“How Will Capitalism End?” by Wolfgang Streeck, 2017
The title is more provocative than the book. Streeck thinks world-wide capital will slowly self-destruct from a 'thousand cuts.' He combines the theories of 5 others to construct his ‘economic sociology.’ Capital’s decay will result in a form of barbarism-lite, relying on individuals, families and groups to organize themselves as the state and ruling class become weak and unable to control the situation. He doesn't use the phrase 'failed states' however, though this certainly seems to be what he’s saying. “Economic stagnation, oligarchic redistribution, plundering of the public domain, corruption and global anarchy” are his version of a slow-moving apocalypse. It is a world of 1) declining growth; 2) increasing inequality and 3) rising debt. Versions of democracy are superfluous to this dictatorship of finance capital. Democracy has outlived its usefulness and will only decline. He does not directly discuss warlordism, which might be a variation of this scenario.
Socialism is not on the agenda because of the weakness of the labor and socialist movements produced by the onslaught of neo-liberalism. Capital’s disorganization also disorganizes its opposition. So he’s a pessimist as to movements and organizations. Streeck thinks we are coming to an interregnum – a transitional period – to something else. To what? And how long will the 'transition' last? He makes no mention of fascism, of war or of the situation outside the ‘advanced’ capitalist economies.
Streeck goes into some detail. For instance, reams have been written about inequality for years, but nothing has changed. According to statistics from the 'material power index' the difference between the top 100 U.S. families and the bottom 90% of the population is 108,327 to 1. This is an inequality level similar to Roman plutocrats and Roman slaves. This power will block any Piketty or Warren 'wealth tax' proposal, no matter how popular. He takes apart the suspicious neo-liberal meanings of the terms 'resilience' and 'disruption,' and the individual methods of “coping, hoping, doping and shopping.”
Streeck cannot imagine what social structure comes after capitalism however. He is more ‘modernist’ than Marxist, more Polanyi and Weber than anything else. He thinks Marx was a ‘determinist’ which shows how little he understands the Marxist method. He rejects a "decree, Leninist-style” that abolishes capital, which means in his own contorted way that he rejects an organized social revolution, no matter how massive or coordinated world-wide. Protests will be - and are presently - “of a Luddite-sort: local, dispersed, uncoordinated and primitive.” Capital will decay ‘as a process” – which is pretty obvious. But because he doesn't believe in dialectics, he thinks there will be no 'quantity into quality' in this decay. Let’s see if there is anything valuable he has to say about the conditions under which a social revolution might take place or might not.
CONTRIBUTIONS?
Streeck’s focus is on Europe, the aftermath of the 2008 crisis and financialization – all done to death at this point. He makes much of the incompatibility between democracy – what he calls a ‘moral’ economy; and capital, an 'economic economy' … a split that is only growing wider. The 30 years after WWII – the ‘trente glorieuses’ of what he calls ‘democratic capitalism’ were an exception to the general trend of capital and its incompatible relation with democracy… a relation always based on power. Because counter-capitalist movements are weak, capital is losing any ability to regulate itself, and democracy is a ‘demand’ of the weak. Regulation and ‘self-regulation’ have proved to be continuing failures in preventing crises, another morbid symptom. Capital's entrepreneurs are always one or two steps ahead of regulators, who are members of a revolving door anyway. Capital is becoming a victim of its own success. This view might lead to a position of passivity by the radical labor movement, ‘waiting’ for collapse.
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| Gradual decay? Or Both Sudden and Gradual? |
Streeck believes capital, a historical formation, has gone through 3 phases after WWII – the tax state, the debt state and now the ‘consolidation’ state, where austerity becomes the norm. This is true even in the more social-democratic states of Europe like Sweden and Germany, and certainly shown in the EU’s treatment of Greece. Money like the Euro, dollar or yuan are sites of contestation – not a neutral chit of exchange. Money is a ‘politico-economic institution’ at heart, part of ‘market struggle.’ He points out the domination of the EU by Germany and perhaps France, though again makes no prediction as the future of the EU or the euro. He notes that ‘international bodies like the World Bank, the ECB, the IMF, BRICS Bank, etc. are even farther away from democratic control than national entities – though certainly the ‘national’ Federal Reserve and other central banks have almost no social oversight either. He makes no predictions as to whether central banks can continue to patch over capitalist crises and explicitly states that this is impossible to guess. This even though central bank assets and liabilities have climbed to astronomical levels.
