Wolfgang Streeck
Author of How Will Capitalism End?: Essays on a Failing System
About the Author
Armin Schafer is a research at the Max Planck Institute for the Study of Societies in Cologne, Germany. Wolfgang Streeck is Managing Director at the Max Planck Institute for the Study of Societies in Cologue, Germany.
Works by Wolfgang Streeck
Social Institutions and Economic Performance : Studies of Industrial Relations in Advanced Capitalist Economies (1992) 2 copies
Private Interest Government: Beyond Market and State (Sage Studies in Neo-Corporatism) (1986) 2 copies
Governing Interests: Business Associations Facing Internationalism (Routledge Studies in International Business and the World Economy) (2005) 2 copies
Associated Works
The Impact of European Integration: Political, Sociological, and Economic Changes (1996) — Contributor — 3 copies
Tagged
Common Knowledge
- Birthdate
- 1946-10-27
- Gender
- male
- Education
- Goethe University Frankfurt
Columbia University - Occupations
- professor (Sociology)
sociologist - Organizations
- Max Planck Institute (Emeritus Director)
University of Munster
University of Wisconsin-Madison
University of Cologne - Nationality
- Germany
- Birthplace
- Lengerich, Germany
- Places of residence
- Bruhl, Germany
- Associated Place (for map)
- Germany
Members
Reviews
I came across an excellent quote from Wolfgang Streeck in another capitalism-is-doomed book that I read not long ago, damned if I can remember which one though. Thus his name piqued my interest and I was compelled to borrow ‘How Will Capitalism End?’ when I saw it in the library. The book consists of eleven essays, none as long as the introduction, on three broad topics: capitalism’s incompatibility with democracy, the history of capitalism’s self-destructiveness, and how the show more discipline of sociology can study the two. I am generally suspicious of non-fiction collections with fifty page introductions, but concede that sometimes this is necessary to draw together a series of short pieces written at various times for various purposes. All chapters have an academic tone, while mostly avoiding specialised technical language. Where it was used, the meaning was generally clear from context. As the chapters were not originally written with the intention of being collected into a book, there is inevitably some overlap here and there. Streeck politely apologises for this in a note at the beginning. However he does not apologise for his fondness for footnotes, which verges upon absurd at times. Minor matters of presentation aside, the actual content is excellent. There is a great deal of interesting and well-explained material to be found in quite a short book.
From the start, it is refreshing to read a well-argued thesis that capitalism and democracy’s cohabitation is inherently temporary and unstable. This view was popular throughout the 19th century and the first half of the 20th. Fukuyama’s triumphalist [b:The End of History and the Last Man|57981|The End of History and the Last Man|Francis Fukuyama|https://images.gr-assets.com/books/1391572633s/57981.jpg|56476] looks in retrospect even weaker than it did when I read it in 2012. The thesis is clearly one that was believed because people wanted it to be true, rather than because there was overwhelming evidence in support. Streeck returns repeatedly to the theme of how the thirty years between WWII and the rise of neoliberalism were exceptional and there is no reason to assume that they can be repeated. As a sociologist, Streeck grounds his points in historical, economic, and social context. He is very good at picking out and summarising the crucial features of complex historic changes. Globalisation, for instance, he explains as follows: ‘Now states were located in markets, rather than markets in states.’ How beautifully succinct! That’s precisely the nature of globalisation: an economic order in which national governments are subordinate to international markets, especially financial markets.
His condemnation of neoliberalism is extremely thorough and satisfying. A summary:
On inequality specifically:
On the lack of alternatives to capitalism:
Streeck argues that without such opposition to moderate its profit-seeking, over-commodification of land, labour, and money inevitably creates crises in capitalism. Capitalism systematically overruns public institutions that were constituted to control these excesses: ‘capitalist action may break through its social containment unless that containment is continuously reinforced and vigilantly kept current.’ Within the three broad headings, many other books explore further details: over-commodification of land and nature results in climate change, deteriorating air quality, species extinction, polluted oceans and soils, etc. Over-commodification of labour results in a poor, insecurely employed, exhausted workforce reliant upon credit to get by. Not only does this hugely undermine well-being, it damages productivity, creates serious social tensions, and encourages credit bubbles. (The introduction proposes a neat list of behaviours for survival under neoliberal capitalism: coping, hoping, doping, and shopping, which certainly strike a chord.) Over-commodification of money occurs when financial markets are freed of regulation and thus able to fraudulently create obscure investment products with no actual value, resulting in massive financial crises like that of 2007/8.
