Capitalism remains the most fundamental institution organizing modern human life. It has transformed the ways of life, forms of consciousness, and cultural production of countless generations, and there seems to be no end in sight to its influence. In fact, I seriously wonder whether or not the contemporary left – as it is currently constituted – will be at all capable of maintaining a robust resistance to capitalism, let alone be able to articulate viable alternatives to the present system. Although it has become a penchant of the left to speak about those places, forces, and events where the interests of capital seem to be confronted or rejected, the more sinister reality is that capitalism’s expansion is intensifying, its influence deepening, and its political and cultural effects worsening. What this means is that a new vision for democratic life needs to be articulated, one that encompasses the economic, political, and cultural spheres. Without this, capitalism will have succeeded in reorienting all of human existence to its own ends – and then we will truly see an end of history.
But what do I mean exactly when I talk about capitalism being “resurgent”? The French economists Gerard Duménil and Dominique Lévy have argued in their book, Capital Resurgent, that we are witnessing a new concentration of capitalist class power. Through their analysis of capital concentration, inequality of wages, and the transformation of tax policies, all under the ideological and policy program of “neoliberalism,” they have been able to show that there has been a distinct economic shift over the past 25 years in western capitalist countries toward a new, entrenched class inequality. David Harvey’s recent book, A Brief History of Neoliberalism, has similarly argued that we are witnessing – through these same policy mechanisms – a revolt from above, a reinstatement of capitalist class power against the equalizing forces of the Keynesian policies of the welfare state that dominated the three decades after the Second World War. A resurgent capitalism is therefore not simply the political economic factors that these writers have charted, it is also – and I think more importantly – a transformation of political consciousness that needs to be a central concern for us today. Inequality is more tolerated now then ever before in modern history; the culture of the workplace has become more akin to neo-feudalistic work relations than at any other time in the past sixty years; and an alienated sense of life has led to increasingly effete and puerile cultural products – and this is only mentioning what is happening in the developed capitalist economies rather than the developing ones. But ironically, very little of this is the subject of contemporary left critique, and one would be hard-pressed to find social movements – let alone any with any viable constituency – that are mobilized by such realities.
This resurgent capitalism has been able to reverse the democratic gains made by the labor movement and by the social democratic forces which created the welfare state during the early decades of the twentieth-century. It has been able to break the back of organized labor, commodify culture and construct a culture of consent which has accepted passively many of the most important capitalist institutions and organizations. For this reason, the left must take seriously the realities that have been emerging, as well as the historical legacies that have been undone. Deference to anarchism, naive anti-capitalism, or to hyper-moral argumentation will get nowhere politically – examining real, concrete political alternatives is therefore of utmost importance.
The political and cultural consequences of resurgent capitalism ought not to be overlooked. In a very real way, a resurgent capitalism has had two broad effects on contemporary life which are going largely unaddressed in any real, concrete way. First is the problem of what many are calling the “new inequality” between different classes which has been surging since the early 1980s, a new economic inequality which has had the effect of reconstructing older forms of social power and new forms of dependency. This has led to a transformation of the state – largely through the force of neoliberal policies and ideas which seek to protect capital at the expense of democratic accountability. Second is the proliferation of the ethos of capitalism, i.e., capitalism as second nature. This last, cultural dimension is crucial in my view because it is through this sphere that capitalism is most able to transform meaning and political vision – its most profound effect being the erosion of the democratic ethos and impulse in western nations and, in the end, the evisceration of any shadow of a vibrant anti-capitalist discourse.
The New Inequality and the Return of Hierarchy
The most salient feature of contemporary capitalism is the explosion of economic inequality which occurred during the last two decades of the twentieth-century. According to every major economic index, economic inequality has grown; economic elites have been able to regain substantial power over economic affairs, economic policy, and the direction of the institutions of the state. But the real salience of this empirical reality is scarcely seen for what it is. Most critics of economic inequality simply assume the moral and political wrongs associated with it. Then again, there is the growing tolerance of economic inequality that has set in throughout western democracies, most specifically in the United States. Economic inequality must, I believe, be cast in political terms. Economic relations are now seen as apolitical relations; the market seen as an institution somehow separate from political concerns. But by looking at this issue through a new lens, we can glimpse a new way of politically engaging a critique of capitalism in democratic terms.
