Tech suppresses class consciousness by giving people a false sense of what's possible in terms of upward mobility. To point out the obvious, this is what draws a lot of writers to Substack. This conditioning starts young — a lot of little kids these days aspire to be influencers. The idea that anyone with enough inherent talent can use platforms and AI to bootstrap their way to a steady income is nonsense, but it's incredibly seductive, especially to the "uncredentialed" / non-degree-holding class.
In terms of labor, I'm partial to theorizations of cognitive capitalism and psychopolitics as frameworks for understanding how the mind becomes standing reserve for value extraction via tech addiction. There's no "real" value there, but tech addiction fuels the production of digital capital through the generation of data that can be used to build AI. The fact that data are non-rivalrous goods makes this model all the more appealing for the rentiers. And tech addiction has a psychological wasting effect that feeds into fragmentation and disintegration (socially, politically, economically) which is, again, useful for capitalists.
Very interesting and plausible, but raises two (more) questions. 1. Can't say that capital has "turned" to rent-seeking, rent-seeking by all available means has been a major activity since forever. And last time I looked, which was the recent quarterly reports, big US corporations are making solid profits and rich folks are doing swell, thanks. The question is how the burden of the new national entrants and overcapacity has been foisted entirely on the 90% of workers with lower incomes. 2. Speaking of technology, the growth of service relative to manufacturing is the elephant in the room here, lots of "class" implications, have to include it in the analysis.
There are very many interesting comments here, but one confusion I've seen in several comments. The key issue is the rate of profit in manufacturing not "profitability" in general, nor the mass of profits. It is also important to emphasize that the argument does not rely on the claim that the rate or profit has continually declined, nor is it dependent on the notion of the increasing organic composition of capital. Overcapacity is central, and the data show that this is a very serious problem. The fundamental image of capitalism upon which the entire argument rests is that of a system of anarchic, unplanned, and future oriented investment.
I would happily leave the profit rate out of the discussion, since it seems to be an issue that divides people who otherwise vigorously agree on quite a few fundamental points. If there is a substantive issue at stake here, I continue to think it is not the "profit rate" in any elaborate sense, but the more basic relationship question: in virtue of what magnitude is excess capacity excessive? One way of approaching the question stresses the relationship between productive capacity and effective demand. Here is Ben Kunkel, in his important (for me, at least) 2014 essay on Brenner:
"excess supply can presumably be addressed in one of two ways: by reducing supply to the level of demand (through the envisioned shakeout of uncompetitive firms), or by raising demand to the level of supply. Excess capacity would disappear with the circumstance of adequate overall demand. In this sense, the fatally overpaid workers of the past forty years—as they are conceived of across the political spectrum—might be reconceived as fatally underpaid, not just from their own point of view but from the standpoint of systemic requirements for sustained growth. "
And: "only a rising total wage bill during the ’70s and after could have ensured consumer demand consistent with the maintenance of full employment—and a sustainably high rate of return."
Here, there is a causal channel linking (1) social structures of accumulation to (2) the distribution of income among social classes to (3) the level and composition of final demand and (4) to the possibility of overcoming, resolving, or working through the related problems of unemployment, overcapacity, underconsumption, and -- yes -- even the possibility of maintaining a "sustainably high rate of return."
But Kunkel's reading of Brenner is not the only one possible, nor does it seem to me to be the animating spirit behind the original Brenner-Riley theses, which rejects aggregate demand management in principal as a way of doing anything except causing inflation.
I'm curious how much of the above we see eye to eye on, or if I've missed the point entirely here.
Just seeing this now (I've been deep inside myself trying to finish the book, and perhaps also hiding from the world we currently live in).
I really appreciate the writeup, and I am especially thrilled to see your reference to Crotty (1993)! I've long tried to emulate Crotty's willingness to be the Keynesian in a room full of Marxists and the Marxist in a room full of Keynesians (and to do so not through "both sides" but through concrete analysis of American capitalism).
Naturally, I think of Crotty as closer to my own bricolaged Marx-Keynes-Kalecki-Minsky approach than he is to the Brenner/Riley version of economics. But the fact that the reply by Riley/Brenner takes for granted that Alvin Hansen and Jim Crotty are the best starting points is more important than the question of whose "side" he would have been on. Aaron Benanav deserves a lot of credit for bringing Crotty into the ken of the NLR stalwarts.
I also did not get a chance to say on the panel, but I am happy to state publicly here what I have already told @rileysociology, among others. I have to concede that I too "find Riley and Brenner’s theory more elegant and persuasive" than I did when I wrote my original response to their original theses. The centrality of gimmicks and ripoffs is extravagantly on display under the Trump clique, but it had already become clear during the madness of Diamond Joe. The other demented president's ultimate reliance, not on Jared Bernstein or Jen Harris or even Larry Summers, but on Hunter Biden and Jill Biden's majordomo, must be credited as a point in favor of Dylan Riley's "patrimonialism" analysis.
It won't surprise anyone that the Gaza genocide coincided with my negative reevalution of the seriousness of Bidenomics, but I maintain that this is not simply "mood affiliation." The way that figures like Jake Sullivan accepted (indeed, perpetrated) the genocide, in front of a world unified in horror, suggested to me that these were perhaps not people with a serious vision of hegemonic politics. They had no alternative besides lies and brutal violence for the Gaza "conflict," which is not the way one acts when one is actually in the business of building a new political economic order (as opposed to coming up with the most convenient possible way of linking Sullivan's priority - armed American primacy - with the domestic economic issues which were inconveniently forced to the surface by the tens of millions of Americans who supported Trump and/or Sanders in 2016, 2020, or 2024. ) Moreover, the inability of the left to make the slightest impact on Kamala's support for the genocide was a reality check about the ability of the left to pressure Biden-Harris into anything that required an actual confrontation between labor and capital, or even between capital and the marketcrafting state.