Of the three, money gets the most coverage in this volume, which includes a fair amount of economic and political history focused on Europe. Indeed, chapters 4 to 7 consist of detailed critique of the EU as a neoliberal, anti-democratic institution. A lot of the material echoes Varoufakis in [b:And the Weak Suffer What They Must? Europe's Crisis and America's Economic Future|24886497|And the Weak Suffer What They Must? Europe's Crisis and America's Economic Future|Yanis Varoufakis|https://images.gr-assets.com/books/1452563894s/24886497.jpg|44534977]. I feel ambivalent reading such critiques these days, being a British person stuck in the chaotic and hellish political limbo of Brexit. As a Remainer, it seems axiomatic that I should fully support the EU, because Brexit ‘debate’ is so polarised. Yet to me it is clearly the lesser of two evils. As Trump’s current visit to the UK makes clear, if we leave the EU the NHS will be sold off to US health companies, product standards will fall, environmental protections will be eroded, and employment protection will be weakened. After nearly a decade of austerity and Tory deregulation, public services in the UK are already in a bad state. Brexit would make things a great deal worse. The EU may be neoliberal, as Streeck and Varoufakis make abundantly clear, but historically the UK has pushed it to the right and resisted its more progressive policies. The EU may also be undemocratic; Leavers have a point there. However they are looking in the wrong place for the UK’s lost so-called sovereignty. That was stolen by international financial markets, who will descend like vultures to asset-strip the UK if we leave the EU. The European Central Bank is certainly a neoliberal and undemocratic instrument of globalised finance; so is the Bank of England. If the UK wants the EU to tackle its systemic problems and structural contradictions, we can pursue this better from within rather than flouncing off then yelling feebly from our rainy privatised island. This is quite apart from the racist anti-immigration discourse, immense practical difficulties and unnecessary costs associated with the actual exit, not to mention the disastrous effects it could have on peace in Northern Ireland.
Having recently read Zuboff’s [b:The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power|26195941|The Age of Surveillance Capitalism The Fight for a Human Future at the New Frontier of Power|Shoshana Zuboff|https://images.gr-assets.com/books/1521733914s/26195941.jpg|46170685], I was curious to see whether Streeck identified data commodification as novel manifestation of capitalism. Digital marketing is mentioned as an engine of consumerism, but the main overlap is this general point about ‘border-crossing’ that Zuboff also emphasises: ‘Capitalist expansion, or development, consists of the establishment of market relations where hitherto there were none. Social institutions that demarcate areas of trade against areas of non-trade, from national borders to laws prohibiting, say, sale of organs, children, or cocaine, will find themselves under pressure from profit-pursuing actors seeking to extend economic exchange cross demarcation lines. […] Studying contemporary capitalism requires that processes of this sort are recognised as fundamental rather than contingent, and as principal driving forces of institutional change and historical development.’ In the realm of surveillance capitalism, behavioural data and predictions became tradeable because tech companies were not prevented from extending commodification in this direction. Streeck’s analysis also reminded me of a question Zuboff’s book raised and lacks a clear answer: to what extent is surveillance capitalism parasitic upon industrial capitalism? Streeck by no means treats capitalism as a single thing, indeed he is at pains to point out historical, cultural, and social variations. However he does not broach the question of whether information technology has enabled a new manifestation of capitalism, its surveillance form, and what that might mean for the future. Surveillance capitalism clearly needs industrial capitalism to produce and maintain its physical infrastructure; it cannot exist in isolation. Moreover, it has strong interdependencies with international financial and consumer goods markets. Yet it also undermines the operation of democracy and exacerbates inequality, over-commodification, globalisation, and demoralisation, indeed accelerating these trends. But will it collapse along with capitalism, or shape a post-capitalist world? I need to read and think more about this before I can come to any firm conclusions.
