"The contradictions of modern capitalism haven’t resolved themselves, as Bellamy assumed. Rather, they’ve become deeply embedded in American life, and the new economic world created after the Civil War has come to feel so natural, so inescapable, that even many of its staunchest critics have trouble imagining an alternative."
Yes. Capitalism has become a monopoly.
For a half century, from about 1920 to 1970, capitalism had competition. Communism, as an ideology, was taken seriously. There were times when it looked like the USSR might eventually outperform the US. The UK had a long-standing socialist movement.
This kept capitalism honest. For most of that period, US wages tracked productivity.
Businesses were afraid of labor, and afraid of government. If companies got too uppity,
they might be nationalized. Communism itself never worked all that well, but the threat of communism forced capitalism to perform better.
Then, in the 1970s, things changed. There was a plan, the famous Powell Memorandum, to take back America for the benefit of business.[1]
It was a radical proposal which, through heavy promotion and lobbying, became mainstream, then dominant. If you don't know what that was, go read it.
What we ended up with is postmodern capitalism, which is rather inefficient. Only 8% of the workforce is in manufacturing, while finance and marketing are larger than that. This is the tail wagging the dog.
Like most monopolies, capitalism has trouble getting out of its own way.
An economy dominated by direct labor, where labor inputs directly produce manufactured output, has a sort of built-in sanity check. Most effort goes into real output. Competition is a side effect of that. A marketing driven economy turns that on its head. It lacks a built-in sanity check. The extreme example of this is meme coins in crypto markets, which are pure Ponzi schemes and known to be such.
Almost the only other system of economic organization that seems to have worked is China, from Zhao Ziyang up to Xi Jinping's first term. Much has been written about that elsewhere.
Nobody really knows how to run a post-industrial economy. This is a problem. It leads to national leaders who look for "enemies" to blame, rather than looking into a mirror. From Xi to Putin to Trump, there are too many of those right now.
The current issue of the Economist has a boot stamping on a face on the cover, with the headline "Now what?". A very good question.
Competition, not just economic, but also cultural. Marshall Plan, but also "jim crow is making us look bad". Cold-war "they need papers to travel, while we just (anonymously) buy a ticket and that's it" revulsion and pride, later seemed less compelling. Outgroup stabilization of identity? It's struck me as odd, how narratives around current China seem different than for cold-war USSR. Less identity-threat defensiveness and self-affirming pride, more indifference, and denial, than panics and pride. We still have US vs European heath care stories. With the USSR, we had many such, but with China, not so much.
What a remarkable document! I’ve long been puzzled by the establishment reaction to the social ferment of the late 1960s and early 1970s. Powell isn’t wrong about there being a strong anti-US element to it, nor that a great deal of that sentiment originated with left wing academics, but instead of recommending reforms to the system that would make it harder to attack, he proposes that the chamber of commerce appoint a board of textbook censors! This is a full on declaration of intellectual bankruptcy, an admission that they are unable to argue against Marxists. Which seems insane to me given how terribly Marxism was working out at that very moment, compared to capitalism, in basically any axis of human well being you might choose to measure.
That plan was put into effect, and remains very influential today.
- The Heritage Foundation was part of the implementation.[1]
- Far more businesses hired lobbyists in Washington.[2] Business lobbying used to be a minor activity.
- Academic support was obtained. First, from Milton Friedman. See his famous article announcing that the social purpose of corporations is to increase profits.[3] This gave academic respectability to "Greed is good, greed works". Entire academic centers were purpose-built to push this position. The Mercatus Center at George Washington University is one such.[4] Other academic institutions were repurposed, through funding, to support this effort. The Hoover Institution is one of them.[5]
None of this is a secret, but it's not that well known.
"The contradictions of modern capitalism haven’t resolved themselves, as Bellamy assumed. Rather, they’ve become deeply embedded in American life, and the new economic world created after the Civil War has come to feel so natural, so inescapable, that even many of its staunchest critics have trouble imagining an alternative."
