Sketches

Extracts from a talk about the Occupy Movement reprinted in Tomdispatch, May 8

…The 1970s marked a major turning point in American history. For centuries, since the country began, it had been a developing society, and not always in very pretty ways…. The general progress was toward wealth, industrialization, development and hope. There was a pretty constant expectation that it was going to go on like this. That was true even in very dark times.

I’m just old enough to remember the Great Depression. After the first few years, by the mid-1930s – although the situation was objectively much harsher than it is today – nevertheless, the spirit was quite different. There was a sense that “we’re gonna get out of it,” even among unemployed people, including a lot of my relatives, a sense that “it will get better.”

It’s quite different now. For many people in the United States, there’s a pervasive sense of hopelessness, sometimes despair. I think it’s quite new in American history.

The change took place in the 1970s. There are a lot of reasons for it. One of the underlying factors, discussed mainly by economic historian Robert Brenner, was the falling rate of profit in manufacturing. There were other factors. It led to major changes in the economy – a reversal of several hundred years of progress towards industrialization and development that turned into a process of de-industrialization and de-development. Of course, manufacturing production continued overseas very profitably, but it’s no good for the work force.

Along with that came a significant shift of the economy from productive enterprise – producing things people need or could use – to financial manipulation. The financialization of the economy really took off at that time.

Before the 1970s, banks were banks. They did what banks were supposed to do in a state capitalist economy: they took unused funds from your bank account, for example, and transferred them to some potentially useful purpose like helping a family buy a home or send a kid to college. That changed dramatically in the 1970s. Until then, there had been no financial crises since the Great Depression. The 1950s and 1960s had been a period of enormous growth, the highest in American history, maybe in economic history.

And it was egalitarian. The lowest quintile did about as well as the highest quintile. Lots of people moved into reasonable lifestyles – what’s called the “middle class” here, the “working class” in other countries – but it was real. And the 1960s accelerated it. The activism of those years, after a pretty dismal decade, really civilized the country in lots of ways that are permanent….

The developments that took place during the 1970s set off a vicious cycle. It led to the concentration of wealth increasingly in the hands of the financial sector….