When I first read the late Mike Davis's late essay "Thanatos Triumphant" (2022), I thought he was hysterical. My mistake: the man was and is right about everything. Read it and weep:
"no rational leader would sacrifice the 21st-century Russian economy to raise a faux double-eagle over the Dnieper. Indeed, no rational leader would...On the other shore, Biden conducts a nonstop seance with Dean Acheson and all the ghosts of Cold Wars past. The White House is visionless in the wilderness it helped to create. All the think tanks and genius minds that supposedly guide the Clinton-Obama wing of the Democratic Party are in their own way as lizard-brained as the soothsayers in the Kremlin. They can’t imagine any other intellectual framework for declining American power than nuclear-tipped competition with Russia and China. (One could almost hear the sigh of relief as Putin lifted the mental burden of having to think global strategy in the Anthropocene). In the end, Biden has turned out to be the same warmonger in power that we feared Hillary Clinton would be. Although Eastern Europe now distracts, who can doubt Biden’s determination to seek confrontation in the South China Sea – waters far more dangerous than the Black Sea?
Meanwhile the White House seems to have almost casually chucked its weak commitment to progressivism into the trash..."
He wrote all that before 10/7/23, of course. Mike Davis was not blind and visionless during his seances. While Jake Sullivan was busy memorizing Billy Joel lyrics, Mike channelled Leonard Cohen: "I've seen the future, brother: it is murder."
We need a synthesis of @rileysociology’s “politically constituted ripoffs” and @maxread’s “suckerfication crisis.” Since neither side of the new Brenner debate is actually that interested in the falling rate of profit, we should submerge ourselves in the revolting concreteness of our current scam-based form of collective life.
What was most of European history if not a bunch of psychotic biker gangs calling themselves families holding the population under their thumbs. Only the French Revolution broke that yoke but it didn’t end until WW I. And then replacements came up …
In fact, Kamala Harris did not support "genocide". She ran on a two state program, much to the displeasure of many "Palestine supporters” who seem to prefer a genocide of Israeli Jews as a more final solution. Joe Biden's presidency was flawed, but enormously impactful and featured passage of the most progressive legislation in 50 years or more. Biden's failures, including his failure in Israel should be put against LBJ (Vietnam) or FDR who was also successful but actually did support genocide by allowing his state department to block escape for European Jews (which is one of the reasons why Israel came into existence).
I agree that the FDR State Department decision to turn back ships full of European Jews was abhorrent. In fact, I thought about it often during the Gaza genocide, when (as even you would have to admit) the US was going to great lengths to turn Gaza and its people into rubble.
Incidentally, one motive for US support in Israel was that the same racists who didn't want the SS Louis to dock in 1939, also didn't want the displaced Jews of Europe to come to America after 1945. It is easy to understand why most American and European Jews experienced the founding of Israel as emancipation and security. It is important to remember how conveniently everything worked out for American anti-Semites too.
I did note that all the EU states hysterically denouncing Israeli "genocide” forgot to open their borders to Palestinian refugees (as did the Arab states). Perhaps just an oversight.
The US government did not support Israel until the cold war made it convenient. The primary source of arms for Israelis in 1948 was the Soviet Block mainly from Skodka (plus the black market). This was back when Israel was considered an anti-colonial story - fighting the UK and their Arab puppet armies. Later, European Jews were magically transformed in the European imagination from dark skinned Palestinian interlopers into white colonialist devils whose traditional function as scapegoat allowed them to be assigned all the guilt for European imperialism. Non-European Israeli Jews have remained invisible as is only proper for natives.
Other than your denial of the Gaza genocide, I don't see where anything you say here is an actual challenge to anything I said. Which makes sense, since everything I said is obvious and correct.
There are two diametrically opposed tech trends: the obvious one of computers (and global English literacy) helping American credentialed workers sell their wares (consulting, movies, software) everywhere; and the less obvious one of containerized shipping enabling the entire rest of the world to displace American non-credentialed workers.
Oh, and as I was taking the bus home tonight, from a city history event with lots of home movies of trams, past Waymos: the tech of the car itself mostly hasn’t changed during the period in question. But the dominance of the highway and exurban sprawl have changed cars from something that enabled the middle class to have a lawn of their own, to something that causes social anomie and economic distress. So maybe not a tech change per se but a change in the built environment of American life that very much impacts our politics.
Oh there 1000% was a problem with cars from the beginning, but the political valence at the beginning was “I feel abundant because suddenly I have gone from cramped city apartments to a suburban lawn”.
I always find these overcapacity, falling profits, etc strangely disconnected from the actual experience of the economy. It certainly doesn't seem like western economies have a lot of overcapacity. And the profit share in the US doesn't look like what you would think this is saying, it's mostly stable or up over the past 40 years.
I think there's a simpler and similar diagnosis -- the stability of liberalism/capitalism/democracy in the west was underwritten by the boom. Obviously that stability wasn't there prior to WW2. Since the boom, and more so since the 1991 recession that you've written so much about and especially the great recession as it becomes clear that the postwar economy isn't coming back, people's view of the economy and of the larger structures of economic and political life, have been decidedly negative.
