The World Turned Inside Out Read online

  At Rowman & Littlefield, Niels Aaboe, Michelle Cassidy, and Elaine McGarraugh shepherded the manuscript through production with expert care, pointed questions, and good humor. It was a pleasure working with them.

  Chronology

  Books are italicized, movies, plays, and TV shows are shown in quotation marks; an asterisk indicates best picture.

  1970 “Little Big Man.”

  1971 “Sweet Sweetback’s Badasssss Song”; “Shaft.”

  1972 “The Godfather,” the original; “Superfly.”

  1973 Supreme Court decides Roe v. Wade on grounds of right of privacy; Organization of Petroleum Exporting Countries doubles prices of crude oil, inflating consumer price index and contributing to “stagflation”; Congress passes the War Powers Act, limiting presidential discretion in declaring and fighting wars; Latin America’s 9/11, the overthrow of Salvador Allende, the democratically elected president of Chile, with U.S. connivance; Daniel Bell, The Coming of Post-Industrial Society; Martin Scorsese’s first feature, “Mean Streets”; “High Plains Drifter”; George Gilder, Sexual Suicide.

  1974 President Nixon resigns in August; “The Texas Chain Saw Massacre,” the original; “Chinatown”; “The Godfather, Part II.”

  1975 Frank Church’s Senate committee condemns U.S. illegal intervention in Chile and elsewhere; James Q. Wilson, Thinking About Crime; Seymour Martin Lipset & Everett S. Ladd, The Divided Academy; Gayle Rubin, “Notes on the Traffic in Women,” in Rayna Reiter, ed., The Anthropology of Women; Samuel P. Huntington, et al., for the Trilateral Commission, The Crisis of Democracy; Daniel Bell, The Cultural Contradictions of Capitalism; New York City, on verge of bankruptcy, pleads for federal aid.

  1976 Jimmy Carter elected president; “Rocky”*, the original; “Taxi Driver.”

  1977 Charles Lindblom, Politics and Markets.

  1978 Congress passes FISA, the Foreign Intelligence and Surveillance Act, limiting surveillance of U.S. citizens by government agencies; “I Spit on Your Grave,” aka “Day of the Woman”; “The Deer Hunter”*; “Halloween,” the original; Irving Kristol, Two Cheers for Capitalism; Will Eisner, A Contract with God.

  1979 Iraninan Revolution, capture of American hostages; Sandinistas come to power in Nicaragua; Soviet invasion of Afghanistan; “Apocalypse Now”; Jimmy Carter cedes Panama Canal.

  1980 Ronald Reagan elected president; Lester Thurow, The Zero-Sum Society; “Friday the 13th,” the original; Solidarity Movement in Poland.

  1981 George Gilder, Wealth and Poverty; “Ms. 45”; Solidarity crushed.

  1982 Michael Novak, The Spirit of Democratic Capitalism; Michael Jackson’s “Thriller”; “Blade Runner”; “Poltergeist”; “First Blood.”

  1983 MTV debuts; “Scarface”; Barbara Ehrenreich, The Hearts of Men.

  1984 “Nightmare on Elm Street,” the original; “Terminator,” the original; Ronald Reagan re-elected; Paul Craig Roberts, The Supply-Side Revolution; Charles Murray, Losing Ground; William Gibson, Neuromancer.

  1985 Perestroika and Glasnost in USSR: economic reform and press freedom inaugurated by Communist Party General Secretary Mikhail Gorbachev; Solidarity resurfaces in Poland; Don DeLillo, White Noise; “Rambo: First Blood, Part II.”

  1986 “Platoon”; Art Spiegelman, Maus; David Stockman, The Triumph of Politics; Joan W. Scott, “Gender: A Useful Category of Historical Analysis.”

  1987 “Robocop,” the original; “Lethal Weapon,” the original; Robert Bork nominated to Supreme Court by Reagan; Toni Morrison, Beloved; Alan Bloom, The Closing of the American Mind; Judith Butler, Subjects of Desire.

  1988 George H. W. Bush elected president.

  1989 Berlin Wall breached; Velvet Revolution begins in Czechoslovakia; “The Simpsons” debuts on FOX; “The Little Mermaid.”

