The first thing that hits you when you arrive in South Miami Beach is how exuberantly the town has turned itself into a theme park where personal indulgence is celebrated as public spectator sport. You can see it even first thing in the morning. At eight o'clock on a Saturday, with the sun still sitting low in the sky, a crew of landscapers begins to unbolt thirty-foot royal palm trees from flat-bed trailers that line the block; by dusk the barren construction site will be transformed into an oasis. A pack of young clubbers, the girls in unimaginably short skirts and the boys dressed like blackshirts, wanders down the strip, sipping streetside café cubano to keep last night alive. Storefronts offer entire wardrobes in spandex, suits spun from silk as fine as vapors, and t-shirts reading "Give Me Your Best Shot." There is already activity at the henna tattoo parlor.

Meanwhile the News Café, the strip's focal point, exudes the lure of forbidden fruit. Opera arias play on the juke box, cigars that look Cuban get sold beneath the cash register, a hauntingly beautiful woman with sculpted cheekbones looks bored with her companion. Therein lies the secret to the district's allure: South Beach does not simply embrace fin-de-siècle American popular culture, it vigorously extends its boundaries.

I realized this during a recent visit, my first in six years. The aesthetic of the strip is "licensed" libido—erotic indulgence that is no longer an act of rebellion. From South Beach it infects American mass culture, further challenging the mainstream to acknowledge that pleasure is fun. Psychologically as well as geographically this place is a beachhead, the launching point for an assault on middle America's self-righteous pride in denial of the senses. This process of contamination deserves a name: The South Beach Effect.

At first glance, it seems ironic that a prime incubator for a new vitality is a place that just a few years back one visited at considerable peril. (On second thought, it's not so ironic-the energy that pulsates through pop culture usually bubbles up from the bottom). Twenty years ago, South Beach was desolate and dangerous, populated by elderly poor and Marialitos, Cuban criminals Castro released as his revenge on Florida. In the late 1970s, when I was a reporter for the Miami Herald, the only attractions in South Beach were drugs, prostitutes, and the stone crabs at Joe's. For half a million dollars, you could have your pick of any property in the neighborhood.

How things have changed! Today it's as if a social neutron bomb had leveled the place, leaving the buildings intact but eliminating the people. The old folk who rocked away their days on the porches of the residential hotels are gone. The same Art Deco buildings, renovated to mint condition, now book for hundreds of dollars a night. Euro-chic is the local patois, Spanish the lingua franca. Fashion shoots are so commonplace that stunning models, lulling about the terrace of the News Cafe while sipping their morning coffee, barely arouse curiosity.

Designer Gianni Versace, "the impassioned shameful opulent titillating daredevil magician of art and artifice," according to one biographer, put South Beach back on the map. In the late 1980s, he rehabilitated a vast ocean-front site into a private palazzo; with 700 square feet of murals in his bedroom alone, the compound was worthy of a Medici prince. It was there, in fact, that his assassin killed him, stalking him from his habitual early morning visit to the News Cafe. In death the designer became a media commodity accessible to ordinary Americans to whom he was previously unknown. Thus sanitized, tourists now gather daily to snap pictures of themselves standing beside the monumental iron gates of his mansion.

I sensed, as I watched, that there was more going on here than just a brush with the famous. In an earlier era of American culture, Versace's sybaritic ways might have been cause for shunning. Now, however, there are fewer cues in the popular culture to tell people how to feel about the sensual. The ground rules are slipping away. We are less sure whether a Versace-esque life style is a form of moral decay we abhor or an existence we envy. Which is, in a nutshell, is the dilemma posed by the South Beach Effect.

Hollywood saw this coming, transporting the gay French comedy La Cage Aux Folles to South Beach for its American remake, The Birdcage. But the film played too fast and loose as farce to be taken seriously. With the Versace mansion, we're talking real!

• • •

Which is why the South Beach Effect, as it gathers momentum, could put serious stress on the cultural bedrock. For most of our history, a public celebration of Eros has been buried in the substrata, unacknowledged except as a subversive influence that the mainstream has furiously resisted.

The custodians of propriety have traditionally goaded American popular culture into line, demonizing most variations of pleasure. Pockets of resistance arise; movies and television portray strays who have wandered off to luxuriate in the senses. That's always been one appeal of New York, "nasty Gotham," a circumscribed landscape of danger. But these odd hedonists never last long. They are typically understood to be aberrations, and having strayed too far from the Protestant work ethic they predictably come to a bad end. Mainstream advertising pretends to be sexy, but on Madison Avenue there is less celebration than icy control. The bikini-clad women on beer commercials and the buffed boys wearing Calvin Klein boxers on the side of buses are images of frozen prurience, cold and distancing. Even unclothed they are unapproachable.

The South Beach Effect operates according to a wholly different principle. The half-mile beachfront Collins Avenue strip simmers with the heat of a tropical sun and moves with a Latin shuffle. Even the municipal car park, a structure which in every other city is poured-concrete ugly, is grandly landscaped with hanging veins. The visual environment—human, natural, architectural—puts a premium on beauty, rewarding the eye with something lovely and colorful. In the same way that Disney World tightly manages the visual spectrum of its customers to exclude anything but sterilized techno-stupor, South Beach drapes itself in human-scale sensuality.

There have always been isolated pockets of hedonism catering to the decadent rich. But South Beach's significance is that it's not off-limits to us plain folks: this is part of the mainland United States! Indeed, the allure is such that the national chains—Gap, Benetton, and Banana Republic—are moving in. This isn't good news: who wants to see Ocean Drive become just another strip-mall? But for the moment the scene is sufficiently exotic to entice Middle America with the vision of an alternative approach to life.

To appreciate the vector of contagion, consider the notes of another recent visitor, a woman who describes herself as straight and corporate, the antithesis of a hedonist. During her trip to South Beach she e-mailed back the following dispatch:

ended up @ Madonna's place, The Blue Door, very cool modern, deco, futuristic, high impact … HUGE floor to ceiling columns with white, flowing, curtain partitions dividing different moods/areas … most beautiful pool table I have ever seen … beautiful people everywhere … ate @ a sushi bar in the lobby and the drinks were incredible.

This from a woman who admits she does little but work, whose life embodies the stern virtues of conservatism. The South Beach Effect must harbor the seeds of subversion when it can tempt the likes of her.

Another favorite club calls itself Chaos. To those who have already crossed over the line, the name suggests faith in the vitality of random diversity. For those entrenched on the other side—think of the Christian Right, or its Republican mouthpieces in Congress—it's a terrifying prospect of a social order stripped of moral certitudes. Between them rises the South Beach Effect, the great divide. And popular culture is the looming litmus test.