Dylan Riley and Robert Brenner’s ‘Seven Theses on American Politics’, published after the us midterms last winter, has outlasted its immediate occasion in striking fashion. The article sparked a thoughtful, expansive, at times technically intricate debate that has ranged beyond the pages of New Left Review—drawing responses in Jacobin and Brooklyn Rail, spawning Substacks and podcasts—and spanned the generations. Riley and Brenner’s interlocutors in the journal so far—Matthew Karp, Tim Barker and Aaron Benanav—are part of a cohort of radical intellectuals shaped by the fallout of the 2007–12 crisis; the richness and rigour of today’s discussion far surpasses what left analysis could muster a decade ago.footnote1 The proximate purpose of ‘Seven Theses’ was two-fold: first, to explain the Democrats’ unexpectedly robust performance in the midterms, and, second, to assess the ideological complexion and macro-economic consequences of ‘Bidenism’—the Administration’s fiscal stimuli and eco-nationalist neo-industrial policies: the Bipartisan Infrastructure Investment and Jobs Act of 2021, and the chips and Science Act and the Inflation Reduction Act, both passed in the summer of 2022. Riley and Brenner’s assorted theses—‘rough’, ‘unfinished’ and ‘proposed in an experimental and provisional spirit’—were ‘intended to provoke further discussion’. Before revisiting them in detail, it is worth reflecting: why did they succeed?
Bucking the tendency of American political commentary to neglect the ‘economic history structuring shifts in the political system’,footnote2 ‘Seven Theses’ attempted to apprehend conjunctural developments—election results, government policies—by linking them to a ‘deep structural transformation’ within American capitalism, namely the emergence of a ‘new regime of accumulation: let us call it political capitalism’, under which ‘raw political power, rather than productive investment, is the key determinant of the rate of return’. By sketching these structural, longer-term changes in the dynamics of accumulation, Riley and Brenner sought to clarify the conditions and parameters of politics. It is the bracing depth of their analysis that accounts for the intensity and calibre of the engagement it has attracted—as well as, perhaps, for the preponderantly critical character of the responses. An inquiry into the material substratum and ‘structures’ of American politics, inevitably somewhat schematic and broad-brush, is bound to elide or distort some of the more nuanced aspects of the conjuncture, especially one as complex and fluctuating as the early 2020s.
Whatever the pitfalls of the approach, the perplexing characteristics of the present period, most agree, warrant fresh, ambitious theorizing of the kind on display in ‘Seven Theses’. The debate is an attempt to grapple with a succession of unprecedented crises—and the distinctive political reactions they elicited—in the heartlands of the capitalist system: the slow and faltering recovery from the near-meltdown of the financial system in 2008, austerity and foreclosures hitting working people as quantitative easing and near-zero interest rates drove asset prices to dizzy heights; the rise of new tech giants with a private-monopoly hold over digital communications and algorithmic regulation; the political shock of Trump’s victory to the two-party system and the liberal establishment; the deterioration of us–China relations, beginning in 2018, and ominously ramped up under Biden; the onslaught of extreme weather events as the world warms faster than predicted; the watershed of the pandemic, with the Federal government pouring cash into workers’ and companies’ bank accounts, as large sections of the global economy went into lockdown; soaring consumer prices, with food and fuel spikes driven by a ferocious land war in Europe and supply-chain hangovers from Covid-19, alongside a tight labour market—with unemployment in the us, as of June, still at 3.6 per cent despite ten successive rate hikes by the Fed since March 2022.footnote3 Beneath these shocks, the symptoms of a deeper, longer-running malaise linger, stemming from the secular deceleration of the world economy and aggravated by the weak, uneven recovery of the 2010s: stagnating real wages and worsening precarity, depressed rates of accumulation even as profits have revived, a hypertrophied and brittle financial sector increasingly dependent on monetary stimulus and bailouts. Whether or not political capitalism, the flagship concept of ‘Seven Theses’, is an apt way of capturing the novelties, not to say morbidities, of the era, few could question that there is, as Barker put it, ‘something to talk about here’.