Yes. Capitalism has become a monopoly.
For a half century, from about 1920 to 1970, capitalism had competition. Communism, as an ideology, was taken seriously. There were times when it looked like the USSR might eventually outperform the US. The UK had a long-standing socialist movement.
This kept capitalism honest. For most of that period, US wages tracked productivity. Businesses were afraid of labor, and afraid of government. If companies got too uppity, they might be nationalized. Communism itself never worked all that well, but the threat of communism forced capitalism to perform better.
Then, in the 1970s, things changed. There was a plan, the famous Powell Memorandum, to take back America for the benefit of business.[1] It was a radical proposal which, through heavy promotion and lobbying, became mainstream, then dominant. If you don't know what that was, go read it.
What we ended up with is postmodern capitalism, which is rather inefficient. Only 8% of the workforce is in manufacturing, while finance and marketing are larger than that. This is the tail wagging the dog. Like most monopolies, capitalism has trouble getting out of its own way.
An economy dominated by direct labor, where labor inputs directly produce manufactured output, has a sort of built-in sanity check. Most effort goes into real output. Competition is a side effect of that. A marketing driven economy turns that on its head. It lacks a built-in sanity check. The extreme example of this is meme coins in crypto markets, which are pure Ponzi schemes and known to be such.
Almost the only other system of economic organization that seems to have worked is China, from Zhao Ziyang up to Xi Jinping's first term. Much has been written about that elsewhere.
Nobody really knows how to run a post-industrial economy. This is a problem. It leads to national leaders who look for "enemies" to blame, rather than looking into a mirror. From Xi to Putin to Trump, there are too many of those right now.
The current issue of the Economist has a boot stamping on a face on the cover, with the headline "Now what?". A very good question.
[1] https://archive.org/details/PowellMemorandum-AttackOnAmerica...
Competition, not just economic, but also cultural. Marshall Plan, but also "jim crow is making us look bad". Cold-war "they need papers to travel, while we just (anonymously) buy a ticket and that's it" revulsion and pride, later seemed less compelling. Outgroup stabilization of identity? It's struck me as odd, how narratives around current China seem different than for cold-war USSR. Less identity-threat defensiveness and self-affirming pride, more indifference, and denial, than panics and pride. We still have US vs European heath care stories. With the USSR, we had many such, but with China, not so much.
What a remarkable document! I’ve long been puzzled by the establishment reaction to the social ferment of the late 1960s and early 1970s. Powell isn’t wrong about there being a strong anti-US element to it, nor that a great deal of that sentiment originated with left wing academics, but instead of recommending reforms to the system that would make it harder to attack, he proposes that the chamber of commerce appoint a board of textbook censors! This is a full on declaration of intellectual bankruptcy, an admission that they are unable to argue against Marxists. Which seems insane to me given how terribly Marxism was working out at that very moment, compared to capitalism, in basically any axis of human well being you might choose to measure.
That plan was put into effect, and remains very influential today.
- The Heritage Foundation was part of the implementation.[1]
- Far more businesses hired lobbyists in Washington.[2] Business lobbying used to be a minor activity.
- Academic support was obtained. First, from Milton Friedman. See his famous article announcing that the social purpose of corporations is to increase profits.[3] This gave academic respectability to "Greed is good, greed works". Entire academic centers were purpose-built to push this position. The Mercatus Center at George Washington University is one such.[4] Other academic institutions were repurposed, through funding, to support this effort. The Hoover Institution is one of them.[5]
None of this is a secret, but it's not that well known.
[1] https://en.wikipedia.org/wiki/The_Heritage_Foundation
[2] https://academic.oup.com/book/9937/chapter-abstract/15727264...
[3] https://www.nytimes.com/1970/09/13/archives/a-friedman-doctr...
[4] https://en.wikipedia.org/wiki/Mercatus_Center
[5] https://www.hoover.org/about/hoover-story/timeline
Thank you so much for providing context; this answers a lot of questions I had about how we got to where we are today in the U.S.
Communism is in that book.