Once in a long while a new book comes along that challenges prevailing patterns of progressive social and economic thought in a way that is both deep and far-reaching, yet still evidently originating from within the critical left, so as—potentially—to prove persuasive to thoughtful and open-minded progressives. Capitalism on Edge is such a book.

The author, Albena Azmanova, a reader of social and political thought at the University of Kent in England, has the advantage of deep perspective. She grew up disobedient under the socialist autocracy that was late-stage communism in Bulgaria, was involved in the dissolution of that system, and shared in the disillusion with what came after. A second element of perspective—more useful in some quarters than in others—is that she writes with complete mastery of the philosophical idiom of the Frankfurt School and as much clarity as that tradition permits. There is one difficult chapter in her book, a dive into the deep mines of critical social thought, but the rest is straightforward, accessible, and luminously clear.

Azmanova develops a synoptic treatment of the modern history of capitalism, which resolves into roughly four phases. The first, called liberal or laissez-faire capitalism, ran from the mid-nineteenth century to the 1930s and featured the clearing out of the remaining legal vestiges of feudal hierarchy—such as slavery and the legal subordination of women—and in some cases also associated protections such as guilds, so that free labor and free capital could make their way through free markets. This system collapsed in the 1930s after the Great Depression. It was replaced, in Western democracies—in the United States during the New Deal and in Europe after 1945—by welfare state capitalism, featuring regulation, social insurance, strong trade unions, and large, stable, national industrial corporations.

Welfare state capitalism succeeded for a generation; it tamed some of the tendencies toward crisis in capitalism while remaining sufficiently dynamic—and allowing sufficient personal liberty—to outlast the socialist and communist challenges from the revolutionary East. But it eventually fell prey to discontents, from both radicals and reactionaries. Azmanova observes that the successes of welfare-state capitalism blurred the convention lines of class conflict in the West, through the emergence of a significant professional class and the diffusion of nominal ownership of capital assets, giving a large share of the population the perception of an ownership stake in the system. The security and community of the welfare state fostered the youth rebellions of the baby boomers – and these in turn brought on the reaction. Rising inequality imposes social discipline on the insecure.

The next phase was neoliberalism, which took hold after the stagflation of the 1970s and combined free trade with privatization, deregulation, and fiscal austerity, relieved by bouts of tax cutting and easy money, all contributing to a vast rise in inequalities. This system was justified by the necessity of “competitiveness” and defended with Herbert Spencer’s old Social Darwinist clarion call: “There is no alternative.” Neoliberal policies did not dismantle the welfare state all at once—many parts of it lasted a long time and some are still with us—but they undercut the accepted legitimacy of those policies and institutions, and spawned an intellectual reaction that moved onwards, not backwards, largely accepting the free-market critique of Roosevelt and Keynes and embracing the core tenets of the neoliberal view.

Neoliberalism received a shock at the dawn of our century with the bursting of the dot-com bubble and then 9-11, and an even bigger one with the financial crisis of 2007-2009. All this gave rise to a backlash from the left, at least in Western countries. This movement is characterized by the trope of exclusion of certain groups from the general prosperity, inflected by a group consciousness and a politics of identity. The left in short became neoliberal in its core commitments. It no longer sought fundamental reform of the capitalist system, still less its overthrow. Instead the “progressive” view—as personified across the globe by luminaries ranging from Paul Krugman to Thomas Piketty—is to seek redistribution within the system, an economics combining growth with opportunity. Opportunities are to be delivered by education, affirmative action, anti-discrimination enforcement, and similar measures, plus a reorientation of the tax burden toward the ultra-wealthy in the name of social justice. Social entrepreneurship and self-help are other aspects of this worldview.

