NEWS ANALYSIS : For Some, Tumult of 1996 Parallels 1896's Gilded Age

By JOHN BALZAR

Feb. 17, 1996 12 AM PT

TIMES STAFF WRITER

“Go home and pick up any history book, and look what happened in America . . . “

President Clinton voiced his dare while campaigning in New Hampshire recently. He was referring to that tumultuous time in American life “when we moved from farm to factory, when we moved from being a rural country to a more urbanized one.”

Tumult is upon us again, as industrialism yields to information. And what do the patterns of history say now?

First, the distemper of today is similar--in respects eerily similar--to the volatile national disposition of 100 years ago.

The Gilded Age, Mark Twain called it. It was the epoch of unfettered American capitalism. The rich got richer with a promise of a better life for all. But those not rich got restless and angry. They coined a name for themselves: populists.

The second lesson is that the Gilded Age came crashing down around the silk stockings of its champions.

Last, history says it’s a likely sign we’re about to bump into something when we look backward to see where we are going. And you might ask yourself how often you again hear mention of populism. Isn’t it more frequent and louder every day?

“If we could rewind history, I think we’d find that the mood today would not be too different from the mood in 1896,” said John Petrocik, director of UCLA’s Center for the Study of Society of Politics.

The nub of the matter, the driving force of unrest, was then and is now America’s sense of fairness. You could call this one of the nation’s most important values. Or you could call it something more, the foundation from which our most treasured myths about ourselves arise.

Although history rarely travels in neat, repetitive cycles, only the foolish disregard refrains as strong as the struggle for what is fair, what is right. People, after all, hold dear their habits.

“Big change is coming. And if you were a mathematician you could determine just when it’s going to happen--because it happens on such a regular basis,” said Bill Carrick, a Democratic political strategist.

Consider the voices of anxiety over America’s free-trade policy. Both Republican presidential candidate Patrick J. Buchanan and House Democratic leader Richard A. Gephardt (D-Mo.) agree that business is exporting jobs overseas.

“When you look across the ideological spectrum and you start to see the ideas of Gephardt meet around the corner with Buchanan--that’s the beginning of a sea change,” said Carrick.

The Gilded Age arose out of the Civil War, much as our contemporary times grew out of an America transformed after World War II. Then as now, the economy shed its skin, society emerged reconfigured. And as the new society matured, its fangs grew longer.

University of Oklahoma professor of history H. Wayne Morgan drew these parallels in an article for American Heritage magazine:

“Many of the public questions we grapple with today resemble those of the Gilded Age--the place of minorities in society, the problems of a wave of foreign immigration, women’s rights, government’s role in shaping social development. Questions of monetary policy and tariff protection are also very much alive.”

Central to the 1880s and 1890s was the relative role and power of business and government and the failure to make good on America’s dreams of shared prosperity.

Consider the entry in the Encyclopedia Americana on the Gilded Age: “It was marked--in more than customary measure--by materialism, pursuit of profit, corruption in business and government, ostentatious display of possessions, vulgarity in taste, and ruthless exploitation of natural resources.”

Or, consider the book, “The Incorporation of America,” by historian Alan Trachtenberg, who wrote that the Gilded Age “wrenched American society from the moorings of familiar values . . . “

In simplified fashion, the Gilded Age was driven by enthusiastic, some might say rampant, and increasingly concentrated capitalism. This was aided by weak, compliant and corrupt government. The modern corporation was born and flourished. Oil and railroad barons embossed their names in gold. The downtrodden called them greedy. The defenders insisted, in a distant echo of today, that business was only responding to competition.

Turmoil within the major parties and from third parties brought a 180-degree shift in attitudes and politics. The Progressive Party in 1892 was called revolutionary for its platform seeking a graduated income tax, public ownership of utilities, the voter initiative and referendum, the eight-hour workday, immigration restrictions and government control of currency instead of banks.

“Yet, within a generation almost every one of the planks was enacted in whole or in part. The People’s party was a seed-bed of American politics for the next half-century,” concludes the authoritative “Concise History of the American Republic” by Samuel Eliot Morison, Henry Steel Commager and William E. Leuchtenburg.

The presidencies following the turn of the century gave rise, although fitfully, to increasing government restraint on big business. Republican Theodore Roosevelt championed the “little man” and Democrat Woodrow Wilson promised America “new freedom” by challenging corporations. The federal government created departments of Commerce and Labor, and the regulatory arm of government reached into society.

The finale came when business itself went bust with the stock market collapse in 1929, leading to Franklin D. Roosevelt’s New Deal.

America today is once again adrift on a seemingly unstoppable tide of change. A few months ago, it seemed the ranking leadership in both the Democratic and Republican parties shared a consensus for riding it out. More business, harder work, lower taxes and less government. Disagreements were by degree. Some people might become unimaginably rich while others lose their jobs, but that is the price for the country to pay to stay competitive in the world economy.

President Clinton recently described with a booster’s pride the results under his administration: “It’s an amazing thing to consider that in the last three years, we have produced in the United States in each year the largest number of self-made millionaires our country has ever produced.”

