This was always “a counterrevolution without revolution,” to paraphrase Bernard Harcourt, a preemptive strike against an incipient social revolution that was not to be.
For years, that counteroffensive has undermined the power of unions, eviscerated public services, and reinstated the private family as the welfare provider of last resort while for the most part leaving formal rights intact. In the last decade or so, the counterrevolution has gone into overdrive. Feeding off its own paranoia more than any real threat from the left, it is now seeking to extinguish even the legacy of civil, labor, and sexual rights won in a previous era. The escalation is visible everywhere. We have only to look to the Republican Party and its hijacking by the far-right fringe. The constant congressional obstructionism that seeks to torpedo even the most routine acts of government spending. A Federal Reserve that has done all in its power to sustain the wealth of asset holders while resorting to maximum firepower when faced with the mere whiff of rising wages in the lower echelons of the labor market. A Supreme Court that has eviscerated the major voting rights legislation of the 1960s, curtailed the power of unions, and overturned the constitutional right to abortion.
Talk of revolution appears as untimely as ever, except for the fact that the left is alive in a way it has not been in a very long time. From wildcat teacher strikes in right-to-work states to union breakthroughs at Amazon and Starbucks and a new wave of militancy driven by the university’s academic precariat, the labor movement has emerged from its multidecade torpor. The Black liberation movement too has acquired a new momentum, even in the face of far-right backlash. Black Lives Matter has forced the issue of systemic police racism onto the public agenda as never before, and it has done so by making explicit the links between mass incarceration, everyday criminal indebtedness, and local government austerity. The feminist movement was dealt a devastating juridical blow with the Dobbs decision of 2022. Yet the decision was met on the ground by a resurgence of mutual aid initiatives not seen since the feminist health movement of the 1970s. While the revival of the left has hardly dented the self-fueled delirium of the far right, we have at least retrieved the sense that things could be otherwise.
This is no small thing. By far the most insidious legacy of the neoliberal counterrevolution was its foreclosure of the political imagination. In the wake of Reagan and Thatcher, more than a few disillusioned leftists embraced the realpolitik of neoliberal compromise. Indeed, “third-way” neoliberals such as the New Democrats in the United States or New Labor in the United Kingdom often ended up implementing austerity measures with more zeal and efficacy than their right-wing counterparts. This was more than simple reformism. By ceding to the triad of central bank independence, balanced budgets, and regressive tax cuts, third-way neoliberals came to believe that Keynesianism itself was utopian. Political ambition, even of the most moderate kind, was sacrificed on the altar of economic realism. The left could fantasize as much as it liked—we simply could not afford social democracy anymore, much less revolutionary change.
Yet this dogma is becoming harder to maintain, if only because neoliberal monetary and fiscal authorities have so blatantly transgressed their own rules of self-restraint during the last decade or so of financial crisis. When the Federal Reserve is prepared to stimulate asset price inflation without apparent technical limit, on what grounds could it oppose the same intervention on behalf of wages or social welfare? When the only limit it is willing to recognize is that of wage inflation—phantasmatic or otherwise—it becomes that much harder to hide the real political stakes. It is not “inflation” as such that is the real bogeyman, but the prospect of wage rises outrunning corporate profits or eroding asset values.
One reason why modern monetary theory (MMT) has become widely legible in recent years is the fact that the Federal Reserve has so perfectly enacted its economic agenda—in reverse.
A politically simplified translation of leftist post-Keynesian theory, MMT teaches that we can afford anything we have the current labor power to do: in a fiat money regime, the central bank has only to activate its money-printing powers to pay for any spending the Treasury might want to initiate. While this knowledge is no secret to central bankers, neoliberal monetary orthodoxy has shrouded it in mystery—lest it be misused in the service of (social) wage inflation. Yet in the last decade or so, the Federal Reserve has selectively broken its own taboo to implement an upside-down version of MMT, in which the state’s powers of fiat money creation are deployed in the almost exclusive service of asset holders. If we have learned anything at all from this experience, it is that pseudoscientific laws of price stability can be transgressed at will, so long as the resulting wealth is redistributed upward. The limits to wealth creation are political, not technical.