For those inclined to read a Verso book titled ‘How Will Capitalism End?’, the conclusion that Streeck reaches is likely to seem depressing. Rather than giving way to a more democratic and/or socialist order, Streeck argues that neoliberal capitalism has no obvious successor other than complete chaos. In response to Wolfgang Merkel arguing for reform of neoliberal capitalism, he comments very reasonably: ‘one feels obliged to ask where those reforms are to come from, reversing a now decades-long mainstream of economic and political-institutional development that went in the exact opposite direction. […] Can a democratic renewal – a re-establishment of the primacy of democratic politics over the inherent dynamics of capitalist development – really be expected from a public no longer used to taking politics seriously?’ The essays in this collection were written between 2011 and 2015. In the past four years, evidence of a democratic renewal has been conspicuously absent. Despite the grim implications of this, there is something invigorating in Streeck’s writing. The idea that capitalism would collapse from its own contradictions is a powerful and important one. Even if the aftermath of capitalism is a chaotic and violent breakdown, it’s worth thinking now about what could be built from the ruins. The most important contribution that this book makes is summarised by a statement from the first chapter:
From the start, it is refreshing to read a well-argued thesis that capitalism and democracy’s cohabitation is inherently temporary and unstable. This view was popular throughout the 19th century and the first half of the 20th. Fukuyama’s triumphalist [b:The End of History and the Last Man|57981|The End of History and the Last Man|Francis Fukuyama|https://images.gr-assets.com/books/1391572633s/57981.jpg|56476] looks in retrospect even weaker than it did when I read it in 2012. The thesis is clearly one that was believed because people wanted it to be true, rather than because there was overwhelming evidence in support. Streeck returns repeatedly to the theme of how the thirty years between WWII and the rise of neoliberalism were exceptional and there is no reason to assume that they can be repeated. As a sociologist, Streeck grounds his points in historical, economic, and social context. He is very good at picking out and summarising the crucial features of complex historic changes. Globalisation, for instance, he explains as follows: ‘Now states were located in markets, rather than markets in states.’ How beautifully succinct! That’s precisely the nature of globalisation: an economic order in which national governments are subordinate to international markets, especially financial markets.
His condemnation of neoliberalism is extremely thorough and satisfying. A summary:
Capitalist society is disintegrating, but not under the impact of an organised opposition fighting in the name of a better social order. Rather it disintegrates from within, from the success of capitalism and the internal contradictions intensified by that success, and from capitalism having overrun its opponents and in the process become more capitalist than is good for it. Low growth, grotesque inequality, and mountains of debt; the neutralisation of post-war capitalism’s progress engine, democracy, and its replacements with oligarchic neo-feudalism; the clearing away by ‘globalisation’ of social barriers against the commodification of labour, land, and money; and systemic disorders such as infectious corruption in the competitive struggle for ever bigger rewards for individual success, with the attendant culture of demoralisation, and rapidly spreading international anarchy – all these together have profoundly destabilised the post-war capitalist way of social life, without a hint as to how stability might ever be restored.
On inequality specifically:
Oligarchic elites, Winters shows, while they may disagree on just about everything else, are firmly united in their desire to defend their wealth. For this they can afford to employ a huge and highly sophisticated ‘wealth defence industry’ of lawyers, PR specialists, lobbyists, active and retired politicians, and think tanks and ideologies of all kinds, including entire economics departments.
On the lack of alternatives to capitalism:
Having no opposition may actually be more of a liability for capitalism than an asset. Social systems thrive on internal heterogeneity, on a pluralism of organising principles protecting them from dedicating themselves entirely to a single purpose, crowding out other goals that must also be attended to if the system is to be sustainable. Capitalism as we know it has benefited greatly from the rise of counter-movements against the rule of profit and the market. Socialism and trade unionism, by putting a brake on commodification, prevented capitalism from destroying its non-capitalist foundations - trust, good faith, altruism, solidarity within families and communities, and the like.