These measures aim to make neoliberal austerity—an ideology lent protective cover by calls for “fiscal responsibility”—more balanced and more fair, and to curtail the most egregious consequences of capitalism, including environmental injustice, extreme poverty, and differential life expectancy, so that they do not fall so heavily on people of color or other marginalized groups. But those in the neoliberal left do not dispute the system itself. Nor do they question its success at delivering the goods in the form of material sufficiency and of incessant, seductive novelty in the experiences of consumption. Acceptable politics therefore resolves into a tussle between Hillary Clinton 2016 and Elizabeth Warren 2020, between “America is already great” and calls for wealth taxes and anti-trust, to make capitalism work (somewhat) better than it actually does. To people with this perspective, Bernie Sanders and Jeremy Corbyn were beyond the pale.

Meanwhile, Azmanova argues that capitalism itself has moved on, leaving its neoliberal phase behind and the global left-neoliberal critique and prescriptions largely dangling in mid-air.

Precarity capitalism, Azmanova argues, is our fourth phase and has become the new face of the old system. Its main trait is not growth or competitiveness but instability, and its dominant form of inequality is not of income or wealth but of security and self-confidence. The crucial divide within economies dominated by precarity is between a minority ensconced in a diminishing set of safe career paths or sufficient wealth not to bother worrying about that, and a majority living in persistent anxiety over the costs of health, housing, education, the quality of public services and other formerly ordinary attributes of middle-class life. And to this one might add the overarching fear of ecological limits, manifested mainly as climate change.

For a long time, left critics, including this reviewer, held to a view that crises would eventually breed a new politics, restoring elements of decency and authentic democracy to the social structures of the West. First Naomi Klein and now Azmanova have demolished this notion; Klein by showing in her 2007 book The Shock Doctrinehow crises are manipulated—and even fostered—to generate neoliberal outcomes, and Azmanova by pointing out the consistent resilience of post-crisis capitalism. This has been at no time so evident as after the Great Financial Crisis of 2007-2009, which appeared, for a time, to be on the verge of bringing down the whole system. We face, Azmanova says, not a crisis of capitalism but a “crisis of the crisis of capitalism.” Perhaps especially for someone like me, who has used the word “crisis” in the subtitles of three books, this is a depressing thought.

The shifting political paradigm that Azmanova describes is becoming more and more apparent. Donald Trump spotted it in 2016. And he won the presidency by placing himself, if only rhetorically, at the head of a revolt of the insecure, of people whose world no longer offered stable middle-class employment in regions enriched by the taxes paid by industrial corporations and their workers. To his followers, Trump offered a return to national capitalism under national control—an illusion, but one with resonance and bite. One could also see the Azmanova impulse in the youth movement that swept Bernie Sanders forward in 2016 on a platform of a $15 minimum wage, Medicare for All, tuition-free public college, and the Green New Deal—a quartet uniquely effective in speaking to the insecurities of the youngest voting cohort. Notably, when Sanders speaks about his education plan, for example, it is the basic issue of cost that dominates, not the vague concepts of opportunity and competitiveness that characterized the education rhetoric of the Clinton-Gore-Obama era. One can see here, as well, why Sanders could not break through in 2020; his approach could not reach the older set who have spent their lives imbibing the neoliberal tropes.

Azmanova traces the defect of modern capitalism to its root: the predominance of the quest for competitive profit, which has of course been the leading feature of the system, its life force, since its beginning 500 years ago. What is the alternative? A plausible candidate, let me gently suggest, may be identified in the mists of mid-twentieth century social thought. It is the idea of countervailing power, or a system where the untrammelled pursuit of profit is controlled by accommodating the interests of stakeholders with conflicting concerns: jobs, health, safety, pollution, the public purpose, and above all, relative stability and security over long periods of time. That idea, once widely acknowledged in America but submerged in the neoliberal tides, has perhaps a future still ahead.

In other words, we do not need a revolution or utopia, but rather a reversal of a canonical late twentieth century error: conflating economic success with shareholder value, devil take the hindmost. That prescription was avidly advanced by economists in the 1970s and ‘80s, such as Milton Friedman and Michael Jensen, and avidly promoted thereafter by tycoons and CEOs. Its fatal flaw was time-inconsistency: What maximizes the stock price on any given day bears no relation to the requirements of maintaining the firm, nor to the production of economic value over time. It is, rather, what fosters predatory finance and executive larceny—the Western equivalents of nomenklatura privatization, which turned much of Eastern Europe over to oligarchs after autocratic socialism collapsed.

