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In support of this bold assertion of popular empowerment, Auchincloss singled out a succession of heroes who had changed things over the course of the century: suffragettes, feminists, the anti-war and civil rights movements, and, finally, "the entrepreneurs", this last group illustrated with a drawing of Bill Gates. Although his story brimmed with 30s populist stylings, Auchincloss took pains to point out that the landmark economic reforms of that decade weren't nearly as wonderful as everyone thought. And while the story hailed the richest man in the world as a champion of the common people, the labour movement was not mentioned at all.

Indeed, wherever one looked in the 90s, entrepreneurs were occupying the ideological space once filled by the noble sons of toil. From the pages of Newsweek to the smiling bubble-talk of CNBC, the cable channel devoted to covering the stock market, it was businessmen who were sounding off against the arrogance of elites, railing against the privilege of old money, protesting about false expertise and waging relentless, idealistic war on the principle of hierarchy wherever it could be found.

From Deadheads to Nobel-laureate economists, from palaeo-conservatives to New Democrats, American leaders in the 90s came to believe that markets were a popular system, a far more democratic form of organisation than (democratically elected) governments. This is the central premise of what I call "market populism": that in addition to being mediums of exchange, markets are mediums of consent. With their mechanisms of supply and demand, poll and focus group, superstore and internet, markets managed to express the popular will more articulately and meaningfully than did mere elections. By their very nature markets conferred democratic legitimacy, markets brought down the pompous and the snooty, markets looked out for the interests of the little guy, markets gave us what we wanted. As journalist Robert Samuelson announced in 1998, "the Market 'R' Us".

One of the reasons market populism prospered so fantastically in the 90s was that it was an extremely useful doctrine. As business leaders melded themselves with the common people, they discovered powerful new weapons to use against their traditional enemies in government and organised labour. Since it was markets that expressed the will of the people, virtually any criticism of business could be described as an act of "elitism" arising out of despicable contempt for the common man.

According to market populism, elitists were not those who, say, watch sporting events from a private box, or spend their weekends pottering on a computer-driven yacht, or fire half their workforce and ship the factory south. No, elitists were the people on the other side of the equation: the trade unionists and Keynesians who believed that society could be organised in any way other than the market way. Since what the market does - no matter how whimsical, irrational or harmful - was the Will of the People, any scheme to operate outside its auspices or control its ravages was by definition a dangerous artifice, the hubris of false expertise.

This fantasy of the market as an anti-elitist machine made the most sense when it was couched in the language of social class. Businessmen and pro-business politicians have always protested about the use of "class war" by their critics on the left; during the 90s, though, they happily used the tactic themselves, depicting the workings of the market as a kind of permanent social revolution in which daring entrepreneurs endlessly toppled fat cats and picked off the millions of lazy rich kids.

The scions of ancient banking families were said to be finding their smug selves wiped out by the streetwise know-how of some kid with a goatee; the arrogant stockbrokers of old were being humiliated by the e-trade masses; the Wasps with their regimental ties were getting their asses kicked by the women, the Asians, the Africans, the Hispanics; the buttoned-down whip-cracking bosses were being fired by the corporate "change agents"; the self-assured network figures were being reduced to tears by the vox populi of the web. A thousand populist revolts shook the office blocks of the nation, and the great forums of corporate ideology overflowed with praise for in-your-face traders from gritty urban backgrounds, for the CEO who still retained the crude manners of the longshoreman.

It was a strange faith but, by the middle of the 90s, it was a populism in the ascendancy. Everyone seemed to find what they wanted in the magic of markets. Markets were serving all tastes, markets were humiliating the pretentious, markets were permitting good art to triumph over bad, markets were overthrowing the man, markets were extinguishing discrimination, markets were making everyone rich.

In the right hands, market populism could explain nearly any social phenomenon. The "tiger economies" of Asia had collapsed, market populists told us, because they had relied on the expertise of elites rather than the infinite wisdom of the people. Similarly, the economies of western Europe were stagnant because the arrogant aristocrats every red-blooded American knows run those lands were clinging to old welfare-state theories. The House of Morgan was swallowed up by Chase Manhattan because it was a snooty outfit that had foolishly tried to resist the democracy of markets.

More important, market populism proved astonishingly versatile as a defence of any business beset by meddling critics in government, union or environmental movement. On the Wall Street Journal editorial page, one saw market populism wheeled out to defend the advertising industry, to defend the auto industry, to bolster demands that the software industry be permitted to import more workers, to hail stock options as the people's true currency and, most remarkably, to defend Microsoft from its antitrust pursuers. Since a company's size (like the value of a billionaire's pile) was simply a reflection of the people's love, antitrust itself was fundamentally illegitimate, a device used by elitist politicians, the Journal once proclaimed, "to promote the interests of the few at the expense of the many".