Streeck argues that without such opposition to moderate its profit-seeking, over-commodification of land, labour, and money inevitably creates crises in capitalism. Capitalism systematically overruns public institutions that were constituted to control these excesses: ‘capitalist action may break through its social containment unless that containment is continuously reinforced and vigilantly kept current.’ Within the three broad headings, many other books explore further details: over-commodification of land and nature results in climate change, deteriorating air quality, species extinction, polluted oceans and soils, etc. Over-commodification of labour results in a poor, insecurely employed, exhausted workforce reliant upon credit to get by. Not only does this hugely undermine well-being, it damages productivity, creates serious social tensions, and encourages credit bubbles. (The introduction proposes a neat list of behaviours for survival under neoliberal capitalism: coping, hoping, doping, and shopping, which certainly strike a chord.) Over-commodification of money occurs when financial markets are freed of regulation and thus able to fraudulently create obscure investment products with no actual value, resulting in massive financial crises like that of 2007/8.
Of the three, money gets the most coverage in this volume, which includes a fair amount of economic and political history focused on Europe. Indeed, chapters 4 to 7 consist of detailed critique of the EU as a neoliberal, anti-democratic institution. A lot of the material echoes Varoufakis in [b:And the Weak Suffer What They Must? Europe's Crisis and America's Economic Future|24886497|And the Weak Suffer What They Must? Europe's Crisis and America's Economic Future|Yanis Varoufakis|https://images.gr-assets.com/books/1452563894s/24886497.jpg|44534977]. I feel ambivalent reading such critiques these days, being a British person stuck in the chaotic and hellish political limbo of Brexit. As a Remainer, it seems axiomatic that I should fully support the EU, because Brexit ‘debate’ is so polarised. Yet to me it is clearly the lesser of two evils. As Trump’s current visit to the UK makes clear, if we leave the EU the NHS will be sold off to US health companies, product standards will fall, environmental protections will be eroded, and employment protection will be weakened. After nearly a decade of austerity and Tory deregulation, public services in the UK are already in a bad state. Brexit would make things a great deal worse. The EU may be neoliberal, as Streeck and Varoufakis make abundantly clear, but historically the UK has pushed it to the right and resisted its more progressive policies. The EU may also be undemocratic; Leavers have a point there. However they are looking in the wrong place for the UK’s lost so-called sovereignty. That was stolen by international financial markets, who will descend like vultures to asset-strip the UK if we leave the EU. The European Central Bank is certainly a neoliberal and undemocratic instrument of globalised finance; so is the Bank of England. If the UK wants the EU to tackle its systemic problems and structural contradictions, we can pursue this better from within rather than flouncing off then yelling feebly from our rainy privatised island. This is quite apart from the racist anti-immigration discourse, immense practical difficulties and unnecessary costs associated with the actual exit, not to mention the disastrous effects it could have on peace in Northern Ireland.
Having recently read Zuboff’s [b:The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power|26195941|The Age of Surveillance Capitalism The Fight for a Human Future at the New Frontier of Power|Shoshana Zuboff|https://images.gr-assets.com/books/1521733914s/26195941.jpg|46170685], I was curious to see whether Streeck identified data commodification as novel manifestation of capitalism. Digital marketing is mentioned as an engine of consumerism, but the main overlap is this general point about ‘border-crossing’ that Zuboff also emphasises: ‘Capitalist expansion, or development, consists of the establishment of market relations where hitherto there were none. Social institutions that demarcate areas of trade against areas of non-trade, from national borders to laws prohibiting, say, sale of organs, children, or cocaine, will find themselves under pressure from profit-pursuing actors seeking to extend economic exchange cross demarcation lines. […] Studying contemporary capitalism requires that processes of this sort are recognised as fundamental rather than contingent, and as principal driving forces of institutional change and historical development.’ In the realm of surveillance capitalism, behavioural data and predictions became tradeable because tech companies were not prevented from extending commodification in this direction. Streeck’s analysis also reminded me of a question Zuboff’s book raised and lacks a clear answer: to what extent is surveillance capitalism parasitic upon industrial capitalism? Streeck by no means treats capitalism as a single thing, indeed he is at pains to point out historical, cultural, and social variations. However he does not broach the question of whether information technology has enabled a new manifestation of capitalism, its surveillance form, and what that might mean for the future. Surveillance capitalism clearly needs industrial capitalism to produce and maintain its physical infrastructure; it cannot exist in isolation. Moreover, it has strong interdependencies with international financial and consumer goods markets. Yet it also undermines the operation of democracy and exacerbates inequality, over-commodification, globalisation, and demoralisation, indeed accelerating these trends. But will it collapse along with capitalism, or shape a post-capitalist world? I need to read and think more about this before I can come to any firm conclusions.
