I quote from a reader’s letter:
“The period after the Second World War, which can probably be described as the best period of capitalism, was strongly influenced by the existence of the Eastern Bloc as an ideological counterweight. The powerful and the rich realised that they had to keep the citizens happy so that they would not succumb to seduction. Again, this is of course only a hypothesis, but the fact that when this motivation collapsed after the fall of the Eastern bloc, the well-documented opening of the scissors between the salaries of workers and managers or specialists in companies began within a few years.”
I believe that to a large extent that was indeed the case. It’s just very simplistic and very inaccurate.
The collapse of the Western welfare state, the huge growth in inequality and the closing of factories took place in Western Europe BEFORE the fall of the Eastern European regimes. For example, Margaret Thatcher’s famous struggle to close the mines and liquidate the worker and miner culture peaked in 1983-85. Mass privatisation and service cuts there began in 1979. Piketty’s statistics also show that the huge increase in inequality took place in the 1980s.
So a better explanation is that certain economic and social forces first destroyed the Western European and American consensus model, then launched a new round of the Cold War against the Soviet Union, and it collapsed.
This does not change the fact that in the preceding period the very decent treatment of workers may have been motivated by fear of communism. But in real life it is rarely the case that we say to ourselves in the long term: These are terrible people, they have no value, I despise them, but I have to treat them nicely because they might join the communists. More often it’s that when I need someone in the long run and I have to treat them well, I start to find them likeable and come to the conclusion that they actually deserve the good treatment. Psychologists talk about cognitive dissonance. And when this applies to an entire social class, it’s easy to create a culture and value system that includes admiration for the hard work of workers in capitalist factories. So yes, they did it out of self-interest, but let’s face it, how much of the emotion in our lives is underpinned by the fact that something is profitable. More than we give ourselves credit for.