Markets, myths, and Misrecognitions: Economic populism in the age of financialization and hyperinequality (original) (raw)

Markets, myths, and misrecognitions: Economic populism in the age of financialization and hyperinequality

Karen Ho
Anthropology Department, University of Minnesota, Minneapolis, MN 55455, USA
Corresponding author: Karen Ho; e-mail: karenho@umn.edu

In this analysis, I use populism as a term to describe recent conservative social movements and representations. Right-wing populism, as I see it, deploys the rhetoric of reverse discrimination and scapegoating to galvanize political energy in the name of the “common man,” within a context of intensifying socioeconomic inequality. Crucially, nostalgic and declensionist political campaigns, from Trumpism to the Tea Party, have framed the “common man” as white, properly masculine, and heterosexual - the rightful heir of the family wage in a moment when this wage has been diminished. And herein lies the conundrum.

On one hand, downward mobility, precarity, and suffering characterize disinvested and deindustrializing regions across the United States. Those who were included in the era of postwar prosperity, underpinned by living-wage manufacturing, have witnessed the dismantling of social contracts and are experiencing downward mobility and a crisis of expectation and entitlement. Those who were largely excluded from the benefits of the family wage and other socioeconomic safety nets, namely, working-class people of color, experience an exacerbated inequality, never having fully participated in the postwar stability, and yet facing increased disinvestment with heightened rates of state-sanctioned violence, incarceration, and so-called access to opportunity, such as “subprime” loans.

On the other hand, over the past thirty years, the policies, practices, measurements, and values of the US social economy that were ushered in by Reagan, continued by Clinton, and underwritten by Wall Street have enabled financialization and mostly benefited the financial elite. While the scapegoating of undeserving others has long characterized elite conservative agendas, it is important to recognize that one of the central ways in which elites have attempted to market and temper the ravages of these policies has been to frame them in terms of cosmopolitanism, meritocracy, and multiculturalism. Using the concept of “progressive neoliberalism,” philosopher Nancy Fraser (2017; see also Bessire and Bond 2017; Brenner 2017) indicts the strategic coupling of multiculturalism with an “anti-provincial,” free-market approach to globalization that ends up solidifying a new institutional elite. She argues that the celebration of diversity has lent “charisma” to the “forces of cognitive capitalism, especially financialization,” and that ideals like “diversity and empowerment, which could in principle serve different ends, now gloss policies that have devastated manufacturing and what were once middle-class lives” (Fraser 2017).

The reactionary populism, then, that has led to Trumpism arose out of real grievances against neoliberal financialization and globalization yet has conflated the policies and practices that benefit the financial elite with

the demands of marginalized and minoritized groups. These misrecognitions have led to problematic wholesale critiques of “identity politics” as well as sweeping calls for leftist class politics that downplay the central role that race and segregation, for example, have played in the making of the middle class.

Given the multiple elisions and confounding layers of obfuscation imposed by dominant narratives, not to mention the embodied misrecognitions constructed out of these mythologies and uneven socioeconomic locations and identities, a critical form of economic anthropology is crucial. By this I mean an economic anthropology that combines feminist, comparative race, postcolonial, and queer epistemologies with substantivist and historical approaches to analyze and unpack the myriad socioeconomic practices, ideologies, and sentiments that shape hierarchies, uneven accumulation, and inequality.

Such an economic anthropology would analyze the historical and social construction of particular markets that have imbued the normative worldviews, sensibilities, and prospects of many Americans. For example, instead of taking the dominant understanding of the housing market for granted (which presumes a neutral market that any hardworking American can participate in), it would unpack how massive federal subsidies and underwriting of loans (through the GI Bill and the Federal Housing Administration [FHA]) offered only to white men across class backgrounds created a majority middle class founded in whiteness. The very possibility of building wealth in property markets was actualized through race, because only whites were extended loans, and more importantly, only houses in segregated areas removed from blackness accrued value in the housing market.

