Evil Geniuses: The Unmaking of America

by Kurt Andersen

The political right rode in on that floodtide of nostalgia, and then, ironically, the old-time every-man-for-himself political economy they reinstalled, less fair and less secure, drove people deeper into their various nostalgic havens for solace.

Of course there are secretive cabals of powerful people who work to make big bad things happen, actual conspiracies, but the proliferation of conspiracy theories since the 1960s, so many so preposterous, had the unfortunate effect of making reasonable people ignore real plots in plain sight. Likewise, the good reflex to search for and focus on the complexities and nuances of any story, on grays rather than simple whites and blacks, can tend to blind us to some plain dark truths.

I still insist on a preponderance of evidence before I draw conclusions. I still resist reducing messy political and economic reality to catchphrases like “vast right-wing conspiracy” and “the system is rigged,” but I discovered that in this case the blunt shorthand is essentially correct. It looks more like arson than a purely accidental fire, more like poisoning than a completely natural illness, more like a cheating of the many by the few. After all, as the god of the economic right himself, Adam Smith, wrote in capitalism’s 1776 bible, The Wealth of Nations: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

But the reengineering was helped along because the masterminds of the economic right brilliantly used the madly proliferating nostalgia. By dressing up their mean new rich-get-richer system in old-time patriotic drag. By portraying low taxes on the rich and unregulated business and weak unions and a weak federal government as the only ways back to some kind of rugged, frontiersy, stronger, better America. And by choosing as their front man a winsome 1950s actor in a cowboy hat, the very embodiment of a certain flavor of American nostalgia.

the terrible mess that an unbalanced, unhinged, decadent capitalism has made of America,

When victory came, it seemed all of a piece, like providence or destiny: an amazing new nation, amazing new technology, amazing new systems of manufacture and transportation—land of the free, home of the new.

The cotton gin is a perfect illustration of the economic fact to which I keep returning: a new technology makes workers more efficient, increased productivity results in more profits, and the economy grows. But as I’ve also said, every economy is a political economy, and the story of the cotton gin is also an extreme illustration of that fundamental truth. Cotton growing happened in the South, of course, and the people whose productivity dramatically improved were enslaved African Americans, at least two-thirds of whom worked producing cotton. And the profits that dramatically improved as a result, of course, all went to the plantation owners. So this remarkable piece of new technology, in addition to driving overall U.S. economic growth, was responsible as well for making slavery a foundation of the U.S. economy.

This new way of organizing production, and using technology to replace skilled workers with cheap unskilled workers, was known at the time as the American System.

The countervailing powers that we built into our free-market political economy from 1880 until 1980 did not amount to an anticapitalist conversion. Rather, it was really the opposite, essential to the system’s evolution and renewal, making our version of capitalism more fair, less harsh, and politically sustainable, a robust foundation for a growing middle class whose spending fueled more economic growth and a society that made most of its citizens reasonably content and proud. “The economic philosophy of American liberals had been rooted in the idea of growth,” the influential sociologist Daniel Bell wrote in the 1970s, around the time he taught a seminar I took in college. “One forgets that in the late 1940s and 1950s,” it was labor leaders “and other liberals [who] had attacked the steel companies and much of American industry for being unwilling to expand capacity. The idea of growth has become so fully absorbed as an economic ideology that one realizes no longer how much of a liberal innovation it was.” Even as Democratic president Harry Truman was launching the Cold War in 1950 to protect capitalist America from foreign Communists, he emphasized in his State of the Union speech that the country needed an even tougher antitrust law to protect our system from falling “under the control of a few dominant economic groups whose powers will be so great that they will be a challenge to democratic institutions.” Restraining excessive business power was a bipartisan consensus...

In other words, post-1960s irony turned out to be “a way for all kinds of taboo styles to sneak past the taste authorities—don’t mind us, we’re just kidding—and then, once inside, turn serious.” America in the 1970s and ’80s gave itself permission not only to celebrate the old days but also to reproduce and restore them. Picking and choosing and exploiting elements of the past extended to politics and the political economy.

