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There was no golden age. The majority must suffer for the few to profit. Larger and larger wealth disparities, deregulation of the economy so the government isn't watching the businessmen anymore, tuition rises, student debt. What's late-stage capitalism? That's a very good question. I'm Eli Cook, historian of capitalism. Let's go down the rabbit hole and look at late-stage capitalism. Okay, let's get right to it. From the no stupid questions subreddit, yard puzzle headed 263 asks, what's late-stage capitalism? Late-stage capitalism is actually more of an internet meme than some kind of academic term. I like to think of it as the moment that
capitalism jumped the shark. Some examples that I've come across that people have used in the internet, people who go to GoFundMe to buy their medicine like insulin, people paying $37 for raw water. A lot of times when I think of late-stage capitalism, I think of a question that people often ask, who asked for this? Do we even want this stuff? Looks like things are getting a little spicy in the comments section. One redditor vitringer says that the whole use of the term is a Marxist mythology about the evolution of capitalism before it turns into socialism. Like with so many other pseudo scientists, it's always right around the corner and has been for 100
years. Late capitalism is definitely a term that Marxists have used, not necessarily to refer to the end of capitalism, but trying to explain where did Marx go wrong? Why hasn't capitalism ended yet? And a lot of times late capitalism was used as an idea of kind of very consumerist form of capitalism where people kind of aren't being exploited in the most outrageous ways, but they're kind of happy little robots. And so in many ways, the way that the term late capitalism has been used is very different from late-stage capitalism. But I think there's an important point to be said here that anybody who uses the term late-stage capitalism is assuming that there are stages. I do agree that there are a lot
of people who use that term who are hoping that maybe, just maybe, this is the last stage and not just a late stage. Here's a good question from the late-stage capitalism subreddit from AMD Master Race. When did the golden age of capitalism turn to late-stage capitalism? This term golden age of capitalism is a term you often in the United States. It's usually referring to the post-war years from the 1940s to around the mid-1970s, when really there was a feeling that capitalism was working for almost everyone. This is an era when inequality dropped, wages were rising, people were moving into the middle class. There was also a feeling that even with one job you could buy a house and create a good life for you and for your family. There
was this moment people look back at now and nostalgically say this was the Golden Age of Capitalism. So when did this turn happen? I think here it's actually pretty clear. Some people call it the neoliberal turn, other people talk about deindustrialization, globalization, financialization, but something happened in the late 1970s and the 1980s which really changed the American economy. This is where you really see Wall Street and big banks taking fuller control of the economy. This is where you begin to see larger and larger wealth disparities. This is where you see the deregulation of the economy, so the government isn't watching kind of the businessmen anymore. This is when you start seeing tuition rises, student debt. This is
where you see things getting more expensive. After World War II, America dominated the world, but by the 1980s Japanese, German manufacturers, they were competing with America. It wasn't so easy anymore for Americans just to churn out all those cars that the world and American consumers were going to buy. So a lot of people do think that there used to be a Golden Age of Capitalism, but let's look at some more controversial takes. Conformity says there was no Golden Age. The majority must suffer for the few to profit. In America it looked okay for a while if you were white labor aristocracy or petty bourgeoisie. This is actually an important point. When you talk about
kind of the Golden Age of Capitalism and you imagine people with job securities and great pensions, a lot of times we're talking about white men in factories. For African Americans, for other minorities, for women this might not have been a Golden Age at all. A lot of times when people talk about the Golden Age of Capitalism, they're talking about suburbia, the American dream where even working-class people could get a subsidized mortgage usually through the government backing small banks. Wall Street was not involved. It was about moving the middle class. It was about newer opportunities for their kids. So for many people, that really was the golden age. When people look at the
Simpsons, back then when the show just came out, people didn't think it was weird that here's this working class Homer Simpson who can afford to live in a pretty nice house in the middle of a nice little town on one salary. A lot of people feel that American dream is over. So let's scroll down a little for a few more perspectives. Here's a matter of time saying sometime in the 1980s when Reagan was president was the first time that more money was made from dealing in financial products than making actual tangible items in a factory. This comment reminds me of the show The Wire. They were just deindustrializing the ports in Baltimore and there's kind of a white working class Frank Sobotka who says
