#dylan riley

OC VALENTINES CHALLENGE // DAY TWO » LIENA RILEY X DYLAN RILEY

The Politics of a Second Gilded Age

Dylan Riley and Robert Brenner, ‘The Long Downturn and its Political Results’, New Left Review 155, Sept/Oct 2025.

This is an article analysing the present socioeconomic and political situation using neo-Marxist methods. In case you don’t know, Robert Brenner is one of the leading figures in International Political Economy. He made his name writing about the transition from feudalism to capitalism, and is also known for attempts to analyse the neoliberal period, such as The Boom and the Bubble (2002) and The Economics of Global Turbulence (2006). His approach is broadly Marxist, although not dogmatically so; he shares with Marx a focus on the ways political economy shapes social life. Dylan Riley, credited as the first author, is an editor of New Left Review and has previously written on inter-war European regime-types, censuses, and the foundations of fascism, from a broadly Gramscian perspective. He has also written on Trump as a Bonapartist. Unfortunately, despite their anti-capitalist politics, New Left Review have put a number of articles (including this one) behind a paywall. Fortunately, however, Riley has put the article on his college site here. The work is framed as a reply to critics of the authors’ earlier works on the long downturn and political capitalism, particularly to criticisms of ‘Seven Theses on American Politics’, which the authors wrote in 2022.

In this article, Dylan Riley and Robert Brenner extend their critiques of contemporary capitalism by linking long-term economic stagnation to profound political changes in “advanced” capitalist societies (i.e. the global North). They argue that the global economy has been locked in a “long downturn” since the early 1970s, characterized by persistently low growth, declining investment, and falling profit rates across Northern economies, which have been far weaker than during the post-war “long boom.” This slowdown is driven by structural factors such as intensified international competition, overcapacity, and stagnation of productivity and investment.

The Long Downturn is a deep and persistent period of economic stagnation rooted in declining profit rates and weak investment since the 1970s. It corresponds to the neoliberal or post-Fordist period. In this period, capitalism is no longer sustaining profits through technical and technological innovation. Capitalist development has more-or-less halted. And, the authors think, this is also what happened in the 1920s-30s, the last period of prolonged downturn which also saw the rise of fascism. State deficit financing and the growing importance of the finance sector are central to the process the authors theorize, which passes from borrowing in the 1980s to deregulation in the 1990s and then to bailouts after the 2008 crash. This has affected capitalists’ incentives in ways which discourage development and encourage rent-seeking, making the downturn self-sustaining.

Against this backdrop, Riley and Brenner develop the concept of “political capitalism”: a regime in which political mechanisms replace productive investment as primary sources of return on capital. With few profitable opportunities in productive investment, capitalists increasingly seek gains through political channels, such as favourable regulation, subsidies, protectionism, state contracts, financial manoeuvres, and rent-seeking, rather than through expanded production or technological innovation. This shift alters the very logic of capitalism and reshapes political coalitions and party structures. Rather than providing general social conditions for capitalist accumulation, parties and coalitions now play the role as channels for providing rents to particular sets of capitalists and their supporters. Workers and poor people are worse-off, while the state has lost some of its power to enact limited reforms, instead relying on rents. Hence, ‘the material pressures on workers to pursue their interests as defined by educational, racial, ethnic or gender identity, rather than their common interests qua workers, have been greatly strengthened’ (p. 66).

In the authors’ view, neoliberal economics has generated political capitalism as a side-effect of its failure in more standard bourgeois economic terms. Political capitalism emerges when returns on capital shift from productive investment to political rent-seeking and redistribution. In other words, capitalists now rely on state coercion and subsidies to sustain their profits, rather than just using the state to create conditions for free-market competition.

