The New Robber Barons – Steve Fraser

The following is from a transcript of Bill Moyer’s Dec. 2014 interview with historian Steve Fraser, author of “The Age of Acquiescence.” Fraser discusses the differences and similarities between the robber baron industrialists that rose into power in the Gilded Age of the late 1800’s, and the super-wealthy that have gained control around the world over the last 35 years…

“I think we are living in the second Gilded Age. It gets that appellation because it is similar to what went on in the first Gilded Age. The first Gilded Age, like our own, was given over to very conspicuous displays of wealth. It was a corrupt age, profoundly politically corrupt.

When Mark Twain writes his first bestselling novel, “The Gilded Age,” that’s what he’s talking about. Crony capitalism of the kind that we are all too familiar with in our own times. It was also known for extreme inequality. Great gulfs in the distribution of income and wealth.

It wasn’t merely that poverty lived alongside great wealth. It’s that poverty was being created by great wealth. And that was a stunning shock to people living back then and caused them to rise up in rebellion, something that also distinguishes our second Gilded Age from our first. We have the same inequality, in fact perhaps even more severe measures of inequality today and have had for a last 30 years, but we do not have that enormous resistance to that social fact of life that we had during the first Gilded Age.

I think one of the reasons is that people living in, let us say, 1880 or 1890, for them, industrial capitalism, the technological revolution, the market economy was new. And it was shocking. And it was disrupting all kinds of traditional ways of life. In fact, threatening to put those ways of life out of existence, whether as an independent farmer or as a handicraftsman or as a peasant from Sicily or a variety of other ways of life were being existentially threatened by this new capitalist, industrial capitalist order of things.

And so they summoned up a kind of political will and the political imagination to say it need– we are not fated to live this way. And so you had great mass movements like the Knights of Labor or the Populist Party or the labor movement in a variety of forms saying, we can establish a different kind of society. A cooperative commonwealth perhaps. A socialist society. There were a variety of alternatives.

Because we’re long removed from that time, people coming of age in the last 30 or 40 years think of– we live in a kind of windowless room of a kind of capitalist society to which there can be no alternatives. A kind of techno-determinism which governs the way we view things. The market is the beginning and end of life so far as we have been instructed and the media have reiterated over and over again. I think that’s one big reason.

I think it was important for everybody to remember that [the social] safety net [did not exist at first, it] was created. It wouldn’t have existed were people not ready to get their backs up. To stand up against that Darwinian ruthless, relentless capitalism of that first Gilded Age. It wasn’t simply because a series of elite reformers decided to invent a safety net. That was the outcome of bitter and very bloody, very violent struggle lasting over two generations.

And they struggled hard maybe to transcend the order that they were living in. And if they didn’t accomplish that what they did accomplish was to civilize capitalism. That’s the safety net you’re talking about. That’s civilized capitalism that protects people against the worst vicissitudes of the free market.

And then something happened in our own time. First of all, beginning at, sometime in the, say the 1970s, the whole industrial order came under assault. America could no longer compete abroad and industries began to fold up. We have the phenomenon of deindustrialization.

Industrial America had given rise to this very powerful labor movement. A labor movement which not only championed the immediate material needs of those working in some particular shop or factory but was the champion of that safety net in general for all working people, whether that was struggling for healthcare or minimum wages or Social Security, pensions and so on. That labor movement began to die with the deindustrialization of the country.

In the ’80s there emerges on the American scene a kind of renegade sea dog capitalist at war with capitalism on behalf of capitalism. I’m talking about the Michael Milkens of the 1980s. The Ivan Boeskys. The Carl Icahns who came on the scene without the sort of social pedigree of the old elite order.

They went to war against what they thought of as a kind of ossified, sclerotic, corporate bureaucracy that was responsible for the economy’s stagnation and its inability to compete abroad. And they began to systematically dismantle the industrial– those leveraged buyouts and so on of the ’80s. Begin to dismantle that whole industrial order in order to support a new financial order. The kind of dominant financial economy that we live in today.

