"America's Long and Productive History of Class Warfare"

Harvard Business Review executive editor & author of  "The Myth of the Rational Market," Justin Fox @ HBR:

Six days before the election, the Republican nominee for president attended a fund-raising dinner at a posh New York restaurant. Two-hundred of the country’s richest and most powerful men were on hand. The next day, they were confronted with this atop the front page of one of the city’s leading newspapers:

This particular scan is from the historical-cartoon site HarpWeek, but the drawing has long been in the public domain — it ran in the now-defunct New York World on Oct. 30, 1884. The candidate was James G. Blaine (the droopy-eyed fellow in the center of the picture who is about to dig in to some Lobby Pudding), and the man who subjected him to this harsh treatment was Joseph Pulitzer, who had bought the World the previous year and was rapidly building it into the most popular and powerful newspaper the nation had ever seen.

The cartoon that Pulitzer had Walt McDougall and Valerian Gribayedoff draw was just the beginning — although what a beginning it was, featuring the likes of Jay Gould (seated just left of Blaine) and William Cornelius Vanderbilt (son of Cornelius, seated just to the right of Blaine with the awesome bifurcated beard, although according to historian Richard John he wasn’t even at the dinner) feasting on political spoils at Delmonico’s while a poor family begged for scraps. As James McGrath Morris recounts in his wonderful biography of Pulitzer:

The World revealed every aspect of the dinner, even though the organizers had done their best to bar the press. From the Timbales à la Reine and Soufflés aux Marrons upon which the men feasted to the thousands of dollars pledged to buy votes, no detail was left out. Even more damning, the main story began with a one-paragraph account of men who had been thrown out of work at a mill in Blaine’s home state and were now applying for assistance or emigrating to Canada.

Some of this was partisan politics: Pulitzer, himself on the ballot as a Democratic candidate for Congress, supported Blaine’s opponent, Grover Cleveland. New York was the most important battleground state, and the World’s assault was widely credited with handing the presidency to Cleveland a few days later.

It wasn’t just that, though. In an era when America’s first industrial magnates were amassing unheard-of riches and using it to mold the political system to their liking, resentment of that wealth and power was widespread. Pulitzer’s attacks on the rich helped bring in readers, so many that before long he too had become a multimillionaire with a yacht, a house not far from Vanderbilt’s on East 55th St. in Manhattan, and a membership in the Jekyll Island Club.

By that point Pulitzer had toned down his paper’s attacks on the rich — yet another example of American capitalism’s remarkable ability through the years to coopt its critics by sharing its spoils with them. But the ferociousness of his initial assaults, and of many others aimed at the tycoons who dominated the country’s late-19th-century Gilded Age, gives the lie to the complaint voiced these days in some circles that current resentment of the rich is somehow unprecedented or un-American — or even reminiscent of Nazi Germany.

Have these people never heard about Teddy Roosevelt excoriating the “malefactors of great wealth,” or his cousin Franklin getting Congress to raise the tax rate on top incomes past 90%? Americans have been pillorying the rich on and off for more than 200 years, and our economic system has survived and mostly thrived. In fact, the political and labor-relations compromises occasioned by what you might call class warfare have on balance surely made the country stronger.

What’s been unique, or at least highly unusual, has been the environment in which entrepreneurs and business executives were able to operate from the late 1970s through the early 2000s. Taxes dropped, high-end incomes exploded, and hardly anybody complained at all. Far from complaining, in fact, the news media for the most part celebrated the recipients of those exploding incomes for their boldness, creativity, and economic importance. It was a pretty stinking awesome time to be a plutocrat: You got to make billions of dollars, pay far less in taxes than you would have a quarter-century before, and get your face on the cover of Forbes or Fortune (or maybe even the top of your head on the cover of HBR).

Fourteen years ago, with the dot-com bubble fizzling but the rest of corporate America seemingly still going like gangbusters, the great management journalist Geoff Colvin wrote a column in Fortune titled “Capitalists: Savor This Moment.” An excerpt:

The business culture is triumphant. Not just for those in authority but for most of society, business is at the center, and that’s pretty much okay with everybody. It doesn’t feel remarkable to us for the same reason fish don’t notice water; we live in it. But step outside the moment and look at commerce’s role in the culture. It’s unprecedented.

Colvin’s conclusion was that this just couldn’t last. He wasn’t sure what would replace it, and even now it’s not obvious what will.  By the numbers it’s still a pretty awesome time to be a plutocrat, but clearly the mood has changed. It’s important to remember, though, that the anomaly is not the current mood of skepticism of business and the rich. It’s what preceded it.