Political capitalism played a less prominent but still animating role in earlier analyses by both Riley and Brenner, including ‘Escalating Plunder’, Brenner’s blistering audit of the Fed bailouts authorized by the cares Act, passed by Trump in March 2020, and Riley’s ‘Faultlines’, published after Biden’s election later that year. But the concept also draws and expands on ideas formulated in older writings. An important antecedent to the present discussion is Brenner’s editorial launching Catalyst magazine in 2017, where he adumbrated the lineaments of the new regime. But the key historical account, setting the scene for its emergence, is Brenner’s influential study of the postwar trajectory of world capitalism, first laid out in a special issue of nlr in 1998 and later published as The Economics of Global Turbulence (2006), various aspects of which have been revisited over the course of the debate.footnote4 Not only did ‘Seven Theses’ reignite broader, older arguments about the vicissitudes of the capitalist system, but the emphases and parameters of the debate that ensued have shifted as it has progressed, with ‘political capitalism’ deployed to explain quite disparate local phenomena, from pandemic relief to the collapse of Silicon Valley Bank.footnote5
It is perhaps little surprise, given its all-encompassing and protean character—and with the real-world referents rapidly evolving—that the debate has at times seemed in danger of becoming at once involuted and diffuse. What follows, then, will seek, first, to narrow the discussion, and second, to open it out: to distinguish a few of the most salient and fundamental questions raised, and to reflect on the political stakes involved in posing them. Along the way, the aim will be, if not to resolve, then at least to acknowledge and define the areas of surface confusion and contradiction, ambiguity and irony, dappling the concept of ‘political capitalism’. The hope is that recasting the discussion in leaner and more reflective terms will facilitate further exchange of a focused, attentive and productive kind.
The seven theses
Given midterms traditionally punish the incumbent party, why did the bruited ‘red wave’ fail to douse Congress despite Biden’s lacklustre approval ratings amid entrenched inflationary pressures?footnote6 Conventional analysis pointed to immediate, contingent factors—the Supreme Court’s overturning of the constitutional right to abortion in the summer of 2022, the off-putting extremity of the Republican candidates endorsed by Trump (and, in some cases, deliberately boosted by Democrat donors’ funds). For Riley and Brenner, these explanations ‘miss the larger picture’: the sociological recomposition of the two major parties’ bases over the last two decades that has transformed the character of elections. While much of the twentieth century saw ‘significant electoral swings, and big congressional majorities’, the twenty-first has been distinguished by feverish deadlock, with narrow victories scraped by turning out ‘a deeply but closely divided electorate’.
The ‘peculiar intensity’ of recent elections—hyper-partisanship producing a kind of churning stasis: ‘two symmetrical waves, crashing into one another’footnote7—is an effect, Riley and Brenner claim, of the rise of a new electoral structure ‘axed on conflicts of material interest within the working class’, defined capaciously as the 68–80 per cent of American households ‘who do not own assets and therefore must subsist on wage income’. The new structure is the upshot of a two-way shift widely known by the shorthand ‘class dealignment’, which Matthew Karp summarizes as ‘the movement of poorer and lower-educated voters toward the Republican Party, and the parallel migration of wealthier and higher-educated voters toward the Democrats’.footnote8 The Democrats’ strong showing in the midterms, Riley and Brenner argue, is a reflection of the Party’s ‘neo-technocratic’ appeal to its core constituency among the ‘credentialled’ fraction of wage-earners. In a highly polarized political landscape, turn-out is a major determinant of success, and the well-educated who now lean Democratic are more likely to be politically engaged, an extra advantage in off-year polls.
