Cirque du Soleil is one of the great artistic follies of our age and one of its most baffling success stories. Four productions populate the Las Vegas Strip, while others are preparing to invade Perth, Australia; Osaka, Japan; and Ostend, Belgium. Cirque du Soleil has spawned a feature film, a reality TV series, and a theater-cum-spa in Montreal. Since decamping Quebec in 1987 with a show titled Le Cirque Réinventé ("we reinvent the circus"), it has all but banished P.T. Barnum's carnival from the imagination. Five years ago, in a desperate bid to reclaim their birthright, Barnum's heirs even produced a knock-off of the classier Canuck show— sans midway and avec fatuousness. It flopped. Meanwhile, Cirque founder Guy Laliberté—such an inspiring name!—exudes French-Canadian benevolence. He does not say, "There's a sucker born every minute." He says, "I dream of filling the planet with creativity."

Such rhapsodies, however, do no justice to the terrifying experience of Cirque du Soleil. Touring stateside these days is a show called Varekai, which in the Romany language means "wherever." Cirque's Web site describes its setting as "an extraordinary world … populated by fantastical creatures." The tickets, however, directed us to the extraordinary hamlet of East Rutherford, N.J., where most of the fantastical creatures seem to have ridden the bus in from Port Authority. I arrived a few minutes late and found the stage occupied by a small goat-man with forest leaves protruding from his trousers and his hair gelled into a three-point salute. "Pfffft!" he said, to much laughter. A few moments later, an angel dressed in white descended from the heavens. The goat-man regarded the angel with mock fury until the angel rose and began to perform trapeze stunts with the aid of a hammock. This seemed to satisfy the goat-man and he departed at stage right. Then there were some earthbound stunts from a troupe of flame-colored acrobats; children dressed in puffy suits as if they were about to train attack dogs, performing with bolas; then empty-eyed ogres dressed as samurai warriors and rhythmically stomping their feet. That brought the first act to a close.

Varekai was so profoundly jarring, so uncertain in its narrative intentions, that when the lights came up nobody in the audience could think to move. At least at the end of similarly exotic occasions—like a Megadeth concert or a White House press conference—the crowd knows when to get up. A small boy sitting a few feet to my right and using a voice reserved for pre-adolescent terror turned to his mother and shrieked, "What's going on?" He spoke for all of us.

Why does Cirque du Soleil endure? It is often claimed that Guy Laliberté created a revolutionary new art form from scratch. This ignores not only a few hundred years of European performances but the recent history of the American circus, which has over the last few decades divided into two opposing camps. The first, exemplified by Ringling Bros. and Barnum & Bailey, consists of the robust sideshow that rumbles into town trailing clowns, tumblers, a menagerie, and a thriving community of midway creeps. Spread across three rings, the performances are hectic and diffuse; the goal is for nonstop wonders. In response, outfits like San Francisco's Pickle Family Circus had by the mid-1970s begun to experiment with a more artistically minded show. They freed the animals, reduced three rings to one, and highlighted the athletic and comic skills of the troupe. Channeling the intimacy of street performers and the Italian commedia dell'arte, the Pickles and others created more modest spectacles—a "New American Circus"—that forswore spectacle in favor of an emotional connection with the audience.

Viewed from this perspective, Cirque du Soleil looks less like a reinvention than a refinement—a New New American Circus, wedged between spectacle and shoestring. Cirque's founders like to boast of humble origins: The show sprang from the mind of Laliberté, then a penniless 24-year-old fire-eater who pestered the Quebec government for grants to support his troupe. Today, Cirque du Soleil has only one ring, and the violin remains the background instrument of choice. Yet "humble" is not the first word one would choose to describe Laliberté's shows, which have a Barnum-like mandate to mesmerize. Varekai's set features dozens of bamboolike trees that performers shimmy up and down, half-visible in the Technicolor lights. Merciless New Age music plays wall-to-wall. When Cirque begins a Beatles-themed show in Las Vegas' Mirage Hotel next year, its transformation from street performance to rock concert will be complete. This is the magic of Cirque: It's artistically pure enough to please the aesthete, and yet crass enough to thrive on the Las Vegas Strip.

Crassness, of course, is one of the pleasures of the circus: You can marvel at the freaks more repulsive than yourself. Here, too, Cirque has taken Barnum's dark, crowd-pleasing impulses and refined his approach. You will see all kinds of oddities in Varekai—bloated clowns, loose-limbed children—but by wrapping them in colorful costumes and setting their movements to music, Laliberté has given them a beauty rarely afforded by the sideshow. Joel Schechter, a historian at San Francisco State University, notes that Cirque du Soleil has even lent new majesty to the contortionist. In the original run of Varekai, Olga Pikhienko balanced on her hands and wrapped her legs behind her head like a pretzel. In any other setting, this would elicit sympathy pains in the anterior cruciate ligaments. And yet in her white bodysuit, Pikhienko had a pure, almost virginal beauty: She looked like a ballerina, a delicate Lladro statuette.

Finally, there's the matter of exoticism. A great deal of Cirque du Soleil's magic comes from its unapologetic Frenchness. Or, if you prefer, its Quebecoisity. By this, I mean that Cirque du Soleil's shows make absolutely no sense at all. I studied the plot of Varekai for a solid hour before attending the performance, but by the end of the second act I was blubbering the same nonsense as the goat-man. But bafflement has its advantages. As with Blue Man Group and De La Guarda, audiences relish the idea of watching something queer and foreign—it gives the impression of highbrow culture, even if the underlying principle is nothing so much as bedlam. (Cirque motto: "Take comfort in the chaos.") As Cirque grows into a global behemoth, queerness becomes a two-way street: It reflects the cultural displacement of audience member and performer alike. In a 1990 Cirque show called Nouvelle Expérience, a clown stands alone on stage, clutching a suitcase and peering at the crowd as if he'd just flown in from Mars. After departing Cirque du Soleil's big top and blinking at the minivans rolling into the Jersey hinterlands, I recognized the feeling.