last time, all it took for the world to take just one step back from laissez-faire capitalism was
- democracies collapsing all over europe
- the great depression
- a world war (or maybe two)
- threat of imminent communist revolutions
The new deal era ended and neoliberalism took over because we had some inflation off and on for about 9 years.
Don't forget a devastating global pandemic! But for real, not only had these countries been destroyed twice and seen liberal democracy fail all around them, they also had a militant and organized working class made up of men who were experienced in extremely brutal warfare. Not to do haram generational politics but these dudes weren't fucking scared of a war, they had just fight two of them and didn't get shit out of them. What's one more, especially if you stand to gain everything?
Neoliberalism will crack because it can't offer any level of social democracy, even European countries are starting to sell off their welfare state. It could have kept going so long as nothing interrupted the cycle of credit and imperialist extraction of wealth. As soon as a major hiccough happened with the covid crash and earlier the great financial crash, it doesn't have many options to keep going. I'm pretty sure they won't shut down because it would mean an end to the cycle of credit and wages, but they also can't keep things limping along either. People already have low levels of trust in the government and capitalist institutions, capitalism is starting to struggle to provide cheap goods in the imperial metropole, it feels like things are ripe for a lot of people to radicalize.
I honestly feel like we're looking at a 1905 or 1917 in this decade (hopefully the latter).
capitalism is starting to struggle to provide cheap goods in the imperial metropole,
LMAO it can't even provide Lysol wipes. Let alone the two months we went without fucking toilet paper.
I believe that neoliberalism is the result of the falling rate of profit and a need to stabilize it before it gets too low. Michael Roberts argues this in his blog. The data shows that the rate of profit stabilized once neoliberalism was implemented in the 1980s, although it started to decline again after the great recession.
The main takeaway is that capitalism cannot support social democracy in the long term, even in the imperial core.
He has a lot of posts like this but this is one of the best ones:
https://thenextrecession.wordpress.com/2012/07/26/the-rate-of-profit-is-key/
Guess I'm gunna have to be a lib...
I have heard of the falling rate of profit explanation of stagflation before, and I still don't know whether it's true. The falling rate of profit concept is one of the (many) things I don't really understand yet, but I got the impression Marxists are divided about how far this has progressed and whether it's even a real phenomenon. It seems to me that profits will probably go up and down over time when capitalists invest or don't invest for various reasons. By invest, I mean investing in actual capacity to meet an actual demand, not as in moving numbers from this account to another. As I said I'm pretty ignorant about it.
The article doesn't really explain it very well. It presents the story, but I don't see a convincing presentation of facts here. There's a bar graph but I don't know what it's graphing or how the rate of profit is calculated.
We all know capitalists wanted to undo the New Deal from day 1, and there was a sharp increase in oil prices that (probably?) drove up prices for just about everything, and this happened to be the crisis that shifted economic policy. Eventually a crisis causes a shift. Capitalists don't need a mortal threat to want to rig the system in their favor.
Not saying it's wrong, but I just don't understand why the falling rate of profit is a better explanation than the oil one.
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Yeah I agree thats one of his more simple articles. Here is how he measures the rate of profit for the US economy :
Readers of my blog and other papers know that I prefer to measure the rate of profit by looking at total surplus value in an economy against total private capital employed in production; to be as close as possible to Marx’s original formula of s/C+v. So I have what I call a ‘whole economy’ measure, based on total national income (less depreciation) for surplus value; net non-residential private fixed assets for constant capital; and adding in employee compensation for variable capital. This is what might be called a general or gross rate of profit. The rate of profit will be lower if we look only at the corporate sector, or the non-financial corporate sector, before or after tax etc.
I find the rate of profit argument to be convincing because it seems the most logical explanation for why the system seems to be teetering towards decline and collapse. The capitalists wouldn't want to risk a rise of socialism and the decline of imperialism just to 'rig the system in their favour', there must be something forcing them to implement these policies.
