Inequality as a Basis for the U.S. Emergence from the Great Stagnation

A significant body of evidence suggests that capitalism entered an economic crisis phase in the late 1960s due to a fall in the rate of profit. With falling profits, corporations are compelled to find means of reducing costs by lowering wages and taxes and/or raising productivity. Attacks on the welfare state (in the form of the war on deficits and debts), unions, and government in general resulted in falling wages, longer hours of work, and increased poverty. Only in 1997, despite years of exaggeration about its macroeconomic recovery, did the United States finally have a true boom year, like something from the Golden Age of the 1950s or early 1960s: GDP, investment, productivity, employment, and even wages grew by reasonable historical standards. This article is an account of how this tentative recovery was accomplished—in part, by the state and corporate sectors' ability to generate inequality over the past quarter century—and how these changes in the macroeconomy changed the context for health and the health sector.