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It was January 1975, and the Watergate Babies had arrived in Washington looking for blood. The Watergate Babies—as the recently elected Democratic congressmen were known—were young, idealistic liberals who had been swept into office on a promise to clean up government, end the war in Vietnam, and rid the nation’s capital of the kind of corruption and dirty politics the Nixon White House had wrought. Richard Nixon himself had resigned just a few months earlier in August. But the Watergate Babies didn’t just campaign against Nixon; they took on the Democratic establishment, too. Newly elected Representative George Miller of California, then just 29 years old, announced, “We came here to take the Bastille.” Latest from Politics The Election’s Biggest Threat Is No Longer the Postal Service One of their first targets was an old man from Texarkana: a former cotton tenant farmer named Wright Patman who had served in Congress since 1929. He was also the chairman of the U.S. House Committee on Banking and Currency and had been for more than a decade. Antiwar liberal reformers realized that the key to power in Congress was through the committee system; being the chairman of a powerful committee meant having control over the flow of legislation. The problem was: Chairmen were selected based on their length of service. So liberal reformers already in office, buttressed by the Watergate Babies’ votes, demanded that the committee chairmen be picked by a full Democratic-caucus vote instead. Ironically, as chairman of the Banking Committee, Patman had been the first Democrat to investigate the Watergate scandal. But he was vulnerable to the new crowd he had helped usher in. He was old; they were young. He had supported segregation in the past and the war in Vietnam; they were vehemently against both. Patman had never gone to college and had been a crusading economic populist during the Great Depression; the Watergate Babies were weaned on campus politics, television, and affluence.

What’s more, the new members were antiwar, not necessarily anti-bank. “Our generation did not know the Depression,” then-Representative Paul Tsongas said. “The populism of the 1930s doesn’t really apply to the 1970s,” argued Pete Stark, a California member who launched his political career by affixing a giant peace sign onto the roof of the bank he owned. In reality, while the Watergate Babies provided the numbers needed to eject him, it was actually Patman’s Banking Committee colleagues who orchestrated his ouster. For more than a decade, Patman had represented a Democratic political tradition stretching back to Thomas Jefferson, an alliance of the agrarian South and the West against Northeastern capital. For decades, Patman had sought to hold financial power in check, investigating corporate monopolies, high interest rates, the Federal Reserve, and big banks. And the banking allies on the committee had had enough of Patman’s hostility to Wall Street. Over the years, Patman had upset these members by blocking bank mergers and going after financial power. As famed muckraking columnist Drew Pearson put it: Patman “committed one cardinal sin as chairman. ... He wants to investigate the big bankers.” And so, it was the older bank allies who truly ensured that Patman would go down. In 1975, these bank-friendly Democrats spread the rumor that Patman was an autocratic chairman biased against junior congressmen. To new members eager to participate in policymaking, this was a searing indictment.

The campaign to oust Patman was brief and savage. Michigan’s Bob Carr, a member of the 1975 class, told me the main charge against Patman was that he was an incompetent chairman (a charge with which the nonprofit Common Cause agreed). One of the revolt’s leaders, Edward Pattison, actually felt warmly toward Patman and his legendary populist career. But, “there was just a feeling that he had lost control of his committee.” Not all on the left were swayed. Barbara Jordan, the renowned representative from Texas, spoke eloquently in Patman’s defense. Ralph Nader raged at the betrayal of a warrior against corporate power. And California’s Henry Waxman, one of the few populist Watergate Babies, broke with his class, puzzled by all the liberals who opposed Patman’s chairmanship. Still, Patman was crushed. Of the three chairmen who fell, Patman lost by the biggest margin. A week later, the bank-friendly members of the committee completed their takeover. Leonor Sullivan—a Missouri populist, the only woman on the Banking Committee, and the author of the Fair Credit Reporting Act—was removed from her position as the subcommittee chair in revenge for her support of Patman. “A revolution has occurred,” noted The Washington Post. The Democratic Party helped to create today’s shockingly disillusioned and sullen public. Indeed, a revolution had occurred. But the contours of that revolution would not be clear for decades. In 1974, young liberals did not perceive financial power as a threat, having grown up in a world where banks and big business were largely kept under control. It was the government—through Vietnam, Nixon, and executive power—that organized the political spectrum. By 1975, liberalism meant, as Carr put it, “where you were on issues like civil rights and the war in Vietnam.” With the exception of a few new members, like Miller and Waxman, suspicion of finance as a part of liberalism had vanished.

