Tag Archives: Wolfgang Streeck

Wolfgang Streeck explains how to reform capitalism for a better 21st century

Summary: We have hundreds of ideas for small reforms of America, but few for radical reform of the capitalist system that runs it. As a demonstration of this problem, Wolfgang Streeck gives a profound critique of capitalism and Adam Tooze  one of the most powerful essays I have seen in a long time. This is part two; part one discussed how we drifted into this crisis of capitalism.

 

A General Logic of Crisis

By Adam Tooze,
London Review of Books, 5 January 2017.

Posted with his generous permission.

Review of Wolfgang Streeck’s How Will Capitalism End?: Essays on a Failing System.

Part two of two: looking at the end of capitalism, and beyond.

The publication of How Will Capitalism End?: Essays on a Failing System thus comes when Streeck has positioned himself as the leading intellectual proponent in Germany of a Gaullist vision of Europe from the left. Now that his cards are fully on the table it is a good moment to try to answer the question: how did Streeck turn critical theory into a vehicle for the assertion of the primacy of the nation?

In one respect at least the national turn has allowed Streeck to subsume what might once have been seen as a fatal weakness in his analysis into a consistent part of the argument. A truly remarkable thing about his work is that he discusses the future of capitalism entirely without reference to the place where the future of capitalism will surely be decided: Asia. That no doubt reflects the limitations of his professional specialisation – OECD industrial relations. China and India are beyond his ken.

But given the arguments he has been making, his Eurocentrism takes on a new meaning. If you are going to articulate the basic tension of the crisis as existing between a superficial, utilitarian universality on the one hand, and a ‘grandiose jointly produced diversity’ on the other, then Europe is, indeed, the classic terrain on which to make your case. Not that there isn’t nationalism elsewhere. But nowhere else has as many different nationalisms in such a tiny space and nowhere else has tried to merge them the way the EU has. India and China never subordinated themselves entirely to the dictates of neoliberalism, nor arguably has the United States: compared to the EU, Nafta was integration-lite. So if the EU stands for a peculiarly pure form of neoliberal capitalism – a basic contention of the Lexit camp – where better to make one’s stand than Europe? In rejecting the false capitalist homogeneity of the EU, one is saving Europe’s essence, namely its diversity. What could be a better expression of that grandiose diversity, after all, than the battle of Brexit, another round in the centuries-old cross-Channel struggle?

But Streeck is a political economist, so he isn’t content with civilisational arguments. He wants to talk about nuts and bolts, the real power behind the scenes. The particular vector of globalisation that has seized his imagination since 2008 is finance. As a somewhat surprised Martin Wolf remarked in the Financial Times, Streeck worries so much about debt you could mistake him for an Austrian economist. Debt, for Streeck, is an index of the unsustainable balance between democracy and capitalism. It’s the way the system borrows time. At times he takes this metaphor quite literally, describing credit as a mechanism through which ‘not-yet-existing virtual resources … are pulled forward from the future.’ Taken at face value that would suggest a very odd view of economic reality indeed.

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Wolfgang Streeck asks “How will capitalism end?”

Summary: Lost in the trivia of the daily news, we can easily lose sight of the great issues shaping our times.  Such as the future of capitalism, tested by demographic change, slowing growth, rising inequality, and political turmoil. Here is the first of two posts with insights by Wolfgang Streeck and Adam Tooze; one of the most powerful essays I have seen in a long time. This post examines how we came to this point, on the brink of great events. In tomorrow’s post they discuss the forces that will test and perhaps break capitalism.

 

A General Logic of Crisis

By Adam Tooze,
London Review of Books, 5 January 2017.

Posted with his generous permission.

Review of Wolfgang Streeck’s How Will Capitalism End?: Essays on a Failing System.

Part one of two: how we got here.

 

‘Whatever it takes.’ These words, spoken by the president of the European Central Bank, Mario Draghi, to a crowd of investors in the City of London on 26 July 2012, have come to represent the symbolic end to the acute phase of the global financial crisis. In the political sphere, by contrast, where words are supposed to be everything, we have not yet been able to draw the line. More than four years on, we know that in 2012 the political fallout was only just beginning.

It was in December 2011 that David Cameron reopened the European question by opting out of the new ‘fiscal compact’ drawn up by Angela Merkel and Nicolas Sarkozy with the aim of enforcing budget discipline across the EU. In the US in spring 2012, Mitt Romney emerged as the candidate from the Republican primaries, but the freakshow anticipated the Trump campaign to come. In Italy the ousting of Berlusconi in a backroom coup in November 2011 and the installation of the ‘unpolitical’ economist Mario Monti as prime minister set the stage for the emergence of Beppe Grillo and Five Star in the local elections of May 2012. In France as the fiscal compact began to bite, François Hollande’s presidency was dead almost before it had started.

Amid all these events, Germany can easily seem like a bastion of stability, with ‘Merkel über alles’ its anthem. But beneath the smooth surface, Merkel’s grip on the chancellorship has since she took office in 2005 been supported by three successive coalitions. And by early 2013 it was clear that her partners since 2009, the free-market, libertarian, liberal FDP, were in trouble. They were being outflanked on their right-wing by a new formation, the AfD, the Alternative für Deutschland, whose focus in 2013 was not immigration but passionate opposition to the euro. Like much of the German right the AfD was indignant not about austerity, but about the failure of Merkel to back an even harder line. The AfD didn’t break the 5 per cent threshold required to enter parliament at its first try, but it took enough votes from the FDP to drop it out of the Bundestag, leaving Merkel to form a new coalition with the Social Democratic Party (SPD).