  1990 “Dances with Wolves”*; Roger Kimball, Tenured Radicals; Judith Butler, Gender Trouble; Noel Carroll, The Philosophy of Horror.

  1991 The “First Gulf War” against Iraq; “The Silence of the Lambs”*; “JFK”; “Beauty and the Beast”; “Terminator 2”; Clark Kerr, The Great Transformation in Higher Education; Donna Haraway, Simians, Cyborgs, and Women.

  1992 “Defense Policy Guidance” memorandum authorized by Dick Cheney and Paul Wolfowitz leaked from Defense Department; Bill Clinton elected president; “Reservoir Dogs”; Arthur Schlesinger, Jr., The Disuniting of America; William Bennett, The De-Valuing of America; Carol Clover, Men, Women, and Chain Saws; Kaja Silverman, Male Subjectivity at the Margins.

  1993 Terrorist bombing of World Trade Center by al Qaeda associates; federal siege at Waco compound of Branch Davidian sect led by David; Scott McCloud, Understanding Comics; Tony Kushner’s “Angels in America” opens on Broadway.

  1994 “Pulp Fiction”; Tricia Rose, Black Noise; S. H. Fernandez, Jr., The New Beats.

  1995 Lynne Cheney, Telling the Truth; Tim LaHaye & Jerry B. Jenkins, Left Behind, Volume I; “Braveheart”*; “Toy Story”; Terrorist bombing of Oklahoma City federal office building by Timothy McVeigh.

  1996 Bill Clinton re-elected president; Robert Bork, Slouching Toward Gomorrah; Samuel P. Huntington, The Clash of Civilizations; “From Dusk Til Dawn.”

  1997 “Buffy the Vampire Slayer” debuts on the WB channel; Project for a New American Century launched by William Kristol, Donald Rumsfeld, Dick Cheney, et al.

  1998 Richard Rorty, Achieving Our Country; “Saving Private Ryan.”

  1999 “The Matrix,” the original; “Fight Club”; Susan Faludi, Stiffed.

  2000 Al Gore wins popular vote, George W. Bush elected president by Supreme Court decision in Bush v. Gore; Michael Hardt & Antonio Negri, Empire; PNAC, “Rebuilding America’s Defenses.”

  2001 Coordinated terrorist attacks on Pentagon and World Trade Center, 9/11.

  2002 National Security Strategy statement issued by White House; Andrew Bacevich, American Empire; Joseph Stiglitz, Globalization and its Discontents.

  2003 American-led invasion of Iraq; Robert Kagan, Of Paradise and Power.

  2004 George W. Bush re-elected president.

  2005 Anti-American insurgency peaks in Iraq.

  2006 Insurgency continues in Iraq; housing prices flatten after fifteen years of steady increase.

  2007 George W. Bush announces a “surge” of additional troops in Baghdad; global financial crisis begins in August, then intensifies with outright failure, federal bailout, or private buyout of several large investment banks in New York City.

  2008 Barack Obama elected president.

  chapter one

  “From Dusk to Dawn”

  Origins and Effects of the Reagan Revolution

  In the very late twentieth century, capitalism seemed triumphant throughout the world—that is why everyone was debating the meaning of “globalization” (on which see chapter 6 below). But in the 1970s, capitalism did not look like the wave of the future. Then, as now, it seemed to be on its last legs. Remember, the Soviet Union—the “evil empire,” as Ronald Reagan would call it—was still intact and was about to invade its neighbor Afghanistan (yes, the very same Afghanistan the United States invaded in 2001). Communist China’s drive to industrialize was in full stride. And socialist movements in Latin America were flourishing; the Nicaraguan Sandinistas, who came to power in 1979, were merely the most visible and effective of these movements.

  At the cutting edge of capitalism, however, back in the United States, the economy was a mess and the future of private enterprise was in doubt. The “oil shock” of 1973 to 1975, which tripled the price of imported crude oil—and thus the price of gasoline—still crippled automobile manufacturing, the signature American industry; indeed, the Chrysler Corporation had filed for bankruptcy and begged the U.S. Congress to come to its rescue with outright grants and guaranteed loans. The housing market and consumer spending were severely cramped by double-digit interest rates and unprecedented inflation (to the tune of 20 percent per year). Moreover, occupational safety and environmental protection, the new watchwords of government regulat
ion and public opinion, had apparently trumped the requirements of

  economic growth. Back then even the Federal Reserve was clueless. And everybody knew it.