Over the next 40 years, this Democratic generation fundamentally altered American politics. They restructured “campaign finance, party nominations, government transparency, and congressional organization.” They took on domestic violence, homophobia, discrimination against the disabled, and sexual harassment. They jettisoned many racially and culturally authoritarian traditions. They produced Bill Clinton’s presidency directly, and in many ways, they shaped President Barack Obama’s. The result today is a paradox. At the same time that the nation has achieved perhaps the most tolerant culture in U.S. history, the destruction of the anti-monopoly and anti-bank tradition in the Democratic Party has also cleared the way for the greatest concentration of economic power in a century. This is not what the Watergate Babies intended when they dethroned Patman as chairman of the Banking Committee. But it helped lead them down that path. The story of Patman’s ousting is part of the larger story of how the Democratic Party helped to create today’s shockingly disillusioned and sullen public, a large chunk of whom is now marching for Donald Trump. While not a household name today, Wright Patman was a legend in his time. His congressional career spanned 46 years, from 1929 to 1976. In that near-half-century of service, Patman would wage constant war against monopoly power. As a young man, at the height of the Depression, he challenged Herbert Hoover’s refusal to grant impoverished veterans’ accelerated war pensions. He successfully drove the immensely wealthy Treasury Secretary Andrew Mellon from office over the issue. Patman’s legislation to help veterans recoup their bonuses, the Bonus Bill—and the fight with Mellon over it—prompted a massive protest by World War I veterans in Washington, D.C., known as “the Bonus Army,” which helped shape the politics of the Depression.

In 1936, he authored the Robinson-Patman Act, a pricing and antitrust law that prohibited price discrimination and manipulation, and that finally constrained the A&P chain store—the Walmart of its day—from gobbling up the retail industry. He would go on to write the Bank Secrecy Act, which stops money-laundering; defend Glass-Steagall, which separates banks from securities dealers; write the Employment Act of 1946, which created the Council of Economic Advisors; and initiate the first investigation into the Nixon administration over Watergate. Far from the longwinded octogenarian the Watergate Babies saw, Patman’s career reads as downright passionate, often marked by a vitality you might see today in an Elizabeth Warren—as when, for example, he asked Fed Chairman Arthur Burns, “Can you give me any reason why you should not be in the penitentiary?” Despite his lack of education, Patman had a savvy political and legal mind. In the late 1930s, the Federal Reserve Board refused to admit it was a government institution. So Patman convinced the District of Columbia’s government to threaten foreclosure of all Federal Reserve Board property; the Board quickly produced evidence that it was indeed part of the federal government. “We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.” Patman was also the beneficiary of the acumen of one of the most influential American lawyers of the 20th century, Supreme Court Justice Louis Brandeis. In the 1930s, when Patman first arrived in Washington, he and Brandeis became friends. While on the Court, Brandeis even secretly wrote legislation about chain stores for Patman. Chain stores, like most attempts at monopoly, could concentrate wealth and power, block equality of opportunity, destroy smaller cities and towns, and turn “independent tradesmen into clerks.” In 1933, Brandeis wrote that Americans should use their democracy to keep that power in check. Patman was the workers’ and farmers’ legislative hero; Brandeis, their judicial champion.

Brandeis did for many New Dealers what he did for Patman, drafting legislation and essentially formalizing the populist social sentiment of the late 19th century into a rigorous set of legally actionable ideas. This philosophy then guided the 20th-century Democratic Party. Brandeis’s basic contention, built up over a lifetime of lawyering from the Gilded Age onward, was that big business and democracy were rivals. “We may have democracy, or we may have wealth concentrated in the hands of a few,” he said, “but we can’t have both.” Economics, identity, and politics could not be divorced, because financial power—bankers and monopolists—threatened local communities and self-government. This use of legal tools to constrain big business and protect democracy is known as anti-monopoly or pro-competition policy. This tension stretched back to colonial times and the nation’s founding. The British East India Company was a chartered corporation organized to monopolize the tea business for its corporate owners and the Crown—which spurred the Boston Tea Party. Alexander Hamilton’s financial architecture concentrated power and wealth—which prompted the founding of the Democratic Party along more Jeffersonian lines, promoting private small-land ownership. J.P. Morgan’s and John D. Rockefeller’s encroaching industrial monopolies were part of the Gilded Age elite that extorted farmers with sky-high interest rates, crushed workers seeking decent working conditions and good pay, and threatened small-business independence—which sparked a populist uprising of farmers, and, in parallel, sparked protest from miners and workers confronting newfound industrial behemoths.

