In the 1970s, the Left Put a Good Crisis to Waste

Review of Counterrevolution: Extravagance and Austerity in Public Finance by Melinda Cooper (Zone Books, 2024)

The long 1970s crisis demonstrated that Keynesian “managed capitalism” was no longer viable. The accumulating contradictions of that order demanded a restructuring in the form of neoliberal capitalism. The rise of finance in this new regime was critical for supporting globalization, restoring class discipline, increasing the rate of exploitation, and boosting profits — even as fewer American workers were employed in industrial jobs and working-class life became ever more precarious. These historic shifts spurred the development of a range of new theories, from speculation that the nation-state was in decline at the hands of all-powerful multinational corporations, to notions of the “hollowing out” of the productive economy as a parasitic and/or unproductive financial sector replaced commodity production with the accumulation of “fictitious” value. Both theoretical strands tended to minimize the role of interconnected state and financial power in restoring accumulation.

Most emblematic has been the work of the historical sociologist Robert Brenner, who has strangely persisted in claiming that the 1970s crisis was, in fact, never resolved. Instead, he insists, we have been living through a five-decade-long (and counting) crisis. More recently, he has argued (alongside coauthor Dylan Riley) that this has culminated in “political capitalism,” in which the profligacy of central banks props up an unproductive financial sector that does little more than extract value from the “real” industrial economy. What we have seen since 2008, he claims, is not so much economic recovery,…