Secular stagnation theory needn’t be ‘true’ to suggest a host of related results. The initial implementation of the New Deal was a political decision made to moderate capitalism to prevent its wholesale overthrow. Much is made today of the relative cooperation the New Deal received from the reigning plutocracy of the 1930s. But the level of dispossession of the Great Depression suggested a real threat of political-economic rupture and the replacement of ‘free-market’ capitalism with state socialism. The popular distinction being made these days between capitalism and neo-liberalism is academic— neo-liberalism is capitalism and New Deal capitalism is technocratic ‘management’ of capitalism in the service of residual plutocracy. The New Deal ended approximately when the threat of political overthrow did in the mid-1970s. The practical background of current economic malaise is that the existing plutocracy of bankers, CEOs and inherited wealth was fully restored from recent catastrophe through means and methods that were ‘political,’ through restoration of economic resources along the lines of division of economic power, and Western economists busied themselves explaining why doing so was necessary. When it came to the other 99.7% of the equation conclusions were quickly drawn that either (a) nothing needs to be done or (b) using duct tape and chicken wire to ‘repair’ the existing order was the best course of action. The ‘infrastructuralists’ are the duct tape and chicken wire crowd who haven’t yet resolved that current circumstance is the result of the existing order, not some accident of nature from outside of it.
Economic Stagnation and the Stagnation of Economics