But these uniform contours of American politics increasingly fail to contain the debate. Most emphatic in his challenge to the status quo is Buchanan, and before him independent presidential aspirant Ross Perot. Now, with new vigor, Republican front-runner Sen. Bob Dole has embraced the theme. In New Hampshire this week, Dole appealed to blue-collar workers suffering because “corporate profits are setting records and so are layoffs.”

Deeper in the GOP pack are suggestive, if incongruous, hints of the same thing. Backers believe business scion Steve Forbes strikes a populist chord with his promise to make taxes fair. The corporate rich may benefit--but at least they will not be able to manipulate the system further, goes the logic. The other main Republican contender, Lamar Alexander, evokes his own populist image with a flannel shirt.

In Congress, many observers have noted with surprise the reluctance of some Republican freshmen in Congress to wage all-out war on environmental regulation in the name of business growth. And the mandate to install so-called V-chips in new television sets to permit family censorship of programming is a new twist on the old tradition of government pulling the reins on the most powerful of industries.

By and large, though, it still seems the closer politicians come to raw populist themes the more likely they are to be regarded as fringe figures. That characterization may be deserved according to the individual. But it does not answer the restless contrarianism Americans express in public opinion polls, one after another.

Given a random list of 14 American institutions, big business was ranked last in earning the confidence of Americans last year. Only 8% expressed a “great deal” of confidence, according to the survey by the Gallup Poll.

Other polls from 1995:

* 65% said “taxes on wealthy people should be kept high so the government can use their money for programs to help lower-income people.” Only 19% said taxes on the wealthy should be kept low “because they invest their money in the private sector and that helps the economy and creates jobs.” This from the Los Angeles Times Poll.

* 74% believe “the present tax system benefits the rich and is unfair to the ordinary working man or woman.”--Time magazine/CNN poll.

* 55% believe the middle class is being squeezed more by tax breaks and unfair advantages to big business. Only 27% blamed welfare and unfair advantage to minorities.--NBC/Wall Street Journal poll.

* 69% agreed that “because America is dominated by large, powerful interests, people like me have almost no say in the political system.”--Los Angeles Times Poll.

Majorities like that are hard to ignore. Politicians will try to tap this discontent, say a growing number of social scientists and political strategists.

“This is not something that we’re going to see. It’s something we’re in the midst of,” says Harley Shaiken, a UC Berkeley professor specializing in issues of labor.

“There is a lot more up for grabs than you would think from the current debate about the dismantling of the welfare state. The attacks on welfare go to the bedrock question of fairness. But once that is in play, it’s a small step to question the fairness of an executive who drives a company into the ground and is rewarded with a bonus.

“The great irony is that the attacks on big government have set the stage for an attack on big business.”

In the campaign arena, the GOP leaning toward a flat tax has dominated attention. But in Congress, Democrats led by Sen. Edward M. Kennedy have proposed going in the opposite direction--old-fashioned tax incentives for businesses that provide extra security for their workers.

A whole shelf of provocative books has been written this decade on the premise of impending and fundamental change.

Some take a traditional view of cyclical politics, like Washington Post columnist E.J. Dionne in a new volume: “They Only Look Dead; Why Progressives Will Dominate the Next Political Era.” Others, including former Citicorp Chairman Walter B. Wriston in his book “The Twilight of Sovereignty: How the Information Revolution is Transforming our World,” suggest that technology will liberate people from both government and corporations.

The data and arguments leave others unpersuaded.

“Is there a big, rumbling revolution out there? No, I don’t see it,” said Ken Khachigian, a San Clemente advisor to Republican presidents and governors.

“There is a great American piety, and I happen to believe it: You can grow up from modest circumstances and achieve wealth. I want my boss to make lots of money, so that I can make money. Rich people don’t sit on their money, they spend it. Maybe class warfare doesn’t work anymore.

“Our country has always had a distrust of big corporations. But at the end of the day, people don’t stop buying cars from GM or Ford, or oil from Mobil. Today’s malefactors of great wealth don’t have the personalities of those in the past. It’s hard to demonize them.”

There are cold, logical reasons to dampen any outbreak of populist fury. Not the least of these is the declining power of nations, not to mention individuals, to resist a capricious global economy.

More down to earth, workers may tremble with insecurity and fume as wages stagnate and layoffs grow to satisfy stock prices, and executives and raiders are rewarded with millions. But these same workers are pumping their own savings into the markets at record rates, hoping the corporate boom will pay for their retirements.

And schemes such as the lottery and sweepstakes come-ons promise the faint-but-irresistible lure that anyone on any given day can join the super rich. Gambling is America’s No. 1 growth industry.

“Until people feel there is something else they can do, nothing is going to happen,” says UC San Diego political science professor Sam Popkin. “Personally, I’d like to see something happen. And it’s one of the great questions of our time, why it [a populist uprising] hasn’t happened. But look, Ralph Nader used to have a million people behind him. Now he gets a crowd of 100 and tries to say America is speaking . . .

“There is a fatalism about things today. What’s fair? The question of fairness has not been answered.”

Times researcher Janet Lundblad contributed to this story.