The love of well-being has now become the predominant taste of the nation; the great current of human passions runs in that channel and sweeps everything along in its course.
—Tocqueville, Democracy in America
A great debate is brewing about the effects of the new economy on our society. On the one side you have the champions of the new economy. They have a vision for the world, they are making it happen, and they are being hugely rewarded for it. This is the group that champions the new economy, that is obsessed with technology, that welcomes the rapid pace of change, that sees ahead a cornucopia of pleasures and possibilities. We could use many different names to refer to this camp: they are economic optimists, cyberspace enthusiasts, techno-utopians. But I have watched this group, and one of its characteristic expressions, usually offered with a signal thrust of the arm, is “Yeah!” Thus I call this group the “Party of Yeah.”
It is being fiercely opposed and denounced by another group that is profoundly distressed by the direction in which society is going. This group is passionately convinced that the new economy is a fraud, and that unfettered markets and runaway technology, far from bringing us closer to the promised land, are destroying our most cherished values. Even if the economy continues to grow, these critics insist that no upsurge in the Dow and the Nasdaq can compensate for moral and social havoc being wreaked by the new economy. If we do not change course, this group warns, we are headed for complete disaster. This group is ideologically more diverse than the first, but it is predominantly made up of cultural pessimists, environmentalists, social conservatives, egalitarians, religious critics of capitalism, and skeptics about technology. I call this group the “Party of Nah.”
Members of the Party of Yeah assert that in previous eras the priest, the intellectual, and the bureaucrat have all tried to lead society, and they have failed miserably. They were unable to solve the problem of scarcity. So all they did was redistribute resources, or try to reconcile people to living in degradation. Most of the time, retorts Spencer Reiss, who edits the tech newsletter New Economy Watch, what they did was arrogate power to themselves. Now, Reiss says, their main function is to pooh-pooh the new economy and hearken back to some nonexistent golden age. “It’s almost evil to hear these people who have done so much harm sit around and criticize the tech revolution,” Reiss says. “What we need from them is an apology.” Columnist Virginia Postrel calls these critics “enemies of the future.”
Staggering Inequalities of Wealth
Yet from these two groups we can excavate a left-wing criticism of technological capitalism and a right-wing criticism. The left-wing critique is in the name of nature and inequality. The right-wing critique is in the name of morality. The most significant political development of our time is that these critiques are becoming one. “Nature, community and decency” will be the rallying cry of the new political movement aimed at resisting the current thrust of the new economy. Let us briefly explore what the critics are saying and why their traditional divisions and enmities are likely to dissolve.
First, inequality. It cannot be denied that there are staggering inequalities of wealth in the United States, and between the West and the Third World. Consider some revealing statistics. The total income of America’s 12 million black households is approximately $430 billion a year. The net worth of the 30 richest Americans, according to Forbes, equals approximately $440 billion. So 30 people in this country have a net worth that exceeds the collective annual earnings of black America.
The top 1 percent of the population owns over one-third of the wealth in the United States. The top 10 percent has two thirds. That means the bottom 90 percent of Americans controls only about a third of the wealth of the nation. Indeed nearly half of American households have a net worth below $50,000, and a quarter below $10,000. According to a recent report by the Center on Budget and Policy Priorities, the earnings of the top fifth of the population soared 15 percent in the past decade or so while the earnings of the bottom fifth remained stagnant. Economist Edward Wolff of New York University, who studies wealth data, estimates that Bill Gates alone has a net worth that surpasses that of 100 million Americans—the bottom 40 percent of the population.
The 50 countries of sub-Saharan Africa, minus South Africa, have a total population of 570 million and a combined gross domestic product of around $200 billion. That equals the net worth of the five richest Americans. A recent United Nations Human Development Report notes that the wealth of the world’s billionaires is greater than the combined income of nearly half the world’s population. According to that report, in 1960 the income of the 20 percent of the world’s people who lived in the richest countries was 30 times the income of the 20 percent who lived in the poorest countries. Now that figure is more than 80 to one. Many Americans and Europeans spend $2 for a bottle of designer water while one-third of the world’s population lives on less than $2 a day.
