Anthropology in the Neoliberal Era,
The crisis of American society during the last quarter of the twentieth century has been shaped by the intersection of several interrelated processes. These include the breakdown of the unwritten postwar compromise between capital and labor, the rise to prominence of finance capital, economic reorganization, and implementation of neoliberal austerity programs, immigration, the stalling out of the civil rights movement, and the appearance of new social movements rooted in identity politics, continued intervention in the internal affairs of Third World countries, and the ongoing importance of Cold War policies even after the dissolution of the socialist states.
In the unwritten pact between capital and organized labor dating from the late 1940s, the capitalist class settled for aspects of a welfare state in return for labor peace. Labor agreed to participate in a capitalist growth economy shaped by Cold War rhetoric and xenophobia in return for regular cost-of-living increases, inexpensive education, and other social benefits. The compromise, which was unstable from its inception, became even more so through the 1960s and 1970s as serious restructuring of the American economy eroded the underlying logic and the political alliances that sustained it (Phillips 1993:3–31). Terms such as “deindustrialization,” “rust belt,” “offshoring,” “the new international division of labor,” “flexible production and accumulation,” and “post-Fordism” were coined to describe the effects as industrial capital moved from the old industrial states in the Northeast to the southern states and Third World countries where inexpensive, non-union labor was plentiful.
The rise to prominence and hegemony of the finance sector by the early 1970s facilitated such transfers. The unilateral abrogation of the Bretton Woods Agreement by the United States in 1971 forced all of the capitalist states “to subordinate every aspect of [their] economic policy to the defence of currency” (van der Pilj 1984:262). This underwrote the emergence of the World Bank and the International Monetary Fund (IMF), both controlled by the United States, as major policy-making institutions whose experts promoted the development of export-oriented economies in Third World countries and advocated neoliberal policies - such as deregulation, free markets, privatization, and austerity - that facilitated the flow of capital (Kolko 1988).