Haymarket Books

post-1970 change in the conditions and lives of American women changed their families and households in ways that also altered US capitalism. Briefly, the mass movement of adult women, mostly married and with children, into paid, mostly full-time labor transformed households and families. Wives and mothers had long held disproportionate responsibility for maintaining the emotional integrity of the traditional nuclear family and the physical integrity of the traditional household

US families discovered that doing more hours of paid labor and covering the associated extra costs left too little net income to offset the impact of stagnant real wages. The American Dream increasingly moved beyond working families’ reach. Threatened with the prospect of slowing consumption, advertisers intensified their association of personal worth and success with the extent of one’s consumption of commodities. Without rising real wages, and unable to earn enough with extra hours of labor, US households turned en masse to the only remaining way to achieve the American Dream: borrowing.

So now, by following the money, we can grasp the economic interconnections that drove world capitalism into crisis. First, stagnant real wages and rising productivity sharply altered the distribution of income and wealth in favor of profits and increases in wealth for the rich. Second, the working class responded by borrowing vast sums to postpone the end of rising consumption that would have had been necessary if they relied only on their wages. Third, employers and the rich lent back to the workers, via ABS, a portion of the extra profits they made from real-wage stagnation. For thirty years, these interconnections generated enough gains—in the forms of rising debt-based consumption for the masses and rising wealth for the employers and the rich—to reproduce the system. But the pattern was unsustainable.

Whether consciously or not, such a focus on misbehavior by the state or by criminals serves to avoid blaming the system and its rules and regulations, its structure of rewards and penalties. Pinpointing “the bad guys” perpetuates the ancient art of scapegoating, deflecting blame on convenient targets when in fact the system is the problem.

For centuries, in every capitalist country, individual economic actors have been charged, convicted, and imprisoned for violating some law, and businesses have been shut down or sanctioned for similar reasons. But the individuals and businesses that follow sooner or later replicate their behavior.

Capitalist societies can continue to monitor, identify, regulate, and prosecute economic misdeeds, but doing so never will prevent cycles and crises. It never has. Overcoming the systemic roots and nature of capitalist crises requires a change in the economic system.

I will begin by noting how corporations and the rich used their rising profits and their falling tax burdens to shape politics. As they altered the tax system to their advantage, they worked hard to define “the tax issue” politically as having nothing to do with shifting burdens from one social group to another. Politicians and politically motivated think tanks inundated public discourse with affirmations that all taxes were excessive burdens that sustained wasteful bureaucrats.

Most Republicans preferred tax cuts for business and the rich (versus average citizens) more than most Democrats, and most Republicans preferred cutting government employment and social welfare services more than most Democrats. But both agreed on far more than they disagreed on.

government spread the ideological message that the socialization or nationalization of banking had not happened, that banks unable to function without massive government supports were nonetheless still “private enterprises.” The government’s supports were always referred to as “temporary,” although no one could know how long each of them might be continued or whether and when they might need to be resumed.

Depression provoked congressional hearings that revealed extensive conflicts of interest and fraud committed by banks and their investment subsidiaries.