Unfortunately, there's not some reform to the economy that will put us in permanent boom territory, especially since the boom also involved other non-repeatable phenomena like mass suburbanization.
Boomers grew up in a period where the economy expanded historically fast and limited international competition, then watched as oil shocks and deficits led to high inflation, which in turn led to punishingly high interest rates. That peaked in the early eighties -- which coincided with entering their peak earning year -- and the next 25 years was a period of rising asset prices in their 401ks and lower relative housing costs as they refinanced their home every 3-5 years.
I recently heard Fareed Zakaria downplay any material basis of the rise of Trump by pointing to how stronger welfare states in Europe have not prevented a rise in populist nationalist backlash, which I thought was a hilariously undercooked theory. Brenner and Riley's piece was sort of an antidote to that elementary analysis coming from a normally serious guy.
In your last post, John, you made a point to reject Douthat's "grand historical forces" explanation for the turn to post-liberalism where, by your description, "individuals have no agency and therefore no responsibility." I wonder how you square Riley and Brenner's material theory with your seeming preference for a Arendtian emphasis on "moral disintegration" as an explanatory factor for fascism over the grand historical narrative. Clearly the two aren't mutually exclusive, but curious as to your take on their interaction.
I heard that Zakaria segment and interpreted it a bit differently, and found it more useful. I didn’t take him to be offering a full alternative theory so much as putting a boundary condition on purely material explanations. The European cases seem relevant in that narrower sense: generous welfare states clearly don’t _inoculate_ societies against nationalist or illiberal politics, which suggests that economic security alone can’t be doing all the explanatory work.
That doesn’t strike me as in tension with Brenner/Riley so much as operating at a different level. Structural shifts may set the stage, but they don’t explain why similar material conditions get translated into very different political narratives and movements. Zakaria’s point, as I understood it, is less about denying political economy than about resisting monocausal explanations.
This seems to dovetail with alarms some people are raising about nonsensical investment markets, the nonsense being driven in part by excess liquidity. Here's "QTR's Fringe Finance" substack from a piece called "Breaking Burry":
"There’s $2 trillion worth of dogshit in the crypto market with a zero bid… and yet it all has a bid… because there’s so much liquidity that people don’t even know what the fuck to do with it all... Assets that we can all agree should be worth nothing... still trade because there’s literally nowhere else for the deluge of liquidity to go... 'Story stocks' with no earnings and lifetime negative cash flow behave like they’re invincible merely because money has to go somewhere.
It's wild and depressing that people who have literally more money than the human brain can comprehend are still so aggressively chasing financial returns on their investments instead of, say, social or civil returns.
This is truly interesting, but here I just want to thank you for using the correct phrase 'jibes with' instead of the all too common, barbarically illiterate 'jives with'. ;>
As a neoliberal reader I feel compelled to ask some skeptical questions.
1. Is it true that profitability has been eroded? Most sources suggest profits as a percentage of GDP have increased since 2000.
2. Why would overproduction and decreasing profitability be bad? “You will have more stuff and the corporations will make less money” sounds like a populist message. Didn’t Marx think communism would lead greater abundance?
3. Why do you need this framework to explain rent seeking? It seems that comes pretty naturally to everyone. Was business really less entwined with the state in the postwar period?
4. “Only labor creates surplus value” seems empirically dicey. Wouldn’t that imply the most profitable companies would be in the most labor intensive industries (e.g. construction).
5. Whether or not AI capex is wise, it seems very much the opposite of this paradigm as it’s being driven by the most profitable companies.
> Why would overproduction and decreasing profitability be bad?
The claim isn't that it's directly bad, it's that it provokes bad responses from capitalists. Private R&D investment, for instance, will always tend to be below the socially optimal level, since it has positive externalities, but the lower the expected return the more severe the shortfall gets.
Agree with that. It does make it stranger to lump AI spending into this framework. Whatever else it is, the AI bubble is not an example of excessive short-termism or underinvestment.
If I'm not wrong, Riley & Brenner say that the stop of sustained growth & predictable large returns on investment makes the economy more volatile. It makes more susceptible to financiary investments disconnected from actual productivity, and prone to follow market fads which create bubbles, AI being one of these.
OK, but here's the problem . Corporate profits didn't fall. They didn't.
All the data shows that the corporate share of income over time shows that it was largely stable through the postwar years and has grown substantially this millennium.
Any hypothesis that starts from "corporate profits were declining" is factually inaccurate.
It is quite true that, in certain industries, corporate profits rose or fell in ways not reflective of national trends, but, twas ever thus. Overall, corporations have only gotten more profitable over the past 80 years, and there was no moment when their profits were in some kind of deep crisis.
As such, I can't get behind the whole "capitalist stagnation" hypothesis.
Here's FRED's graph of manufacturing investments from 1958 to 2020, in real dollars. There are big dips in recessions, sure, and there were periods when investments didn't increase relative to inflation, but capital investment went up 2.5x (in real dollars) between 1960 and the dotcom crash. https://fred.stlouisfed.org/graph/?g=1Osth
Well, I asked the economists here, and they do say that there is a trough in the corporate share of income from around 1975-1995, after which things rebounded and corporate profits are much higher than in the post WWII era. So, yes, I guess there was some fall in the rate of profit for a while.
1) "Professional-managerial class" is an incoherent concept. Corporate executives and corporate lawyers are politically part of the capitalist class-for-itself. Adjunct professors, schoolteachers, personal injury lawyers are politically part of the working class-for-itself.
