Post-1970s fiscal crisis forced states to choose between workers and capital.

Evidence

Naturally, this increasing separation of policy and politics also had clear economic drivers. Unsurprisingly, old mass party often compared to the factory floor: both espoused a tight, almost martial organization in which militants and leaders adhered to a well-defined hierarchy and division of tasks. Those parties also defended specific interest groups in society: employees or employers, the middle or upper classes, Protestants or Catholics. Now to social scientists, instead of workers, there were small and large entrepreneurs, and instead of the proletariat, the so-called precariat. With the slowdown in growth rates since the early 1970s, European economies began to accumulate ever larger public debts. Broadly speaking, the states had two options for dealing with this accumulation crisis: temper the demands of the working class in favor of capital, or temper the demands of capital in favor of the working class. The former’s supposed urge to overload the state with demands led to a strong tendency toward inflation, already infamous at the time as the “economic disease of democracy.” — Arthur Borriello and Anton Jäger, The Populist Moment, 148

Categorization

• XREF: Connects to Streeck’s fiscal-to-debt-state thesis and Olson’s collective action problem from the reader’s political economy reading. — connects to: 1970s crises moved business elites to prioritize capital liquidity over employment stability — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 39; US financialization emerged from state responses to 1970s governance crises. — Gerald F. Davis & Suntae Kim, Financialization of the Economy, 32; The 1973 crisis began a new capitalism immune to state steering and proletarian challenge — Martin Jay, The Dialectical Imagination: A History…, 18 (+3 more)

Broader Connections

• 1970s crises moved business elites to prioritize capital liquidity over employment stability #expands (0.93) — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 39
• Austerity is state intervention that transfers resources from workers to capital #corroborates (0.88) — Clara E. Mattei, Escape from Capitalism, 195
• Austerity framed economic crisis as caused by governments and workers, not capital #expands (0.84) — Clara E. Mattei, The Capital Order, 783
• US financialization emerged from state responses to 1970s governance crises. #corroborates (0.82) — Gerald F. Davis & Suntae Kim, Financialization of the Economy, 32
• The 1973 crisis began a new capitalism immune to state steering and proletarian challenge #expands (0.82) — Martin Jay, The Dialectical Imagination, 18
• The forces of capital returned globally by the late 1970s and reshaped the world #corroborates (0.75)