  Meanwhile, New York City, the financial headquarters of the capitalist world (then still known in Cold War parlance as the “free world”) was close to bankruptcy. Huge swaths of Brooklyn and the South Bronx were smoldering ruins. Garbage rotted in the streets of Manhattan. The subways were visibly decaying, most dangerously after dark—not because graffiti artists were sculpting a new underground alphabet, but because the physical plant was expiring and the middle-class commuters were fleeing. And the intersection of Broadway and Forty-second Street—Times Square, where the ball drops on New Year’s Eve—was not a tourist destination unless your purpose in coming was pornographic. It was a sexual bazaar, an open-air brothel even in winter, where hustlers, performers, and pimps often outnumbered pedestrians.

  Many interested observers—from filmmakers like Martin Scorsese to social scientists like James Q. Wilson—saw these mean streets as thoroughfares to the future of the nation; for they seemed to have channeled the social, political, and cultural extremes inherited from the 1960s and then closed the off-ramps. The plight of New York City was, in this sense, a symptom of systemic failure, of disease in the larger body politic. It was a miniature version of a general crisis in capitalism. And everybody said it.

  At any rate the cultural and intellectual history of the late twentieth century was framed by the perception of this bifocal crisis. For example, the ambivalent yet rigorous defense of capitalism which goes by the name of neoconservatism was a direct result of both the general crisis in capitalism and the specific spectacle of New York City. So too was “deregulation,” the movement to lighten the visible hand of the state which was originally sponsored by liberals like Ted Kennedy and Jimmy Carter. And so was the Reagan Revolution, the touchstone of contemporary conservatism.

  The Supply Side

  Let us look more closely, then, at the fears and the hopes—and the ideas—this crisis created. Whether liberal or conservative, those who examined the economic problem typically interpreted it as a political issue animated by deeper cultural change that started in the 1960s. Whether liberal or conservative, their short-run solution was ideological exhortation and their long-run solution was victory in a protracted war of cultures that would necessarily engage the hearts and minds of every American. To solve the economic problem was to convince the American people that unleashing market forces would reinvigorate freedom, progress, and morality—or that state-centered planning for growth would underwrite liberty, equality, and democracy. As we shall see, it was a hard sell either way.

  The economic experience of the Great Depression and the Second World War had established a Keynesian consensus in Washington which guided both Democratic and Republican administrations during the Cold War (ca. 1947–1989). In fact, the Republican presidents before Reagan were big-

  government liberals—Richard Nixon imposed mandatory wage and price controls to subdue inflation, and Gerald Ford followed suit. The Keynesian consensus, from Left to Right, was based on two assumptions. First, government policies, especially decisions on spending (the federal budget) and interest rates (the Federal Reserve), were the keys to economic growth. Second, the scale of consumer spending was more important than the scope of private investment in determining the rate of economic growth.

  This consensus expired in the late 1970s as a result of an economic reality—

  the new combination of price inflation and lower productivity that went by the name of stagflation—and an intellectual movement that came of age at the same moment. The maturing movement was crucial because it explained the new reality and offered an alternative. In its absence, a larger dose of Keynesian policies would have seemed natural and necessary. This intellectual movement was the supply-side revolution that gave Ronald Reagan the broadband credentials he needed to win the presidential primaries and then the presidency itself. In the name of renewed growth, its proponents—Jack Kemp, Jude Wanniski, Paul Craig Roberts, Arthur Laffer, David Stockman, Irving Kristol—wanted to repeal the welfare state and liberate the private sector from every impediment, including taxes. As Stockman, a Michigan congressman who would eventually run Reagan’s Office of Management and Budget, put it, the supply-side program “required the radical dismantling of state-erected barriers to economic activity.”