2) I didn't see a word about the necessary technological revolution to address the existential crisis of impending climate catastrophe, which has already begun though too slowly if left to the market. But a green new deal with a strong component of economic security for workers offers a way out of the economic squeeze by reinvigorating the public sector of the mixed economy.
3) Joan Robinson a lifetime ago (An Essay on Marxian Economics) refuted the labor theory of value and the hypothesis that falling profits based on organic composition of capital necessarily leads to system crisis. Also, it is abundantly clear that the "free gift of nature" is an illusion, and the exploitation of nature adds illusory value by externalizing huge real costs that don't appear on balance sheets.
4) Superprofits in the tech sector are not based on exploiting labor but are monopoly rents exploiting the working class as consumers.
Yeah, 1) they would agree with you, I said "some people call", 2) that has not materialized into a workable politics, 3) Brenner does not believe in the OCC, as I said , 4) yes, that's in favor of their favor
Biden's Build Back Better program as it emerged from Bernie's committee was a good first step toward a green new deal, before it was gutted by 4% of House Dems led by Gottheimer and 4% of Senate Dems (Manchinema). Falling just short on first try does not make GND politically unworkable.
Clean energy is the solution to inflation problems. As not only Bill McKibben's new book and New Yorker article, but also Krugman in his substack explain, renewable energy (+storage & efficiency) have become the LEAST costly way to meet energy needs, not including the IMMENSE external cost savings. Liza Featherstone and Aaron Regunberg note in TNR that clean energy affordability is a winning issue when Dems run on it.
Clean energy is cheap when adding new capacity in the right areas. Because energy infrastructure is so capital and labor intensive, replacing still functional infrastructure is almost always inflationary (you are spending labor and capital but not increasing output).
The “New Deal” part is still inflationary on its own terms. The point of the New Deal was to reflate a depressed economy stuck in a deflationary trap.
Re: your first point--it depends on what you mean by "class". If you define class solely in terms of income level (as most people do nowadays), and politics solely as the conflict of the rich vs. the poor, I can see how you can dismiss the concept of the "professional-managerial class" as incoherent. However, if you define class in terms of how people actually make their money--which is how the distinction between "aristocracy", "bourgeois", and "working class" actually arose in the first place--the concept of a class of people whose labor is defined by being in managerial and/or symbol-manipulating jobs, and who therefore have distinct interests and preoccupations derived from that experience, makes more sense. The corporate lawyer and the personal-injury lawyer may have wildly disparate incomes, but they share certain habits of thought not necessarily shared by the corporate executive on the one hand and the manual laborer on the other. This is a concept of class that actually makes more sense of the complexity of actual politics than the income-based concept of class that you seem to be relying on. Indeed, perhaps a reason why we talk so little about class these days is that our income-based conception of class fails to account for most of what we actually experience.
I worry that this sort of materialist analysis, in order to remain materialist, must invent a materiality that does not exist. What overcapacity or redundancy? Hasn't globalization functioned as an inexorable force that precisely eliminates that? Don't we suffer in many ways from a lack of capacity driven by a drive to efficiency over resiliency, in turn driven by the urge to short-term growth and the ability to get away with offloading negative externalities? But then we are talking about laws and culture, which it seems to me can, in the lights of such analyses, only be symptoms and not causes.
Maybe nativist rhetoric, for example, is the product of increased competition or maybe it's just rhetoric that tends to be useful, unfortunately, in any era. But I don't see why a simple explanation does not suffice: short-term growth must go up or your valuation collapses, and at a certain point, it becomes impossible to make your short-term growth keep going up without financial chicanery. Only in the realm of hype, in the virtual or financial metaverse, can you keep believing in infinite growth despite finite markets. Even without any competition whatsoever, wouldn't that still be the case, so long as valuations are determined in the manner that they are?
Really interesting, Riley’s a v thoughtful guy. IMO people often don’t think enough about other economies catching up to the postwar US (unscathed industrial powerhouse) when talking about deindustrialization & road to neoliberalism. Hard to stay that far out in front forever, larger forces are at play than specific policymakers’ choices.
Two thoughts on role of tech: a) a lot of analogue technologies (big boats, shipping containers) made it easier for other countries to industrialize by accessing rich demand; b) with rich country wages, manufacturing labour needs to be extremely productive, so it’s naturally going to be super capital-intensive. So even if you make $ by maximizing # dudes to extract from (idk about that) that’s not available in a lot of rich economies’ product sectors.
I got hung up on the corporate profits piece, and I still think its not accurate to say they have dried up. But the rest seems valid to me. I think the force driving this, rather than a decline in corporate profits, is rather an excess of investment capital because of how wages decoupled from productivity 50 years ago. This has been aggravated by supply-side economics ever since. If the productivity gains had been shared more fairly, we would have had more consumption spending and would not have so much excess capital accumulating in wealthy pockets and seeking investment returns. Over decades the accumulating capital spawned all sorts of low-productivity, high return monsters in the financial space, the private equity sector and hedge funds etc
Tech suppresses class consciousness by giving people a false sense of what's possible in terms of upward mobility. To point out the obvious, this is what draws a lot of writers to Substack. This conditioning starts young — a lot of little kids these days aspire to be influencers. The idea that anyone with enough inherent talent can use platforms and AI to bootstrap their way to a steady income is nonsense, but it's incredibly seductive, especially to the "uncredentialed" / non-degree-holding class.
