Low growth, in turn, reinforces inequality by intensifying distributional conflict, making concessions to the poor more costly for the rich, and making the rich insist more than before on strict observance of the ‘Matthew principle’ governing free markets

[...] Egalitarian democracy, regarded under Keynesianism as economically productive, is considered a drag on efficiency under contemporary Hayekianism, where growth is to derive from insulation of markets – and of the cumulative advantage they entail – against redistributive political distortions.

[...] What the deterioration of public finances was related to was declining overall levels of taxation (Figure 1.5) and the increasingly regressive character of tax systems, as a result of ‘reforms’ of top income and corporate tax rates (Figure 1.6). Moreover, by replacing tax revenue with debt, governments contributed further to inequality, in that they offered secure investment opportunities to those whose money they would or could no longer confiscate and had to borrow instead. Unlike taxpayers, buyers of government bonds continue to own what they pay to the state, and in fact collect interest on it, typically paid out of ever less progressive taxation; they can also pass it on to their children. Moreover, rising public debt can be and is being utilized politically to argue for cutbacks in state spending and for privatization of public services, further constraining redistributive democratic intervention in the capitalist economy.

The image I have of the end of capitalism – an end that I believe is already under way – is one of a social system in chronic disrepair, for reasons of its own and regardless of the absence of a viable alternative. While we cannot know when and how exactly capitalism will disappear and what will succeed it, what matters is that no force is on hand that could be expected to reverse the three downward trends in economic growth, social equality and financial stability and end their mutual reinforcement. In contrast to the 1930s, there is today no political-economic formula on the horizon, Left or Right, that might provide capitalist societies with a coherent new regime of regulation [...]

[...] Geoffrey Hodgson has argued that capitalism can survive only as long as it is not completely capitalist – as it has not yet rid itself, or the society in which it resides, of ‘necessary impurities’. Seen this way, capitalism’s defeat of its opposition may actually have been a Pyrrhic victory, freeing it from countervailing powers which, while sometimes inconvenient, had in fact supported it. Could it be that victorious capitalism has become its own worst enemy?

Markets, however, have an inherent tendency to expand beyond their original domain, the trading of material goods, to all other spheres of life, regardless of their suitability for commodification – or, in Marxian terms, for subsumption under the logic of capital accumulation

As of the 1980s, deregulation of U.S. financial markets had abolished the restrictions on the private production and marketization of money devised after the Great Depression. ‘Financialization’, as the process came to be known, seemed the last remaining way to restore growth and profitability to the economy of the overextended hegemon of global capitalism.

[...] consumption in mature capitalist societies has long become dissociated from material need. The lion’s share of consumption expenditure today – and a rapidly growing one – is spent not on the use value of goods, but on their symbolic value, their aura or halo. This is why industry practitioners find themselves paying more than ever for marketing, including not just advertising but also product design and innovation. Nevertheless, in spite of the growing sophistication of sales promotion, the intangibles of culture make commercial success difficult to predict – certainly more so than in an era when growth could be achieved by gradually supplying all households in a country with a washing machine.

[...] there is no indication that the long-term trend towards greater economic inequality will be broken any time soon, or indeed ever. Inequality depresses growth, for Keynesian and other reasons. But the easy money currently provided by central banks to restore growth – easy for capital but not, of course, for labour – further adds to inequality, by blowing up the financial sector and inviting speculative rather than productive investment. Redistribution to the top thus becomes oligarchic: rather than serving a collective interest in economic progress, as promised by neoclassical economics, it turns into extraction of resources from increasingly impoverished, declining societies [...]

This was anticipated in the infamous ‘plutonomy’ memorandums distributed by Citibank in 2005 and 2006 to a select circle of its richest clients, to assure them that their prosperity no longer depended on that of wage earners

[...] What may be surfacing here is the fundamental tension described by Marx between, on the one hand, the increasingly social nature of production in an advanced economy and society, and private ownership of the means of production on the other. As productivity growth requires more public provision, it tends to become incompatible with private accumulation of profits, forcing capitalist elites to choose between the two. The result is what we are seeing already today: economic stagnation combined with oligarchic redistribution.