Report
Patrick Artus

Did US capitalism work less well before being neo-liberal?

We can date the transition of the United States to "neo-liberal" capitalism to January 1981, when Ronald Reagan became president. It can be characterised in particular by labour market deregulation, a reduction in employees’ bargaining power, initially by a fight against dominant positions, tax cuts and a reduction in the government’ s role, free trade and free movement of capital. Neo-liberal capitalism has contributed to the rise in inequality, in poverty and in the return on equity for shareholders in the United States. But has it given positive results in macroeconomic terms? Are the social costs of "neo-liberal" capitalism the price to pay for a more efficient economy? One would normally wish that neo-liberal capitalism had brought about: A rise in the employment rate; A rise in corporate investment; An increase in innovation and in productivity gains; A faster increase in the standard of living. By comparing the periods before and after the early 1980s, we see that for all these variables (employment rate, innovation, productivity gains, standard of living, investment), the situation was more positive from 1950 to 1980 than since 1980: neo-liberal capitalism has not improved the US macroeconomic situation .
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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