In terms of labor, I'm partial to theorizations of cognitive capitalism and psychopolitics as frameworks for understanding how the mind becomes standing reserve for value extraction via tech addiction. There's no "real" value there, but tech addiction fuels the production of digital capital through the generation of data that can be used to build AI. The fact that data are non-rivalrous goods makes this model all the more appealing for the rentiers. And tech addiction has a psychological wasting effect that feeds into fragmentation and disintegration (socially, politically, economically) which is, again, useful for capitalists.
Very interesting and plausible, but raises two (more) questions. 1. Can't say that capital has "turned" to rent-seeking, rent-seeking by all available means has been a major activity since forever. And last time I looked, which was the recent quarterly reports, big US corporations are making solid profits and rich folks are doing swell, thanks. The question is how the burden of the new national entrants and overcapacity has been foisted entirely on the 90% of workers with lower incomes. 2. Speaking of technology, the growth of service relative to manufacturing is the elephant in the room here, lots of "class" implications, have to include it in the analysis.
There are very many interesting comments here, but one confusion I've seen in several comments. The key issue is the rate of profit in manufacturing not "profitability" in general, nor the mass of profits. It is also important to emphasize that the argument does not rely on the claim that the rate or profit has continually declined, nor is it dependent on the notion of the increasing organic composition of capital. Overcapacity is central, and the data show that this is a very serious problem. The fundamental image of capitalism upon which the entire argument rests is that of a system of anarchic, unplanned, and future oriented investment.
I would happily leave the profit rate out of the discussion, since it seems to be an issue that divides people who otherwise vigorously agree on quite a few fundamental points. If there is a substantive issue at stake here, I continue to think it is not the "profit rate" in any elaborate sense, but the more basic relationship question: in virtue of what magnitude is excess capacity excessive? One way of approaching the question stresses the relationship between productive capacity and effective demand. Here is Ben Kunkel, in his important (for me, at least) 2014 essay on Brenner:
"excess supply can presumably be addressed in one of two ways: by reducing supply to the level of demand (through the envisioned shakeout of uncompetitive firms), or by raising demand to the level of supply. Excess capacity would disappear with the circumstance of adequate overall demand. In this sense, the fatally overpaid workers of the past forty years—as they are conceived of across the political spectrum—might be reconceived as fatally underpaid, not just from their own point of view but from the standpoint of systemic requirements for sustained growth. "
And: "only a rising total wage bill during the ’70s and after could have ensured consumer demand consistent with the maintenance of full employment—and a sustainably high rate of return."
Here, there is a causal channel linking (1) social structures of accumulation to (2) the distribution of income among social classes to (3) the level and composition of final demand and (4) to the possibility of overcoming, resolving, or working through the related problems of unemployment, overcapacity, underconsumption, and -- yes -- even the possibility of maintaining a "sustainably high rate of return."
But Kunkel's reading of Brenner is not the only one possible, nor does it seem to me to be the animating spirit behind the original Brenner-Riley theses, which rejects aggregate demand management in principal as a way of doing anything except causing inflation.
I'm curious how much of the above we see eye to eye on, or if I've missed the point entirely here.
(Link to Ben K: https://www.nplusonemag.com/issue-9/politics/full-employment/)
Just seeing this now (I've been deep inside myself trying to finish the book, and perhaps also hiding from the world we currently live in).
I really appreciate the writeup, and I am especially thrilled to see your reference to Crotty (1993)! I've long tried to emulate Crotty's willingness to be the Keynesian in a room full of Marxists and the Marxist in a room full of Keynesians (and to do so not through "both sides" but through concrete analysis of American capitalism).
Naturally, I think of Crotty as closer to my own bricolaged Marx-Keynes-Kalecki-Minsky approach than he is to the Brenner/Riley version of economics. But the fact that the reply by Riley/Brenner takes for granted that Alvin Hansen and Jim Crotty are the best starting points is more important than the question of whose "side" he would have been on. Aaron Benanav deserves a lot of credit for bringing Crotty into the ken of the NLR stalwarts.
I also did not get a chance to say on the panel, but I am happy to state publicly here what I have already told @rileysociology, among others. I have to concede that I too "find Riley and Brenner’s theory more elegant and persuasive" than I did when I wrote my original response to their original theses. The centrality of gimmicks and ripoffs is extravagantly on display under the Trump clique, but it had already become clear during the madness of Diamond Joe. The other demented president's ultimate reliance, not on Jared Bernstein or Jen Harris or even Larry Summers, but on Hunter Biden and Jill Biden's majordomo, must be credited as a point in favor of Dylan Riley's "patrimonialism" analysis.
It won't surprise anyone that the Gaza genocide coincided with my negative reevalution of the seriousness of Bidenomics, but I maintain that this is not simply "mood affiliation." The way that figures like Jake Sullivan accepted (indeed, perpetrated) the genocide, in front of a world unified in horror, suggested to me that these were perhaps not people with a serious vision of hegemonic politics. They had no alternative besides lies and brutal violence for the Gaza "conflict," which is not the way one acts when one is actually in the business of building a new political economic order (as opposed to coming up with the most convenient possible way of linking Sullivan's priority - armed American primacy - with the domestic economic issues which were inconveniently forced to the surface by the tens of millions of Americans who supported Trump and/or Sanders in 2016, 2020, or 2024. ) Moreover, the inability of the left to make the slightest impact on Kamala's support for the genocide was a reality check about the ability of the left to pressure Biden-Harris into anything that required an actual confrontation between labor and capital, or even between capital and the marketcrafting state.