In the 20th century, Woodrow Wilson authored the Federal Trade Commission Act, the Federal Reserve Act, and the anti-merger Clayton Act, and, just before World War I intervened, he put Brandeis on the Supreme Court. Franklin Delano Roosevelt completed what Wilson could not, restructuring the banking system and launching antitrust investigations into “housing, construction, tire, newsprint, steel, potash, sulphur, retail, fertilizer, tobacco, shoe, and various agricultural industries.” Modern liberals tend to confuse a broad social-welfare state and redistribution of resources in the form of tax-and-spend policies with the New Deal. In fact, the central tenet of New Deal competition policy was not big or small government; it was distrust of concentrations of power and conflicts of interest in the economy. The New Deal divided power, pitting faction against other faction, a classic Jefferson-Madison approach to controlling power (think Federalist Paper No. 10). Competition policy meant preserving democracy within the commercial sphere, by keeping markets open. Again, for New Deal populists like Brandeis and Patman, it was democracy or concentrated wealth—but not both. There are hints of this tradition today, on both sides of the aisle. Patman was the first congressman to propose auditing the Federal Reserve, which was an outgrowth of his investigation of Mellon. Auditing the Fed is now supported by conservatives like Ted Cruz and populists like Bernie Sanders. Senator Warren’s attempt to re-impose Glass-Steagall is a basic Brandeisian notion. New Dealers understood this not as regulation, but decentralization, a shrinking of the financial sector to prevent conflicts of interest. In the commercial sphere, Patman had a trust-busting agenda, not a big-government one.

Underpinning the political transformation of the New Deal was an intellectual revolution, a new understanding of property rights. In a 1932 campaign speech known as the Commonwealth Club Address, FDR defined private property as the savings of a family, a Jeffersonian yeoman-farmer notion updated for the 20th century. By contrast, the corporation was not property. Concentrated private economic power was “a public trust,” with public obligations, and the continued “enjoyment of that power by any individual or group must depend upon the fulfillment of that trust.” The titans of the day were not businessmen but “princes of property,” and they had to accept responsibility for their power or be restrained by democratic forces. The corporation had to be fit into the constitutional order. Remember, it was the great bankers and managers of the “money trusts,” such as J.P. Morgan, who sat astride wide swaths of corporate America through their investment and lending power, membership on boards of directors, and influence over industrial titans. Among other things, they maintained a sufficient concentration of power to keep prices up, workers disorganized, and politics firmly within their grasp. New Deal fears of bigness and private concentrations of power were given further ideological ammunition later in the 1930s by fascists abroad. As Roosevelt put it to Congress when announcing a far-reaching assault on monopolies in 1938: “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism.” In 1947, Patman even commissioned experts to publish a book titled Fascism in Action, noting that fascism as a political system was the combination of extreme nationalism and monopoly power, a “dictatorship of big business.”

This basic understanding of property formed the industrial structure of mid-20th-century America and then, through its trading arrangements, much of the rest of the world. Using this framework, the Democrats broke the power of bankers over America’s great industrial commons. To constrain big business and protect democracy, Democrats used a raft of anti-monopoly, or pro-competition, policy to great effect, leading to vast changes: The Securities and Exchange Commission was created, the stock exchanges were regulated, the big banks were broken up, the giant utility holding companies were broken up, farmers gained government support for stable agricultural prices free from speculation, and the chain stores were restrained by laws that blocked them from using predatory pricing to undermine local competition (including, for instance, competition from a local camera store in San Francisco run by a shopkeeper named Harvey Milk). The Democrats then extended this globally, through the International Monetary Fund, World Bank, and NATO—even as the United Stated simultaneously used that decentralization to mobilize local communities around the world against the Soviet threat. For example, when General Douglas MacArthur led the Allied occupation of Japan at the end of World War II, key parts of his economic plan included importing the Glass-Steagall Act and antitrust laws into Japan. Back home, Democrats poured government financing into science, and they forced AT&T, RCA, and DuPont to license their treasure troves of patents so that small businesses could compete and so that the scientific discoveries of the corporate world couldn’t be locked away. Eventually, strong competition policy gained a bipartisan consensus, and the idea that anyone would allow concentrations of private power to dominate U.S. politics seemed utterly foolish. Courtesy the Legislative Reference Library of Texas Competition policy was also a powerful political strategy. Democrats lost the U.S. House of Representatives just twice between 1930 and 1994. To get a sense of how rural Democrats used to relate to voters, one need only pick up an old flyer from the Patman archives in Texas: “Here Is What Our Democratic Party Has Given Us” was the title. There were no fancy slogans or focus-grouped logos. Each item listed is a solid thing that was relevant to the lives of conservative white Southern voters in rural Texas: Electricity. Telephone. Roads. Social Security. Soil conservation. Price supports. Foreclosure prevention.