For those inclined to read a Verso book titled ‘How Will Capitalism End?’, the conclusion that Streeck reaches is likely to seem depressing. Rather than giving way to a more democratic and/or socialist order, Streeck argues that neoliberal capitalism has no obvious successor other than complete chaos. In response to Wolfgang Merkel arguing for reform of neoliberal capitalism, he comments very reasonably: ‘one feels obliged to ask where those reforms are to come from, reversing a now decades-long mainstream of economic and political-institutional development that went in the exact opposite direction. […] Can a democratic renewal – a re-establishment of the primacy of democratic politics over the inherent dynamics of capitalist development – really be expected from a public no longer used to taking politics seriously?’ The essays in this collection were written between 2011 and 2015. In the past four years, evidence of a democratic renewal has been conspicuously absent. Despite the grim implications of this, there is something invigorating in Streeck’s writing. The idea that capitalism would collapse from its own contradictions is a powerful and important one. Even if the aftermath of capitalism is a chaotic and violent breakdown, it’s worth thinking now about what could be built from the ruins. The most important contribution that this book makes is summarised by a statement from the first chapter:
I suggest that we learn to think about capitalism coming to an end without assuming responsibility for answering the question of what one proposes to put in its place. It is a Marxist – or better: modernist – prejudice that capitalism as a historical epoch will end only when a new, better society is in sight, and a revolutionary subject ready to implement it for the good of mankind. This presupposes a degree of control over our common fate of which we cannot even dream after the destruction of collective agency, and indeed the hope for it, in the neoliberal-globalist revolution.show less
If I am honest, I'm not at all sure that this book answers the question which it raises. That being so, isn't it rather rash for me to give it a five star review? I don't think so and, I hope, that the following will explain why.
This book is a collection of Streeck articles which have previously found an audience in the media. This has the advantage that, unlike many books upon a subject such as Capitalism, it does not presume a deep understanding from the reader. That being said, I do not show more profess to have understood every single idea presented; sufficient, however, made sense that the time taken (and it did take me a considerable time to read a mere 250 pages) was, I consider, well spent.
If you are looking for a good Marxist attack upon Capitalism, I suggest that you move on now: this is far more subtle. It begins with an eminently readable explanation as to how Capitalism has come to its current form - and indeed, a clear insight as to what that current state is. Events such as the fight against inflation through the '70's, public debt in the '80's, deregulation in the '90's and the bank bailouts of the noughties all become an understandable, almost inevitable, chain.
Streeck then goes on to link democracy and capitalism in an eternal love/hate relationship. He argues, persuasively, that each is necessary to the other for its inception and continued development but, that each has the intention of limiting the other. Capitalism is certainly on the upstroke at the moment but if, as seems more likely than previously, it proves to be victorious; that victory will be pyrrhic.
So, whilst a date for the death of Capitalism is not to be found, the symptoms currently affecting it are closely examined and reasonable doubt cast upon its ability to regenerate in a Whovian fashion. show less
This book is a collection of Streeck articles which have previously found an audience in the media. This has the advantage that, unlike many books upon a subject such as Capitalism, it does not presume a deep understanding from the reader. That being said, I do not show more profess to have understood every single idea presented; sufficient, however, made sense that the time taken (and it did take me a considerable time to read a mere 250 pages) was, I consider, well spent.
If you are looking for a good Marxist attack upon Capitalism, I suggest that you move on now: this is far more subtle. It begins with an eminently readable explanation as to how Capitalism has come to its current form - and indeed, a clear insight as to what that current state is. Events such as the fight against inflation through the '70's, public debt in the '80's, deregulation in the '90's and the bank bailouts of the noughties all become an understandable, almost inevitable, chain.
