Late-stage capitalism is the COVID of financial politics.
people blame all sorts of problems on it, even as others dispute its very existence. We debate the efficacy of various treatments, while many people deny the legitimacy of those remedies. Nobody seems to be able to agree on what it actually is, or where it comes from, or what we might be able to do about it.
I’m not the guy with the answers. I’m not an economist, or a social theorist. I don’t even have PhD. What I am is a 40-year-old journalist with basic critical-thinking skills and a nose for bullshit. And my aim here is to zero in on a definition of late-stage capitalism we can all agree on. If we could also agree on some of the causes, and the impact, and what we might be able to do about it, that would be icing on the cake.
Let’s start with a definition.
When I hear people (with actual critical-thinking skills) talk about late-stage capitalism, they’re drawing a distinction between capitalism as it was under the Eisenhower administration, versus the phase we’re living in today, in the wake of financial deregulation under the Reagan administration.
We should unpack that definition piece-by-piece, starting with Dwight D. Eisenhower. When he began his presidency in 1953, the United States was riding one of the strongest economic tailwinds in human history. We’d emerged victorious from World War II, and after some economic turbulence related to the Korean War, the U.S. economy boomed with record-breaking employment rates and increasing wages.
For example, the federal minimum wage was increased from $0.75 per hour to $1.00 per hour on March 1, 1956. Average family income rose from $3,300 in 1950 to $5,600 in 1960. Real gross domestic product (GDP) rose by about 37 percent during that same time period.
However, President Eisenhower recognized that this state of affairs wasn’t sustainable. In his farewell address on January 17, 1961, the President warned against the rising power of the “military-industrial complex,” explaining that “we must guard against unwarranted influence” of a coalition of military groups and industrial corporations who would collude against the people for their own “commercial gain.”
As this video from the National Archives makes clear, Eisenhower was deeply concerned about this looming threat, and insisted he warn the American people of the coming danger to their social and economic future. Take a moment and watch.
But people don’t like to hear bad news. They especially don’t like to hear bad news when they’re enjoying unprecedented economic prosperity, buying new cars at bargain prices, moving to affordable houses in the suburbs to raise the generation who would later become known as the Baby Boomers — named for the socioeconomic boom in which they were born, and whose fruits they enjoyed throughout their lives.
That economic boom continued, despite some fluctuations, into the 1960s. Under President John F. Kennedy’s administration, real gross domestic product (GDP) growth averaged 5 percent per year — an increase of more than 55 percent over the course of the decade.
This is a crucial point — we’re talking real wages here; that is, wages adjusted for inflation; wages in terms of buying power. This distinction will be very important as we proceed, so let’s keep it in mind.
Because things started to change for the Boomers as the 1960s became the 1970s.
And to find out how, we’re gonna have to move this over to Substack, where you can finish reading this article for free: