The Birth of Financial Hegemony We just explored the structural crisis which led to the neoliberal counter revolution in a recent post. Searching for data from the period I stumbled upon a remarkable articulation of the business consensus to solve the crises of declining profit rates and stagflation. This was outlined in a special edition of Business Week from June, 1980, titled "Reindustrialization of America". Unfortunately, this was not available online or in print. I had to use the microfilm room for the first time in years. It was strangely satisfying to read a 32-year-old periodical on an even older hand-driven machine. As I cranked through the magazine, my eyes grew wider and wider. This is not what I had expected. The problem They identify the problem accurately: US manufacturing had become uncompetitive in world markets. Rising industrial powers, especially Japan, are taking a larger and larger market share of key sectors. They relate this to lagging productivity: There was indeed a productivity slowdown in the period 1973-79 vis--vis 1967-73. This was true across the industrial world (as is clear from the chart above) and was likely due to the macroeconomic shock of the stagflation crises. But as noted earlier, productivity had grown at 3.3 per cent between 1965-73, compared to 2.9 per cent in the golden age of 1950-65. Therefore, it is clear that it could not have been the reason for the secular decline in the rate of profit of US manufacturers from 1966-82. The problem wasn't that