Foreclosures protected homes against bankers. Farm-to-market roads allowed communities to organize around markets. Social Security protected one’s livelihood in the form of unemployment insurance and old-age benefits. Price supports for family farms protected them from speculators. And rural electrification and telephones shielded communities from the predations of monopolistic utilities. Packaged together, these measures epitomized the idea that citizens must be able to govern themselves through their own community structures, or as Walt Whitman put it: “train communities through all their grades, beginning with individuals and ending there again, to rule themselves.” Patman’s ideals represented a deep understanding that sovereign citizens governing sovereign communities were the only protection against demagoguery. The essence of populist politics is that political and economic freedom are deeply intertwined—that real democracy requires not just an opportunity to vote but an opportunity to compete in an open marketplace. This was the kind of politics that the Watergate Babies accidentally overthrew.

Pete Ryan

The story of why the Watergate Babies spurned populism is its own intellectual journey. It started with a generation of politicians who cut their teeth on college-campus politics. In their youth, they saw, up close, not the perils of robber barons, but the failure of the New Deal state, most profoundly through the war in Vietnam. “We were the ’60s generation that didn’t drop out,” Bob Edgar, a U.S. representative from the class of 1975, told me. The war in Vietnam shaped their generation in two profound ways. First, it disillusioned them toward the New Deal. It was, after all, many New Dealers, including union insiders, who nominated Hubert Humphrey in 1968 and who supported a war that killed millions, including 50,000 Americans their age. And second, higher education—the province of the affluent—exempted one from military service, which was an explicit distinction among classes.

In 1968, there was a great debate about the future of the Democratic Party. Robert F. Kennedy sought to win the primary with a “black-blue” coalition of black “have-nots” and working-class whites. He sought continuity in the policies of protecting independent farmers, shopkeepers, and workers, all of which formed the heart of the New Deal—yet he also wanted to end the war in Vietnam and expand racial justice. But Kennedy’s strategy to merge these ideas disappeared when he was assassinated. When RFK died, Democrats nominated New Deal populist and Vietnam War supporter Humphrey, which split the party between the new-left youth activists and the labor-influenced party regulars—leading to the turbulent 1968 national convention. After Humphrey’s loss to Nixon, Democrats formed the Commission on Party Structure and Delegate Selection, also known as the McGovern-Fraser Commission, which sought to heal and restructure the party. With the help of strategist Fred Dutton, Democrats forged a new coalition. By quietly cutting back the influence of unions, Dutton sought to eject the white working class from the Democratic Party, which he saw as “a major redoubt of traditional Americanism and of the antinegro, antiyouth vote.” The future, he argued, lay in a coalition of African Americans, feminists, and affluent, young, college-educated whites. In 1972, George McGovern would win the Democratic nomination with this very coalition, and many of the Watergate Babies entering office just three years later gleaned their first experiences in politics on his campaign. The generation included people like Pete Stark, who jump-started his campaign by putting a peace sign on his bank. Meanwhile, by 1970, both civil society and large American institutions seemed out of control. The National Guard shot antiwar protesters at Kent State, showing that the fissures over Vietnam were only getting worse. The Penn Central railroad had collapsed in the largest bankruptcy in U.S. history. Corrupt corporate executives mismanaged the nation’s train system under an outdated regulatory system. Inflation was spiraling upward, and the ongoing corporate problems of important institutions—such as Pan Am and Chrysler—were becoming more and more evident. Plus, Japanese imports began displacing American jobs.

But the new political class didn’t pin the blame for social and economic problems solely on Wall Street or corporate management—as populists like Patman did—but on a broader malaise. In 1974, Charlie Peters, the publisher of the hot new magazine The Washington Monthly, wrote: “Yesterday, Penn Central. Today, Pan Am. Tomorrow? The American system is in trouble and we all know it.” Inflation and a wave of corporate problems intermingled, indistinguishable from the claims of the counterculture. “We’ve grown fat and sloppy,” Peters continued. “General Motors and the Post Office each have over 700,000 employees. One turns out lemons. The other loses packages … The old organizations—public or private—simply aren’t doing the job.” To young, liberal politicians, many of whom read Peters, there was simply no difference between what the government was doing in one part of the world and what corporate America was doing at home. This cynicism allowed the traditional Republican notion of overregulation to be introduced into a liberal-leaning group. Whether it was overregulated or mismanaged by Wall Street, Penn Central had collapsed—so what was the difference anyway? The idea of Wall Street posing some kind of specialized problem was dated. After all, it hadn’t been banks sending young people to die in the jungle. Remember also, this is the generation that included people like Pete Stark, the congressman who jump-started his campaign by putting a peace sign on his bank.

