Too long, do read

Nils Gilman in The American Interest discusses the hollowing out of the "social modernist" state by what he calls the "twin insurgencies" of plutocracy and organized crime. It's a long essay that I won't try to fully summarize -- it will reward your patient reading.

I think he implies a false equivalence between the two insurgencies. The plutocracy is a far more important phenomenon, which really drives and enables the epidemic of financial crime, cybercrime, drug and human trafficking. But the basic notion that a class of plutocrats has arisen that sees itself as having no obligation to the population on which it leeches is certainly correct.

In the postwar era, until around the early 1970s,  the wealthy paid taxes to finance the basic infrastructure of society, that made life tolerable for the working and professional classes -- roads, schools, some modicum of retirement security. He doesn't mention amenities such as parks and public art and community centers and so on, but those were also important. Economic inequality declined, and people expected to have a better life than their parents.

By the 1980s, the trajectory changed. He doesn't really offer a single money quote, but I will give you this:

Cremated along with the corpse of Communism was the civic-minded conception of development as the central responsibility of the state and allied elites—a conception shared by communists and liberals alike during the Cold War. It wasn’t just that the state “retreated” from the “commanding heights” of the economy, to use Daniel Yergin’s terms, but also that the very ambition of the state receded. Many states stopped even pretending they wanted to create a more egalitarian society and instead sought to legitimate themselves by claiming they were maximizing individual opportunity. For proponents of this perspective, the rise of new plutocrats counted not as a defeat, but as a success for the new model of governance. . . .

This transformation of the role of the state in the wake of the Cold War has dramatically increased the precariousness of the lives of the middle classes within most societies. On a material level, it has generated unprecedented new forms of insecurity. From above, middle classes find themselves threatened by a global financial elite, in league with ultra-wealthy compradors, both of whom seek to cut social services and the taxes that pay for them—taxes that these elites depict as a form of illegitimate expropriation. From below, the middle classes find themselves exposed to a new resurgence of criminality, which has discovered in their plight a business opportunity.

This of course, is not sustainable. Socialism had little appeal in the post-war social modernist state, but it is making a comeback. Manipulating racial resentment will only keep the plutocracy entrenched for so long. Eventually, people will  demand that the state again serve their interests.

As Michael Tomasky puts it, What are capitalists thinking?He tells essentially the same story, more succinctly.

Every once in a while in history, cause and effect smack us in the face. The conditions under which the czars forced Russians to live gave rise to Bolshevism. The terms imposed at Versailles fueled Hitler’s ascent. The failures of Keynesianism in the 1970s smoothed the path for supply-side economics. And so it is here. . . .