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Contemporary youth and counterculture

In the wake of Sgt. Pepper, the underground and mainstream press widely publicised the Beatles as leaders of youth culture, as well as "lifestyle revolutionaries". In Moore's description, the album "seems to have spoken (in a way no other has) for its generation". An educator referenced in a July 1967 New York Times article was reported to have said on the topic of music studies and its relevance to the day's youth: "If you want to know what youths are thinking and feeling... you cannot find anyone who speaks for them or to them more clearly than the Beatles."

Sgt. Pepper was the focus of much celebration by the counterculture. American Beat poet Allen Ginsberg said of the album: "After the apocalypse of Hitler and the apocalypse of the Bomb, there was here an exclamation of joy, the rediscovery of joy and what it is to be alive." The American psychologist and counterculture figure Timothy Leary labelled the Beatles "avatars of the new world order" and said that the LP "gave a voice to the feeling that the old ways were over" by stressing the need for cultural change based on a peaceful agenda. According to author Michael Frontani, the Beatles "legitimiz the lifestyle of the counterculture", just as they did popular music, and formed the basis of Jann Wenner 's scope on these issues when launching Rolling Stone magazine in late 1967. Further to Lennon wearing an Afghan sheepskin coat at the album launch party, "Afghans" became a popular garment among hippies, and Westerners increasingly sought out the coats on the hippie trail in Afghanistan.

McCartney's LSD admission formalised the link between rock music and drugs, and attracted scorn from American religious leaders and conservatives. Vice-president Spiro Agnew contended that the "friends" referred to in "With a Little Help from My Friends" were "assorted drugs". As part of an escalating national debate that triggered an investigation by the US Congress, he launched a campaign in 1970 to address the issue of American youth being "brainwashed" into taking drugs through the music of the Beatles and other rock artists. In the UK, according to historian David Simonelli, the album's obvious drug allusions inspired a hierarchy within the youth movement for the first time, based on listeners' ability to "get" psychedelia and align with the elite notion of Romantic artistry. Harrison was eager to separate the message of "Within You Without You" from the LSD experience, telling an interviewer: "It's nothing to do with pills... It's just in your own head, the realisation."

The Beatles' presentation as Sgt. Pepper's band resonated at a time when many young people in the UK and the US were seeking to redefine their own identity and were drawn to communities that espoused the transformational power of mind-altering drugs. In the Haight-Ashbury district of San Francisco, the recognised centre of the counterculture, Sgt. Pepper was viewed as a "code for life", according to music journalist Alan Clayson, with street people such as the Merry Band of Pranksters offering "Beatle readings". American social activist Abbie Hoffman credited the album as his inspiration for staging the attempted levitation of the Pentagon during the Mobe 's anti- Vietnam War rally in October 1967. The Byrds ' David Crosby later expressed surprise that by 1970 the album's powerful sentiments had not been enough to stop the Vietnam War.

Sgt. Pepper informed Frank Zappa 's parody of the counterculture and flower power on the Mothers of Invention's 1968 album We're Only in It for the Money. By 1968, according to music critic Greil Marcus, Sgt. Pepper appeared shallow against the emotional backdrop of the political and social upheavals of American life. Simon Frith, in his overview of 1967 for The History of Rock, said that Sgt. Pepper "defined the year" by conveying the optimism and sense of empowerment at the centre of the youth movement. He added that the Velvet Underground 's The Velvet Underground & Nico – an album that contrasted sharply with the Beatles' message by "offer no escape" – became more relevant in a cultural climate typified by "the Sex Pistols, the new political aggression, the rioting in the streets" during the 1970s. In a 1987 review for Q magazine, Charles Shaar Murray asserted that Sgt. Pepper "remains a central pillar of the mythology and iconography of the late '60s", while Colin Larkin states in his 1989 Encyclopedia of Popular Music: " turned out to be no mere pop album but a cultural icon, embracing the constituent elements of the 60s' youth culture: pop art, garish fashion, drugs, instant mysticism and freedom from parental control."