How do Riley and Brenner explain this transition to tight, heated elections won by mobilizing some portion of a fractured and ideologically reshuffled working class? The standard ‘class dealignment framework’—the rival account they aim to dislodge—interprets the new social fissures reshaping electoral politics as a symptom of ‘identity’ having displaced class as the determining principle of political affiliation. This ‘idealist’ explanation, Riley and Brenner contend, is ‘misleading, or at least highly partial’, because it neglects the ‘robustly material’ (if ‘obviously non-class’) basis of contemporary American politics. The divergent attitudes and allegiances of the higher- and lower-educated segments of the wage-earning class ‘are understandable pragmatically without having to attribute to [either] group a fanaticism which it does not hold’.footnote9
What ‘pragmatic’ explanation do they propose? They link these new electoral dynamics to the new political-capitalist regime, itself a kind of morbid adaptation to the ‘long downturn’: the system-wide, global slowdown that set in in the early 1970s, catalysed by declining profitability in manufacturing as intensifying international competition mired successive national industries in chronic crises of overcapacity and weak aggregate demand from which they are yet to escape. Eroding wages to subsidize profits only exacerbated shortfalls in consumer spending, while state interventions—from Keynesian stimulus to accommodating monetary policy and the massive expansion of public and private debt—stabilized the system but at the cost of entrenching its structural weaknesses, preventing a replenishing shake-out of unproductive capital. As Brenner explained in Catalyst in 2017, faced with few outlets for profitable investment, capitalists ‘turned to a far-reaching programme of politically founded upward redistribution’. Profits were sustained by suppressing wage growth and speeding up work, among other traditional cost-cutting measures, and, increasingly, by ‘skipping production altogether’, seeking higher returns in financial speculation and political predation—taking advantage of a repertoire of ‘politically constituted rip-offs’, including such varied items as regressive tax cuts, deregulation, monetary infusions, near-zero interest rates pumping up asset bubbles and the socialization of the losses of an over-leveraged financial sector.footnote10
In these straitened, skewed circumstances, redistribution from capital to labour ‘becomes extremely difficult, if not impossible’, producing a vicious ‘politics of zero-sum redistribution, primarily between different groups of workers’, in which ‘parties become fundamentally fiscal rather than productivist coalitions’. Instead of pursuing their collective interests as a class, workers attempt to protect the value of their labour power by coalescing into ‘status groups’—‘credentialled’ workers promoting ‘expertise’ and ‘science’; ‘native’ workers opposing immigration—as a way of ‘managing competition’. Education and race thus become forms of ‘social closure’.footnote11
The ‘Biden experiment’—the second principal subject of ‘Seven Theses’—is another symptom and casualty of political capitalism, shaped and ultimately undermined by the structural weakness of the us economy as well as its sui generis, ‘accidental’ origins. ‘The pursuit of a quasi-New Deal fiscal programme without the requisite capitalist growth has predictably contributed to rising inflation’ (‘what one gets when one pursues deficit spending in the absence of a dynamic capitalism’). Meanwhile, the zero-sum politics to which stagnation has given rise foreclose meaningful redistribution. Whereas the New Deal and Great Society programmes were premised on a ‘booming economy’ and working-class militancy, the ‘neo-progressive’ fiscal largesse of the 2020s is ‘largely a fortuitous response to the Covid pandemic’, Trump’s populist example (and ‘perhaps’ rivalry with China). What’s more, the means of the Democrats’ electoral success—their ‘strikingly effective’ bid to the highly educated—further curtails the Party’s legislative ambitions.footnote12 In immediate terms, this is due to the ideological cast of its wealthy supporters, many of whom, as Karp has observed, ‘strenuously oppose’ progressive redistributive measures.footnote13 In the longer run, the Democrats’ neo-technocratic brand of ‘multicultural neoliberalism’ is ‘premised upon, and likely to reinforce, the fragmented nature of the us working class’, impeding the coalescence of the class-based social forces that have historically propelled pro-labour reforms.
Vividly juxtaposing the opposing political trajectories of two cities in Minnesota—the tony, exclusive suburb of North Oaks, a gop fortress that turned Democratic in 2022, and the depressed, blue-collar town of Hibbing, which opted for Trump in 2016 and 2020—Karp’s contribution constitutes less a refutation than an elegant refinement of ‘Seven Theses’.footnote14 In particular, Karp proposes a slightly different, and finer-grained periodization. Whereas Riley and Brenner trace the origins of the new electoral structure to the 1990s (‘definitively since 2000’), Karp maintains that the ‘truly fateful shift in voting patterns’—‘the two-way traffic of downscale voters travelling right and upscale voters moving left’—‘has only occurred in the last decade’.footnote15 He agrees that the shift had been brewing for decades—the ‘electoral order first began to wobble in the 1970s’—as ‘stagnation, deindustrialization and the consequent retreat of organized labour’ eroded the support of centre-left parties. But, noting that Obama lost North Oaks and won Hibbing in 2008 despite Republican appeals to an exclusionary nationalism, he argues that political loyalties were only decisively reversed ‘after 2012’, with the election of Trump in 2016 a kind of cartoonish denouement.
