#deindustrialization

In the aftermath of World War II, proposed public-investment-led full employment programs were forcefully combatted and soundly defeated, at a time when left-wing organizations were much stronger than they are today (of course, most of those left-wing organizations were fighting for more than public investment: many were calling for the socialization of production). Large asset-owners understood, correctly, that public investment posed an existential threat to their prerogatives regarding where and how much of society’s resources to invest in the expansion of production—and hence whether economies would expand or slide into recessions. It was not so much full employment they feared, but rather full employment achieved via public investment, which would have neutralized the capacity of large asset owners to throw society into chaos through threats of disinvestment. Throughout the postwar period and into the present, capitalists have ensured that they retained a tight grip over this heavy artillery of the class conflict: the capital strike. By threatening to disinvest, capitalists have ensured that the private investment decisions of large firms are respected, as the condition of maintaining or restoring high levels of employment. Today, firms’ grip over the capital-strike weapon is stronger than it was before, since investment levels are depressed and underemployment is widespread. Moreover, in a world where private investment is weak, fear that public investment could displace its private equivalent as the main driver of economic activity becomes all the stronger, since so little investment is taking place overall. It is a mistake to imagine that capitalists would ever agree to their own planned obsolescence. To challenge capitalists’ control over investment decisions, even under the guise of a New Deal-style capital-labor accord, is not a compromise. As Oskar Lange pointed out in 1938, “To retain private property and private enterprise and to force them to do things different from those required by the pursuit of maximum profit would involve a terrific amount of regimentation of investment,” upsetting “the financial structure of modern capitalist industry” and encouraging firms “to use their economic power to defy the government authorities (for instance, by closing their plants, withdrawing investment, or other kinds of sabotage).” Facing potential insubordination from powerful actors, radical Keynesians would need to threaten firms with full socialization. In order to make good on those threats, they would need to have already developed and disseminated a clear plan for doing away with private enterprise. But then, to have any chance of securing their aims, radical Keynesians would also need to have won the backing of major social movements. Only movements that presented a truly existential threat to asset owners’ wealth would be able to bring capital to heel. Yet if those social movements were powerful enough to force capital to submit to a public-investment-driven economy, why would they not demand more? Such movements would not willingly allow for power’s further concentration in the hands of the state (instead, they would demand a devolution of power to democratic organs of the people themselves). As we will see, automation theorists’ UBI proposals suffer from a similar failure to reckon with the weapons capital wields, above all in an era of economic slowdowns. Capital disinvestment neuters all worker-empowering policies as soon as they are born.