Farrar, Straus and Giroux

They’d faced massive resistance from organized labour and they’d had enough. In response, these pioneers of neoliberalism drew a conclusion that has shaped our age: that a modern economy cannot coexist with an organized working class. Consequently, they resolved to smash labour’s collective bargaining power, traditions and social cohesion completely.
Unions had come under attack before – but always from paternalist politicians who had proffered the lesser of two evils: in place of militancy, they’d encouraged a ‘good’ workforce, defined by moderate socialism, unions run by agents of the state. And they helped build stable, socially conservative communities that could be the breeding ground for soldiers and servants. The general programme of conservatism, and even fascism, had been to promote a different kind of solidarity that served to reinforce the interests of capital. But it was still solidarity.
The neoliberals sought something different: atomization. Because today’s generation sees only the outcome of neoliberalism, it is easy to miss the fact that this goal – the destruction of labour’s bargaining power – was the essence of the entire project: it was a means to all the other ends. Neoliberalism’s guiding principle is not free markets, nor fiscal discipline, nor sound money, nor privatization and offshoring – not even globalization. All these things were byproducts or weapons of its main endeavour: to remove organized labour from the equation.

The attack on organized labour was punctuated by signal moments. In 1981, the US air traffic control union leaders were arrested, paraded in chains, and the entire workforce sacked for taking strike action. Thatcher used paramilitary policing to destroy the miners’ strike in 1984–5.

Those of us who lived through the defeat of organized labour in the 1980s experienced it as traumatic, but told ourselves that our grandfathers had lived through just the same. But if we step back and look at it through the kaleidoscope of long-wave theory, it is in fact unique.
The 1980s saw the first ‘adaptation phase’ in the history of long waves where worker resistance collapsed. In the normal pattern, outlined in chapter 3, resistance forces the capitalists to adapt more radically, creating a new model based on higher productivity and higher real wages. After 1979, the workers’ failure to resist allows key capitalist countries to find a solution to the crisis through lower wages and low-value models of production. This is the fundamental fact, the key to understanding everything that happens next.
The defeat of organized labour did not enable – as the neoliberals thought – a ‘new kind of capitalism’ but rather the extension of the fourth long wave on the basis of stagnant wage growth and atomization. Instead of being forced to innovate their way out of the crisis using technology, as during the late stage of all three previous cycles, the 1 per cent simply imposed penury and atomization on the working class.