It scared them for a while
Chomsky seems to have illusions about the brief egalitarian swing after WWII. He doesn’t seem to place it in context.
In the labor-capital contention, labor did make some gains circa 1945 to 1975. The context is that the gains can be attributed to capital’s fear of the socialist movement.
Between 1850 and 1950 there was growth in:
. the critique of capitalism
. socialist parties
. labor unions
. revolutionary ferment
There were even some revolutionary events.
Capital went from being concerned to being terrified when its system went into depression during the 1930s just as the Marxists said it would. Marxism sure did look prescient around 1935!
Afraid that the post-WWII period would see even more revolutionary activity than did the period after WWI, capital shared the affluence to an unusual degree for some decades. Labor made real gains in regard to wages, benefits, social safety nets, subsidies for college enrollment, health insurance, housing assistance, etc.
By 1970 all the “generosity” produced inflation and falling profit rates. Meanwhile, socialism lost much of its appeal after its real-world manifestations were recognized as being somewhat less than utopian. Socialist parties and labor unions were not liberatory, they were institutions of industrial modernity.
Capital lost its temerity and went back on the offensive in a dynamic that’s been called “neoliberalism.”
* * * *
We do need the pendulum to swing again.
It’s possible that capital has overplayed its hand. The inequality is now so egregious and the debt levels are so high that a crisis of the system is likely.
The socialist movement has been chastened. Joel Kovel and Victor Wallis may have a point in talking about “first epoch socialism” . . . being the romantic / heroic / unrealistically revolutionary era of the Communist Manifesto, et. al. A more mature discourse is being heard these days. And we sure could use a period of eco-socialism to open doors to the greening of society.