But in fact the Goldwater campaign was just the first rollout of a new American political template, an unsuccessful beta test. It tried to exploit popular unease with the culturally new as a way to get a green light for the rollback that Goldwater and the serious right really cared about—a restoration of old-style economic and tax and regulatory policies tilted toward business and the well-to-do.

The mission was twofold: turn elite discourse and general public sentiment more in their favor, and wheedle and finagle the federal government—the discredited federal government—to change laws and rules in their favor. The goal was to create a powerful counter-Establishment. What they accomplished in a decade was astonishing. It astonished even them.

A critical mass of the people elected to run the government had also been persuaded to give big business what it wanted. Democrats held the presidency and a two-to-one House majority and a historic sixty-two-seat Senate majority. Yet in early 1978, a bill to create a new consumer protection agency was defeated in the House because 101 Democrats voted against it, including a majority of the Democratic freshmen, thanks in large part to lobbying by CEOs from the Business Roundtable.

Carter was unwilling or unable to indulge the manic performative patriotism that was becoming obligatory for American politicians in the 1970s.

In retrospect, Milton Friedman’s 1970 manifesto on behalf of shameless greed amounted to a preliminary offer by the philosopher-king of the economic right to forge a grand bargain with the cultural left. Both sides could find common ground concerning ultra-individualism and mistrust of government. And by the end of the 1970s, only the formalities remained to execute the agreement.

Hart’s 1974 Senate campaign stump speech was actually called “The End of the New Deal.” He disparaged liberals who thought that “if there is a problem, [you] create an agency and throw money at the problem,” who “clung to the Roosevelt model long after it ceased to relate to reality”—and to that he added some sexist shade, calling them “the Eleanor Roosevelt wing” of the party. “The ballyhooed War on Poverty” of the 1960s, the Democratic programs that included Medicaid and food stamps, “succeeded only in raising the expectations, but not the living conditions, of the poor,” he said inaccurately. “This nation desperately needs a new breed of thinkers and doers who will question old premises and disregard old alliances.” In that first post-Watergate election, Hart beat the Republican incumbent by a landslide and became the very model of a modern major Democrat.

More fundamentally, continuing Democratic dominance in Congress during the 1980s meant the economic right could use the federal government to remake the political economy only to the extent that Democrats let them. As the 1980s approached, even liberal Democrats were already cooperatively moving right—-more skeptical of unions and government oversight of business, open to lower taxes on the rich—so when the time came, Democrats definitely did let them. Too many confused the singular appeal of Ronald Reagan personally with massive popular approval of pro-business, pro-rich Reaganism, and their reaction was to cower, essentially disavowing their New Deal social democratic past.

But originalism became a crude and self-justifying meme that the right used, from the 1980s on, simply to serve its own interests and prejudices. Originalism’s most important hidden agenda was to keep courts and judges completely out of the business of business, as if what worked for the U.S. economy for its first century, before modern corporations existed, was how things should work today. It was like the Friedman Doctrine, which turned a reasonable capitalist truism (profits are essential) into a simple-minded, unhinged, socially destructive monomania (only profits matter).

As movements, originalism in the law and libertarianism in economics were fraternal twins. Both were born of extreme nostalgia, fetishizing and distorting bygone America, so both more easily achieved mass appeal in the everything-old-is-new-again 1970s and ’80s. Both purported to be based on objective principles that transcended mere politics or special interests, even while both were vehicles for big business and the right to recover, fortify, and expand their economic and political power.

I don’t think it was coincidence that this happened simultaneously with the U.S. political economy metaphorically turning into a winner-take-all casino economy. The gambling hall replaced the factory floor as our governing economic symbol, a flashy, totally temporary gathering of magical-thinking individual strangers whose fortunes depend overwhelmingly on luck instead of on collective hard work with trusted industrious colleagues day after day. Risk-taking is a good thing, central to much of America’s success, but not when the risks are involuntary for everyone except the people near the top, required rather than freely chosen, and when those at the top have arranged things so they don’t have much serious downside risk. As Americans were herded into literal casinos, they were simultaneously being herded en masse into our new national economic casino, where the games were rigged in favor of the well-to-do players.