Inequality is traditionally a concern of the left, and not surprising, some of the people who have been protesting the inequalities generated by technological capitalism have a left-leaning pedigree. “Progress is more plausibly judged by the reduction of deprivation than by the further enrichment of the opulent,” writes economist Amartya Sen, a Nobel laureate. Those who echo Sen’s concerns—economist Laura D’Andrea Tyson, political scientist Bruce Ackerman, philosopher Richard Rorty, journalist Robert Kuttner, and the Reverend Jim Wallis, editor of Sojourner’s magazine—tend to be old-line leftists. But of late they have been joined by Kevin Phillips, a Republican political strategist, and conservative columnist Arianna Huffington, and I suspect that many more right-wingers will join this unlikely coalition in the next few years.
A Casino Economy
Why? Because the issue is too important to concede to the left, and because the left doesn’t know what to do with it. We haven’t heard much from the left about inequality lately, in large part because socialism has been so resoundingly discredited, and so egalitarian concerns are typically muttered sotto voce or confined to left-wing media outlets. And some on the left cannot resist advancing absurd solutions. Thus Richard Rorty wistfully suggests that “if the intellectuals and the unions could ever get back together again, and could reconstitute the kind of left which existed in the forties and fifties, the first decade of the twenty-first century might conceivably be a Second Progressive Era.” A lovely idea, but how practical is it, Rip Van Rorty. Economist Paul Krugman advises the United States to take up “the Swedish model” in which the government consumes 63 percent of the gross national product. No less impractical, Bruce Ackerman and Anne Alstott argue in a recent book that America should ensure that all citizens have a more equal chance to succeed by handing them $80,000 apiece on their twenty-first birthday.
Conservatives cannot possibly agree with these proposals, yet there are good conservative reasons to care about inequality. Not because conservatives are egalitarians who believe that everyone in society should get an equal share, but because conservatives care about the merit principle, the notion that hard work brings just reward, and the scale of inequality in today’s economy seems to call this whole concept of fair play into question. Think about the old notion of reward in America: you start at the bottom and work your way up, and over a lifetime you hope to build up wealth as due reward for your efforts. But now if you adopt this approach there is a name for you: sucker. The new formula is one of Instant Wealth: set up a new company, take it public, and pocket half a billion dollars in two and a half years.
This is a wonderful prospect, except that it destroys the notion of just desserts in a society. Rewards today seem completely detached from any defensible notion of merit; ours feels like a casino economy. Of course many entrepreneurs have accumulated fortunes by producing very valuable things, but is it fair that their children inherit multimillion dollar trust funds while the other kids start out so far behind? As economist James Tobin writes, “One generation’s inequality of outcomes is the next generation’s inequality of opportunity.” Then there are the corporate CEOs who leave with multimillion-dollar golden parachutes. These farewell gifts may seem warranted if the CEO has a successful record, but frequently they accrue to failed CEOs who have driven down the profitability and stock price of their companies. Meanwhile, the ordinary working person is given a pink slip and asked to turn in his parking permit. Again, where is the sense of fairness?
In addition to these concerns about merit and justice, another reason conservatives should care about inequality is moral decency. It was the Tory writer Samuel Johnson who said, “A decent provision for the poor is the true test of civilization.” Inequality itself may be tolerable, but doesn’t the scale of today’s inequality raise ethical concerns? How can conservatives who believe that “all men are created equal” complacently acquiesce in a system that permits some people to live like kings while others live like serfs? A further conservative concern is social stability, and when the chasm between people reaches a certain point, it threatens to strain or break the bonds that hold societies together. Alan Greenspan, chairman of the Federal Reserve, has warned that if the opportunities of the new economy are restricted to a few, there is a serious danger of social unrest.
Right-Wing Environmentalists
In addition to faulting the new economy for exacerbating inequality, the left-wing critique blames it for environmental devastation. This view holds that technology and capitalism rely for their success and proliferation on an increasing exploitation of nature and natural resources. In its extreme formulation, which goes by the name of “deep ecology,” some environmentalists hold that the whole premise of modern technological capitalism, which is to supply the ever-increasing wants of man, is based on the false premise that the biosphere is ours for the ransacking. In the view of “deep ecologists,” technological capitalism is a vicious, predatory enterprise because nature does not belong to us, we belong to nature.