Tim Barker and Aaron Benanav, by contrast, primarily take up Riley and Brenner’s characterization and critique of ‘Bidenomics’—as well as Brenner’s account of the long downturn. This has become the basis for ‘extraordinarily strong claims about the future of capitalism and the feasibility of various political projects’, Barker contends, before raising searching questions, empirical and theoretical, about the significance of the rate of profit in manufacturing.footnote16 Is ‘politically engineered upward redistribution’ a sufficiently subtle analytic instrument with which to parse the fiscal and monetary policies of the 2020s, encompassing not only Fed bailouts but relief for workers, not only monetary stimulus but a dramatic tightening of credit to contain inflation? Even if the ‘overall tilt of state policy is regressive’, Barker insists that the distributional consequences—on both income and power—of, for example, low interest rates, are more ambiguous than Brenner’s verdict suggests: ‘politicized plunder’ funnelling wealth to the rich by inflating asset prices and stock markets. The instrumental and ideological motivations of fiscal intervention are often complex, too: one ought to ask ‘whether the government ever spends money to legitimate itself, or to buy votes from non-rich people, or to invest in the cheapest possible version of social reproduction.’footnote17
Benanav’s contribution, in part a defence of Brenner’s account of overcapacity, was a response to a subsidiary strand of the debate, launched by Riley’s short article in Sidecar which glossed the collapse of Silicon Valley Bank earlier this year as a ‘beautiful, almost paradigmatic demonstration of the fundamental structural problem of contemporary capitalism’—namely the secular decline of profitability and the ensuing recourse to ‘directly political mechanisms’ to generate returns. Biden’s green-nationalist industrialization drive, inevitably greeted by retaliatory ‘onshoring’ projects elsewhere, will only aggravate ‘the problems of overcapacity on a world scale’, necessitating ‘increasing state support’, either ‘monetary juicing’ or ‘direct profitability guarantees’, both of which in turn would ‘exacerbate the phenomenon of political capitalism’.footnote18 A rebuttal by J. W. Mason appeared in Jacobin, where he defended the prospects for New Deal-style stimuli and industrial strategy by taking issue with Brenner’s account of overcapacity. Mason argued that the notion that increasing public investment in one country will ‘diminish opportunities for profitable accumulation elsewhere’ misconceives demand as finite—an ‘absolute or externally given’ constraint—as opposed to a flexible variable, in part determined by the changes in supply effected by the collective investment decisions of producers.footnote19
In response, Benanav argued that Brenner’s theory of overcapacity is in fact dynamic rather than static. The ‘zero-sum game’ doesn’t imply a ‘fixed amount of demand’, but a fiercely competitive world system in which the ongoing slowdown in average rates of economic growth pits capitalist firms and states against each other, such that the rise or recovery of manufacturing in one country, often achieved through currency revaluation, can only be achieved ‘at the expense’ of other countries’ industries. In order to explain why overcapacity has become so entrenched, dragging down growth, Benanav augments Brenner’s theory with a sketch of what he terms the ‘goods-to-services demand shift’. Since productivity growth is harder to come by in services—less amenable to mechanization than manufacturing—they become more expensive over the course of economic development, eating up proportionally more of people’s income, less of which is spent on manufactured goods. Thus the demand shift undermines ‘the self-reinforcing dynamic in which industrial supply created its own demand’, issuing in a surfeit of productive capacity.