Such cultural norms, which framed whiteness as worthy of investment and blackness as contaminating, ensured that the “economic” principle of supply and demand in housing was in fact centrally structured by race. Integration, as a negative cultural value, would immediately depress housing prices by decreasing demand and increasing supply, and segregation would do the opposite, at least in all-white neighborhoods. Moreover, the state actively tried to erase this history and its cultural tracks, resulting in its key beneficiaries believing that their success in accumulating real estate equity resulted from hard work and the normal operations of a neutral free market. It then comes as no surprise that for those reared on the myth of the free market, where subsidies and advantages are normative and largely invisible, a shift in state and market policies that erodes these subsidies while privileging the financial elite would not be blamed on free markets but rather on “undesirable” others. In addition, the very existence of geographically determined voting districts and “blocs” that can be characterized as “white working-class neighborhoods” or “wealthy suburbs” was made possible through the active (and violent) reproduction of segregation in housing (and, yes, also job) markets.

A critical economic anthropology would build on the long-standing work of many scholars to interrogate the origin myths, such as shareholder value and the efficient market hypothesis, that have helped to legitimate and enact the fantastical theory that the assets and infrastructures of corporations belong only to shareholders and financiers. It is precisely this fiction - that the singular and primary purpose of the firm is to create value (in the form of a rising stock price) for its shareholders, who are problematically conceptualized as “the owners” - that has allowed corporate America to be shorn from its job-creating potential and commitment to employment and other stakeholders and to be mined as a collection of financial assets for elite and private gain. Shareholder value, then, helped to justify Wall Street’s liquidation of corporate America and the social contract, mostly for the benefit of institutionally privileged white men. While much of this “unlocked” wealth has been redistributed to the top, today’s key beneficiaries (comprised, in large part, of the financial elite) have been able to deflect critiques of free markets, elite smartness, and Wall Street bailouts (often framed in terms of protectionism and getting better deals for workers) by mobilizing not only shared fraternity grounded in whiteness but also resentments against those who have long challenged normative hierarchies.

National economic myths have fostered a stunning misrecognition of the causes of growing socioeconomic inequality. For the past thirty years, the cultural practices and ideologies of finance have completely divorced the common understanding of what constitutes a robust economy (for financiers, a rising stock market and short-term

shareholder value) from employment, job security, rising wages, and other more “traditional” measures of economic and corporate health-measures that take into account a wide range of stakeholders. And yet, even though corporations have been thoroughly financialized and transformed to benefit the financial elite, the expectations of many Americans still rest on the prior “stakeholder” model and its understanding of the purpose of corporate America. This explains why many Americans presume that the causes of our continual “jobless recoveries” are immigrant job stealers or affirmative action or even “skills gaps” rather than corporations that are simply no longer committed to employment and job creation. Right-wing populism seeks to obscure rather than reveal the consequences when corporations, now governed by the concerns of finance and private equity, are interested not in the welfare of workers or even long-term productivity, but in mergers and acquisitions and financial deal making to boost stock prices and financial fees.

Even though the state and high finance have collaborated to cause the erosion of entire sectors of well-paying jobs (jobs that, by the way, were never broadly shared for most people of color or women), these structural sites have escaped scrutiny. Instead, economic populism mistakenly organizes around the fake culprit of reverse discrimination and special rights. Of course, when neoliberal policies are packaged as cosmopolitan and multicultural despite the fact that they have mainly benefited the financial elite, and when markets are presumed to be meritocratic and neutral (as opposed to elite white racial fraternities), such presumptions further resentment against people of color; minoritized struggles; and antiracist, antihomophobic, and feminist social movements. The burden and continual challenge of economic anthropology is to unpack these resentments and illuminate their relation to the financialization of the US and global social economy.

References

Bessire, Lucas, and David Bond. 2017. “Introduction: The Rise of Trumpism.” Cultural Anthropology (blog), January 18. https://culanth.org/fieldsights/1031-introduction-the-rise-of-trumpism.
Brenner, Johanna. 2017. “There Was No Such Thing as ‘Progressive Neoliberalism.’” Dissent, January 14. https://www.dissentmagazine.org/online\_articles/ nancy-fraser-progressive-neoliberalism-social-movements-response.
Fraser, Nancy. 2017. “The End of Progressive Neoliberalism.” Dissent, January 2. https://www.dissentmagazine.org/online\_articles/progressive-neoliberalism-reactionary-populism-nancy-fraser.