Why Bank Rage Is Not Populism
March 26, 2009

by James Ridgeway		print version
		print version (graphics)

The cover of Newsweek on the stands today reads “The Thinking Man’s Guide to Populist Rage.” These covers, of course, tend to go for eye-catching hyperbole (six weeks ago, Newsweek’s cover line was “We Are All Socialists Now”).

But the issue is filled with serious essays on the subject, by Michael Kazin, Eliot Spitzer, and others. And in this morning’s New York Times, John Harwood makes similar claims, painting people’s anger at Wall Street as part of a populist resurgence. Harwood’s most prominent source is, of all people, Ed Rollins, the Republican strategist whose credentials on the subject consist of working on the campaign of faux-populist Ross Perot.

One person not quoted in these pieces is the original, and still unequaled, historian of populism, Lawrence Goodwyn. He identified the first populist movement—-the agrarian revolt of the 1890s—as the greatest mass movement in American history, and as a largely unfulfilled dream. Goodwyn’s 1978 book The Populist Moment is still in print and well worth reading, both for its stirring history and its insights into what is going on today—-and what isn’t going on.

Goodwyn traces the Populist Movement to its origins in the rural depression after the Civil War, when farmers formed clubs that fought the monopolistic railroad rates set by the big Eastern railroads, to the detriment of Southern and Western farmers. By the 1870s these clubs had grown in number and size, forming themselves into Farmers Alliances, which engaged in all sorts of cooperative action, from catching horse thieves to buying supplies. By the 1890s, the alliances had a combined membership of more than one million people and were in the thick of politics, fighting railroad rates, fighting the big cattle operators, demanding taxes on speculative landholdings, defending local merchants, and demanding paper money to replace the gold standard.

Most significantly, in relation to today’s economic crisis, the alliances believed they needed to wrest control of credit, and of the money supply in general, from the hands of bankers and other blood-sucking plutocrats, and place it in the hands of the farmers and laborers who were the real producers of wealth. Georgia populist leader Tom Watson accused the Democrats of sacrificing “the liberty and prosperity of the country…to Plutocratic greed,” and the Republicans of serving the interests of “monopolists, gamblers, gigantic corporations, bondholders, [and] bankers.” He said that big business didn’t care about ordinary Americans “except as raw material served up for the twin gods of production and profit.”

As an alternative, the populists proposed what they called the “sub-treasury plan,” under which a new monetary system would be created and operated “in the name of the whole people,” and credit would be freely extended to farmers, small producers, and other ordinary citizens. The plan represented a genuine challenge to the commercial banking industry, and to big corporations in general.

In the election of 1890 the movement emerged with substantial blocs—

Kingfisher Reformer (Oklahoma), November 29, 1894

52 congressmen, seven state legislatures, a handful of senators and governors–and by 1892, the alliance leaders had created the foundations of a new People’s Party. They got more than one million votes in the elections that year. Cleveland won, and in 1893, rural America fell into deep depression. The populists gained favor, and in 1896, the Democratic Party’s nomination of William Jennings Bryan (who also opposed the gold standard) represented an effort to pull in the People’s Party. 

But the revolt collapsed, for a myriad of reasons: It failed in its efforts to build alliances with industrial labor unions and with black farmers in the South. And it was deprived of its driving force when economic conditions improved. Some rebellious farmers went home to the Republican Party; others splintered off into generally futile local movements. Certain populist ideas were gradually worked into the overall economy-—railroad regulation, some banking reform, direct election of senators, postal savings banks, initiatives and referendums, and an expanded concept of currency.

But in fact, the movement’s co-optation into the mainstream politics of the Progressive Era was what cemented its demise. Goodwyn sees these reforms as “skin-deep parodies of the original ideals.” As he puts it, what happened was “a consolidation of our current political culture, framed by the narrow aspirations of ‘reform,’—-falling within the labels of ‘progressive’ or `liberal.’ No one would ever again challenge the basic structures of the political economy.” As for the farmers, “the noose tightened, with smallholders being swallowed by big enterprises.” It marked the beginning of the movement toward agribusiness, as well as an affirmation of the power of the industrialists, the insurance companies, and above all the banks. The public would push back at that power structure in bad financial times such as the Great Depression, but would never again pose it any serious threat.

What’s going on today bears little resemblance to the great surge of political organizing that began in and spread through the South and West in the 1890s. To begin with, it isn’t now, nor is it likely to become, part of any larger mass movement. It’s directed at the worst excesses of the system, not at the system itself. And it doesn’t offer an alternative vision, beyond a few more progressive “reforms.”

Some of these mild reforms are being earnestly pursued by the Obama Administration, which at the same time clearly has no intention of taking them any deeper. (Contrary to what Rush Limbaugh and Newsweek may say, we are not all socialists now.) They may well succeed in reining in the worst abuses of a system. But the system will survive largely intact and the society it dominates will remain wildly unequal, a far cry from the dreams of those farmers who gathered in barns and grange halls when the nation was much younger than it is today.

Anthony Weekly Bulletin (Kansa), May 4, 1894. Cartoons from web site on Populism created by Worth Robert Miller, Department of History, Missouri State University: http://history.missouristate.edu/wrmiller/default.htm.

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James Ridgeway is Senior Washington Correspondent for Mother Jones Magazine, where he writes both articles for the magazine and a weekly web column on MotherJones.com.

Ridgeway also writes pieces for the Guardian Newspaper in the UK and Counterpunch, an online newsletter, and collaborates on original short videos, available at RidgewayNg.com.

Read more of Jim's articles at Satya Center at the James Ridgeway Archive.