On August 15, 1971, President Richard M. Nixon (who was actually to the left of both Bill/Hillary Clinton and Obama on most issues) ended the Gold Standard for all practical purposes. First temporarily, then permanently by 1973, and all remaining tenuous links between the dollar and gold were severed completely by 1975. Some pundits point to this as the main reason why America has gone downhill ever since, and as they say, the rest is history.
But that's not really accurate, though. You see, the so-called "Gold Standard" hasn't been true gold since 1933, when FDR first suspended it. And for very good reason: all of the objective evidence showed that the Gold Standard created artificial scarcity of money, and thus made the Great Depression worse. Only after it was suspended was the economy able to heal. And when it was reinstated after WWII with the Bretton Woods System, it contained a massive loophole that basically allowed central banks like the FERAL Reserve to do as they pleased regardless, provided that the system of fixed currency exchange rates remained intact. And not every country toed the line, inflation happened anyway with the very expensive Vietnam War followed by the exogenous 1973 oil crisis, and eventually by the early 1970s the system had collapsed, so Nixon essentially had to put it down like a rabid dog.
The world indeed changed in 1971, and could have changed for the better. Without the old Gold Standard to tie its hands, the federal government now had full Monetary Sovereignty as the sole issuer of its own currency, and but for the arcane and archaic rules left over from the Gold Standard, would have been able to fund a better than Nordic style social welfare state with less than Florida or Alaska taxes, simply by creating the money on an ad-hoc basis. There indeed was increasing appetite among We the People for that which reads like Bernie Sanders' wish list. Things like Universal Basic Income (UBI), Job Guarantee, single-payer Medicare For All, paid family leave, free or subsidized childcare, free college, and stuff like that were all being considered back then. And the futurists' almost unanimous predictions of a radically shorter workweek by now could have been realized as well.
So what happened? Why aren't we living in a free, post-capitalist utopia (or at least protopia) by now?
Enter the infamous Powell Manifesto in 1971. From FDR's New Deal up until then, the oligarchs were kept on a very tight leash with things like high taxes on the very rich, regulation of Wall Street and big business in general, social welfare programs, and a strong organized labor (union) movement. But that Powell Manifesto, and what it advocated, was the beginning of the end for that, which ultimately paved the way for the "Reagan Revolution" of neoliberalism, inspired by Milton Friedman and the Chicago School: deregulation of Wall Street and big business, tax cuts for the rich, gutting the social safety net, union-busting, offshoring/outsourcing, and stuff like that. That agenda was ultimately continued by every administration since then to one degree or another. Inequality exploded and poverty began to worsen again after plummeting for decades, and all manner of social ills related to those increased as well.
Productivity has increased dramatically since 1971, and yet wages have failed to keep up. Why? Because the oligarchs took nearly all of the gains since then, that's why. And their sycophantic lackeys in government have enabled them.
America, and the world, ultimately learned the hard way why the Powell Manifesto was dead wrong, and that letting the oligarchs off of their leash completely was NOT such a good idea after all. That is, only to repeatedly and thick-headedly forget such a lesson over and over again since then. The parable of Chesterton's Fence comes to mind.
Some argue that power doesn't really corrupt, it reveals. Regardless, though, it is still just as dangerous to concentrate so much wealth and power in the hands of so few people. A bad person on a leash is still a bad person, of course, but truly they are far more dangerous without the leash.
Also, let's not forget to thank the social conservatives, traditionalists, and reactionaries of both duopoly parties as well. From the arguably misguided Daniel Patrick Moynihan all the way to Phyllis Schlafly and her demonic ilk, they railed hard against any programs or policies that in their eyes threatened "the family" (code for patriarchy, of course), and they successfully rallied their increasingly disaffected base. Kinda like the reactionaries today, in fact. But the fact remains that, both then and now, the reactionaries would not have gotten far had the Democrats not all but abandoned their economic progressivism first.
And as they say, the rest is history. History may not always repeat itself, but it sure as hell does rhyme!
P.S. For those who claim that increasing the number of women in the workforce was the cause of this problem of wages lagging behind not only productivity but also the cost of living, keep in mind that nearly doubling the workforce should have resulted in shortening the workweek across the board, as "many hands make light work". Passing a Dutch-style law that gives workers the right to the same hourly wage rate regardless of number of hours, and the right to choose one's hours, would have largely done the trick without violating the iron laws of supply and demand, as would lowering the the legal threshold for overtime pay from 40 hours/week to 32 or less (it almost was set at 30 in 1938, by the way). Closing the "exempt" loophole for salaried employees would also be wise. But the oligarchs had other plans, and as they say, the rest is history....