That’s because the successful and comfortable social contract that had been in effect in America from the 1930s was replaced by a new one. Social contracts are unwritten but real, taken seriously but not literally, which is their beauty and their problem. They consist of all the principles and norms governing how members of society are expected to treat one another, the balance between economic rights and responsibilities, between how much freedom is permitted and how much fairness is required. All the formal rules specifying behavioral constraints and responsibilities, the statutes and bureaucratic codes, are distinct from the social contract but overlap with it, because lots of the specific rules—tax rates, minimum wages, environmental regulations, the cost of education—are codifications of the social contract. Contracts are negotiated, ideally in a way that all the signatories feel fairly treated. In the evolving American social contract, the balance among the competing demands of liberty and equality and solidarity (or fraternité) worked pretty well for most of the twentieth century, the arc bending toward justice. But then came the ultra-individualistic frenzy of the 1960s, and during the 1970s and ’80s, liberty assumed its powerfully politicized form and eclipsed equality and solidarity among our aspirational values. Greed is good meant that selfishness lost its stigma. And that was when we were in trouble.

For instance, in a survey in the 2000s of four hundred financial officers of public companies, as many as 78 percent of them actually admitted they would cancel projects and forgo investment that they knew would have important long-term economic benefits for their companies rather than risk disappointing Wall Street’s every-ninety-days earnings expectations. Another giant irony: precisely that kind of perverse, enterprise-damaging management behavior was what the professor-godfathers of shareholder supremacy in 1976 had warned that purely salaried managers were doing. According to “Theory of the Firm,” when an executive’s pay isn’t a function of the stock price, “his incentive to devote significant effort to creative activities such as searching out new profitable ventures falls. He may in fact avoid such ventures simply because it requires too much trouble or effort” to understand new technologies and use them to innovate. Forty years later, the research provides no consensus that paying executives in stock solves the problems of executive inattention or laziness.

It’s ironic that just as we entered an economic era all about eliminating inessential middlemen and corporate bloat, one bloated sector filled with inessential middlemen, finance, has flourished as never before. It’s ironic that one of the rationales for America’s 1980s makeover was to revive the heroic American tradition of risk-taking—given that so much of the story has turned out to be about reckless financiers insulating themselves from risk by shifting it to customers and, through the government, to taxpayers. It’s ironic that finance, a service industry created to help business and the rest of us, so bubbly and booming on and on these last four decades, has mainly helped itself. “There is no clear evidence,” the chief financial industry regulator of the U.K. and former vice-chairman of Merrill Lynch Europe concluded in 2010, “that the growth in the scale and complexity of the financial system in the rich developed world over the last 20 to 30 years has driven increased growth or stability.” A final disturbing effect of financialization can’t be proven with statistics or experts’ quotes. It’s the damage to the human spirit that comes from making everything everyone is or does literally and strictly reducible to dollars and cents, and how such a cynical system makes everyone in it more cynical. A finance-obsessed society makes us each a little less human, a lot more of an abstraction. An employee of an LBO’d company is only a cost that needs to be kept down or eliminat...

The shocking cataclysm in America’s big, iconic heavy industries, steel and cars, along with the longer-term slowing of economic growth generally, created a chronic widespread dread and anxiety about the economic future. The economic right and big business used that confusion and fear to get free rein to achieve their larger goals. Times are tough! Government can’t save you! Adapt or die! But then when the acute crises passed and the economy stabilized in the late 1980s and ’90s, and productivity and economic growth returned to their long-term historical norms, the norms of fairness were not restored. The system that had been reengineered to better serve big business and the rich remained in place.

Despite that 1938 decision, the American norm that emerged out of the New Deal was that for companies to replace striking workers was unacceptably unfair—a norm that remained in force until its spectacular de facto repeal by Reagan during the air traffic controllers’ strike.

But imagine the thousands of companies and cities and schools and cultural institutions all over the country that have delegated so much of this kind of work to contractors, thereby making the treatment of all those eleven-dollar-an-hour workers somebody else’s problem. According to a 2018 study by five major-university economists, a full third of the increase in American income inequality over these last forty years has been the result of just this one new, dehumanizing labor practice.