  It also required tax cuts because increased investment would not happen unless entrepreneurs could keep most of the wealth they generated. This was a matter of incentives, according to the supply-siders, who drew on a large body of research (much of it done by Martin Feldstein of the National Bureau of Economic Research) showing that higher tax rates on personal and corporate income caused lower investment. The loss of tax revenue after the cuts they proposed would be more than offset, they argued, by the gain in tax revenue generated by the faster growth determined by greater investment, which would, in turn, be elicited by the incentive of higher retained earnings. Their argument never made any empirical sense—the numbers just don’t add up, as George H. W. Bush pointed out in 1980, when he ran against Reagan in the primaries—but the arithmetic was beside the point. The

  supply-siders were arguing that individual saving and private investment, not consumer spending and government policies, were the keys to economic growth. They were arguing against history.

  For the history of the twentieth century is the record of economic growth accompanied, perhaps even caused, by declining saving and investment, on the one hand, and rising consumption, on the other. It is also the record of massive market failure: No one except the most devoted disciples of Milton Friedman can still believe that the Great Depression was the result of the Federal Reserve’s mistakes (see the appendix on the 2008–2009 economic crisis). Once you acknowledge these simple facts, the supply-side argument sounds more or less absurd. But it was never offered as merely a recipe for economic growth—it was the blueprint for a moral renewal through which the American people would relearn the virtues of hard money, balanced budgets, and real work. Wealth creation would replace redistribution, as Stockman and many others put it. By this they meant two things. First, the limits to growth animated by markets were artificial bureaucratic conventions, not natural environmental constraints. Faster growth through deregulation would underwrite social justice by generating the jobs necessary to get the poor off the welfare rolls.

  Second, a transparent relation between effort and reward, between work done and income received, had to be reestablished by the wider application of market forces. Otherwise the American people would continue to shrug off the welfare state’s transfer payments, which permitted wages without work. They would continue to be morally corrupted by the state’s largesse. As Stockman summarized it: “As an intellectual and moral matter, this comprehensive supply-side doctrine had a powerful appeal. It offered a rigorous standard of justice and fairness, and provided a recipe for economic growth and prosperity—the only viable way to truly eliminate poverty and social deprivation.”

  The supply-siders called themselves conservatives, of course, but their doctrine was radical, even utopian—it was a “conservatism of yearning,” a “rootless nostalgia for roots,” as Peter Viereck, an avowed conservative, once put it. The doctrine was radical in the sense that its inventors repudiated that big part of the past that we call the twentieth century. It was utopian in the sense that its proponents constantly cited “classical truths” as if these were impervious to counterarguments grounded in historical consciousness and experience. George Gilder’s influential body of work in the 1970s is a perfect example. This quirky Harvard grad made his bones by writing a book called Sexual Suicide (1973), in which he argued that feminism threatened Western civilization, and then by writing a flurry of magazine articles that would become the core of another book, Wealth and Poverty (1981), the most energetic and engaging manifesto of the supply-side revolution.

  Historians wi
ll someday think of Gilder as the George Fitzhugh of his time—as a man of principle who didn’t and wouldn’t notice the irreversible tendencies of his century. For now, however, we must treat him as a profoundly important intellectual whose ideas shaped policy and public discourse for at least a decade. Sexual Suicide brought him wide notice as well as notoriety. Here he argued that the key to the “intractable problem” of the “hardcore American poor” (a.k.a. black folk) was the lack of married men. Bachelors don’t work as hard as husbands, Gilder claimed. So the lack of a marriage contract in the nether realms of American society, where the “underclass” congregated, consigned the poor to a future of poverty. More generally, the breakdown of the family caused by feminist revolt against patriarchal norms had produced a huge crop of men, white as well as black, without attachments to wives and children, men who were meandering through adulthood without the kind of commitments and ambitions marriage and family normally produce. Observers on the Left, among them Barbara Ehrenreich, also noted that a new surplus of bachelors was abstaining from the affective attachments that could become long-term commitments under the emotional tutelage of the family. Their solution to the problem—it echoed the attitude of the nineteenth-century “women’s movement”—was to search for ways women and children could survive without men, which meant rethinking the nature of the family and calling for public policies that recognized women’s social positions and political concerns.