Even after the Microsoft verdict had been announced, the paper continued to assert that the company "should have argued that we have a monopoly because our customers want us to have one". And when Al Gore began annoying the men of privilege last autumn with his (admittedly feeble) attacks on big business, the paper responded in the most direct manner imaginable. "Mr Bush should tell Americans [that] when my opponent attacks 'big corporations', he's attacking you and me."

Market populism proved particularly useful in the workplace. Whether you toiled for one of the great American corporations, for some zesty startup, or on an assembly line, workers in the 90s couldn't help but realise that class power was lopsided as never before. Management held all the cards in the 90s, and CEOs were able to work their will without encountering much organised resistance. The corporation "delayered", throwing off entire levels of white-collar workers; it "disaggregated", ridding itself of its extraneous operations; it embraced "flexibility", replacing career employees with zero-benefits temps; it "outsourced" every possible piece of work to the lowest bidder; it "re-engineered" its various processes in a less labour-intensive way; it "disintermediated", used new technology to cut out middlemen and move "back office" jobs to the lowest-paid climes on earth. Unions shrank before professionally directed assaults and, in the US, organised workers finally slipped below 10% of the private sector workforce. Meanwhile, the remuneration awarded to American CEOs rose to astronomical levels. In 1999, corporate chiefs were paid, on average, some 475 times what their blue-collar employees took home.

Yet to read the management literature of the decade, what was really going on in the world of the corporation was democratisation. Whatever recommendations individual gurus might make regarding the structure of the workplace, the management literature of the 90s almost universally insisted that its larger project was liberation, giving a voice to the voiceless, "empowering" the individual, subverting the pretensions of the mighty, and striking blows against hierarchy of all kinds.

Management theory performed this reversal by redefining the workplace power struggle. The problems of the corporation weren't its upward redistribution of wealth or its refusal to bargain with its workers collectively or the massive disparities between bosses and bossed; the real problems were moral ones - "elitism", "arrogance", "certainty." And these were to be solved by embracing the Jacobin forces of the market ever more closely, by throwing out such distasteful relics of the past asloyalty and lifetime employment.

Understood this way, the true warriors for workplace democracy weren't trade unionists; they were the new breed of executives - the ones who abjured stuffy suits for casual wear, the zany "change agents", the makers of wow. Readers of new business magazines like Fast Company and Business 2.0 thrilled to tales of caring CEOs, of bosses who sat in cubicles like everyone else, of white-collar workers who demanded the right to drink beer and wear jeans in the office.

The entrepreneur, by virtue of his or her close relationship to the market, was the true bearer of populist humility - and also the true hero of the common man. Über-guru Tom Peters claimed that, in terms of the populist lexicon, the dotcom millionaires and the working class had switched moral positions - even stretching this absurd argument so far as to apply the populist keyword "parasite" to describe the very folks who once made up the labour movement.

"When I began working as a management consultant at McKinsey & Co in 1974," he wrote in 1997, "'we' (the professional service people - accountants, lawyers, consultants, ad agency denizens) were considered the parasites... living off the sweat of real people's brows. Times have changed. And how! The nerds have won! Bill Gates is the richest man in the world! It is the Age of Brainware. Now the people who lift 'things' (the rapidly declining fraction) are the new parasites living off the carpal-tunnel syndrome of the computer programmers' perpetually strained keyboard hands."

Again Bill Gates's money is thought, unproblematically and transparently, to endow him with the approval of the people, to establish him as vicar of the general will. This may seem silly at first, but it was a logic that yielded results. By insisting that bosses were the real commoners, that outsourcing was an act of humility, that downsizing was just an opportunity to pursue your personal authenticity, that corporations were, by virtue of their attunement to market forces, bearers of a kind of soulfulness that government and union could never touch, management theory brought an unprecedented degree of workplace quiescence.

It was thanks, at least in part, to the hyperbolic prose of Tom Peters and his colleagues that so many of the downsized agreed that what had happened to them was right, was necessary, was justified; it was thanks to the revolutionary crowing of magazines like Fast Company that so many left the parking lots of their former employers in such an orderly fashion, talking confidently about their impending careers as "free agents". Even more tellingly, in a decade when unemployment got as low as 4% - making management extremely vulnerable to demands for increased wages - union organising and strike activity remained at their lowest points since the 1920s. That the US was able to endure the wrenching upward redistribution of wealth that it did in the 90s with only small, localised outbreaks of social unrest must be chalked up, in part, to the literature that explicitly sought to persuade the world of the goodness and the justice of that redistribution.

Market populism did equally valuable service in the passionately, stridently optimistic rhetoric of the rising stock market. As everyone knows by now, the 90s was supposed to have been the age of Wall Street's "democratisation". The myth went like this. Once upon a time the world of finance had been a place of elites, of unbridled snobbery, of wealthy Wasps in suits, sneering at the common people and keeping this glorious thing, the stock market, all to themselves. But the great bull market of the 1990s, the myth continues, was something different: a bull market of the people, a powerful tool for economic democracy. This bull market was thought to be the Götterdämmerung of the ruling class, the final victory of the common people over their former masters.