Meanwhile, writing in Sidecar, Grey Anderson highlighted the near-total neglect of ‘the relational logic between expanded domestic spending and an increasingly aggressive Pacific policy’—not only in the ‘Seven Theses’ discussion, but in broader left assessments of Washington’s industrial pivot:
Viewed from the halls of power, the anti-China orientation of us industrial policy is not an unfortunate by-product of the green ‘transition’, but its motivating purpose. For its conceptors, the logic governing the new era of infrastructure spending is fundamentally geopolitical; its precedent is to be sought not in the New Deal but in the military Keynesianism of the Cold War.footnote20
A trenchant critique of the ‘worldwide comeback’ of industrial strategy—and of the myopia of the left’s warm reception—also appeared in Brooklyn Rail, where Jamie Merchant similarly emphasized the anti-China objectives galvanizing Biden’s neo-mercantilist policies, though stressing economic relationships rather than national-security logics. Insofar as ‘politically engineered upward redistribution’ within the us polity scants these broader geopolitical dynamics, ‘political capitalism’ could appear a parochial framework. As we saw, the crucial backdrop to the emergence of the new regime is the fading dynamism of global capitalism since the 1970s; yet ‘Seven Theses’ only examines the effects of this worldwide slowdown on American politics—as though national political systems, while shaped by global economic forces, operate in an insular vacuum. International competition was the pivotal factor in Brenner’s original account of overcapacity, but has faded from view, Merchant observes. Bidenomics is a product of the long downturn in a more thoroughgoing sense—not only indirectly, as shaped by the zero-sum political dynamics to which secular stagnation has given rise, but as the American iteration of ‘a strategy that capitalist countries are forced to adopt to defeat one another on the shifting stage of global competition’, which entails the ‘constantly expanding footprint of national states in both domestic and international corporate economies’:
The different national forms this takes—Bidenomics in the us, Germany’s Industrial Strategy 2030, China’s Made in China 2025, India’s mii (Make in India) initiative, and so on—are all particular instances of a single, structural transformation of the world economy into a fragmented state-capitalist hellscape.footnote21
Ambiguities, contradictions, ironies
Is ‘political capitalism’, in the broad sense of the dependence of capitalist profits on political power, really new? Aren’t capitalist economies always ‘politically constituted’, with profit-making perennially reliant on the complicity if not active intervention of the state, which establishes and enforces the institutional conditions that permit the sustainable extraction of surplus value—enshrining strong private property rights, tinkering with the value of currencies, regulating trade union activity? Are the political mechanisms of upward wealth transfer Riley and Brenner identify—such as tax breaks and privatization—so very ‘novel’, and do they really compose a distinct ‘regime of accumulation’? Riley and Brenner do not define the term—which derives from Michel Aglietta’s Régulation et crises du capitalisme (1976)—but such a regime presumably fosters capital accumulation, in the sense of returns on productive investment, yet one of the defining features of the contemporary period, especially glaring since 2008, is the persistently depressed rates of accumulation even though profits as such have rallied.footnote22
Political capitalism has not only attracted this sort of lively critical engagement, but also generated a certain amount of confusion. Its relationship to neoliberalism, in particular, remains somewhat unclear; at times, the two seem virtually synonymous.footnote23 The politicization of the rate of return appears to have begun with neoliberalism, as Riley explains in ‘Faultlines’: ‘with the onset of the long downturn, a profound mutation in the material basis of us party politics took place from around 1980. Political power, rather than investment and accumulation, began to play an increasingly direct role in securing rates of return for capital . . . this could perhaps be termed “political capitalism”.’ Is political capitalism a wholly new regime or neoliberalism in more brazen form?footnote24
Karp and Barker both mischaracterize political capitalism in passing as chiefly referring to the large-scale state interventions of the Covid era. The mischaracterization is partly down to the capacious application of the concept, flexibly adapted to contextualize both midterm elections and fiscal stimuli, but the term itself could also be seen as misleading: ‘political capitalism’ conjures a highly proactive state, directly administering productive enterprises, rather than a servile, hamstrung one, enriching capitalists in ways that ever more flagrantly contradict the needs of the ordinary people it purports to represent.footnote25 Recall that in ‘Escalating Plunder’, Brenner criticized the emergency funding extended by the Fed to corporations—‘placing money in their hands without conditions on how they should spend it’ (such as to retain employees and refrain from stock buybacks)—as ‘a hands-off approach to the economy’s leading producers and financiers on the part of the bipartisan political-economic establishment’.footnote26
In fact, these sorts of Keynesian expansionary policies were explicitly contrasted with and excluded from political capitalism in the 2017 Catalyst editorial, where Brenner described the turn to ‘politically founded upward redistribution’ as precisely a response to the diminishing effectiveness of stimuli in the 1970s. And among the repertoire of classically neoliberal policies Brenner included in his list of political ‘rip-offs’—tax cuts, privatization, financialization—fiscal spending was conspicuously absent. In ‘Escalating Plunder’, he lamented the absence of a ‘new wave of statist intervention in the interests of greater productivity and competitiveness’. But by the time of ‘Seven Theses’, as Barker points out, Biden’s raft of subsidies designed to boost domestic manufacturing joins the list of rip-offs, and is blamed for stoking inflation.
