The ascendance of Wall Street, and of a managerial bureaucracy (PMC) more generally, largely explains the political realignments that have been playing out in the U.S. Beginning in the 1970s, the American political class made decisions at the behest of business interests and oligarchs to restructure the U.S. economy in ways intended to shift the balance of political and economic power towards capital. Finance was, and still is, the method of affecting this transfer of power. However, the current epoch of finance capitalism has run its course. Its logic has been lost. The threats to the neoliberal order are now internal to it.
Bi-partisan claims that China is a growing economic and military threat to the U.S. places economic competition within the national frame that American capitalists have spent the last five decades arguing is no longer relevant because of globalization. This posture of a unified national interest follows several decades of American industrialists cum financiers doing everything they can to concentrate wealth and power for themselves. Now, having done so, the frame of ‘nation’ is being opportunistically reasserted to claim a unified national interest to oppose ‘foreign’ competition. However, China didn’t pass NAFTA and China didn’t bail out Wall Street.
The contours of current U.S. political divisions can be seen in the graph above. The top three sectors in terms of contribution to GDP by industry are finance, professional services and government. Manufacturing has declined as a relative contributor just as the neoliberal program intended. Unionized industrial jobs have been replaced with non-unionized service jobs. The PMC is the functionary class facilitating this shift as it assumes roles as, and managing, service sector workers. It is the representative face of capital as manufacturing has been migrated abroad. The ‘anti-labor left’ that has emerged in the U.S. since the 1990s is concentrated within the PMC.
The latter point isn’t meant to be gratuitous. In descriptive terms, a central goal of liberalism is to make capitalism fair. However, fairness in capitalist terms is that .0000000000001% of the population owns half of the national wealth. This is equitable distribution in capitalist theory. So, liberalism wants to make the system where .000000000001% of the population owns half of the wealth fair without changing the system or redistributing wealth. Inclusivity— the ‘level playing field,’ is the metric of fairness. Support for labor, and the power of labor, is a challenge to that system of distribution. It balances the power of employers. But it is antithetical to neoliberalism.
Caution needs to be applied in considering the actual economic contribution of finance. In the first, the GDP arithmetic is Price X Quantity = Output. Government support for finance has resulted in a very large rise in ‘P’ in finance and professional services. Pay levels (‘P’) in these industries have risen as they have stagnated or declined for ‘ordinary’ service workers. This represents the concentration of economic power, not the production of the stuff that money can buy. The tautology that people are paid the value of what they produce gets turned around when bankers create most of the money….[ ]