There is perhaps one thing that Trump and his cohort have grasped that would usefully complement the agenda of solidarity, sustainability, social insurance, and countervailing power that emerges from this book. And that is that the failure of the neoliberal model to deliver on its promises of growth through competitiveness and “tough love” for ordinary workers and the poor is not due solely to the fact that it handed Anglo-Saxon capitalism over to predators, thugs, and fraudsters posing as financiers. It is also due to actual existing competition from better-performing systems. We must consider the fact that Anglo-Saxon money-manager capitalism isn’t the only economic system out there in the world today. There are alternatives. And not only that: Experience shows us that the alternatives are superior, both in delivering competitiveness and in improving living standards and reducing extreme poverty, as well as in retaining the capacity to respond to an extreme crisis, coming, for instance, from the biosphere.

A mixed economy featuring corporations with long time horizons, stable relationships with their bankers and countervailing power was never wholly dismantled in Germany, in Scandinavia or Japan, and it took root in Korea, where it survived several severe financial shocks that would have demolished it in Europe or North America. These serve as the prime examples of successful resistance within the West to untrammelled exercise of financial power.

And there is China. We need not be detained by squabbles over whether the Chinese system is capitalist or socialist, whether the most influential economist over modern China is Karl Marx, John Maynard Keynes, or Henry George. Elements of both systems, and inspiration from all three thinkers, can be found in the way China’s economy works today. But the large Chinese state-owned corporations and China’s presence on the world stage are unquestionably Galbraithian, focused on market share, learning, new technologies, and improvement of the national capital stock. And so, in important respects, has been the Chinese state, which prizes above all autonomy, predictability, and social stability, and if not always firm control of its banking sector, the willingness to override that sector’s autonomy whenever necessary. China is no democracy, and modern China was built on many epic disasters, including the famine and Cultural Revolution, none of which appeal as models. But that it is a functioning society capable of mobilizing to meet vast challenges has never been clearer than in recent days. And one can say the same of South Korea, and perhaps of Japan, while in Europe Germany is, so far, the best prepared to handle the corona crisis.

What is the source of this resilience? It is not, of course the leadership of a Communist Party, which does not exist in Korea or Japan or Germany. What these societies share is that over four neoliberal decades they maintained their large industrial corporations as going concerns in line with national strategies, along with their productive base and social organization; they did not give everything over to the market. And over those decades, put to the test against the neoliberal corporation dominated by Wall Street, there is no doubt which side won out. The Galbraithian firm fostered and protected by a vigilant state now dominates world markets in most advanced sectors and many that are more modest but no less basic. It is also capable of meeting the challenge of mobilization facing the world in this pandemic; in the production of medical masks, for instance, China ramped up capacity almost six-fold in a month. Money-market capitalism, in a vast transformation initiated in the early 1980s by Reagan and Paul Volcker, has left an industrial shell, with capacity in some areas limited by bottlenecks in others, and by the failure, so far, of clear and effective chains of command. The Anglo-American model is therefore now under enormous stress, as capital markets crumble and market-based networks begin to break down.

In the crisis now upon us, the issue before the Anglo-American side is whether the reality of our situation will now sink in. Will we recognize, in time, the need to mobilize all our resources, to socialize our health system and keep the supply chains open until the virus can be contained? Will we realize that when this is done, life will not be what it was before, and that a vast reorganization of economy and society will be necessary? Or will the neoliberal ideologues in control succeed in squelching that debate—which they are trying to do, at this writing, by focusing on bailouts and stimulus in the belief that somehow the bubbles now bursting can be reinflated in a few months? Will we remain mired in illusions of growth, with or without equity and inclusion? Or will we now and finally displace those illusions, with a new wave that understands the nature of precarity capitalism and what must be done, as Albena Azmanova has so ably set forth in Capitalism on Edge.