The period between 1947 and 1973 is called the Golden Age of Capitalism. Corporate profits were high, economic growth was strong, and there was a truce between labor and capital called Keynesianism. It worked like this: Labor got high wages and capital got no talk about socialism. This all sounds so wonderful, right? It seems plain crazy that we left this economic/class paradise for the nightmare of neoliberalism (stagnant wages, weak labor unions, outsourcing, financialization of the economy), which began around 1973 and ended in 2008.
Considering the economic mess we are in today, it seems very sensible to call the whole neoliberal turn a big mistake. In fact, some on the right, like the economist and legal theorist Richard Posner, have, after being shocked by the US government's bailout of Wall Street, even become Keynesians—an economic program that sees demand side (we the people) rather than supply side (the "job creators") as the key to economic stability and growth.
But we can't go back to the golden age. Why? Because it was the result of forces that are not transcendental, outside of time/history. These forces were once real and material, but they no longer exist. To understand this clearly, one has to read the most important leftist book of the year, and probably the decade, The Making of Global Capitalism: The Political Economy of American Empire.
It's written by two Canadians (Leo Panitch and Sam Gindin—the first is a professor of political science and the second is an economist), it's written with great care and precision, and its third chapter, "Planning the New American Empire," ends with this insight:
The 10 million US soldiers brought back into the civilian economy after World War II were the equivalent of 20 percent of the 1945 workforce... And given that 46 percent of the American GDP consisted of military production at the war's end, it was hardly surprising that many economists feared that "V-J Day meant major depression and mass unemployment."
So you had millions of soldiers entering the job market on the one hand and this problem on the other: "[Because] government expenditures on civilian items compensated for only 11 percent of the decrease in the military budget, the question arose how the economy's enormous productive capacity could be sustained." How do you fill the other 89 percent? The answer: Keynes, which meant full employment for society, high wages for laborers, and lots of bank loans for homes in the suburbs. The trick worked—America became the most powerful economy on earth.
To return to Keynes, therefore, is not to access some Platonic economic form but to go back in time, to go back to the one war that made America so productive that when peacetime arrived, the capitalists were willing to hold hands with labor out of fear of losing all of that marvelous, glorious productivity.
But Panitch and Gindin's book is not about the limits and fantasies of Keynesianism. It's about how the American state and not American businesses established global capitalism. The world we live in now, the world market of money and goods, could not have happened without the state, which not only imposed capitalism on other countries but became its ultimate guarantor, its lender of last resort, its unsinkable ship during financial storms. There is no poetry in The Making of Global Capitalism, no dreams of socialism, no horizons of communism. What the thinkers present is a simple and steady flow of facts that explain how the American state established the market of our world.