a walled garden of success that denies access to all but a select few. (...)
Indeed, in many respects, the present moment seems to recapitulate certain features of the late-nineteenth-century Populist movement. Then, too, dedication to hard work and its value as a source of personal dignity coexisted with concerns that the system was becoming “rigged.” The rise of industrialism and the consolidation of smaller economic entities into larger ones placed new stresses on once largely independent American workers, roughly two thirds of whom had been had been absorbed into wage labor positions by the end of the nineteenth century. As historian Daniel Rodgers observed of these workers, “No amount of sheer hard work would open the way to self-employment or wealth.” Yet the historical record reveals no rejection of the value of hard work among those objecting to the conditions of wage labor. Rather, criticism and protests were directed against “the system,” which workers believed was abandoning the principles of competition and fair access to opportunity. An 1891 editorial in a Nebraska Populist publication for farmers lambasted conditions that subjected workers to fourteen to sixteen hours of work a day while reducing their relationship to their employer to that of “servant to master, of a machine to its director.” The “competitive system” had become not the pathway to success and wealth but the source of alienation, with the survival of the fittest now serving as a “satanic creed.” Populist writers also blamed the industrial system for breaking its own rules by permitting an “artificial individual”—the publicly traded corporation—to bend the law and the conditions of competition to its own interests.
Calling out the transgressors did not signify a loss of faith in a fair economy, as Populists continued to praise the merits of the “productive classes” of “farmers, laborers, merchants, and all other people who produce wealth,” in the words of an 1896 Populist manifesto. It was the monopolists and financiers of the time who no longer complied with the dictates of fair and competitive capitalism. The Populists sought government remedies precisely to restore the competition and openness assured by the economic myths in which they continued to believe.
The Populist resistance to wage labor and corporate power had little staying power in the twentieth century. As the historian Christopher Lasch explained it, agrarian populism represented the last stand of “producerism” in American history, an ideology that equally valorized small proprietors, shopkeepers, and the yeoman farmer. Increased wages and rising standards of living offered by the Fordist production regimes led to general acceptance of the expanded power of corporations. But as it turned out, the Populist response to transgressions against the American economic mythology in the Gilded Age adumbrated some of the ways American working people since the early 1970s have kept their faith in the American Dream even while economic transformations have made it hard to attain.
Sadly, one of the signal defeats of the Populist movement—its failure to adequately address the continued exclusion of most African Americans from the full range of opportunities—also foreshadowed another problem in the present struggles against a “rigged” system. To be sure, the Populists at times made surprising inroads across racial lines, forming alliances with organizations of black farmers. Their gatherings occasionally brought together both black and white southerners to rally support for Populist candidates and organize strikes for higher farm wages. But as the historian Lawrence Goodwyn observed, the southern blacks joining these associations quickly saw that the protests against vicious corporate monopoly were not sufficient to challenge the underlying racial caste system. Economic improvement by way of higher commodity prices and flexible currency certainly offered some relief from their conditions, but it was not enough to ensure the needed level of protection from prejudice and the threat of violence. There was “no purely ‘economic’ way out,” as Goodwyn wrote.
It is fair to say that a new economic populism—at least as a coherent political movement with significant voting power—has been rendered impotent by cultural identity markers that shape voting patterns. But even more detrimental to any political organizing is the large number of the economically alienated who are swayed by neither left-wing nor right-wing appeals to populism. Their perception of a “rigged” economy goes hand in hand with perceptions of a “rigged” political system offering little hope for change. The best data on the 40 percent of eligible adults who do not vote in US elections (around 100 million Americans in 2016) suggests that they are, in comparison to voters, more likely to be people of color, more likely to make less than $30,000 a year, more likely to have had trouble paying bills in the past twelve months, less likely to have a savings account, and less likely to have any kind of retirement account or health care.
This political reality blunts the chance of real populist challenges to the monopolistic behavior of many of the large corporations that have in recent years consistently pursued anticompetitive acquisitions and mergers, exploited vender lock-in powers, forced no-compete clauses on low-wage workers, and taken advantage of general economies of scale to eliminate competition. A 2014
Wall Street Journal guest editorial by PayPal founder Peter Thiel sums up the view of the new monopolists: Competition, he wrote, is now only for “losers.” Winners, in other words, no longer have to play on a level playing field. Perhaps what Americans need from their leaders is not so much moralistic scolding about personal responsibility but greater reflection on why figures like Thiel have come to profess an economic mythology so contrary to traditional mythic commitments to fairness and equal opportunity.
by Andrew Lynn, The Hedgehog Review |
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Image: CalypsoArt/Alamy Stock Photo
[ed. See also:
The Next Decade Could Be Even Worse (The Atlantic).]