Against a triumphant Republican Party high on right-wing ideology, liberals’ new selling point was their lack of any ideology at all. The faction that was now dominant in the Democratic Party had been pushing for a more centrist economic and social welfare policy since the 1970s, but the Republican Party after 1980 had no comparable moderating faction—which in a two-party system meant that Democrats kept moving toward a center that kept moving to the right.

Very few people I knew voted for Reagan, but given that he didn’t do anything crazy and started making peace with the Soviet Union, affluent college-educated people, liberals and otherwise, didn’t disagree very ferociously about politics in the 1980s and ’90s, and certainly not about economics. In retrospect, that rough consensus looks like the beginning of an unspoken class solidarity among the bourgeoisie—nearly everyone suspicious of economic populism, but some among us, the Republicans, more suspicious than the rest. Affluent college-educated people, Democrats as well as Republicans, began using the phrase socially liberal but fiscally conservative to describe their politics, which meant low taxes in return for tolerance of…whatever, as long it didn’t cost affluent people anything.* It was a libertarianism lite that kept everything nice and clubbable and, unlike Republican conservatism, at least had the virtue of ideological consistency.

And even though the Democrats controlled the House with huge majorities throughout the 1980s and early ’90s and won the Senate back for six years, the federal government consistently treated business and the rich spectacularly well. The top income tax rate for the wealthiest was cut from 70 to 50 percent in 1982. It would’ve been prudent to stop there for a while and see how that worked out. But no: in the second Reagan term, the top rate was cut again to 38.5 percent, then once more to 28 percent—along with a large reduction of the income threshold for the highest bracket, which meant that somebody making $1 million or $10 million a year would now be taxed at the same rate that a teacher or plumber was taxed on everything they earned above the equivalent of $40,000. The cut in the top tax rate on profits from selling stocks was also cut in half between 1976 and 1982, another enormous boon to the rich, since three-quarters of those gains go to the wealthiest 5 percent of Americans.

Sometime in the 1980s, liberals passed through the stages of political denial and anger and depression, and during the ’90s, they settled into modest bargaining and acceptance for the long haul.

In other words, Clinton’s Wall Street–bred economic brain trust helped encode into the system the increased recklessness that Wall Street demanded and that would keep feeding inequality and insecurity and soon lead to the financial meltdown and Wall Street bailout and Great Recession. Congratulations, modern bipartisan Democrats!

Yet around the same time, a private meeting was held in Chicago that looks in retrospect an awful lot like a prime node of the conspiracy of the elite economic right committed to subverting democracy. Except it was not shadowy, because a transcript of their conversation was soon published in The University of Chicago Law Review. The group consisted of some of the principal founders of Law and Economics, the movement that was busy encoding the preferences of the economic right into the legal and judicial system. (Not present was Robert Bork’s Yale Law School pal Guido Calabresi, another founder of the movement who’d just become a federal appeals court judge appointed by…President Clinton.*2) This supremely august group of conservative legal scholars had assembled in a room at the law school for a conversation about all that their little group had accomplished during the previous couple of decades, and about what remained to be done in the future. The gathering had a distinctly celebratory air. One of the five, the Nobel Prize–winning economist Gary Becker—whose mentor Milton Friedman considered him “the greatest social scientist” of the late twentieth century, and who was in turn a mentor to the junk bond felon Mike Milken—fretted that victory was not yet total. In particular, he was peeved by some new federal rules that made it a bit easier for employees who’d been fired or forced to quit to claim discrimination. But his fellow pioneer Richard Posner, a judge on the federa...

“Is nostalgia stopping our culture’s ability to surge forward,” he asks, “or are we nostalgic precisely because our culture has stopped moving forward and so we inevitably look back to more momentous and dynamic times?” I’m pretty sure it’s both, as it tends to be with big, diffuse causes and effects.

Again, the writer J. G. Ballard delivered a kind of early-warning prophecy. “The year 2000 will come,” he wrote in the early 1990s, “but I have a feeling that some time over the next 10 or 20 years, there is going to be a major break of human continuity. One of the reasons we’ve turned our backs against the future at present is that people may well perceive unconsciously that the future is going to be a very dangerous place.”