We used to make in this country, build Now we just put our hand in the next guy's pocket. It's true. The financialization of the economy, kind of a turn away from building in factories did not help most Americans. The jobs in factories were usually really good jobs. They had job security, they were unionized, people had good pensions, and they could really live a middle class lifestyle. When those factories closed down, most people found themselves working in service industries. The biggest employer in kind of the golden age was General Motors and it was General Electric. These were companies that almost all the workers were unionized. Even if you went into the bathroom, the person cleaning the
bathroom was part of the union. And on the other end, today biggest private employer is Walmart. Some people today in late stage capitalism at Walmart get paid so little money that they have to use food stamps. And where do they take those food stamps to buy all their stuff? Walmart cuz all the other small groceries closed. Late stage capitalism, here we are. Now a lot of this financialization is just about deregulation. Once the rules changed and Wall Street could start doing whatever it wanted. But a lot of this is connected to the deindustrialization. There used to be a lot of corporations in America who actually wanted their workers to have a good wage. But what happens in financialization is you get
these kind of corporate raiders types, okay? It's mergers and acquisitions. If you've seen Pretty Woman, this is what Richard Gere used to do. Well, I don't sell the whole company. I break it up into pieces and then I sell that off. It's worth more than the whole. So it's sort of like stealing cars and selling them for the parts, right? And maybe the perfect example of how these corporations have changed is the ratio to how much the CEO makes to the average worker. In the 1960s and the early 1970s, the golden age of capitalism, the ratio of salary between the average worker and the CEO was about
1 and 20. That's a fair amount. Now it's 1 and 300. Now all corporations care about is maximizing the price of their shares. They bring in CEOs and they say from now on your compensation isn't going to be in wages. It's going to be in stock options, which means you also have an incentive to really just only care about raising stock prices. And what do we get in the 1980s, for instance? We get a situation where if suddenly there is a recession, the first thing you do, not the last thing, the first thing you do is just fire lots of workers. They call it downsizing and hundreds of thousands of Americans lost jobs in good industrial factories and those jobs never ever came back and
those people lost their middle class lifestyle forever. Here's a good one. Over at the subreddit Neutral Politics, what are the effects that a large wealth disparity has on a society? When you begin to have large wealth disparities, you begin to have people who don't trust the institutions anymore. A lot of this has to do with feeling, you know, the system is rigged. Sometimes you can funnel that energy into positive places, but sometimes it can go to very dark places. You'll find someone to blame and often times, unfortunately, these energies don't go to blaming the actual people who created these inequalities.
Another issue that happens because of inequality is social mobility. Think of life as like this ladder where you're trying to climb up. If the rungs between each step on the ladder get bigger and bigger, then you don't have social mobility anymore. The chances today to kind of move up the ladder has diminished dramatically in the last 30 or 40 years. There's even a graph called the Great Gatsby Curve that charts the level of inequality in a society and the level of social mobility, and you see that these things correlate almost perfectly. The higher the inequality, the less the chance that smart kid from a poor background is ever going to be able to make it big in America. Other problems that you get with high inequality is just that it's
inefficient. High inequality is bad for the economy. People like John Maynard Keynes, the economist who liked to talk about the importance of consumers and their purchasing power, he would say that you know high inequality creates a situation where a lot of money gets stuck with the rich people, and the problem is the rich people don't spend that money. The money isn't moving through the economy. We're not getting demand, and therefore you kind of get a stagnant economy with less innovation, with less technology changes, and all because the average Joe doesn't have enough money to buy all the products that he could be buying. Now inequality is always bad, but it is really bad in a
capitalist society where you have to buy even your basic needs through the market. If you don't have enough money, that means you don't have healthcare. It means you can't afford to go to college. This isn't just about, you know, people having less than others. This is also just about people that having the opportunity to reach their potential. And finally, there's the question of basic justice. Even people who are billionaires, they didn't make all that money on their own. Marx would call this exploitation. The idea that most of us are not in the end receiving in return what we contribute to the economy. And here on the Ask Reddit subreddit, Yellow
Rainbird asked, Has late-stage capitalism happened before in history? And if so, what was the outcome? I think this is a great point cuz I think there's a lot we can learn from history. If you look back, for instance, the 1920s, a lot of the things that people were talking about, or even earlier to the Gilded Age, were the same problems we're dealing with today. An economy dominated by huge corporations, the government not looking out for people, corrupt politicians or in the pocket of the richest billionaires. These are problems that we've dealt with before. And I want to say yes, there have been countries that have gotten past this stage, including the United States. If you've heard of Franklin Delano Roosevelt's New Deal, which came after