Streeck then goes on to link democracy and capitalism in an eternal love/hate relationship. He argues, persuasively, that each is necessary to the other for its inception and continued development but, that each has the intention of limiting the other. Capitalism is certainly on the upstroke at the moment but if, as seems more likely than previously, it proves to be victorious; that victory will be pyrrhic.
So, whilst a date for the death of Capitalism is not to be found, the symptoms currently affecting it are closely examined and reasonable doubt cast upon its ability to regenerate in a Whovian fashion. show less
Spoiler alert! You know the answer to this short book's provocative title very early on. Warning! There could be sentences or whole paragraphs you may not understand. This should be read if one has sympathy with Streek's belief that capitalism by its expansive unstructured nature is destabilizing democratic governments and through sociology, not necessarily socialism, a remedy for this is needed. This tract is Euro-USA oriented. It is of interest to me how our author would include the show more mainland China's economic-social regime to fit into his thesis. What aids in reading all of this besides not shying away from controversy and big questions is a passion and sense of urgency.
Quotes: (age 108) “Political communities are republics that can not by their very nature be turned into markets, or not without depriving them of some of their central qualities. Unlike the highly flexible communities of choice that emerge in societies governed by advance patterns of consumption, political communities are basically communities of fate. At their core, they ask their members not to insist on their separate individuality but to accept a collectively shared identity, integrating the former into the later. Compared to market relations, political relations are therefore by necessity rigid and persistent; they emphasize, and must emphasize, strong ties of duties rather than weak ties of choice. They are obligatory rather than voluntary, dialogical rather than monological, demanding sacrifices in utility and effort, and they insist on loyalty, —providing, in the terms of Albert Hirschman, opportunities for 'voice', while frowning upon 'exit'.”
(page 124) “I have described the debt the elsewhere as having two constituencies, citizens and creditors – or two peoples, a Stattsvolk and a Marktvolt. Debt states have to be loyal to both, with the two struggling over who is to be the principal stakeholder and who, in a fiscal crunch, has to give. The consolidation state settles that struggle in favor of the second constituency, its Marktvolk, by firmly internalizing the primacy of the state's commercial-contractual commitments to its lenders over its public-political commitments to its citizenry. In a consolidation state, citizens lose out to investors, rights of citizenship are trumped by claims from commercial contracts, voters range below creditors, the result of elections are less important than those of bond auctions, public opinion matters less than investor confidence, and debt service crowds out public services...”
(page 241) “I see the current crisis as a strong signal for our discipline that a theoretical program focused on a society cleansed of its economy is unsustainable, unless we are content with remaining as speechless on the leading social issues of our time as we were before, during and after the events of 2008. Many today feel that the current financial and fiscal crisis is not just an economic but fundamentally a social matter important enough to demand a revised interpretation of modern society – one that takes systematic notice of its being continuously revolutionized by expanding markets, of the fragility of social structures and political institutions that results from this; the growing uncertainty faced by governments and citizens as markets increasingly escape social controls; the inherent limits of the market as a site of social integration and a basis for social order, and the like.”
(page 250) “Hauling the economy back into society, and indeed into sociology may be a program for which one could today find allies, in a world in which states are about to be turned into something like public corporations having to earn the confidence of capital givers; in which international organizations function as deposit insurance or debt collection agencies on the behalf of private investors; and governments begin to resemble corporate managements pressed to extract 'creditor value' from citizens turned into work forces disciplined by capital markets. Perhaps there may also be demand for a renewed critical theory of political economy among the young who no longer join the political parties, avoid trade unions, and refuse to vote in elections.” show less
Quotes: (age 108) “Political communities are republics that can not by their very nature be turned into markets, or not without depriving them of some of their central qualities. Unlike the highly flexible communities of choice that emerge in societies governed by advance patterns of consumption, political communities are basically communities of fate. At their core, they ask their members not to insist on their separate individuality but to accept a collectively shared identity, integrating the former into the later. Compared to market relations, political relations are therefore by necessity rigid and persistent; they emphasize, and must emphasize, strong ties of duties rather than weak ties of choice. They are obligatory rather than voluntary, dialogical rather than monological, demanding sacrifices in utility and effort, and they insist on loyalty, —providing, in the terms of Albert Hirschman, opportunities for 'voice', while frowning upon 'exit'.”
