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Modern (American) Capitalism: A Three Act Tragedy

Mark Setterfield ()

No 1722, Working Papers from New School for Social Research, Department of Economics

Abstract: This paper examines the process of demand formation in capitalist economies characterized by high levels of household indebtedness, with a particular focus on contemporary developments and their sustainability. The thesis developed is that over the past 35 years, supply-side economics hollowed out the core of the demand-generating mechanism in US capitalism, with disastrous consequences. Particular attention is focused on the interplay of growing inequality, emulation effects, the erosion of social provision, household debt accumulation, and the evolution of consumption spending. The unsustainability of these processes gives rise to a discussion of initiatives that might alter the process of demand-formation so as to make it both more equitable and more sustainable.

Keywords: Neoliberalism; supply-side economics; zapping labor; incomes policy based on fear; household debt; financial fragility (search for similar items in EconPapers)
JEL-codes: E12 E21 E24 E25 E61 E64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-pke
Date: 2017-06
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http://www.economicpolicyresearch.org/econ/2017/NSSR_WP_222017.pdf First version, 2017 (application/pdf)

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