The authors contend that political outcomes such as the relative strength of far-right forces, polarized electorates, and weakened left parties cannot be understood solely through cultural explanations like “culture wars.” Instead, these political dynamics reflect material conflicts between different fractions of the working class and capital under conditions of stagnation: credentialed (well-integrated, formal-sector, highly-educated) workers aligned with traditional centre-left parties, and non-credentialed (precarious, informal-sector, less-educated) workers attracted to protectionist and nationalist parties. In other words, the far-right is basically vacuuming up all the people left outside the dominant patronage machine. Contemporary political divisions reflect the material interests of different socioeconomic fractions under stagnation, as channelled in patrimonial politics, not just cultural disputes, prejudice, or privilege.

Responding to critics, Riley and Brenner clarify that their analysis emphasizes structural economic constraints shaping politics, not just immediate electoral performance. They reaffirm that without addressing the underlying stagnation in productive investment and profitability, capitalism will continue to generate political instability, inequality, and fragmented working-class politics.

Political capitalism refers to a phase of capitalism in which profits are increasingly secured through political means rather than productive economic activity. Because long-term economic stagnation has reduced opportunities for profitable investment in production, firms and investors turn to the state to sustain returns. Instead of expanding output, innovation, or employment, capital seeks advantage through lobbying and regulatory capture; through subsidies, tax breaks, and state contracts; through trade protection and industrial policy; through financial manipulation and asset inflation; and through control over public resources and rents.

Under political capitalism, the state becomes a central arena of accumulation, intensifying competition among capitalist fractions for political favour. This fuels polarization, corruption, and instability, as economic conflicts are increasingly fought out in the political sphere rather than resolved through growth.

Riley and Brenner argue that this shift helps explain the weakening of traditional centre-left and labour parties, the rise of nationalist and authoritarian movements, and growing class fragmentation within the working population. In short, political capitalism is not a deviation from capitalism but a systemic response to prolonged stagnation, where politics substitutes for growth as the main source of profit, producing increasingly volatile and conflictual political outcomes.

What it means for radicals: If the authors are right, their analysis suggests that we are in a dangerous period in which the state is more corrupt and authoritarian than before. Classifying the operations of the state in political-economic terms is standard to Marxist approaches, because the state is viewed as part of the superstructure and not the base of capitalism. In practice, however, processes like political capitalism suggest that the state is also part of the base. Anarchists more usually treat the state as a separate actor, allied to but distinct from capitalists, which has its own logics and interests in control and extraction. It seems to me that political capitalism entails a shift of power within the ruling power-bloc, in which the statist class gains in power and influence by becoming the main provider for the capitalist class, which loses a lot of its autonomy and whatever interests it had in limiting state power. The two fractions also move closer together, becoming more like the party-state model found in China and formerly in the eastern bloc.

If the process continues, it could lead to neopatrimonial forms of state of the kind already found in poorer parts of the world, spreading to the global North (as they already seem to be doing in the eastern bloc). A lot is known already about this state-form, which often undergoes economic instability, turbulence such as civil wars, and a tendency towards authoritarianism legitimized as a way of suppressing zero-sum social conflicts along lines such as ethnicity and religion.

This context changes the strategic field in several ways. The first of these is that it is increasingly hard to use the state against capital or vice-versa, because they are bonded more closely together. It might be increasingly important to work informally. Second, strategies based on targeting capitalist profits are less successful if capital depends more on rents. We’ll increasingly find the whole state/capital machine, not particular corporations, aligned against us. Thirdly, the difficulties which already characterize neopatrimonial systems are now starting to occur everywhere, dividing social groups into contending, culturally-defined fractions pitted against each other in competition for shares of state patronage.

The main problem here is that, as people become dependent on the crumbs from rents provided to their faction, factional identities bind people into the system. This is something I’ve noticed happening among present and former anarchists, leftists, and other radicals, via trajectories such as academic incorporation, the NGO-industrial complex, and reliance on funding bids. If we’re going to remain antagonistic towards the system as a whole, we need to avoid being dragged into the conflict among fractions of rent-seekers within political capitalism.