Inequality in economic terms must be seen as unequal relations of social power; as the reinstallation of hierarchical forms of social life, political power, and individual opportunity. The great “age of democratic revolution” that swept through the western world railed against these pre-modern forms of life; resurgent capitalism has reinstated them not only within the political and economic spheres of life, but within the very cultural and mental forms of life of supposedly “democratic” nations.
A key aspect of what has been called the “new inequality” is a result of the restructuring of American capitalism, i.e., its integration into a more competitive world market for production and consumption.  Indeed, this is the most common explanation behind the rise in income dispersion that has been at the center of the recent surge in social inequality in America. Wages have grown more unequal as a result of macroeconomic causes such as unemployment, inflation, rapid economic growth and stagnation of the minimum wage, the decline in the power of unions and their influence as well as the exchange rate of the dollar.  In addition, the emergence of segmented labor markets – which accompanied and were exacerbated by the process of deindustrialization – has also created a situation of spatial and racial/ethnic exclusion as affluent, white suburbs become more economically and socially distant from decayed urban areas. The segmentation of labor markets is therefore accompanied by a segmentation of housing, public goods such as education and environmental standards, and therefore life chances and opportunities creating an “American apartheid” where the separation of racial and class groups becomes all but insurmountable. 
Although this is clearly true, there is also another side to the “new inequality”; one that is decidedly more pernicious in the sense that what we see happening is not only a change in the structure of work and income in a post-industrial order, but also a deepening of class divisions along the lines of wealth inequality. Edward Wolff has argued that when discussing inequality we should be focusing on the inequality of wealth since wealth inequality between households means a disparity in the ability to buy a home and secure other basic resources. A household with more wealth is more “likely to be better able to provide for its children’s educational and health needs, live in a neighborhood characterized by more amenities and lower levels of crime, have greater resources that can be called upon in times of economic hardship, and have more influence in political life.”  This recent surge in wealth inequality is in contrast with the broad secular trend that spanned the period between 1929 and the early 1970s when there was a pronounced decline in wealth inequality in America. 
None of this would have been possible without the massive transformation of the state that began to occur in many countries during the late 1970s and 1980s and which continues today. The revolt of the economic elites that began taking place during the mid 1970s in America and the United Kingdom – and which is continuing to develop there today – was a revolt against the mildly social democratic order fostered during the first half of the 20th century, itself a response to the social atomism and harsh effects of late 19th century industrial capitalism. The social movements of working people that had constructed the modern welfare state – especially in Western Europe and the United States – waned as a result of a curious consensus between labor and capital constructed during the 1930s and 40s. The basic idea of the welfare state was Keynesian in nature: the state would intervene in the economy in order to expand social welfare. New institutions of the state would be funded by larger tax margins on capital and the wealthy and would be able to control violent business cycles through stimulating growth in times of economic downturn. The massive industrial economy that was maturing during the middle of the century was able to sustain this alliance with the state and labor, but, in some ways, it was too successful.
This social democratic vision of the early 20th century which emphasized the democratization of the economic sector through the institutions of the state has run aground and the result has been the expansion of capitalism and its intensification. Without the institutions of the state to keep in check the interests of capital, the result has become what Hans Morgenthau once termed “the new despotism and the new feudalism.” Even more, however, it has created a new cultural consensus and mentality which has begun to cement the legitimacy of capitalism unlike any other period in history.
The Culture of Capitalism and the Erosion of Democratic Life
At the heart of these realities, both political and economic, lies a deeper, more important reality. The transformation of the ways we think about capitalism, about its effects, about the very foundations of how our political life is to be organized, is scarcely an issue for reflection. The most profound effect of rising economic inequality and the alliance of many sectors of capital with the state has been a return to older forms of social hierarchy and the emergence of a quasi-feudalistic form of social relations. The culture of everyday life has become infested with a culture of inequality, a culture of hierarchy. Democracy is not what it was for the revolutionary social movements of the past: a means for a more liberated form of life. It has become instead a mere instrumental reality, lacking any deeper consciousness of unfreedom and servitude.
