[...] the call remains for a return to the type of regulatory system of the Keynesian postwar welfare state, which ostensibly held the depredations of capital at bay. The rationale runs along these lines: in the 1940s, '50s, and '60s, corporations were kept in their place by a state that imposed checks on banking and manufacturing. Starting in the late 1970s, the state retreated and let the market run wild. If we could only return to the heyday of American capitalism, all would be well.

But is a return feasible, and if it were, would all be well? The present crisis and the limitations of such alternatives may be best grasped by examining the roots of neoliberalism in the crisis of capitalism in the 1970s, afflicting the system's vaunted postwar "Golden Age." The era that many on the left look back to with longing, combined a welfre state (to a greater extent in Europe and Canada and a lesser extent in the U.S.) and a Keynesian commitment to full employment in the Global North and varying degrees of state planning in the Global South. It was shored up by the international financial stability of Bretton Woods, which regulated the international monetary system with the U.S. dollar at its center. During its zenith, it delivered relative economic prosperity in the Global North and moderate development in the Global South.

Yet by the late 1960s the welfare state system was running out of steam. As the 1970s arrived, it sputtered out. The costs of the Vietnam War and domestic spending put significant strain on the U.S. dollar. [...]