But is the left prepared to act on this knowledge? Contemporary Marxist critiques of modern monetary theory—of which there are many—sometimes read as a counsel of despair.
When they dismiss the theory as a Keynesian half-measure, they are stating the obvious. There is undeniable value in the quasi-Spinozist claim that fiscal and monetary actions should be judged by their real-world effects, not their distance from transcendent economic laws. But in other respects, MMT remains committed to the Keynesian/Hegelian project of dialectical mediation, with all its built-in buffers—the distinction between productive and unproductive labor, the confinement of social democracy within national borders, and the fear of overexuberant wage growth. Tellingly, both MMT and neoliberal monetary orthodoxy are in agreement that the one “technical” limit to central bank extravagance is excessive wage inflation.
That this is a limited project goes without saying. The whole point of Keynesianism is to moderate the relationship between labor and capital so that central bank money creation and the state’s power to tax and spend never tip over into a full-blown socialization of finance. Yet in their zeal to demonstrate the obvious—that technocratic Keynesianism can never eliminate capitalist austerity—Marxist critics sometimes seem to suggest there is no response to austerity at all. At their most despairing, they replace the praxis of social change with the consolations of eschatology. If we just wait long enough, capitalism’s long slowdown will release us from capture.
For those who think that Marxism is supposed to be more—not less—ambitious than Keynesianism, this cannot be enough. Given the ever more blatant role of nominally public fiscal and monetary authorities in sustaining the summits of private wealth, it is hard to avoid a confrontation with the politics of money. There can be no truly radical challenge to capitalism today without some larger vision of collectivized money creation and spending. The question of how to organize money creation while releasing it from the constraints of private property is key to a postcapitalist praxis.
Without this horizon, anarchist mutual aid becomes a leftist adaptation to austerity and Marxist anti-reformism an admission of defeat. What then would it take to radicalize the project of socialized finance? If Keynesian monetary theory is hamstrung by its need to mediate between labor and capital, how might we collectivize and redistribute wealth beyond these class limits—as well as beyond the gendered, racial, and national limits within which the welfare state has historically been confined? How would we implement a social wage divested of all the sexual and racial conditionalities of the Fordist family wage? What would monetary and fiscal extravagance look like from the left?
The knowledge that extravagance is technically possible is small consolation, of course, when the chasm between technical possibility and political reality is as vast as ever. While blueprints for a wider distribution of wealth have flourished in the wake of the Global Financial Crisis, we cannot expect progressive reform (much less revolutionary change) to be delivered by technocratic fiat.
The emergency response to the coronavirus pandemic was greeted by many on the left as a demonstration project in fiscal and monetary abundance. Yet central banks are now doing all in their power to punish wage earners for this brief moment of transgression, as if terrified by the possibilities it might have unleashed. It must be conceded that the balance of power is considerably less favorable than it was in the early 1970s, when labor unions briefly eroded the profit share of national income and wage-push inflation instilled terror in financial markets. Today, we are faced with profit-push and not wage-push inflation, and financial asset holders have fared remarkably well in the face of interest rate hikes that are crippling the rest of the economy.
Most important perhaps, the evolution of the capitalist state has profoundly altered the terrain on which anticapitalist struggles take place. Keynesianism describes the strategy by which the state transfers a growing share of social risks and responsibilities onto its ledger. Its operating logic is centripetal: it is always seeking to incorporate and neutralize class struggle. As such, the anarcho-communists of the 1970s saw themselves as working “in and against the state” to radicalize the Keynesian project of wealth distribution while eluding absorption within its institutional and normative constraints.
The neo-liberal state, by contrast, is animated by the centrifugal spirit of secession: without renouncing any of its punitive powers, it is desperate to disown its historically assumed social obligations and actively aids and abets private efforts to elude its sphere of regulatory oversight. How then might we return to the spirit of 1970s anarcho-communism, while acknowledging the very different challenges thrown up by the neoliberal antisocial state? Is anarchism destined to play the game of unwitting collaborator when capitalism itself is casting off its former social functions? And is a resurgent socialism always going to be the midwife to Keynesianism, a statist dampener on more revolutionary desires? (The latter danger has become very real with the rollout of President Biden’s industrial policy and the possible emergence of a green military Keynesianism.)