As 1960s activists became 1970s politicians, they had to develop a political-economic framework to deal with inflation and corporate failures. And this is where the young Democrats’ intellectual journey took a turn. While an older, increasingly feeble generation was arguing that the problem lay in monopoly and banking power, several leading thinkers on both the right and the left provided a new explanation. On the right, a finance-friendly school of libertarian intellectuals known as the Chicago School targeted Brandeisian competition policy. Michael Jensen, a Milton Friedman-influenced financial economist, argued that “our form of political democracy” threatened the large corporation. Government rules, labor power, and antitrust policies were scaring businessmen into not investing. This type of thinking became known as the “capital shortage” argument: A lack of investment capital caused a lack of goods and services and, thus, inflation. Inflation then destroyed more capital, worsening the shortage. The corporation, to Jensen, was property—not FDR’s public trust—and inhibiting the use of that property by shareholder owners was the reason for economic malaise. Another Chicago School libertarian, George Stigler, argued a theory of regulatory capture. It wasn’t Wall Street or corporate corruption that broke America’s transportation system, he said, it was the incompetence of New Deal regulators themselves, acting in the interests of the industries they were supposed to be regulating. The answer was to shield the corporation from inept regulators and deregulate. Essentially, Jensen and Stigler offered a restoration of the pre-FDR view of property rights. Inserting democracy into the commercial arena with competitive markets was “a charade” and “the last eruption of the exhausted mind.” And the most important architect of this intellectual counterrevolution, the one who engaged in a direct assault on traditional anti-monopoly policy, was the libertarian legal scholar Robert Bork. His book The Antitrust Paradox undermined the idea of competition as the purpose of the antitrust laws. Monopolies, Bork believed, were generally good, as long as they delivered low prices. A monopoly would only persist if it were more efficient than its competitors. If there were a company making super-charged monopoly profits, bankers would naturally invest in a competitor, thus addressing the monopoly problem without government intervention. Government intervention, in fact, could only hurt, damaging efficient monopolies with pointless competition and redundancy. In an era of high prices, a theory focused on price seemed reasonable.

On the Democratic Party’s left, a series of thinkers agreed with key elements of the arguments made by Jensen, Stigler, and Bork. The prominent left-wing economist John Kenneth Galbraith argued that big business—or “the planning system” as he called it—could in fact be a form of virtuous socialism. Their view of political economics was exactly the opposite of Patman’s and the other populists. Rather than distribute power, they actively sought to concentrate it. Galbraith for instance cited the A&P chain store, which, rather than the political threat Patman had decried, Galbraith declared should be recognized as a vehicle for consumer rights and lower prices. His theory was called “countervailing power.” Big business was balanced by those subject to it: big government and big labor. Inserting democracy into the commercial arena itself through competitive markets was “a charade” and “the last eruption of the exhausted mind.” Anti-monopoly measures had never worked; they were a “cul-de-sac” for reformist energy, leading away from the real solution of public ownership of industry. For younger Democrats, the key vector for these ideas was an economist named Lester Thurow, who organized the ideas of Galbraith, Stigler, Friedman, Bork, and Jensen into one progressive-sounding package. In an influential book, The Zero-Sum Society, Thurow proposed that all government and business activities were simply zero-sum contests over resources and incomes, ignoring the arguments of New Dealers that concentration was a political problem and led to tyranny. In his analysis, anti-monopoly policy, especially in the face of corporate problems was anachronistic and harmful. Thurow essentially reframed Bork’s ideas for a Democratic audience.

With key intellectuals in the Democratic Party increasingly agreeing with Republican thought leaders on the virtues of corporate concentration, the political economic debate changed drastically. Henceforth, the economic leadership of the two parties would increasingly argue not over whether concentrations of wealth were threats to democracy or to the economy, but over whether concentrations of wealth would be centrally directed through the public sector or managed through the private sector—a big-government redistributionist party versus a small-government libertarian party. Democrats and Republicans disagreed on the purpose of concentrated power, but everyone agreed on its inevitability. By the late 1970s, the populist Brandeisian anti-monopoly tradition—protecting communities by breaking up concentrations of power—had been air-brushed out of the debate. And in doing so, America’s fundamental political vision transformed: from protecting citizen sovereignty to maximizing consumer welfare. The Watergate Babies began to coalesce around their own sense of this new intellectual economic philosophy to deal with the stagnating economy around them. In an early sign of where it would lead, President Jimmy Carter deregulated the trucking, banking, and airline industries, with help from economist Alfred Kahn, Senator Edward Kennedy, and Kennedy’s young aide, future Supreme Court Justice Stephen Breyer. Democrats then popularized supply-side economics in a Thurow-influenced and Democrat-authored 1980 Joint Economic Committee report, “Plugging in the Supply Side.”

