What is the likelihood that the incoming Joe Biden administration can be pushed to pursue a progressive policy agenda? An assessment of the prevailing economic conditions in the United States reveals both opportunities and obstacles that the Left will face in its efforts to move policy toward the widely popular agenda of the Bernie Sanders campaign. This article argues that the current condition of US capitalism makes a major change in direction toward progressive policies possible. At the same time, the consequence of a failure to move US policy away from decades of neoliberalism would likely be an even more retrograde future.

Understanding the current economic conditions and the possibilities they generate requires taking account of the interplay of continuity and change in capitalism over time. Capitalism has taken a series of discrete institutional forms, or “regimes,” over time. The monopoly stage of capitalism arose around 1900, superseding the previous small-business competitive capitalism. After World War II, regulated (or social democratic) capitalism emerged and lasted until the 1970s. Then, around 1980, the contemporary neoliberal form of capitalism arose.¹ In each period, the system remained capitalist but, at a more concrete level, many of the institutions, as well as the dominant ideas, changed from one regime to another.

The institutions and dominant ideas of each previous form of capitalism promoted capital accumulation and economic expansion for several decades, but eventually the contradictions of each form gave rise to a structural crisis in which the existing regime no longer promoted normal accumulation. Such structural crises have brought some combination of prolonged economic stagnation, a falling rate of profit, and heightened economic instability. History suggests that a structural crisis continues until a new institutional form of capitalism emerges that again promotes normal capital accumulation. Hence, each institutional form can be called a social structure of accumulation (SSA).²

During the period in which a regime of capitalism is working “effectively,” it is difficult to change the policy trajectory in a way that is inconsistent with the dominant institutions and ideas. For example, once post–World War II regulated capitalism was consolidated in the late 1940s, an alternation of political party control of the administration had little impact on the overall policy direction. In the neoliberal era, the Democratic US presidency of Bill Clinton and Labour Party rule under Tony Blair in the UK extended and deepened neoliberalism, despite promises to the contrary during their respective election campaigns.

Once an institutional form of capitalism enters its crisis phase, however, a change in direction makes its way onto the agenda. The financial crisis and Great Recession of 2008 marked the beginning of the structural crisis phase of neoliberal capitalism. This has important implications for assessing the possibility of moving toward a progressive policy agenda in 2021. In such a structural crisis period, competing proposals for major change suddenly move from the political fringes into the mainstream, as happened in the 1930s and the 1970s. As we have seen in recent years, authoritarian nationalism, which had been marginalized in the developed capitalist countries after World War II, experienced a remarkable rise from the dead in many places, including in the United States with the election of Donald Trump as president on an authoritarian nationalist appeal. At the same time, Senator Bernie Sanders, running as a self-proclaimed democratic socialist, came close to winning the Democratic primary for president in 2016 and in 2020 was a leading candidate for president again.

This article first examines economic developments since 1980 and their consequences that have brought us to the current conjuncture, including the impact of the COVID-19 pandemic. Next we will consider the implications for the ability of the Left to effectively promote a progressive shift in the policy direction in the United States in 2021, as well as the dangers that loom if the Left fails in that effort.