Sometimes this "democratisation" was spoken of as a sort of social uprising, a final routing of the snobbish old-guard culture of Wall Street. Sometimes it was said to be the market itself that had worked these great changes, that had humiliated the suits and enriched all sorts of colourful proletarians. Sometimes it was described as a demographic phenomenon, a reflection of the vast percentage of the nation's population that was now entrusting their savings to the market. But however you looked at it, one thing was sure. The common people, we were told, understood this market, warmed to it instinctively the way they would a beloved relative.

At the same time, we were told, the old-money elites just didn't get it, and they flailed and failed as the little people paid them back for centuries of snooty hauteur. The decade was filled with corny tales of down-home investors whipping the pros. In the early 90s we thrilled to stories of Warren Buffett, the down-home billionaire; of Peter Lynch, the man who told us to forget about the complex stuff and invest in the companies that made our favourite everyday products; and of the Beardstown Ladies, a group of small-town Illinois grandmas whose local investment club was said to have racked up some gigantic figure or other by investing in humble, populist companies like Wal-Mart. The point of the episode wasn't the ladies' investing advice, which was fairly rudimentary (like how to read the stock listings in the newspaper), but instead a moral lesson, a demonstration that even society's feeblest, lowliest and worst-informed - kindly grannies from the ever innocent small-town midwest - could beat, as they put it, the "self-important MBAs" of "New York, or Zurich, or Tokyo".

In the late 90s we were deluged with tales of average people prospering hugely by investing in hi-tech stocks: the secretaries who had been transformed into mil lionaires by the grace of Microsoft; the college dropouts whose stock options had showered on them the kind of money most of us can't even imagine. The fantastic appreciation in internet shares in 1998 and 1999 was said to be a special sort of boom, one that was only comprehensible to the unpretentious. While the hated "experts", those cosmopolitan sophisticates who are the enemy in all populist narratives, carped and doubted, the common people trusted their new corporate heroes without reservation or cynicism. While the old money looked at the numbers and sold short, We, the People got it. The internet was democracy itself, the golden promise of interactivity descended unto earth to help usher us into a populist utopia. And in each of the dotcom favourites we perceived some distillation of market populism: an online bookstore that was supposed to be the apotheosis of democratic business practice; a vendor of airline tickets that empowered consumers; a flea market without walls that we fancied a "community" in the most exalted sense.

None of it really worked out as promised, of course. Just as the Beardstown Ladies were later revealed to have exaggerated their gains, so all the overheated talk about the infinite democracy of cyberspace turned out to be the concerted puffery of an industry whose real source of optimism was its discovery that it was able to palm off one overpriced flotation after another on the most credulous market in decades.

As the Nasdaq fell some 50% from its high in March 2000, we learned the appalling price of Wall Street's phoney populism. But it may have been too late. In the political sphere, Wall Street was able to parlay what seemed to be overwhelming public support into victory after victory over its traditional antagonists in government. Antitrust enforcement was allowed to go slack (the Microsoft case notwithstanding), the Glass-Steagall banking act was repealed, and - glory of glories - a Republican president was elected promising to "privatise" social security, to turn over to Wall Street the vast public funds that secure the nation's retirement.

Nor was all of this confined to the US. Wherever the "New Economy" touched its magic finger, it seems, the same perverse cultural logic appeared, recasting economic discussion along these oddly inverted democratic lines. In Britain it was most clearly identifiable in the person of Tony Blair, a man who has so perfected the fake populist style that he hands out honours to humble lollipop ladies with one hand while privatising the Underground with the other. But it also informs the work of political theorists like Charles Leadbeater of Demos, whose 1999 "New Economy" book Living on Thin Air asserts that democracy and the dawning "knowledge economy" are somehow intrinsically linked. Even while admitting that the "New Economy" wildly skews the distribution of a society's wealth, Leadbeater insisted that it was nonetheless a more democratic mode than its predecessor, since it thrived on "a culture of dissent, dispute, disrespect for authority, diversity and experimentation". Sneer at the fat cats all you want - just don't interfere with their stock options.

Tellingly, Leadbeater also suggested that to fully swallow the ways of the "New Economy", Britain would have to adopt a new "narrative", an "engaging and compelling account of [the] future that captures the popular imagination, and which people can buy into, endorsing and enacting it in their everyday lives". And it was as a narrative of social legitimacy that market populism has proven most useful. Looking out at what has been the most lopsided prosperity in our lifetimes, market populism told us that all was well, that with the demise of the welfare state and the crushing of union power a newer, more extreme form of economic democracy was being born. Because our billionaires were so cool, because our websites were so very interactive, this was the most democratic of all possible worlds.