When you look at that civilized capitalism that lasted, say, from the New Deal through to 1970, a half century, you see the compression of that, what once had been that wide gulf of income and distribution in wealth. Because of that safety net, because of progressive taxation and so on.

Then the scissors moves in the opposite direction during the reign of financial capitalism. And that’s the destruction of that safety net, the destruction of unions, is very demobilizing. It makes people afraid. And it makes them– it robs them of the armature to fight back.

The mystery is people are always being put upon. Sometimes they fight back. Sometimes they don’t. After all, people faced extremely difficult, even violent opposition in the first Gilded Age and yet found the will to collectively fight back. We’re living in a time now where a lot conspires against that.

I think we underestimate the degree to which the politics of fear operates in our society and in our economy. If you’re living– look at us now. The dominant form of employment, or what is becoming the dominant form of employment in our economy today is contingent, casual, precarious labor, without any protections. No security at the job. No fringe benefits.

You’re at the mercy of your employer and an economy that’s in chronic flux. Pensions have been stripped away. The social safety net has been shredded to a very significant degree. When you’re faced with that kind of situation naturally you have to think twice about whether you’re going to fight back.

[The mythology is that] every man was going to be a speculator and make it rich. And do it on his own. Do it on his own is the key thing. How are you going to get collective resistance if everybody dreams instead of their own individual ascent into the imperium, you know, realm of wealth and power?

And so that it’s kind of like a fable of democratic capitalism. That is capitalism as a democracy of the audacious who will make it on their own, while in fact most of the people are headed in the opposite direction.

And it allows people whose real life is tied to this highly impermanent, unstable economy to think of that as a good thing. As a form of freedom. I’m going to reinvent myself. Okay, I can’t count on my employer to hire me on any permanent basis. I can’t count on that kind of envelope of fringe benefits that’s going to protect me and my family.

Good. I’m going to reinvent myself as a kind of freelancing, free agent, you know, mini Jamie Dimon. And this became persuasive to a certain segment of our population. And so it’s also part of the fables of freedom that I think have conduced to acquiescence.

Another fable of freedom is an old one but it’s taken on new and very telling life in our time. And that is the fable that you can escape and be free privately through consumer culture. That that is the pathway to liberation. And that has always offered itself up all through the 20th century as a way of escape.

I don’t mean to minimize the importance of material wellbeing for people and the need to live a civilized life. To have what you need to live a civilized life. The material things you need. But we have advanced way beyond that. And we deal in fantasy to an extreme degree.

And it’s very hard to resist this because the media in all of its various forms presents an image of the country which we’re all supposed to respect, admire and strive for which is at variance with the underlying social and economic reality that millions upon millions of people live.

We’re fascinated by the glitz, the glamor, the high tech. We think of our country as a consummately prosperous one. Even while every social indice indicates the opposite. That we are actually undergoing a process of– we are a developed country underdeveloping. And because what does development mean?

First of all, if it doesn’t mean– how is the general population faring? How– what is the measure of their well being? And if we look at stagnant, declining real wages. If we look at families that can no longer support themselves without multiple jobs. Without both spouses working.

If we look at college students deeply in debt in order to, in theory, get that degree which promises them, and that’s an illusory promise to some very significant degree, some upward mobility. It’s that reality which the media often does not portray.

I think elites during the first Gilded Age, the people we used to call the robber barons, were held in great suspicion. Their motives were doubted. They seemed to be behaving in ways that violated the notions of economic justice, of religious propriety.

They seemed to be placing money before all else. They seemed to be threats to the democratic way of life. They were buying Supreme Court justices. They were buying senators and so on. They seemed to be an imminent threat to the American birthright of the democratic revolution.

Elites in our second Gilded Age, in our day, are far less frequently thought to be guilty of that, and on the contrary, as the champions of the free market are thought to be our wise men. Our savants.