A more moderate version of the environmental critique holds that the natural ecosystem is a complicated and fragile thing, and that as technology and capitalism spread around the world, we are likely to make more and more pressing demands on nature that threaten to destroy the ecosystem’s delicate balance. This might be acceptable if we could build a new ecosystem. But the failure of Biosphere 2, an early 1990s experiment in building a functioning ecosystem hermetically sealed off from the earth’s supplies, confirmed that we are not very good are playing Mother Nature. If human beings continue to tread so clumsily on the planet, argues biologist David Tilman, who reviewed the Biosphere 2 experiment, “we are heading for a world in which we will have to engineer services we have always received free from nature.” This version of environmentalism has been endorsed, indeed promulgated, by the Harvard biologist E. O. Wilson, who is a political conservative and, in general, a booster of capitalism and technology (especially biotechnology).
For years conservatives tended to downplay the claims of nature and to make jokes about the environment, such as Ronald Reagan’s quip that “when you’ve seen one redwood you’ve seen them all.” But conservatism is fundamentally about conserving things, and what is more important for us human beings to conserve than the beauty of our natural world? Teddy Roosevelt was a right-wing environmentalist who loved animals so much that he pursued them with the intensity of a big-game hunter. Perhaps no less paradoxically, right-wingers are moving toward a pro-environmental stance. This does not mean that conservatives are signing up in droves to go tree-hugging with the Sierra Club. But conservatives now contend that one of the great benefits of wealth and technology is that they give us the resources and the knowledge to preserve our forests, our rivers, and our wildlife.
The right-wing critique of technological capitalism is relatively a new development. Columnist George Will, who calls himself a Tory, has asserted for a long time that capitalism is problematic for conservatism because it “undermines traditional social structures and values.” But in America, until recently, this has been an eccentric view. American conservatives, unlike their European counterparts, have in general been champions of technology and capitalism. Reagan, for example, optimistically held that if you give people freedom, if you encourage an entrepreneurial climate, then the market will supply a cornucopia of technological wonders, and people will use these resources and this liberty to craft an American dream for themselves. In Reagan’s view technological capitalism was entirely consistent with what he called “traditional values” because he believed that if you give people freedom they will choose to live virtuously.
Wealth Accumulates and Men Decay
It is this Reaganite premise that has, in the view of many conservatives, been discredited by the events of the last two decades. Many conservatives feel they are living in a society where economic capital is rising and moral capital is depleting, where “wealth accumulates, and men decay.” What some conservatives are now saying is that technology and capitalism are partly to blame for this cultural and moral deterioration. Hilton Kramer, the distinguished critic, charges that technology debases and vulgarizes high art and culture by reducing “all mental processes to lower and lower levels of emotional response.” The Internet, fumes Richard John Neuhaus, editor of First Things, exacerbates the problem of cultural illiteracy among young people. The people who devote themselves to technology are always in a hurry, but they have no idea where they are going. They are full of opinions, but they are unable to form reflective judgments. Their arrogance, in other words, is utterly unsubstantiated by understanding. In summary, the Internet is producing “a global village of village idiots.”
The conservative indictment of capitalism is no less harsh, and it will seem surprising to those who identify the right as unabashedly pro-capitalist. Perhaps that was true 20 years ago, but not now. Some right-wingers charge that capitalism produces affluence, and affluence produces moral degeneracy, especially in the children of the affluent. “Decadence is brought to us by the marketplace,” remarks conservative activist Don Eberly. A recent issue of Family Policy, published by the Family Research Council, blames the rise of sexual promiscuity not on the 1960s but on capitalism, affluence, and social mobility. These views are percolating up to the right-wing leadership. William Bennett recently said, “Unbridled capitalism is a problem. It may not be a problem for production, but it’s a problem for human beings. It’s a problem for the whole dimension of things we call the realm of values and human relationships.”
One right-wing pal of mine puts this argument in perspective. “Look at the so-called Greatest Generation,” he says. “Its virtues were forged in the Depression and in the battlefields of Europe. But the greatest generation couldn’t reproduce itself, and why? Because it wanted its children to live well. So in the 1950s, the greatest generation produced the baby-boomers. The Clinton generation. And why did this generation become the most self-indulgent in American history? It’s simple: too much money.”
Dinesh D’Souza is a research scholar at the American Enterprise Institute and is the author of The Virtue of Prosperity: Finding Values in an Age of Techno-Affluence (Free Press), from which this article is adapted.
