The Revenge of the Capitalist Class: Crisis, the Legitimacy of Capitalism and the Restoration of Finance from the 1970s to Present

Abstract

In the 1970s, US capitalism suffered a legitimacy crisis as the economy was mired in high inflation, unemployment, and slower growth. The rate of profit had been decreasing since the late 1960s and by the mid-1970s Wall Street was in poor shape. Capitalists politically mobilized in the 1970s to restore the rate of profit and to restore power to economic elites. In this article, I examine changes to the American economic system with special focus on the perspectives of capitalist elites. While the rate of profit in industry was not restored by the “neoliberal” era, the rate of profit in the financial sector (albeit sometimes volatile) has increased beyond what it was prior to neoliberalism. Thus, the capitalist political mobilizations of the 1970s inadvertently put Wall Street back into power.