Streeck has many charts on growth, debt, inequality, strike days, inflation, interest rates and taxation. The decline in taxation of the rich and corporations by capitalist states, especially in the hidden international arena, is forcing public entities into austerity and more public debt, which then sparks privatization for their benefit. He does not mention war budgets or how high debt can grow before it is terminal. He thinks capital has entered a period of stagnation which has spurred financialization – but doesn’t call it profit stagnation.
He focuses on the drive of capital to create new ‘needs’ above and beyond basic necessities as essential to the survival of the system. Basic ‘necessities’ was the drive under the ‘Fordist’ system until the early 1970s. These optional needs are now the reason for the relentless onslaught of advertising in every communication medium. He assumes that ‘most’ basic needs have been taken care of in capitalist center countries, which was not true even in 2017. These “customized commodities’ are represented by those hundreds of boxes of questionable cereals in your local super-market, but also every single variation of every commodity niche imaginable.
He thinks most of this is not based on ‘use-value’ but on ‘status value’ – which might not always be true. For instance, if you have a computer (something he only mentions once!) there is a broad range of software and hardware needed to work at a high level. It’s not a ‘status’ product until at a certain point the monitor is bigger than the wall! Or perhaps when the digital equipment allows a child to play high-end multi-player video games in real time across the world. But I digress. He quotes Veblen as to conspicuous consumption and Marx on commodity fetishism in this context. Intentional defunding of the public sector has made it dull and old-fashioned compared to the shiny world of hip, cool products. He also thinks single-issue politics are a kind of life-style commodity, which can be easily jettisoned.
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| The Anaconda |
Streeck discusses the nature of a certain kind of authoritarian state – not fascist, or a dictatorship or theocracy or even the ‘authoritarian fake democracies’ that are common now in Russia, Iran, Turkey or Hungary - but what he calls a ‘liberal-authoritarian’ state. He, like Foucault, believes that monetarist neo-liberalism was initially developed in Germany, not the U.S. or England. His term is ‘ordoliberal’ – a German terms meaning a government that caters to the capitalists. This led to ‘post-democratic’ or ‘a-democratic’ Hayekian capitalism where the market, big banks and financial entities rule. He makes no mention of international corporations oddly enough, their interlocking directorates, their shared role in private and public planning entities like the Atlantic Council, the Trilateral Commission or the G20. So his concept is quite limited to the finance side, a la Michael Hudson.
PREDICTIONS
Streeck’s failure to actually answer the question in his book’s title suggests his theory has no ability to predict anything. It is basically ‘kinda’ descriptive and might help sociology students. He’s more interested in ‘the public mission of sociology’ which uses an ‘economic sociology’ that understands capital is part of history and which does not separate economy from society. He understands capital to be a dynamic yet unstable system always in pursuit of capital accumulation, so turmoil is built into the capitalist lifework and culture. This is no secret to anyone alive today. His focus is on self-destruction of the system without break points – just a continual slide into dystopia, like a car rusting into the junkyard. Of course we know cars don't go to the junkyard based on gradual problems. It's the failure of a key component that usually leads to that. It will be a major breakdown in the capitalist economy or some other event that no longer allows people to avoid staring capital's failure in the face.
Prior blog reviews on sociological topics, use blog search box, upper left, to investigate our 16 year archive, using these terms: “Microverses,” “Understanding Cities,” “Angry White Men,” “The Politics of the Precariat,” “the Souls of Black Folk” (Dubois); “The Melancholia of the Working Class,” “The Precariat” (Standing); “Time Wars” (Rifkin); “Riot, Strike, Riot,” “Caste – the Origins of Our Discontents” (Wilkerson).
Red Frog
May 4, 2023
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