In 1982, journalist Randall Rothenberg noted the emergence of this new statist viewpoint of economic power within the Democratic Party with an Esquire cover story, “The Neoliberal Club.” In that article, which later became a book, Rothenberg profiled up-and-coming Thurow disciples like Gary Hart, Bill Bradley, Bill Clinton, Bruce Babbitt, Richard Gephardt, Michael Dukakis, Al Gore, Paul Tsongas, and Tim Wirth, as well as thinkers like Robert Reich and writers like Michael Kinsley. These were all essentially representatives of the Watergate Baby generation. It was a prescient article: Most Democratic presidential candidates for the next 25 years came from this pool of leaders. Not all Watergate Babies became neoliberals, of course. There were populists of the generation, like Waxman and Miller, but they operated in an intellectual environment where the libertarian and statist thinkers who rejected Brandeis shaped the political economy. Democrats and Republicans still fought. Neoliberals, while agreeing with Reagan Republicans on a basic view that the structure of corporate America should be as depoliticized and as shielded from voters as possible, still vehemently opposed Ronald Reagan on environmental policy, foreign policy, and taxes. But the very idea of competition policy, of inserting democracy into the economy, made no sense to them. Previously, voters had expected politicians to do something about everything from the price of milk to mortgage rates. Now, neoliberals expressed public power through financial markets. As libertarian and future Fed Chairman Alan Greenspan had written a decade before, “The ultimate regulator of competition in a free economy is the capital market.”

At the same time, Rothenberg noted, while they agreed with Republicans on the importance of a depoliticized economy, they also still believed in the public good. They sought an “industrial policy”—a never-quite-defined planning mechanism—to direct resources in the economy through a cooperative three-way dialogue among labor, business, and government. The government, they felt, should push the United States toward a high-tech future economy via private high-growth technology companies. This mix of central planning and private monopoly may sound odd, but it is the intellectual underpinning of both the Affordable Care Act and the Dodd-Frank Wall Street Reform Act. Although the details of both policies are influenced by a certain amount of happenstance and political give-and-take, both policies deliver social benefits through heavily concentrated private actors, which could be seen as a private form of central planning. And both laws went through committees chaired by members first elected in 1974. Clinton stripped antitrust out of the Democratic platform; it was the first time a reference to monopoly power was not in the platform since 1880. Regulatory experts organized key elements of social justice—like environmental rules, consumer protection, stability mandates, product design, and diversity directives—in this progressive framework. Faith in technocrats, the revolving door, and privatization all flowed from a belief in this basic structure to deliver social justice.

In their first five years, the 1975 class of Democrats categorically realigned American politics, ridding their party of its traditional commitments. They released monopoly power by relaxing antitrust laws, eliminating rules against financial concentration, and lifting price regulations. When Reagan came into office, one of his most extreme acts was to eliminate the New Deal anti-monopoly framework. He continued Carter’s deregulation of finance, but Reagan also stopped a major antitrust case against IBM and adopted Bork’s view of antitrust as policy. The result was a massive merger boom and massive concentration in the private sector. The success of the Watergate Baby worldview over the old populists can be seen in what did not happen in response to this quiet yet extraordinarily radical revolution: There was no fight to block Reagan’s antitrust restructuring. He reversed the single most important New Deal policy to constrain concentrations of economic and political power, and… nothing. Antitrust was forgotten, because no one was left to fight for it. When Bill Clinton took office as the 42nd president, the Watergate Babies would finally have their chance to govern. Clinton wasn’t in public office in 1975—he lost his first political election in 1974, a close race in Arkansas for a congressional seat—but he was in all other respects a Watergate Baby. Like the Watergate class, Clinton had worked for McGovern. He avoided service in Vietnam due to higher education. He was featured in Rothenberg’s The Neoliberals for his work on education reform. He read The Washington Monthly.