Described as ‘massive state spending aimed directly at private industry, with trickledown effects for the broader population’, does Biden’s array of tax credits, loans and grants hew to the logic of ‘political capitalism’? There is little disputing their broadly upward-distributive character, which Thomas Meaney has aptly described as the ‘public subsidization of private capital’s returns’, inducing companies to invest in environmentally and geopolitically strategic industries by socializing the risks of such investment.footnote27 Even the Economist concedes the sum of Biden’s spending is ‘remarkable in that it is going mainly to private enterprises’.footnote28 The subsidies certainly disburse public monies to capital, whose profits can in that sense be regarded as politically assisted, if not politically decreed. Yet doesn’t subsuming all such policies under the rubric of ‘politically engineered upward redistribution’ ‘conflate wildly different sorts of policy’, as Barker puts it—income tax breaks with ‘Made in America’ initiatives? Is the contrast between the political and the productive implied in Riley and Brenner’s definition—which juxtaposes productive investment with ‘investments in politics’—sustainable when considering the chips Act and ira, which are certainly politically driven and upwardly redistributive but also, crucially, designed to draw capital into the productive sector?
Whether or not the investment they spur will prove ‘productive’ or not is another matter: the ‘reshoring’ of, for example, chip-making, to a ‘high-cost destination’ like the us, in combination with the disruption to international supply chains caused by export controls, is likely to be, in the Economist’s judgement, ‘distressingly inefficient’, as well as threatening a global glut. The effects on employment of this influx of capital to domestic industry may also be underwhelming; job growth in manufacturing has slowed this year, and the Bureau of Labor Statistics expects employment in the sector to shrink between 2021 and 2031, despite the ‘boom’ supposedly ignited by Biden’s initiatives.footnote29 Nevertheless, it is surely beyond question that these bills are designed to increase American productive capacity and that the battery-makers and ev manufacturers taking advantage of the handouts will be using them to purchase factors of production—building factories, hiring workers—and that such investments will be a ‘key determinant’ of their eventual returns.
The equivocation about Keynesian stimulus is a symptom, it would seem, of a larger uncertainty about the prospects for reviving growth, and the capacity of states to reshape economies in ways that overcome the structural weaknesses stemming from overcapacity and falling real wages. The longer-term outlook for a return to rapid growth rates in advanced economies looks bleak. The productivity revolutions that transformed agriculture and industry, bringing new phases of accumulation, are, as Gopal Balakrishnan observed back in 2009—foreseeing a ‘long-term drift’ towards a ‘stationary state’—unlikely to be repeated for service-dominated economies catering to ageing, shrinking populations.footnote30 Riley and Brenner appear similarly sceptical about the prospects of revitalizing American capitalism. Bidenomics, as we saw, is a ‘quasi-New Deal fiscal programme without the requisite capitalist growth’. Several questions present themselves: couldn’t the original New Deal—in its initial stages, an emergency response to prolonged depression—equally be described as a ‘fiscal programme without the requisite capitalist growth’? Even if war preparations were what ultimately lifted the us economy out of its rut, wasn’t growth the goal rather than a prerequisite? And can Bidenomics be described as ‘deficit spending without growth’ or does its strategic attempt to bolster productive capacity more closely resemble ‘a programme of restructuring’? Biden’s subsidies fall far short of the spending proposed in the foiled Build Back Better plan, let alone Sanders’s $16tn Green New Deal—and come to a mere 0.5 per cent of gdp, compared to the approximately 6 per cent of gdp a year invested in infrastructure in the mid-20th century.footnote31 Would these more extravagant investment programmes propel the economy where Bidenism can only overheat it? And if not, what sort of policies could revive profitability and overall growth rates? Ctd....