In recent times, some of the most helpful reflections on strategy vis-à-vis the neoliberal state have come from the Debt Collective, a group that emerged out of the Occupy Wall Street movement of 2011.
Originally conceived as a union of student debtors, the collective and its offshoots have since coordinated a series of strategic defaults involving a much broader array of personal debt, with a view to consolidating them into an effective counterforce against the combined powers of private finance and the state. Via its Rolling Jubilee, the collective has purchased portfolios of medical, student, payday, probation, and judgment debt on secondary markets with the express purpose of canceling the associated liabilities.
By the time unpaid debt has been sold on to the secondary market, it has lost much of its market value in the eyes of creditors. The burden on the individual debtor, however, remains as daunting as ever owing to the accumulation of interest rates, penalty fees, and tarnished credit scores. Thus, while the Debt Collective claims to have annulled an impressive $832 million of personal debts, its interventions are worth far more than this. By rescuing the debtor from the devastating personal ordeal of being hounded by debt collectors for years on end, mass debt cancelation deactivates the entire disciplinary mechanism that sustains the economy of private credit. Collectivized debt default, in this instance, plays much the same role as full employment in Michał Kalecki’s reflections on Keynesianism: it is one method by which the neoliberal antisocial state can be forced to reckon with its own limits.
The Debt Collective begins from the premise that the sheer ubiquity of unmanageable household indebtedness can be tapped as a source of solidarity and leveraged as a way of releasing people from the experience of individual fault and punishment. The largest financial institutions rely on the size of their liabilities and their interconnectedness to other actors to demand Treasury bailouts and central bank monetary accommodation. How then might consumer and wage-earner debtors consolidate their liabilities such that they too become a systemic risk—hence, too big to fail? While simultaneously agitating for the reform of interest rate regulations and bankruptcy laws, the collective’s actions are driven by the more ambitious agenda of socializing finance.
If pursued at scale, after all, the effect of collective default is to transfer private and familial debt back onto the state balance sheet, where it assumes the status of a free public service. This is one very direct way of pushing the fiscal levers from below such that government is forced to assume costs it would rather outsource to the household. While rarely articulated as such, this same strategy of collective debt transfer is at stake in any call for free health care, education, or a living wage.
This strategic lens can be usefully extended to labor activism also, which at its most forceful can profoundly shift the tectonic plates of fiscal and monetary distribution. The possibilities are most obvious in the public sector, of course, where every dispute around formal wages has immediate repercussions for state budgets and the social wage. With their visible dependence on government support, public-sector movements have no choice but to confront fiscal and monetary issues that are usually sidelined in the wage-bargaining process: the relationship between labor income, asset prices, and government spending; the distributional stakes of taxation and credit creation; the challenges of administering a public service or managing welfare under conditions of austerity. That such challenges can become sources of strength is demonstrated by recent initiatives to build coalitions between striking public-sector workers and their so-called clients in a united front against permanent austerity. To get a sense of how far-reaching such campaigns can be, the United Teachers Los Angeles (UTLA) has fought to lift the commercial property-tax limit on school funding, to turn school-owned vacant land into affordable housing, and to contain the power of the private equity funds that exploit renters (through their real-estate portfolios) as well as teachers (through state tax policies that privilege capital gains at the expense of funding for schools).
Public-sector unionism is sometimes dismissed as peripheral to the real work of anticapitalist struggle on the anachronistic grounds that the fulcrum of capitalist power relations lies in the profit-making private sector. This assumption misreads the last century of capitalist organization, which saw “private-sector” surplus-value production massively underwritten by the state, whether through direct subventions, tax expenditures, or government contracts, and thereby misses the hidden affinities between public-and private-sector unionism. Today the dividing line between private- and public-sector labor is more tenuous than ever. Private health-care clinics are dependent on government-insured Medicare and Medicaid patients and nominally public universities have transferred a growing share of their costs to students, while corporations rely on a cornucopia of tax expenditures and bailouts to fund their private initiatives.