Clinton Democrats eventually came to reflect Dutton’s political formulation, more diverse and less reliant on the white working class. His administration looked like America—with women, African Americans, Latinos, and gays and lesbians represented—and most were educated at top universities. Thurow’s influence was also notable. Clinton stripped antitrust out of the Democratic platform; it was the first time a reference to monopoly power was not in the platform since 1880. Globalization, deregulation, and balanced budgets would animate Clinton’s political economy, with high-tech and finance leading the way. And it seemed to work. From 1993 to 2001, GDP growth averaged 4 percent, up from 2.8 percent from 1981 to 1993. The median family income increased by $6,000, with the lowest inflation rate since the 1960s. Plus, 22 million jobs were created, 7 million people came out of poverty, America saw the highest homeownership rate ever, the national debt nearly disappeared, and interest rates came down. African Americans experienced pay increases for the first time since the 1960s. Goldman Sachs called it the “best economy ever,” and BusinessWeek lauded a “New Age economy of technological innovation and rising productivity.” The administration put this additional fat of the land toward third-world debt relief, student aid, empowerment zones, and community block grants. (When George W. Bush came into office after Clinton, The Onion’s headline read, “Bush: ‘Our Long National Nightmare of Peace and Prosperity is Over.’”) A West Wing generation learned only Watergate Baby politics, never realizing an earlier progressive economic tradition had even existed. At the end of his presidency, Clinton explained his success. He praised Greenspan’s stewardship of the Federal Reserve. He said that the key to noninflationary growth was ensuring that workers did not demand raises beyond the rate of productivity, while unleashing businesses to pursue the most profitable lines of investment through deregulation and globalization. He implicitly touted the theory of capital shortage: Inflation resulted from overregulation and deficits, which took money out of the hands of businesses. Putting money and power back into the hands of businesses with deregulation and a balanced budget led to low interest rates, massive corporate profits, productivity growth, and broad prosperity. Bork and Thurow, in other words, were right.

Clinton’s policy framework diverged with that of his Republican predecessors in many ways, not just on social policy but also on raising marginal tax rates on the wealthy. In terms of concentrations of power in the private sector, however, it was more a completion of what Reagan did than a repudiation of it. From telecommunications to media to oil to banking to trade, Clinton administration officials—believing that technology and market forces alone would disrupt monopolies—ended up massively concentrating power in the corporate sector. They did this through active policy, repealing Glass-Steagall, expanding trade through NAFTA, and welcoming China’s entrance into the global-trading order via the World Trade Organization. But corporate concentration also occurred in less-examined ways, like through the Supreme Court and defense procurement. Clinton Library papers, for example, reveal that the lone Senate objection to the Supreme Court nominations of both Stephen Breyer and Ruth Bader Ginsburg was from a lurking populist Ohio Democrat, Howard Metzenbaum, who opposed the future justices’ general agreement with Bork on competition policy. And in response to the end of the Cold War, the administration restructured the defense industry, shrinking the number of prime defense contractors from 107 to five. The new defense-industrial base, now concentrated in the hands of a few executives, stopped subsidizing key industries. The electronics industry was soon offshored.

