As the pendulum swings back from four decades of neoliberal dominance, the reissue of “Recapitalizing America” remains a prescient critique of the corporate-driven transformation that reshaped American policy, society, and global capitalism.
In the early 1980s, U.S. policy prescriptions underwent a dramatic shift. The government slashed taxes on corporations and the wealthy, deregulated key industries, and curtailed protections for workers. This agenda—now broadly recognized as neoliberalism—promised prosperity through free markets and small government. Instead, it unleashed soaring inequality, stagnant wages, financial speculation, and the globalization of production.
In Recapitalizing America, originally published in 1983, S.M.Miller and I warned that these changes would fail to rejuvenate domestic manufacturing or boost productivity as promised. Instead, we predicted—with startling accuracy—a future of corporate power, financialized economies, and weakened public institutions. Today, as economic nationalism resurges and policymakers reconsider the limits of market-based governance, this early critique remains relevant, not only for economic historians but as a model of critical engaged social science.
The Rise of Corporate Power
We called the shift recapitalization to reflect two linked phenomena: first, the direct transfer of wealth from the state to corporations and the wealthy via tax cuts; second, the erosion of institutions—like labor unions and regulatory agencies—that once checked corporate power. Recapitalization was not an economic theory, but a political project aimed at reshaping the very shape and purpose of government and the distribution of power between large firms and the rest of civil society.
Recapitalization predicted that large firms, emboldened by deregulation and free-market ideology, would redirect capital not toward innovation or job creation, but toward speculation and corporate consolidation. As firms gained more freedom we argued, their accountability to workers, communities, and even the nation would shrink. These predictions, of course, came to pass.
Recapitalization as Accepted Wisdom
Though originally associated with Ronald Reagan, recapitalization quickly gained bipartisan traction. Many centrist Democrats adopted similar ideas, prioritizing market efficiency over social equity. This convergence allowed neoliberalism to dominate U.S. policy for more than forty years, with devastating results—from shuttered factories to glob al financial crises, to rising “deaths of despair” in left-behind communities.
Economists like Milton Friedman gave these shifts academic legitimacy, but as later research confirmed, they were often just the ideological front for a concerted corporate effort to regain control over economic policy.
What began in the U.S. soon spread globally. As David Harvey noted, neoliberalism became the default economic framework for much of the world, often enforced through institutions like the IMF and World Bank. But its promises rarely materialized. Instead, countries saw rising inequality, economic instability, and democratic backsliding.
Naturalizing the market—as though it were a neutral force—became one of neoliberalism’s most insidious infections. As Somers and Block observed, “Naturalism is the most potent weapon of market fundamentalism.” This ideology discouraged people from imagining alternatives.
A New Reckoning?
Recent years have seen a crack in this consensus. The backlash began in earnest with Donald Trump’s working class populism and tariff-driven industrial policy, wrapped in nationalism both reflected growing discontent with free market orthodoxy. President Biden went further, investing in infrastructure, supporting unions, and backing targeted industrial policy. These shifts signal a potential reimagining of government’s role in shaping economic outcomes.
Until the second Trump presidency I wondered if we were witnessing the beginning of a new era—one where policy centers people over profit, and government reclaims a steering role in the economy. The second Trump administration with its deliberate destruction of state capacity and embrace of private sector alternatives suggests that any hope the pendulum was swinging back toward a people centered economy was at best premature.
Updating the Vision
Looking back, Recapitalizing America was not flawless. We underestimated the collapse of unions, the rise of tech giants, and the fragility of global finance. We also assumed that economic nationalism was a feasible solution, a notion that today—amid global pandemics, climate crises, and emerging trade wars—seems less tenable. Most dangerously we took the continuation of democracy for granted, an embarrassing naiveté at this writing.
Still, our core diagnosis stands: market-based policies empowered corporations while gutting democratic checks on their influence. The result has been not only economic hardship but the erosion of civic trust and the rise of grievance-based populism.
Rethinking Economic Assumptions
In the years since 1983, social science has caught up. Sociologists like Neil Fligstein argue that markets are arenas of power, shaped by institutions and politics. Left unchecked, markets tend to amplify inequalities and concentrate power.
The notion that wealthy individuals or firms are inherently more efficient or moral has proven false. As Joseph Stiglitz and others have shown, allowing powerful actors to dominate investment and production decisions is both undemocratic and dangerous. Many economists no longer view markets as self-regulating systems tending toward equilibrium, but rather sets of actors contending in markets, firms, and politics over distributions of surplus.
We now know that effective governance—both national and global—is essential for directing capital into productive, sustainable, and equitable uses, especially in the face of existential challenges like climate change.
Moving Beyond Growth
One of today’s central dilemmas is how to think about economic growth. For decades, Gross National Product (GNP) was treated as a measure of national success. But GNP alone obscures who benefits—and who suffers. Environmental degradation, income inequality, and geographic disinvestment have all been masked by fetishized macroeconomic indicators.
The real question isn’t how much we grow, but what kind of growth we pursue—and for whom. Rich communities need sustainability, not expansion. Poor communities need inclusion and opportunity.
Policy as a Moral Project
In our more recent work Relational Inequalities, 2019, Dustin Avent-Holt and I argue that economic policy must start with moral and democratic principles. Markets are human constructs—shaped by choices, values, and power dynamics. Designing better economic systems means acknowledging exploitation, opportunity hoarding, and inequality—not as unfortunate byproducts, but as central features of unchecked capitalism.
Positively, good public policy should aim to enhance human dignity, broaden participation, and build institutions that prevent abuse by the powerful. In this view, recapitalization, neoliberalism, and shareholder capitalism are not scientific truths, but ideological strategies—ones we can and must replace.
Why Revisit the Past?
Why read a 40-year-old critique of an emerging capitalist ideology? Recapitalizing America shows how careful social science can challenge the false certainties of economic and political orthodoxy. As the policy pendulum swings back toward active government and public accountability, our book offers a blueprint—and a caution.
Always ask: Who benefits? Who pays? Who decides?
The answers to these questions—not abstract economic models—should guide the next era of policy-making.
Coda
Most of what was right and useful in Recapitalizing America was the result of the deep wisdom and humanity of S.M. “Mike” Miller, my mentor and the lead author.
Author
Donald Tomaskovic-Devey
University of Massachusetts, Amherst