When I first read the late Mike Davis's late essay "Thanatos Triumphant" (2022), I thought he was hysterical. My mistake: the man was and is right about everything. Read it and weep:
"no rational leader would sacrifice the 21st-century Russian economy to raise a faux double-eagle over the Dnieper. Indeed, no rational leader would...On the other shore, Biden conducts a nonstop seance with Dean Acheson and all the ghosts of Cold Wars past. The White House is visionless in the wilderness it helped to create. All the think tanks and genius minds that supposedly guide the Clinton-Obama wing of the Democratic Party are in their own way as lizard-brained as the soothsayers in the Kremlin. They can’t imagine any other intellectual framework for declining American power than nuclear-tipped competition with Russia and China. (One could almost hear the sigh of relief as Putin lifted the mental burden of having to think global strategy in the Anthropocene). In the end, Biden has turned out to be the same warmonger in power that we feared Hillary Clinton would be. Although Eastern Europe now distracts, who can doubt Biden’s determination to seek confrontation in the South China Sea – waters far more dangerous than the Black Sea?
Meanwhile the White House seems to have almost casually chucked its weak commitment to progressivism into the trash..."
He wrote all that before 10/7/23, of course. Mike Davis was not blind and visionless during his seances. While Jake Sullivan was busy memorizing Billy Joel lyrics, Mike channelled Leonard Cohen: "I've seen the future, brother: it is murder."
https://newleftreview.org/sidecar/posts/thanatos-triumphant
We need a synthesis of @rileysociology’s “politically constituted ripoffs” and @maxread’s “suckerfication crisis.” Since neither side of the new Brenner debate is actually that interested in the falling rate of profit, we should submerge ourselves in the revolting concreteness of our current scam-based form of collective life.
That's interesting. I agree, I also want to somehow incorporate my "mob theory."
What was most of European history if not a bunch of psychotic biker gangs calling themselves families holding the population under their thumbs. Only the French Revolution broke that yoke but it didn’t end until WW I. And then replacements came up …
Relevant and recommended: https://www.bloomsbury.com/us/dark-quadrant-9781538142509/ (a much more serious book than the cover and title might suggest)
In fact, Kamala Harris did not support "genocide". She ran on a two state program, much to the displeasure of many "Palestine supporters” who seem to prefer a genocide of Israeli Jews as a more final solution. Joe Biden's presidency was flawed, but enormously impactful and featured passage of the most progressive legislation in 50 years or more. Biden's failures, including his failure in Israel should be put against LBJ (Vietnam) or FDR who was also successful but actually did support genocide by allowing his state department to block escape for European Jews (which is one of the reasons why Israel came into existence).
I agree that the FDR State Department decision to turn back ships full of European Jews was abhorrent. In fact, I thought about it often during the Gaza genocide, when (as even you would have to admit) the US was going to great lengths to turn Gaza and its people into rubble.
Incidentally, one motive for US support in Israel was that the same racists who didn't want the SS Louis to dock in 1939, also didn't want the displaced Jews of Europe to come to America after 1945. It is easy to understand why most American and European Jews experienced the founding of Israel as emancipation and security. It is important to remember how conveniently everything worked out for American anti-Semites too.
I did note that all the EU states hysterically denouncing Israeli "genocide” forgot to open their borders to Palestinian refugees (as did the Arab states). Perhaps just an oversight.
The US government did not support Israel until the cold war made it convenient. The primary source of arms for Israelis in 1948 was the Soviet Block mainly from Skodka (plus the black market). This was back when Israel was considered an anti-colonial story - fighting the UK and their Arab puppet armies. Later, European Jews were magically transformed in the European imagination from dark skinned Palestinian interlopers into white colonialist devils whose traditional function as scapegoat allowed them to be assigned all the guilt for European imperialism. Non-European Israeli Jews have remained invisible as is only proper for natives.
Other than your denial of the Gaza genocide, I don't see where anything you say here is an actual challenge to anything I said. Which makes sense, since everything I said is obvious and correct.
The other 1948: https://en.wikipedia.org/wiki/Displaced_Persons_Act
of course
There are two diametrically opposed tech trends: the obvious one of computers (and global English literacy) helping American credentialed workers sell their wares (consulting, movies, software) everywhere; and the less obvious one of containerized shipping enabling the entire rest of the world to displace American non-credentialed workers.
Oh, and as I was taking the bus home tonight, from a city history event with lots of home movies of trams, past Waymos: the tech of the car itself mostly hasn’t changed during the period in question. But the dominance of the highway and exurban sprawl have changed cars from something that enabled the middle class to have a lawn of their own, to something that causes social anomie and economic distress. So maybe not a tech change per se but a change in the built environment of American life that very much impacts our politics.
The Magnificent Ambersons would have one believe there was a problem with the cars from the beginning
Oh there 1000% was a problem with cars from the beginning, but the political valence at the beginning was “I feel abundant because suddenly I have gone from cramped city apartments to a suburban lawn”.
Containers & big boats jumped into my head too when I was reading the discussion of the ch
I always find these overcapacity, falling profits, etc strangely disconnected from the actual experience of the economy. It certainly doesn't seem like western economies have a lot of overcapacity. And the profit share in the US doesn't look like what you would think this is saying, it's mostly stable or up over the past 40 years.
I think there's a simpler and similar diagnosis -- the stability of liberalism/capitalism/democracy in the west was underwritten by the boom. Obviously that stability wasn't there prior to WW2. Since the boom, and more so since the 1991 recession that you've written so much about and especially the great recession as it becomes clear that the postwar economy isn't coming back, people's view of the economy and of the larger structures of economic and political life, have been decidedly negative.
