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What is late-stage capitalism? Historian of American capitalism Professor Eli Cook deep dives into Reddit to separate capitalism fact from fiction. Watch as Eli covers the ‘golden age’ of capitalism, the impact of wealth disparities and whether late-stage capitalism can be reversed?
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00:00There was no golden age. The majority must suffer for the few to profit.
00:03Larger and larger wealth disparities, deregulation of the economy so the government isn't watching the businessmen anymore,
00:10tuition rises, student debt.
00:12What's late-stage capitalism?
00:13That's a very good question.
00:15I'm Eli Cook, historian of capitalism.
00:17Let's go down the rabbit hole and look at late-stage capitalism.
00:21Okay, let's get right to it.
00:23On the No Stupid Questions subreddit, YardPuzzleHeaded263 asks,
00:28What's late-stage capitalism?
00:29Late-stage capitalism is actually more of an internet meme than some kind of academic term.
00:34I like to think of it as the moment that capitalism jumped the shark.
00:37Some examples that I've come across that people have used in the internet,
00:40people who go to GoFundMe to buy their medicine like insulin,
00:43people paying $37 for raw water.
00:46A lot of times when I think of late-stage capitalism, I think of a question that people often ask,
00:50Who asked for this? Do we even want this stuff?
00:52Looks like things are getting a little spicy in the comment section.
00:55One Redditor, Vitringer, says that the whole use of the term is a Marxist mythology about the evolution of capitalism
01:01before it turns into socialism.
01:03Like with so many other pseudo-scientists, it's always right around the corner and has been for a hundred years.
01:08Late capitalism is definitely a term that Marxists have used, not necessarily to refer to the end of capitalism,
01:13but trying to explain where did Marx go wrong, why hasn't capitalism ended yet.
01:17And a lot of times late capitalism was used as an idea of kind of a very consumerist form of
01:22capitalism,
01:22where people kind of aren't being exploited in the most outrageous ways, but they're kind of happy little robots.
01:29And so in many ways, the way that the term late capitalism has been used is very different from late
01:33-stage capitalism.
01:35But I think there's an important point to be said here that anybody who uses the term late-stage capitalism
01:39is assuming that there are stages.
01:41I do agree that there are a lot of people who use that term who are hoping that maybe, just
01:45maybe, this is the last stage and not just the late stage.
01:48Here's a good question from the late-stage capitalism subreddit from amdmasterace.
01:53When did the golden age of capitalism turn to late-stage capitalism?
01:56This term, golden age of capitalism, is a term you often hear in the United States.
02:01It's usually referring to the post-war years from the 1940s to around the mid-1970s,
02:06when really there was a feeling that capitalism was working for almost everyone.
02:10This is an era when inequality dropped, wages were rising, people were moving into the middle class.
02:16There was also a feeling that even with one job, you could buy a house and create a good life
02:20for you and for your family.
02:21There was this moment people look back at now and nostalgically say, this was the golden age of capitalism.
02:27So when did this turn happen?
02:28I think here it's actually pretty clear.
02:30Some people call it the neoliberal turn.
02:32Other people talk about de-industrialization, globalization, financialization.
02:37But something happened in the late 1970s and the 1980s which really changed the American economy.
02:43This is where you really see Wall Street and big banks taking fuller control of the economy.
02:48This is where you begin to see larger and larger wealth disparities.
02:52This is where you see the deregulation of the economy so the government isn't watching kind of the businessmen anymore.
02:58This is when you start seeing tuition rises, student debt.
03:01This is where you see things getting more expensive.
03:04After World War II, America dominated the world.
03:06But by the 1980s, Japanese, German manufacturers, they were competing with America.
03:11It wasn't so easy anymore for Americans just to churn out all those cars that the world and American consumers
03:17were going to buy.
03:18So a lot of people do think that there used to be a golden age of capitalism.
03:21But let's look at some more controversial takes.
03:24Conformity says,
03:25There was no golden age.
03:26The majority must suffer for the few to profit.
03:28In America, it looked okay for a while if you were white labor aristocracy or petty bourgeoisie.
03:33This is actually an important point.
03:34When you talk about kind of the golden age of capitalism and you imagine people with job securities and great
03:39pensions,
03:40a lot of times we're talking about white men in factories.
03:43For African Americans, for other minorities, for women, this might not have been a golden age at all.
03:48A lot of times when people talk about the golden age of capitalism, they're talking about suburbia.
03:52The American dream where even working class people could get a subsidized mortgage,
03:57usually through the government backing small banks.
04:00Wall Street was not involved.
04:01It was about moving to the middle class.