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Sociologist Wolfgang Streeck asks if Capitalism has a future

Summary: The pace of change has accelerated since Y2k so that it’s difficult to see what’s happening. Here’s a provocative essay by sociologist Wolfgang Streeck describing an evolution almost too large for us to see as it happens — the decline of capitalism (and, though he does not discuss this, its evolution into something else).

Evolution

Thou know’st ’tis common;
all that lives must die,
Passing through nature to eternity.

— Queen Gertrude to Hamlet in Act I, scene 2.

Excerpt from “On the dismal future of capitalism

By Wolfgang Streeck
Socio-Economic Review, January 2016

The writing is on the wall, and has been for some time; we must only learn to read it. The message is: capitalism is a historical social formation; it has not just a beginning but also an end. Three trends have run in parallel since the 1970s, throughout the family of rich capitalist democracies: declining growth, rising inequality of income and wealth and rising debt — public, private and total. Today the three seem to have become mutually reinforcing: low growth contributes to inequality by intensifying distributional conflict; inequality dampens growth by curbing effective demand; high levels of existing debt clog credit markets and increase the risk of financial crises; an overgrown financial sector both results from and adds to economic inequality etc.

Already the last growth cycle before 2008 was more fake than real and post-2008 recovery remains anaemic at best, also because Keynesian stimulus, monetary or fiscal, fails to work in the face of unprecedented amounts of accumulated debt.

Note that we are talking about long-term trends, not just a momentary unfortunate coincidence, and indeed about global trends, affecting the capitalist system as a whole and as such. Nothing is in sight that seems only nearly powerful enough to break the three trends, deeply engrained and densely intertwined as they have become.

… State-administered capitalism has failed — that is, was rejected by the owners of capital as too costly for them, to be replaced with free-market capitalism, which has also failed. For the time being, central banks act as regents waiting for a new ruler. But who would this be, and what would be his recipe for holding the capitalist enterprise together?

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Sociologist Wolfgang Streeck explains the politics of the migrant crisis reshaping Europe

Summary: This essay by German sociologist Wolfgang Streeck provides a look at the the political crisis of Germany — and Europe — created by its leaders open of their borders, and more broadly about the new form of political leadership in the West (as Bush Jr. demonstrated for America after 9/11). He provides a different perspective than we see in the US news media. It is brilliant (the title is sarcasm).

One way nations are re-shaped

Migrants to Germany.

Migrants enter Germany on 20 October 2015. By Christof Stache/AFP/Getty Images.

Scenario for a Wonderful Tomorrow

By Wolfgang Streeck
London Review of Books, 31 March 2016
Published with his generous permission.

About Merkel, a model 21stC politician and architect of the new Europe

Europe is falling apart, destroyed by its most devoted fans, the Germans. In the summer of 2015, having humiliated the Greeks by forcing another reform diktat down their throats, Angela Merkel started a new game, aimed at diverting attention from the economic and political disaster monetary union had become.

Abrupt changes of policy are nothing new to Merkel, who is best described as a postmodern politician with a premodern, Machiavellian contempt for both causes and people. Having made her party adopt a radically neoliberal, deregulationist anti-labour platform in 2003, she barely escaped defeat two years later at the hands of Gerhard Schroeder. When she became chancellor, she used her office and the Grand Coalition with the post-Schroeder Social Democratic Party (SPD) to purge her own party of neoliberalism and neoliberals, and social-democratise it beyond recognition.

In 2011, after the nuclear accident at Fukushima, which received extensive media coverage in Germany, it took Merkel, then known as the Atomkanzlerin, no more than a few days to order the immediate closure of eight nuclear power plants and to initiate legislation to end all nuclear power generation by 2022 at the latest. This was only a few months after she had, with much political arm-twisting, got the Bundestag to repeal the nuclear phase-out passed by the Red-Green coalition in 2001, and to extend the operating licences of German nuclear plants by an average of ten years.

The refugee crisis

Last year, the refugee crisis offered Merkel another opportunity to demonstrate just how fast she can change tack. Once again, media coverage influenced her decision-making, just as it would a few months later when smartphone videos of the New Year’s Eve riot at Cologne Central Station triggered another 180 degree turn in her policies.

In July a PR event, part of a government campaign to encourage cabinet members to meet ordinary citizens and listen to their ideas, went wrong. One of the young people invited to take part in a ‘dialogue’ with Merkel on the environment, the 14-year-old daughter of Palestinian asylum seekers, unexpectedly complained in front of the TV cameras that her family, who had been living in Germany for four years, might be sent back to the Lebanon at any moment. She asked, in flawless German, why she wasn’t allowed to stay in Germany ‘to enjoy life like everybody else’. Merkel said something like, ‘we cannot take in everyone, much as we might want to.’ The girl began to cry. Not knowing what to do, Merkel started patting the child’s head with a helpless expression on her face. {See the story here.}

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