Unfortunately, there's not some reform to the economy that will put us in permanent boom territory, especially since the boom also involved other non-repeatable phenomena like mass suburbanization.
Boomers grew up in a period where the economy expanded historically fast and limited international competition, then watched as oil shocks and deficits led to high inflation, which in turn led to punishingly high interest rates. That peaked in the early eighties -- which coincided with entering their peak earning year -- and the next 25 years was a period of rising asset prices in their 401ks and lower relative housing costs as they refinanced their home every 3-5 years.
I recently heard Fareed Zakaria downplay any material basis of the rise of Trump by pointing to how stronger welfare states in Europe have not prevented a rise in populist nationalist backlash, which I thought was a hilariously undercooked theory. Brenner and Riley's piece was sort of an antidote to that elementary analysis coming from a normally serious guy.
In your last post, John, you made a point to reject Douthat's "grand historical forces" explanation for the turn to post-liberalism where, by your description, "individuals have no agency and therefore no responsibility." I wonder how you square Riley and Brenner's material theory with your seeming preference for a Arendtian emphasis on "moral disintegration" as an explanatory factor for fascism over the grand historical narrative. Clearly the two aren't mutually exclusive, but curious as to your take on their interaction.
ah you caught me!
Long story short, I think you have to be a kind of Kantian: you have to act as if you have free will and what you do matters.
I heard that Zakaria segment and interpreted it a bit differently, and found it more useful. I didn’t take him to be offering a full alternative theory so much as putting a boundary condition on purely material explanations. The European cases seem relevant in that narrower sense: generous welfare states clearly don’t _inoculate_ societies against nationalist or illiberal politics, which suggests that economic security alone can’t be doing all the explanatory work.
That doesn’t strike me as in tension with Brenner/Riley so much as operating at a different level. Structural shifts may set the stage, but they don’t explain why similar material conditions get translated into very different political narratives and movements. Zakaria’s point, as I understood it, is less about denying political economy than about resisting monocausal explanations.
This seems to dovetail with alarms some people are raising about nonsensical investment markets, the nonsense being driven in part by excess liquidity. Here's "QTR's Fringe Finance" substack from a piece called "Breaking Burry":
"There’s $2 trillion worth of dogshit in the crypto market with a zero bid… and yet it all has a bid… because there’s so much liquidity that people don’t even know what the fuck to do with it all... Assets that we can all agree should be worth nothing... still trade because there’s literally nowhere else for the deluge of liquidity to go... 'Story stocks' with no earnings and lifetime negative cash flow behave like they’re invincible merely because money has to go somewhere.
It's wild and depressing that people who have literally more money than the human brain can comprehend are still so aggressively chasing financial returns on their investments instead of, say, social or civil returns.
This is truly interesting, but here I just want to thank you for using the correct phrase 'jibes with' instead of the all too common, barbarically illiterate 'jives with'. ;>
As a neoliberal reader I feel compelled to ask some skeptical questions.
1. Is it true that profitability has been eroded? Most sources suggest profits as a percentage of GDP have increased since 2000.
2. Why would overproduction and decreasing profitability be bad? “You will have more stuff and the corporations will make less money” sounds like a populist message. Didn’t Marx think communism would lead greater abundance?
3. Why do you need this framework to explain rent seeking? It seems that comes pretty naturally to everyone. Was business really less entwined with the state in the postwar period?
4. “Only labor creates surplus value” seems empirically dicey. Wouldn’t that imply the most profitable companies would be in the most labor intensive industries (e.g. construction).
5. Whether or not AI capex is wise, it seems very much the opposite of this paradigm as it’s being driven by the most profitable companies.
> Why would overproduction and decreasing profitability be bad?
The claim isn't that it's directly bad, it's that it provokes bad responses from capitalists. Private R&D investment, for instance, will always tend to be below the socially optimal level, since it has positive externalities, but the lower the expected return the more severe the shortfall gets.
Agree with that. It does make it stranger to lump AI spending into this framework. Whatever else it is, the AI bubble is not an example of excessive short-termism or underinvestment.
If I'm not wrong, Riley & Brenner say that the stop of sustained growth & predictable large returns on investment makes the economy more volatile. It makes more susceptible to financiary investments disconnected from actual productivity, and prone to follow market fads which create bubbles, AI being one of these.
OK, but here's the problem . Corporate profits didn't fall. They didn't.
All the data shows that the corporate share of income over time shows that it was largely stable through the postwar years and has grown substantially this millennium.
Any hypothesis that starts from "corporate profits were declining" is factually inaccurate.
It is quite true that, in certain industries, corporate profits rose or fell in ways not reflective of national trends, but, twas ever thus. Overall, corporations have only gotten more profitable over the past 80 years, and there was no moment when their profits were in some kind of deep crisis.
As such, I can't get behind the whole "capitalist stagnation" hypothesis.
Yeah they avoided falling profits by avoiding capital investments.
Here's FRED's graph of manufacturing investments from 1958 to 2020, in real dollars. There are big dips in recessions, sure, and there were periods when investments didn't increase relative to inflation, but capital investment went up 2.5x (in real dollars) between 1960 and the dotcom crash. https://fred.stlouisfed.org/graph/?g=1Osth
Well, I asked the economists here, and they do say that there is a trough in the corporate share of income from around 1975-1995, after which things rebounded and corporate profits are much higher than in the post WWII era. So, yes, I guess there was some fall in the rate of profit for a while.
