Economics Financial Crisis History Political Philosophy Politics

The Reagan Revolution

[digg-reddit-me]In which I discuss a repeated theme of this blog – the two domestic revolutions of the past 50 years that undermined the ever-evolving “American way of life” and caused profound social, economic, and political anxieties. The Reagan Revolution did for money what the ’60s did for sex – and today we are paying the price. 

The 1960s are remembered today – for better or worse – for the social, cultural, and sexual revolutions which roiled the nation between 1960 and 1972. The iconic images and movements of the later, more radical years of the time period primarily involve forces that undermined American mores and traditions. Flower children, the Summer of Love, LSD, marijuana, rock and roll, SDS, teach-ins, Black Panthers – the cumulative force of these challenges to the American way of life led to a backlash, which Richard Nixon and his counterparts rode to power. By 1968, many Americans felt as if their way of life were under siege from radical forces – oftentimes, a radicalism embraced even by their children. Riots broke out in major American cities; illegal drugs were consumed conspicuously and without shame; sex was given freely and openly; the legitimacy of the military, of the government, and of the academy were all questioned and often attacked – all of this in the name of freedom and in protest against the societal structures and rules that had heretofore defined the American experience. By the end of the 1960s, the “silent majority” felt their way of life under attack by these sixties revolutions, as Richard Nixon explained in a speech connecting major societal problems to the “sixties” experience:

We are reaping the whirlwind for a decade of growing disrespect for law, decency and principle in America.

Aside from Richard Nixon, the most prominent beneficiary of this counter-revolution, this reaction against the sixties revolution, was a second-rate actor turned politician, Ronald Reagan. He ran for governor on a law and order platform – pledging to beat back the forces of chaos and freedom to protect the compromises that were the basis for the American way of life. Reagan made a national name for himself by taking aggressive measures to quash the college demonstrations of the “communist sympathizers, protesters and sex deviants” at the University of California, Berkley campus.

In defending his extreme measures that resulted in the death of a student in the aftermath of a police riot, Reagan drew a line in the sand:

If it takes a bloodbath, let’s get it over with. No more appeasement.

Reagan’s popularity stemmed in a large measure from how he was able to harness his populist law-and-order stands with a sunny optimism about America. But when Reagan finally took power in 1980, he did not merely attempt to reverse the 1960s revolutions. He unleashed a new revolution, undermining American values and traditions just as radically as the 1960s revolutions had. As Stephen Metcalf explained in Slate:

The ’80s did for money what the ’60s did for sex.

Metcalf goes on:

They told a miraculously tempting lie about the curative powers of disinhibition. It took AIDS, feminism, and sociobiology a while to catch up to our illusions about free love. It has taken cronyism, speculation, and manic overleveraging a while to catch up to our illusions about free money.

Reagan himself revered Franklin Delano Roosevelt and the New Deal but the forces he unleashed were determined to overthrow not just the Great Society programs of the 1960s and the social, cultural, and sexual revolutions of that decade, but the New Deal of the 1930s and the social and economic structure that sprang from the Depression and the government involvement in its aftermath. The Reagan administration unleashed a neoliberal revolution. While Reagan’s support and popularity was to a large degree a result of his stands against the social, cultural, and sexual revolutions of the 1960s against the commonly accepted American values and traditions, his administration unleashed its own revolution which likewise attacked and undermined commonly accepted American values and traditions.

As Stanley Fish recently described neoliberalism in the New York Times:

Whereas in other theories, the achieving of a better life for all requires a measure of state intervention, in the polemics of neoliberalism (elaborated by Milton Friedman and Friedrich von Hayek and put into practice by Ronald Reagan and Margaret Thatcher), state interventions — governmental policies of social engineering — are “presented as the problem rather than the solution” (Chris Harman, “Theorising Neoliberalism,” International Socialism Journal, December 2007).

The free market was seen by these neoliberals as a natural phenomenon that was destroyed by government involvement rather than the government- and society-tended creation that it actually is, as has commonly been understood by Americans from Alexander Hamilton to Theodore Roosevelt. This neoliberal revolution began with much less fanfare and demonstration and less popular support and revolt than the sixties revolutions, but its effects were at least as profound. There were not the same iconic or disturbing images of radicalism and culture war, or catalyzing events like Woodstock, in this second domestic revolution, but the impact on the fabric that bound and organized the nation was just as profound. By explicitly seeking to undermine the “American system” of capitalism and especially the changes to the social contract since the New Deal (which involved the government regulation of businesses, a focus on local and small corporations rather than consolidation, a focus on labor and manufacturing instead of high finance, and a strong, robust middle class that was the focus of a growing economic prosperity) the Reagan revolution accelerated the trends that had begun to appear in the 1970s. Income inequality soared, middle and lower income stagnated while the wealthiest rose, businesses combined and became ever larger, and regulations were relaxed. In what became known as the Great Divergence, the wealth produced by American society stopped being spread out to the middle class and became concentrated in an ever smaller percentage of the population. The very shape of our society changed as a result of Reagan’s revolutions – and American families began to feel squeezed, until the effects of this revolution became more pronounced. By the 2000s, this “silent majority” again felt under seige – though without the same sense of focus as neoliberals actively sought to shift the blame for these economic attacks on the middle class to the 1960s revolutions in a manner that was still resonant for older Americans.

And while the effects of the sixties revolutions have been widely discussed, the effects of the revolution of the 1980s have been largely unspoken. The concentration of wealth in ever smaller percentages of the population, the economic focus on finance over labor, manufacturing, or industry, the slashing of the social safety net, the push for ever bigger corporations, and the relaxation of any type of regulation. 

Thus Reagan, opposing the cultural, social, and sexual revolutions of the 1960s overthrowing conventions that held together American society, unleashed a new economic, financial, and governmental revolution that overthrew the social contract of Franklin Delano Roosevelt, and the economic and governmental conventions that held American society together.