It is the consummate all embracing expression of the triumph of the free market ideology as the synonym for freedom. In other words, it used to be you could talk about freedom and the free market as distinct notions. Now, and for some time, since the age of Reagan began free market capitalism and freedom are conflated. They are completely married to each other. And we have, as a culture, bought into that idea. It’s part of what I mean when I say the attenuating of any alternatives.

Let me give you a very interesting example, to me anyway. When the Cold War first broke out, and we faced the Soviet Union, we depicted ourselves as the free world, as we all know. And that, as a slave empire, whatever you want to call it exactly. But actually we talked very little then about capitalism.

We talked about freedom and the free world, but not so much about capitalism. Why? Because the country had just emerged out of the Great Depression. Capitalism didn’t have a very high reputation in 1945 or 1950. People were still very skeptical about whether it could indeed serve the general welfare. Right?

It failed in the most traumatic way. It’s the second greatest trauma in our country’s history next to the Civil War. Horrible. It ruined millions of lives. It is axiomatic in our current political culture that when we say freedom we mean capitalism. And that is an indication of how we have been.

You know, there’s a philosopher who said that language is the house of being. It’s where we live. And if you’re living in a language that’s been denuded of some of its key furniture like certain concepts like that, you’re homeless.

You have no way to challenge even when you’re faced with wholesale larceny. I mean on the part of the major banking institutions. I mean what– let’s call a spade a spade. These were thieves. And yet the we lack the kind of linguistic wherewithal, which is much more, it’s spiritual, to confront it.

Most of the jobs that are being created [now] are low wage jobs. Most of the forms of precarious, contingent employment are spreading from one economic sector to another. The social safety net continues to fray. Our public amenities continue to decay. Our infrastructure is a scandal when compared to Western Europe. I mean scandalously decaying and in ruins. So business profits, good. Right? And employment back up a bit. Yes, true. But at lower levels of life.

They’re back, but at that cost. If they can lower their costs, if you can drive wages down, if you can operate, which many businesses do, outside the boundaries of the law, whether that’s the wage an hour law or very– occupational health and safety regulations. If those bureaucracies that are supposed to regulate them have been stripped bare so they can’t possibly force them even if they wanted to, then what you’re looking at is a society that’s recovering but recovering at some lower level of life for most people.

And that’s why the media says, and even President Obama says, what’s the problem? The economy’s getting better. And people seem to persistently say, well, no it’s not really. They don’t seem to believe those statistics and those headlines. And there’s good reason for that, because for many, many millions of people, life is really not improving.

I think people are increasingly fed up. They recognize that the economy and the political system is run by and for the one percent, if you will. That their voices are not being heard. And I think that can only go on so long without there being more and more outbreaks of what used to be called class struggle, class warfare.

We live in acquiescent times, but you never know what’s percolating or simmering or whatever the right word is, beneath the surface of things. I often say to people, if you took a picture of America in 1932. A snapshot of America, 1932, Hoover is president. The country is in the very depths of the Great Depression. It’s horrible.

Millions upon millions of people unemployed. Millions of people evicted from their homes. Millions of people losing their farms. Et cetera, et cetera. And the picture would reflect that. Despair. Demoralization. Demobilization. Nothing happening. Fear haunts the landscape.

Take that same snapshot two years later, 1934, and it’s a different country. And it’s a different country not because Franklin Roosevelt was president. He’s part of that story. But it’s because suddenly there are millions of people mobilizing all over the place.

There’s this militant labor movement conducting general strikes in San Francisco and Minneapolis and down South in the textile industry. There are people aiding their neighbors when they get evicted. Stopping that. Gathering up their furniture on the sidewalk and putting it back in their apartment.

There are farmers out in the Great Plains dumping milk on the highways in order to preserve the price of milk. There are rent strikes going on all over the place. There are new labor farmer parties forming in places like Wisconsin and Minnesota and elsewhere. The country is electric with social activity and a new ethos of social solidarity. Something nobody would have predicted in 1932.

So you never know…”