04:03It was about newer opportunities for their kids.
04:06So for many people, that really was the golden age.
04:08When people look at The Simpsons, back then when the show just came out,
04:11people didn't think it was weird that here's this working class Homer Simpson
04:14who can afford to live in a pretty nice house in the middle of a nice little town on one
04:18salary.
04:19A lot of people feel that American dream is over.
04:22So let's scroll down a little for a few more perspectives.
04:25Here's a matter of time saying,
04:27sometime in the 1980s when Reagan was president,
04:29was the first time that more money was made from dealing in financial products
04:32than making actual tangible items in a factory.
04:36This comment reminds me of the show The Wire.
04:38They were just de-industrializing the ports in Baltimore.
04:43And there's kind of a white working class, Frank Sabatka, who says,
04:46We used to make shit in this country, build shit.
04:48Now we just put our hand in the next guy's pocket.
04:50It's true, the financialization of the economy,
04:54kind of a turn away from building shit in factories,
04:56did not help most Americans.
04:59The jobs in factories were usually really good jobs.
05:02They had job security, they were unionized,
05:04people had good pensions,
05:06and they could really live a middle-class lifestyle.
05:08When those factories closed down,
05:10most people found themselves working in service industries.
05:14The biggest employer in kind of the golden age was General Motors,
05:17and it was General Electric.
05:18These were companies that almost all the workers were unionized.
05:21Even if you went into the bathroom,
05:22the person cleaning the bathroom was part of the union.
05:25And on the other hand, today, biggest private employer is Walmart.
05:28Some people today in late-stage capitalism at Walmart
05:30get paid so little money that they have to use food stamps.
05:34And where do they take those food stamps to buy all their stuff?
05:37Walmart, because all the other small groceries closed.
05:40Late-stage capitalism, here we are.
05:43Now, a lot of this financialization is just about deregulation.
05:46Once the rules changed,
05:47then Wall Street could start doing whatever it wanted.
05:49But a lot of this is connected to the de-industrialization.
05:52There used to be a lot of corporations in America
05:54who actually wanted their workers to have a good wage.
05:57But what happens in financialization
05:59is you get these kind of corporate raiders types, okay?
06:02It's mergers and acquisitions.
06:03If you've seen Pretty Woman,
06:04this is what Richard Gere used to do.
06:06Well, I don't sell the whole company.
06:08I break it up into pieces,
06:09and then I sell that off.
06:11It's worth more than the whole.
06:12So it's sort of like stealing cars
06:15and selling them for the parts, right?
06:16And maybe the perfect example
06:17of how these corporations have changed
06:19is the ratio to how much the CEO makes
06:22to the average worker.
06:23In the 1960s and early 1970s,
06:25the golden age of capitalism,
06:26the ratio of salary between the average worker
06:29and the CEO was about 1 in 20.
06:32That's a fair amount.
06:33Now it's 1 in 300.
06:35Now all corporations care about
06:37is maximizing the price of their shares.
06:39They bring in CEOs and they say,
06:41from now on,
06:42your compensation isn't gonna be in wages.
06:44It's gonna be in stock options,
06:46which means you also have an incentive
06:48to really just only care about raising stock prices.
06:51And what do we get in the 1980s, for instance?
06:53We get a situation where
06:55if suddenly there is a recession,
06:57the first thing you do,
06:58not the last thing,
06:59the first thing you do
07:00is just fire lots of workers.
07:02They call it downsizing
07:03and hundreds of thousands of Americans
07:05lost jobs in good industrial factories
07:08and those jobs never, ever came back.
07:11And those people lost
07:12their middle-class lifestyle forever.
07:14Here's a good one.
07:15Over at the subreddit Neutral Politics,
07:18what are the effects
07:19that a large wealth disparity has on a society?
07:21When you begin to have large wealth disparities,
07:24you begin to have people
07:25who don't trust the institutions anymore.
07:28A lot of this has to do with feeling,
07:30you know, the system is rigged.
07:31Sometimes you can funnel that energy
07:33into positive places,
07:34but sometimes it can go to very dark places.
07:36You'll find someone to blame
07:38and oftentimes, unfortunately,
07:40these energies don't go to blaming
07:41the actual people who created these inequalities.
07:44Another issue that happens
07:45because of inequality is social mobility.
07:48Think of life as like this ladder
07:49where you're trying to climb up.
07:50If the rungs between each step on the ladder
07:53get bigger and bigger and bigger,
07:55then you don't have social mobility anymore.
07:57The chances today to kind of move up the ladder
08:00has diminished dramatically
08:01in the last 30 or 40 years.