But who could argue? The concentration of media and telecommunications companies happened concurrent with an investment boom into the newest beacon of progress: the internet. The futurism, the political coalition of the multiethnic cosmopolitans, the social justice of the private centrally planned corporation—it worked. Clinton’s “Third Way” went global, as political leaders abroad copied the Clinton model of success. A West Wing generation learned only Watergate Baby politics, never realizing an earlier progressive economic tradition had even existed. Despite this prosperity, in 2000, the American people didn’t reward the Democrats with majorities in Congress or an Oval Office victory. In particular, the rural parts of the country in the South, which had been a traditional area of Democratic strength up until the 1970s, were strongly opposed to this new Democratic Party. And white working-class people, whom Dutton had dismissed, did not perceive the benefits of the “greatest economy ever.” They also began to die. Starting in 1998 and continuing to this day, the mortality rate among white Americans, specifically those without a high school-degree, has been on the rise—leaving them scared and alienated. Old problems also reemerged. Financial crises unseen since the 1920s began breaking out across the world, from Mexico to East Asia, prompted by “hot-money” flows. Deflation, rather than inflation, and a capital glut, rather than a capital shortage, started to concern policymakers. And it turns out, according to a McKinsey study, that a disproportionately large amount of the productivity gains from the remarkable computerization of the economy were the result of just one company: Walmart, the new A&P. The mega store’s economic influence “reached levels not seen by a single company since the 19th-century.” The gains of the 1990s, it turns out, were not structural, but illusory. Early in Bush’s term, the stock-market bubble burst and wages collapsed. A few years later, a global banking crisis, induced by a financial sector that had steadily gained power for 40 years, erupted. Concentration of power in the private sector, it turned out, had its downsides. By 2008, the ideas that took hold in the 1970s had been Democratic orthodoxy for two generations. “Left-wing” meant opposing war, supporting social tolerance, advocating environmentalism, and accepting corporatism and big finance while also seeking redistribution via taxes. The Obama administration has been ideologically consistent with the Watergate Babies’ rejection of populism. Modern liberal political culture epitomizes Dutton’s ideas. And its accomplishments are impressive. As late as 1995, a majority of Americans did not approve of interracial marriage. Today, gay marriage is the law of the land, and intermarriage rates are high and growing. Culturally, the United States is a far more tolerant and open society. Dealing with a financial collapse in the early years of his administration, Obama’s political-economic framework supported concentrated yet regulated financial power. From 2009 to 2010, the administration prioritized the stability of a concentrated financial system over risking an attempt to end the foreclosure wave threatening the American housing market. In the last seven years, another massive merger boom has occurred, with concentrations accruing in the hospital, airline, telecommunications, and technology industries. Progressive corporations like Google are key pillars of a cosmopolitan liberal culture. This is the world of the Watergate Babies and the libertarian and statist thinkers who shaped their intellectual understanding of it. But what intellectuals like Thurow, Galbraith, Greenspan, Bork, and so forth didn’t foresee was political disillusionment on a vast scale. In 2014, for example, voting rates in some states dropped to levels unseen since the 1820s (when property-franchise laws were in force). Meanwhile, American soldiers once again find themselves in a quagmire; this time, in the Middle East. Despite their best efforts, U.S. institutions seem as out-of-control and ungovernable as they did when the 1975 class came into office. For decades, preventing economic concentration was understood as a bulwark against tyranny. For most Americans, the institutions that touch their lives are unreachable. Americans get broadband through Comcast, their internet through Google, their seeds and chemicals through Monsanto. They sell their grain through Cargill and buy everything from books to lawnmowers through Amazon. Open markets are gone, replaced by a handful of corporate giants. Political groups associated with Koch Industries have a larger budget than either political party, and there is no faith in what was once the most democratically responsive part of government: Congress. Steeped in centralized power and mistrust, Americans must now confront Donald Trump, the loudest and most grotesque symbol of authoritarianism in politics today. “This,” wrote Robert Kagan in The Washington Post, “is how fascism comes to America.” The nation is awash in commentary and fear over the current cultural moment. “America is a breeding ground for tyranny,” wrote Andrew Sullivan in New York magazine. Yet, Trump’s emergence would not be a surprise to someone like Patman, or to most New Dealers. They would note that the real-estate mogul’s authoritarianism is not new in American culture; it is ubiquitous. It is consistent with how the commercial sphere has developed since the 1970s. Americans feel a lack of control: They are at the mercy of distant forces, their livelihoods dependent on the arbitrary whims of power. Patman once attacked chain stores as un-American, saying, “We, the American people, want no part of monopolistic dictatorship in … American business.” Having yielded to monopolies in business, the nation must now face the un-American threat to democracy Patman warned they would sow. Americans have forgotten about the centuries-old anti-monopoly tradition that was designed to promote self-governing communities and political independence. The Watergate Babies got rid of Patman’s populism for a lot of reasons. But there was wisdom there. In the 1930s, Patman said that restricting chain stores would prevent “Hitler’s methods of government and business in Europe” from coming to the United States. For decades after World War II, preventing economic concentration was understood as a bulwark against tyranny. But since the 1970s, this rhetoric has seemed ridiculous. Now, the destabilization of political institutions suggests that it may not have been. Financial crises are a regular feature of the U.S. banking system, and prices for essential goods and services reflect monopoly power rather than free citizens buying and selling to each other. Americans, sullen and unmoored from community structures, are turning to rage, apathy, protest, and tribalism, like white supremacy. Ending the threat of authoritarianism is not a left-wing or right-wing problem, and the solution does not reside in building a bigger or a smaller government. Restoring political stability means structuring society’s public and corporate institutions so they can be governed by human beings and communities. It means protecting the property rights of citizens and not confusing property with arbitrary tollbooths erected by tech billionaires. And it means understanding that protecting competitive markets and preventing concentrations of power are essential components of democracy. Fortunately, Americans are beginning to remember what was once lost. Senator Elizabeth Warren often sounds like she’s channeling Wright Patman. Senator Bernie Sanders stirred enormous enthusiasm in a younger generation more in touch with their populist souls. Republicans even debated putting antitrust back in their party platform. President Obama has begun talking about the problem of monopolies. Renata Hesse, the head of the government’s antitrust division, recently gave a blistering speech repudiating Bork’s corporatist ideas. And none other than Hillary Clinton, in an October 3, 2016, speech on renewing antitrust vigor, noted that Trump, while a unique figure, also represents the “broader trends” of big business picking on the little guy. Restoring America’s anti-monopoly traditions does not mean rejecting what the Watergate Babies accomplished. It means merging their understanding of a multicultural democratic society with Brandeis’s vision of an “industrial democracy.” The United States must place democracy at the heart of its commercial sphere once again. That means competition policy, in force, all the time, at every level. The prevailing culture must be re-geared, so that the republic may be born anew. Editor’s note: The views in this article do not represent those of the author’s employer.