The interests of private- and public-sector workers are therefore more closely aligned than one might think. Take the General Motors strike of 2019, which saw 48,000 United Auto Workers members walk off the job in protest against stagnant wages and insecure conditions, a decade after the company was bailed out to the tune of $50 billion by the U.S. Treasury and one year after the Trump tax cuts delivered trillions of dollars in stock buybacks to GM shareholders.
The action was successful in the short term: striking workers managed to secure wage gains and a guarantee of job security in exchange for the closure of the Lordstown, Baltimore, and Warren transmission plants. But how much more powerful could industrial action be if it intervened at the scene of the crime: that is, if it sought to block the diversion of bailout and tax-cut funds into stock buybacks in the first place? Today there can be little doubt that the union movement’s embrace of pension-fund capitalism was a fatal error: by trading rising share prices for rising wages, union pension funds helped inflate the wealth of the largest individual portfolio owners while delivering very little to wage earners, with their very small stock holdings and ever more precarious work trajectories.
At GM as in so many other nominally private sectors of the economy, what we have seen in recent decades is a direct infusion of public money into the hands of the wealthiest asset holders (the chief beneficiaries of bailouts and tax cuts) while mere wage earners are left to pay the price. Thus, the wider issues of fiscal and monetary policy loom large in private- as well as public-sector disputes.
For all the efforts by the right to reinvigorate, in symbolic form, the race, ethnic, and gender fault lines that divided workers in the 1970s, we are no longer dealing with the same set of class relations. Blue-collar workers in construction and transportation are no longer overwhelmingly white. Independent contractors may operate as genuine small business owners or the most exploited of dependants. White-collar workers are not automatically middle-class. The real wages of workers in the same institution can differ wildly as a function of student debt burdens and inherited wealth. Public universities are increasingly funded by their students and thus de facto privatized, while whole cohorts of graduate students are positioned as low-rung workers in the same institutions. The last few decades of asset price inflation have expanded the focus of class conflict (including such issues as unaffordable housing and soaring rents) while introducing new fault lines within the one wage-earner class (homeowner versus renter, inheritor versus non-inheritor). We can be sure that something profound has shifted in the class composition of the American workforce when the United Auto Workers is winning its most decisive victories in the higher education sector through the organizing efforts of postdoctoral fellows, nontenured instructors, graduate students, and other precarious academic workers.
But we can also observe that the scope of class conflict is itself in flux when the most militant unions regularly address the issue of housing alongside wages. The recent demands by wildcat strikers at UC Santa Cruz for wage rises equal to soaring house prices in coastal California are a case in point: by articulating what is at present impossible—that wages be indexed to asset price inflation—such actions threaten the basic hierarchy between capital and wage income and strike at the heart of our contemporary capitalist regime.
The experience of (social) wage austerity, alongside asset-holder abundance, is one that is shared by public- and private-sector workers alike, administrators of public services and their so-called clients. It extends beyond the formal wage relation to include those who routinely encounter the violence of racially targeted policing when moving through urban space and anyone who traverses a minefield of user fees in exchange for the use of nominally public services. While the class positions of graduate students, auto workers, public school teachers, the chronically overpoliced, the long-term unemployed, and the welfare-dependent cannot be conflated, public spending austerity is the common thread running through their diverse experiences. The challenge of addressing the seemingly distant spheres of monetary and fiscal policy is less technocratic than it seems. As the strike-driven wage-push inflation of the early 1970s demonstrated, “old-fashioned” forms of action can be the most effective means of corroding the value of financial assets and redistributing wealth from below. Labor strikes, rent strikes, strategic defaults, urban riots, occupations of public space, and squatting can all have an acute effect on the value of private wealth and the calculation of public spending priorities. The real challenge is coordinating and consolidating such actions at scale such that they enduringly shift the levers of fiscal and monetary action in an egalitarian direction. The left will never be able to afford the revolutionary change it longs for unless some effort is made to collectivize the process of money creation and public spending. How to make such change affordable is the process of revolution itself.
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