Once again, just to be clear, I’m not suggesting that the evil geniuses who pulled off the remarkable political and economic transformation from the 1970s through the ’90s also planned or executed our cultural U-turn. In this respect, they were mainly just shrewd and lucky. Rather, it’s like when two different chronic illnesses tend to appear in the same people at the same time—like arthritis and heart disease, or depressive disorders and anxiety disorders, or COVID-19 and type 2 diabetes. The medical term of art is comorbidity. The outbreak of mass nostalgia in the 1970s that then developed into a general cultural listlessness, in other words, is comorbid with what happened to our political economy. One illness didn’t exactly cause the other illness, but each made the other more serious, and harder to cure.

At the same time, the Kochs and their gang spent more time and money on their new political dominion, organizations that run attack TV ads against insufficiently right-wing candidates, operate impressive propaganda sites, and mobilize angry citizens to agitate on behalf of the antigovernment economic agenda—a kind of grassroots politics funded and coordinated from Washington that had just come to be known as Astroturfing. In addition to the funding by right-wing billionaire coordinators, large corporations—oil, pharmaceuticals, insurance, tobacco—also chip in. The groups evolve and split and merge and dissolve and reconfigure, but the two most significant, both Koch creations, have been FreedomWorks (“Lower Taxes, Less Government, More Freedom”) and Americans for Prosperity. Without them—money, planning, talking points, facilities, transportation, almost everything—the Tea Party movement, despite its authentic financial-crash-and-black-president-induced hysteria, might have fizzled out quickly and accomplished little.

And the problem isn’t just the spectacle of enormous wealth and the gratuitous economic inequality and insecurity. It’s also the corruption of our system of government, ruining democracy. Beginning in the 1980s, big business and the rich achieved the political power to tilt our system—legislatures, executive branches, judiciaries, media, academia—much more in their favor. Thus they become even richer, which permitted them to buy more political leverage to tilt the system more excessively, further entrenching their wealth and political power. And so on and on. As the Nobel Prize–winning economist Joseph Stiglitz puts it, we’re “converting higher economic inequality into greater political inequality. Political inequality, in its turn, gives rise to more economic inequality.” It’s another cascading vicious cycle, maybe the most disturbing of all.

The Obama administration immediately fell into the modern Democratic role of being the restrained tidiers-up after “conservative” recklessness—in this case, the disastrous $2 trillion war in Iraq as well as the disastrous Wall Street crash. The brand-new administration was consumed for a while with the work of preventing a collapse of the financial system and the onset of a depression.

It’s another way our political economy and society have been dragged back in time. Not only have we let economic inequality and insecurity revert to the levels of a century ago, we’ve also shrunk the middle class down to the size it was in the old days and reconstituted a vestigial caste to make life even easier for the well-to-do. A century after it began disappearing in America, the servant class is back.

Machines want to do all our work. We’re letting them. We will keep letting them. And the right turn we made forty years ago has made our political economy and government particularly ill-equipped to deal with the transformation.

“Markets are not just the natural and spontaneous consequence of government inaction,” its 2018 manifesto explained. Remember: the economic right’s great confidence trick in the 1980s was to redesign and reengineer the economy to privilege the rich and business—and then to insist that a market economy is like a precious unchangeable piece of nature, neither designed nor engineered. Markets are products of design—for good or ill….For instance, when we design markets that do not price the costs that a firm imposes on others—for example through pollution, or in finance…—then we get far more of things that we don’t want (like global warming and financial catastrophes). Environmental or financial regulation of this sort is not “anti-market”; on the contrary, it is essential to a properly constituted market where firms can’t make excess profits by pushing off costs onto others. “Countries like Canada, Denmark and Sweden,” says Will Wilkinson, Niskanen’s head of policy, “have become more robustly capitalist over the past several decades. They needed to be better capitalists to afford their socialism.” What he calls “free-market ‘socialism’ ”—note that he puts socialism in quotation marks—may seem like an oxymoron, but in fact it’s acknowledgment of the range of vigorous real-world nonbinary hybrids.