Back to issue155•Sept/Oct 2025

NLR 155, September–October 2025

155, Sept Oct 2025

Seven theses on American Politics’, a provisional and hastily composed response to the 2022 mid-term elections, touched off, somewhat to our surprise, an extensive debate, stimulating and strongly argued, in nlr’s pages and beyond.footnote1 We’re grateful to all who engaged with the text, in many cases critically elaborating upon its implications in ways that helped us to clarify our own ideas. Before diving into the substance of the debate, we should consider what provoked the unexpected intensity of the response. In our view, this has much to do with the broader political conjuncture. The historical matrix in which ‘Seven Theses’ appeared was defined by the continuing incapacity of governments to revitalize the economy amid growing heartland discontent; the clear electoral advantage of the far-right forces over the radical new lefts, as protest vehicles for this—maga over Sanders, Farage over Corbyn, Le Pen over Mélenchon, the AfD over Die Linke; and rising geopolitical tensions, with the stand-off between the us and China and the Russian invasion of Ukraine; within a year, the Middle East would be on fire under a new round of Israeli expansionism.

Within this fraught situation—constituting a multi-front crisis for the left, even before Trump’s second win—political discourse had become centred on narrow electoralist questions. Our piece—perhaps precisely because of its aphoristic, fragmentary character—brought these larger strategic problems to the fore. Rather than look to the culture wars to explain America’s polarizations, we argued that these expressed the material interests of different working-class fractions within the zero-sum conditions of a stagnant economy; this had now mutated into a form of ‘political capitalism’, wherein low returns on productive investment were compensated by politically engineered upward redistribution on a systemic scale.

Our critics addressed these propositions from multiple angles. Tim Barker raised some acute questions about our analysis of secular stagnation. Aaron Benanav set the long downturn in the context of supply-chain globalization, the shift to services and financial-sector ‘over-accumulation’. Matthew Karp disputed our definition of class and our characterization of the party coalitions, suggesting that we elided the extent to which the liberal Democratic elite signified a self-satisfied ruling class for many American workers. Alyssa Battistoni and Geoff Mann took us to task for neglecting any substantive discussion of Biden’s Green New Deal. Many critics took issue with our conception of ‘political capitalism’: notably, for Lola Seaton, we didn’t differentiate its mode of upward redistribution from the normal operations of the capitalist state, nor explain its relation to neoliberal capitalism, as generally understood. Both Barker and Carmen Parmense—writing in * ss * * African Mercury*—pointed out that Brenner had previously rejected the idea of distinct ‘regimes of accumulation’. Seaton, Barker, Parmense and others asked how political capitalism related to the highly charged international situation.footnote2

‘What is the connection between the evolution of capitalism since the 1980s and the structure of politics that has emerged in the rich world, particularly in the us, since the financial crisis of 2007–08?’ This was the question we wanted to answer. In responding to the myriad issues raised in the debate, we aim first to tackle the economic questions—the problems of declining profit rates, low investment, sluggish growth—and then to discuss the political issues of class and party alignment in relation to capitalism’s changing parameters. Full replies to the questions of class definition, environmental strategy and geopolitical competition require a degree of theoretical elaboration that would exceed the bounds of this essay; we hope to return to them on another occasion. Here, however, we need to start by acknowledging that many of the responses to ‘Seven Theses’ pointed out real weaknesses or omissions in our analysis; in some cases, the confusion and misunderstandings that arose were a result of our own lack of clarity. We begin, therefore, by attempting to rectify this through an initial examination of secular stagnation, as a feature of mature capitalism, expanding the historical frame to compare the two ‘long downturns’ of the 1930s and the 1970s, with the aim of illuminating their contrasted outcomes.

Our point of departure in ‘Seven Theses’ was the observation that the Long Downturn that has gripped the world economy since the early 1970s has proved more persistent than many commentators expected. As Benanav notes, however, there is now a widening consensus among economic historians on the reality of stagnation. Robert Gordon has documented the mediocre performance of American Total Factor Productivity (tfp) since the 1970s, while Bradford DeLong highlights the ‘significant drop’ in worker-productivity growth for the 1973–2010 period. Ruchir Sharma notes that ‘productivity growth has slowed sharply since 1980’. In a similar vein Thomas Philippon argues that the slowdown in tfp growth ‘started in 2000 and is now widespread among rich countries’, adding that the Great Recession of 2008–09 ‘has probably reinforced this negative trend but it has not created it’. In The Crisis of Democratic Capitalism, the * ft *’s Martin Wolf avers: ‘Average productivity growth in the 2010s (between 2010 and 2019) became dismal in all high-income countries. This is important and depressing.’ Meanwhile, the secular trend of declining investment in oecd countries is, as Cédric Durand notes, ‘one of the least contested features of the advanced-capitalist economies.’ Recent oecd data confirm the decline in net business investment, with the corporate sector ‘saving’—or paying out to shareholders—significantly more than it invested.footnote3

Long-term gdp per capita growth rates bear this out. As Figure 1 shows, average gdp per capita growth for the us, uk, Germany, France, Italy and Japan from the mid-1940s to around 1970 was often well above four per cent, after the lower levels of the 1890s to the 1930s. Following the severe depression of the mid-70s, such rates were never reached again. Since the early 2000s, growth rates have struggled to reach 2 per cent and have often been closer to zero.

How should we explain these developments? The bleak aftermath of the 2008 crisis brought a revival of the concept of ‘secular stagnation’, first advanced by Alvin Hansen to describe the crisis of the 1930s. Hansen (1887–1975), a Harvard economist and influential policy advisor under Roosevelt and Truman, was an early advocate of Keynes’s perspective in the us, whose initial research focused on the business cycle. Summarizing the work of Cassel, Schumpeter, Spiethoff and others, Hansen’s Business Cycle Theory suggested this dynamic was set off by a sudden spurt of capital accumulation which brought about the overproduction of capital stock, dragging down the rate of profit and ultimately issuing in the collapse of investment. These cycles of boom and bust occurred for two reasons. First, fixed-capital investments were made in conditions of uncertainty: the nature of future demand was ‘impossible to forecast accurately, especially in a competitive society where each producer is unaware of the amount of fixed capital which his competitors are constructing.’footnote4 This uncertainty was an inherent feature of an economy in which private actors made the main investment decisions.