08:03There's even a graph called the Great Gatsby Curve
08:06that charts the level of inequality in a society
08:09and the level of social mobility,
08:11and you see that these things correlate almost perfectly.
08:14The higher the inequality,
08:15the less the chance that that smart kid
08:18from a poor background
08:19is ever going to be able to make it big in America.
08:22Other problems that you get with high inequality
08:25is just that it's inefficient.
08:26High inequality is bad for the economy.
08:29People like John Maynard Keynes,
08:31the economist who like to talk about
08:32the importance of consumers
08:34and their purchasing power,
08:36he would say that, you know,
08:37high inequality creates a situation
08:38where a lot of money gets stuck with the rich people,
08:41and the problem is the rich people
08:42don't spend that money.
08:43The money isn't moving through the economy,
08:45we're not getting demand,
08:46and therefore you kind of get a stagnant economy
08:49with less innovation,
08:50with less technology changes,
08:52and all because the average Joe
08:54doesn't have enough money
08:55to buy all the products that he could be buying.
08:58Now, inequality is always bad,
09:00but it is really bad in a capitalist society
09:02where you have to buy even your basic needs
09:05through the market.
09:06If you don't have enough money,
09:07that means you don't have healthcare.
09:09It means you can't afford to go to college.
09:11This isn't just about, you know,
09:13people having less than others.
09:14This is also just about people
09:15not having the opportunity
09:17to reach their potential.
09:18And finally, there's the question of basic justice.
09:21Even people who are billionaires,
09:22they didn't make all that money on their own.
09:24Marx would call this exploitation,
09:26the idea that most of us are not in the end
09:29receiving in return
09:30what we contribute to the economy.
09:32And here on the Ask Reddit subreddit,
09:35Yellow Rain Bird asked,
09:36has late stage capitalism happened before in history?
09:39And if so, what was the outcome?
09:40I think this is a great point
09:41because I think there's a lot
09:42we can learn from history.
09:43If you look back, for instance, the 1920s,
09:46a lot of the things that people were talking about
09:48or even earlier to the Gilded Age
09:49were the same problems we're dealing with today.
09:52An economy dominated by huge corporations,
09:54the government not looking out for people,
09:56corrupt politicians
09:57or in the pocket of the richest billionaires.
09:59These are problems that we've dealt with before.
10:01And I want to say, yes,
10:03there have been countries
10:04that have gotten past this stage,
10:05including the United States.
10:07If you've heard of
10:08Franklin Delano Roosevelt's New Deal,
10:10which came after the Great Depression,
10:12in many ways, the New Deal
10:13was a way to get America
10:15out of the extreme capitalism
10:16that had been in in the 1920s.
10:18He taxed the rich.
10:20Jobs for the working poor,
10:22jobs for the unemployed
10:23that the government created,
10:25creating the national park trails
10:26that you walk on today,
10:28infrastructure.
10:29So I absolutely think
10:30that there's nothing inevitable
10:31about late stage capitalism.
10:32It doesn't have to be this way.
10:34Things can be different.
10:35And in fact, they were.
10:36That said, even the 1920s
10:39might not compare
10:40to the levels of inequality
10:42and corporate concentration
10:43and just power
10:44that these billionaires have today.
10:46We are really in uncharted territory.
10:49And that doesn't make things impossible,
10:50but it does make it very hard.
10:52Speaking of the end of capitalism,
10:54in the capitalism subreddit,
10:56DashDevs asked,
10:57can the concentration of wealth
10:58in just a few hands
10:59lead to the destruction of capitalism?
11:02And actually,
11:03one of the most popular responses
11:05from the Green Baron
11:06was that, yes, it can.
11:08And it already has.
11:09And I think this is
11:10a very important point
11:11because I think in many ways,
11:13we are reaching a point
11:14where late stage capitalism
11:15is so obscene,
11:17so absurd,
11:18so unequal,
11:19it might be delegitimizing
11:22capitalism itself.
11:23This is something
11:23that capitalists themselves
11:24are aware of.
11:25Not all of them,
11:26but some of them
11:27are smart enough
11:28to know that in the long run,
11:29if they want to play a long game,
11:30maybe they've gotten
11:31a little bit too greedy.
11:33Warren Buffett for years
11:34has been talking
11:35about how it makes no sense
11:37that his secretary
11:38pays a higher percentage
11:39of taxes than he does.
11:41He's saying this
11:42because he understands
11:43that if capitalism
11:44loses its legitimacy
11:46in the United States
11:47or anywhere else,
11:48it might be destroyed.
11:49Let's duck into
11:50the Gen Z subreddit
11:52and see how the Zoomers
11:53are feeling about capitalism
11:54these days.