In every sector of cultural life, capitalism’s effect can be felt. It has reduced the culture of the workplace to a purposeless social activity. Alienated from any sense of social purpose, individuals begin to seek satisfaction through a culture of consumption. In political life, the atomization of everyday life has also estranged people’s consciousness from the very roots of the iron cage of economic life in which they are enmeshed. Instead of seeing economic inequality as relations of social power, the culture of the workplace as a fundamentally anti-democratic, even authoritarian sphere of their lives, they increasingly accept conditions of alienation, servitude, and their estrangement from more socially meaningful forms of life and activity. The result is a growing political apathy where the political impulses of the past have been driven asunder. The erosion of democracy is therefore inherent within the cultural and economic shifts of contemporary capitalism. The existence of social hierarchies – which the age of democratic revolutions in the eighteenth century sought to eradicate – has returned, and in those places where they always existed – such as in China, the Middle East, India, and the like – capitalism has ossified and empowered such structures, making them even more enduring than in previous eras. The notion – always disingenuous from the start – that capitalism and liberal democracy were somehow fused to one another has shown itself to be empirically discredited.
The critique of capitalism therefore needs to be premised on a wholly new vision of democratic social life. It needs to confront the alienating effects of market capitalism, highlight the anti-democratic implications and effects of the institution of capital, and realize that the state must be considered as the only viable mechanism for democratizing the economic sphere. This is a position drawn from the social democratic tradition that was emerging during the beginning of the 20th century – both in the United States and in Europe – and it remains, I think, the only practical solution to reorienting democratic life. Utopias no longer hold sway over the imagination, popular or otherwise; what is required is a direct appeal to the concrete needs of working people: to fight for an expansion of leisure time; to rail against inequality and hierarchy and the way this effects the everyday life of working people. Politically, this means transcending the narrow form of interest group politics that dominates the contemporary left and pushing for new forms of worker organizations, supporting movements for economic justice that link the interests of the working poor and the middle class.
But none of this can begin without an intellectual critique which lays the critical categories of the problem out with clarity. Without a new, more robust and realistic critique of capitalism, its interests will continue to displace the common interests of the public. The imperatives of the business community will continue to become the imperatives of social policy, economic organization, and the culture of everyday life. This new discourse critiquing inequality needs to tap into the contradictions that are inherent in the relationship between democracy and capitalism, rather than what neconservative and neoliberal arguments put forth, which is their essential unity. Inequality is where much of this new discourse needs to begin since it has historically been the starting place – from ancient Greece through the most modern democratic revolutions and social movements – that inspired social change and the confrontation of social injustice.
The new critique of capitalism cannot rest on the presumptions and assumptions of previous eras and generations. The cultural sphere of life has made people increasingly less receptive to political arguments that are critical of capitalism since it has been able to embed itself into cultural consciousness. It needs to emphasize the class nature of everyday life; it needs to shed light on the interconnections between everyday life and the broader structures and institutions that capitalism has created and perpetuates; it needs to place a renewed emphasis on political ideals of solidarity and community at the expense of simple individualism, expand and intensify the public sphere; and finally, it needs to illuminate the unequal power relations – made more intense by the processes of globalization – that shape modern political, economic, and social life. Only through a renewed discourse critiquing capitalism can groups that are in search of social justice find new theoretical arguments to both gain insight into their own struggles as well as provide their own movements with a renewed sense of political purpose and relevance.
1. This is not, however, a problem that is unique to the United States. For a discussion of this phenomenon in Europe, see Anthony B. Atkinson, ‘Bringing Income Distribution in from the Cold’, Economic Journal 107, March 1997.
2. See James K. Galbraith, Created Unequal: The Crisis in American Pay (New York: The Free Press, 1998), 133-149.
3. For an excellent discussion of the spatial aspects of economic inequality and the problem of housing segmentation, see Douglas Massey and Nancy Denton, American Apartheid (Cambridge: Harvard University Press, 2001). Also for the worsening economic conditions of the urban poor, see William Julius Wilson, The Truly Disadvantaged (Chicago: University of Chicago Press, 1987) and When Work Disappears: The World of the New Urban Poor (New York: Knopf, 1996).
4. Edward N. Wolff, ‘Racial Wealth Disparities’, Jerome Levy Institute of Economics Public Policy Brief No. 66, 2001, 7.
5. See Jeffrey Williamson and Peter Lindert, ‘Long-Term Trends in American Wealth Inequality’, in James D. Smith, ed., Modeling the Distribution and Intergenerational Transmission of Wealth (Chicago: University of Chicago Press, 1980).
Michael J. Thompson is the founder and editor of Logos: A Journal of Modern Society & Culture (www.logosjournal.com) and is Assistant Professor of Political Science at William Paterson University. His next book is Confronting Neoconservatism: The Rise of the New Right in America, forthcoming from NYU Press.