the Great Depression. In many ways, the New Deal was a way to get America out of the extreme capitalism that it'd been in the 1920s. He taxed the rich, jobs for the working poor, jobs for the unemployed that the government created, creating the national park trails that you walk on today, infrastructure. So I absolutely think that there's nothing inevitable about late stage capitalism. It doesn't have to be this way. Things can be different and in fact, they were. That said, even the 1920s might not compare to the levels of inequality and corporate concentration and just power that these billionaires have today. We
are really in uncharted territory and that doesn't make things impossible, but it does make it very hard. Speaking of the end of capitalism in the capitalism subreddit, Dash Devs asked, can the concentration of wealth in just a few hands lead to the destruction of capitalism? And actually one of the most popular responses from the Green Baron was that yes, it can and it already has. And I think this is a very important point because I think in many ways we are reaching a point where late stage capitalism is so obscene, so absurd, so unequal, it might be delegitimizing capitalism itself. This is something that capitalists themselves are aware of. Not all of them, but some of them
are smart enough to know that in the long run, if they want to play a long game, maybe they've gotten a little bit too greedy. Warren Buffett for years has been talking about how it makes no sense that his secretary pays a higher percentage of taxes than he does. He's saying this because he understands that if capitalism loses its legitimacy in the United States or anywhere else, it might be destroyed. Let's duck into the Gen Z subreddit and see how the Zoomers are feeling about capitalism these days. One redditor writes, I hate how we're suffering the most during late stage capitalism. Billionaires spending our tax dollars on either straight or funding other businesses. Meanwhile,
us regular folk have to use 70% of our money for groceries, rent, and household items. Out of every generation, we're going through the worst of it due to us becoming adults during this time period. A lot of capitalism is about accumulating wealth and we know that kind of the boomers got to buy houses when they were cheap and then they kind of accumulate a lot of wealth, but you know, the Gen Z'ers oftentimes they see now that they have no way that they could ever buy a house. There's no way that they ever could really kind of create wealth for themselves and it's true that you know, for many different aspects of everyday American life the costs are going higher. We've been
seeing a rise in prices in almost every sector of the economy and I do agree that in many ways Gen Z are the biggest losers of this process. I think what annoys a lot of the Gen Z'ers the most is when the boomers tell them, oh well you know, you just didn't work hard enough. We pulled ourselves up by our bootstraps. If you actually look at American history in that period you see that it absolutely wasn't just individuals working hard. There were so many different social structures in place to allow these people to thrive. Very cheap education, subsidized mortgages, unions that gave you higher wages, billionaires who paid higher taxes, corporations that were more regulated, labor laws that were more in
favor of the little guy and not just the big capitalists. It feels that even if I work hard, even if I do my best, even if I do what everyone told me and I get good grades and I do everything that I'm supposed to do, I still can't make it because the system is rigged and it 's not working for me anymore. It's working only for the rich. And this brings us to the question of how can we maybe kind of go back to a more golden age? So in the effective altruism subreddit Ace Dude Yeah asked how do we fight reverse late stage capitalism? The first thing I want to say is absolutely things can still turn around. The one thing that you know, billionaires and big corporations want you to believe is that things are inevitable, that they're
natural, this is just the way they are, you can't change them. The first step towards changing things is believing in that change. I know it sounds corny, but that's just the truth. And what changes can you make? I mean again, we can just go back to America. We don't need to look at some socialist utopia. We can go back to the New Deal. We can go back to the 1930s. We can talk about unions at workplaces. We can talk about voting for politicians who aren't in the pockets of corporations, passing major laws that kind of change the structure of the economy, creating alternative forms of businesses instead of just corporations.
We need to discipline the capitalists. Obviously, we probably need to tax them a lot more. We need public options. Just get one public option out there and let people decide if they want that or if they want the same health insurance that they've been getting. There have been some dark moments in American history. You look at the 19th century, you would never imagine things like weekends or that there would be laws against children working in mines or the fact that you have Social Security now. These things didn't just happen. You have to fight, but you can win and you can get these things. Okay. That's enough writing for now. Until next time.