11:55One Redditor writes,
11:56I hate how we're suffering
11:57the most during
11:58late stage capitalism.
12:00Billionaires spending
12:00our tax dollars
12:01on either straight bullshit
12:02or funding other businesses.
12:04Meanwhile,
12:05us regular folk
12:05have to use 70%
12:06of our money
12:07for groceries,
12:08rent,
12:08and household items.
12:09Out of every generation,
12:10we're going through
12:11the worst of it
12:12due to us becoming adults
12:13during this time period.
12:15A lot of capitalism
12:16is about accumulating wealth.
12:18And we know that
12:19kind of the boomers
12:20got to buy houses
12:21when they were cheap
12:21and then they kind of
12:22accumulate a lot of wealth.
12:24But, you know,
12:24the Gen Zers,
12:25oftentimes they see now
12:27that they have no way
12:28that they could ever
12:28buy a house.
12:29So there's no way
12:30that they ever
12:31could really kind of
12:32create wealth for themselves.
12:33And it's true
12:34that, you know,
12:35for many different aspects
12:36of everyday American life,
12:38the costs are going higher.
12:39We've been seeing
12:40a rise in prices
12:40in almost every sector
12:41of the economy.
12:42And I do agree
12:43that in many ways,
12:44Gen Z are the biggest losers
12:46of this process.
12:47I think what annoys
12:48a lot of the Gen Zers
12:50the most
12:50is when the boomers
12:51tell them,
12:51oh, well, you know,
12:52you just didn't work hard enough.
12:54We pulled ourselves up
12:55by our bootstraps.
12:57If you actually look
12:58at American history
12:58in that period,
13:00you see that it absolutely
13:01wasn't just individuals
13:02working hard.
13:03There were so many
13:04different social structures
13:05in place
13:06to allow these people
13:07to thrive.
13:08Very cheap education,
13:10subsidized mortgages,
13:11unions that gave you
13:12higher wages,
13:13billionaires who paid
13:14higher taxes,
13:15corporations that were
13:16more regulated,
13:17labor laws that were
13:18more in favor of the little guy
13:20and not just the big capitalists.
13:21It feels that even
13:22if I work hard,
13:23even if I do my best,
13:24even if I do
13:25what everyone told me
13:26and I get good grades
13:27and I do everything
13:28that I'm supposed to do,
13:29I still can't make it
13:30because the system
13:31is rigged
13:31and it's not working
13:32for me anymore.
13:33It's working only
13:34for the rich.
13:35And this brings us
13:36to the question of
13:36how can we maybe
13:37kind of go back
13:38to a more golden age?
13:40So in the
13:41effective altruism subreddit,
13:44AceDudeYeah asked,
13:45how do we fight,
13:45reverse,
13:46late-stage capitalism?
13:48The first thing
13:49I want to say is
13:49absolutely
13:50things can still turn around.
13:52The one thing
13:53that, you know,
13:54billionaires
13:54and big corporations
13:55want you to believe
13:56is that things
13:57are inevitable,
13:58that they're natural,
13:59this is just the way
13:59they are.
14:00You can't change them.
14:01The first step
14:02towards changing things
14:03is believing in that change.
14:04I know it sounds corny,
14:06but that's just the truth.
14:07And what changes
14:07can you make?
14:08I mean, again,
14:10we can just go back
14:11to America.
14:11We don't need to look
14:12at some socialist utopia.
14:14We can go back
14:14to the New Deal.
14:15We can go back
14:16to the 1930s.
14:17We can talk about
14:17unions at workplaces.
14:19We can talk about
14:20voting for politicians
14:21who aren't
14:22in the pockets
14:23of corporations,
14:24passing major laws
14:25that kind of change
14:27the structure of the economy,
14:28creating alternative forms
14:29of businesses
14:30instead of just corporations.
14:31We need to discipline
14:33the capitalists.
14:34Obviously,
14:34we probably need
14:35to tax them a lot more.
14:36We need public options.
14:38Just get one public option
14:39out there
14:40and let people decide
14:41if they want that
14:42or if they want
14:43the same s***y health insurance
14:44that they've been getting.
14:45There have been some dark moments
14:46in American history.
14:47You look at the 19th century,
14:49you would never imagine
14:50things like weekends
14:51or that there'd be laws
14:52against children
14:53working in mines
14:54or the fact that you have
14:55social security now.
14:57These things didn't just happen.
14:58You have to fight,
14:59but you can win
15:00and you can get these things.
15:01Okay.
15:03That's enough Reddit for now.
15:04Until next time.