Some quick points:
1) "Professional-managerial class" is an incoherent concept. Corporate executives and corporate lawyers are politically part of the capitalist class-for-itself. Adjunct professors, schoolteachers, personal injury lawyers are politically part of the working class-for-itself.
2) I didn't see a word about the necessary technological revolution to address the existential crisis of impending climate catastrophe, which has already begun though too slowly if left to the market. But a green new deal with a strong component of economic security for workers offers a way out of the economic squeeze by reinvigorating the public sector of the mixed economy.
3) Joan Robinson a lifetime ago (An Essay on Marxian Economics) refuted the labor theory of value and the hypothesis that falling profits based on organic composition of capital necessarily leads to system crisis. Also, it is abundantly clear that the "free gift of nature" is an illusion, and the exploitation of nature adds illusory value by externalizing huge real costs that don't appear on balance sheets.
4) Superprofits in the tech sector are not based on exploiting labor but are monopoly rents exploiting the working class as consumers.
Yeah, 1) they would agree with you, I said "some people call", 2) that has not materialized into a workable politics, 3) Brenner does not believe in the OCC, as I said , 4) yes, that's in favor of their favor
Biden's Build Back Better program as it emerged from Bernie's committee was a good first step toward a green new deal, before it was gutted by 4% of House Dems led by Gottheimer and 4% of Senate Dems (Manchinema). Falling just short on first try does not make GND politically unworkable.
Inflation creates problems but fair
Ya and going bigger really doesn’t help on this front
Clean energy is the solution to inflation problems. As not only Bill McKibben's new book and New Yorker article, but also Krugman in his substack explain, renewable energy (+storage & efficiency) have become the LEAST costly way to meet energy needs, not including the IMMENSE external cost savings. Liza Featherstone and Aaron Regunberg note in TNR that clean energy affordability is a winning issue when Dems run on it.
Clean energy is cheap when adding new capacity in the right areas. Because energy infrastructure is so capital and labor intensive, replacing still functional infrastructure is almost always inflationary (you are spending labor and capital but not increasing output).
The “New Deal” part is still inflationary on its own terms. The point of the New Deal was to reflate a depressed economy stuck in a deflationary trap.
Re: your first point--it depends on what you mean by "class". If you define class solely in terms of income level (as most people do nowadays), and politics solely as the conflict of the rich vs. the poor, I can see how you can dismiss the concept of the "professional-managerial class" as incoherent. However, if you define class in terms of how people actually make their money--which is how the distinction between "aristocracy", "bourgeois", and "working class" actually arose in the first place--the concept of a class of people whose labor is defined by being in managerial and/or symbol-manipulating jobs, and who therefore have distinct interests and preoccupations derived from that experience, makes more sense. The corporate lawyer and the personal-injury lawyer may have wildly disparate incomes, but they share certain habits of thought not necessarily shared by the corporate executive on the one hand and the manual laborer on the other. This is a concept of class that actually makes more sense of the complexity of actual politics than the income-based concept of class that you seem to be relying on. Indeed, perhaps a reason why we talk so little about class these days is that our income-based conception of class fails to account for most of what we actually experience.
I worry that this sort of materialist analysis, in order to remain materialist, must invent a materiality that does not exist. What overcapacity or redundancy? Hasn't globalization functioned as an inexorable force that precisely eliminates that? Don't we suffer in many ways from a lack of capacity driven by a drive to efficiency over resiliency, in turn driven by the urge to short-term growth and the ability to get away with offloading negative externalities? But then we are talking about laws and culture, which it seems to me can, in the lights of such analyses, only be symptoms and not causes.
Maybe nativist rhetoric, for example, is the product of increased competition or maybe it's just rhetoric that tends to be useful, unfortunately, in any era. But I don't see why a simple explanation does not suffice: short-term growth must go up or your valuation collapses, and at a certain point, it becomes impossible to make your short-term growth keep going up without financial chicanery. Only in the realm of hype, in the virtual or financial metaverse, can you keep believing in infinite growth despite finite markets. Even without any competition whatsoever, wouldn't that still be the case, so long as valuations are determined in the manner that they are?
Damn! Sad to have missed this event, any chance it was recorded?
Really interesting, Riley’s a v thoughtful guy. IMO people often don’t think enough about other economies catching up to the postwar US (unscathed industrial powerhouse) when talking about deindustrialization & road to neoliberalism. Hard to stay that far out in front forever, larger forces are at play than specific policymakers’ choices.
Two thoughts on role of tech: a) a lot of analogue technologies (big boats, shipping containers) made it easier for other countries to industrialize by accessing rich demand; b) with rich country wages, manufacturing labour needs to be extremely productive, so it’s naturally going to be super capital-intensive. So even if you make $ by maximizing # dudes to extract from (idk about that) that’s not available in a lot of rich economies’ product sectors.
Coming back to this with interest.
I got hung up on the corporate profits piece, and I still think its not accurate to say they have dried up. But the rest seems valid to me. I think the force driving this, rather than a decline in corporate profits, is rather an excess of investment capital because of how wages decoupled from productivity 50 years ago. This has been aggravated by supply-side economics ever since. If the productivity gains had been shared more fairly, we would have had more consumption spending and would not have so much excess capital accumulating in wealthy pockets and seeking investment returns. Over decades the accumulating capital spawned all sorts of low-productivity, high return monsters in the financial space, the private equity sector and hedge funds etc
Very interesting analysis, thanks for sharing