(page 124) “I have described the debt the elsewhere as having two constituencies, citizens and creditors – or two peoples, a Stattsvolk and a Marktvolt. Debt states have to be loyal to both, with the two struggling over who is to be the principal stakeholder and who, in a fiscal crunch, has to give. The consolidation state settles that struggle in favor of the second constituency, its Marktvolk, by firmly internalizing the primacy of the state's commercial-contractual commitments to its lenders over its public-political commitments to its citizenry. In a consolidation state, citizens lose out to investors, rights of citizenship are trumped by claims from commercial contracts, voters range below creditors, the result of elections are less important than those of bond auctions, public opinion matters less than investor confidence, and debt service crowds out public services...”
(page 241) “I see the current crisis as a strong signal for our discipline that a theoretical program focused on a society cleansed of its economy is unsustainable, unless we are content with remaining as speechless on the leading social issues of our time as we were before, during and after the events of 2008. Many today feel that the current financial and fiscal crisis is not just an economic but fundamentally a social matter important enough to demand a revised interpretation of modern society – one that takes systematic notice of its being continuously revolutionized by expanding markets, of the fragility of social structures and political institutions that results from this; the growing uncertainty faced by governments and citizens as markets increasingly escape social controls; the inherent limits of the market as a site of social integration and a basis for social order, and the like.”
(page 250) “Hauling the economy back into society, and indeed into sociology may be a program for which one could today find allies, in a world in which states are about to be turned into something like public corporations having to earn the confidence of capital givers; in which international organizations function as deposit insurance or debt collection agencies on the behalf of private investors; and governments begin to resemble corporate managements pressed to extract 'creditor value' from citizens turned into work forces disciplined by capital markets. Perhaps there may also be demand for a renewed critical theory of political economy among the young who no longer join the political parties, avoid trade unions, and refuse to vote in elections.” show less
In this useful book Wolfgang Streek presents images of post 2008 democratic capitalism around his Tax State/ Debt State idea.
Speaking of the West, the Tax State covers the post WW2 period to the late 1970's showing manageable budget deficits, government spending on infrastructure, balanced corporate and union power and general national unity policies with a leftist slant that he clearly approves of.
The Debt State is a different animal involving what he calls the financialization of society. show more Basically he sees a radically changed world of instant communication and enormously increased competition with Western states unable to afford the welfare commitments that date from their industrial leadership. So what to do?
Streek sees Neoliberalism giving birth to a Debt State in which private and government deficits are "financed" at low interest rates and savers are more or less obliged to take on more debt and speculate in the face of near zero returns on their capital. He records the way that public debt ballooned until 1993, private debt led to the internet (2000) and housing/banking (2008) collapses and how oceans of government QE credit are now giving us the current "recovery".
The core of the book is an interesting discussion of the way in which the Debt State interacts with Democracy.
Essentially debtors lose freedom whether they are individuals or governments, and he shows the neoliberal totemization of Market Confidence above all else, and the absolute abuse of this concept to cow politicians into accepting the whole neoliberal package of unrestricted movement of capital (with the associated threat), unlimited freedom to outsource, and the requirement that the public give 100% backing to the craziest leveraged Wall Street bets.
So far so good, but the author then suggests a dubious solution in returning to the Tax State when (in the opinion of this reviewer) he could have devoted more space to the fundamental issues of outsourcing and economic efficiency + a more positive views of the European Union. Just because it's been captured by "Marktvolk" doesn't mean that it's a bad idea.
This reviewer personally witnessed the Tax State of Great Britain in the early 1970's with high personal taxation, out of control government spending, Keynesianism, nationalization and a Social Contract in the context of an activist Socialist/ Marxist government. As Burk and Cairncross show in their interesting book "Goodbye, Great Britain: The 1976 IMF Crisis" it was a spectacular failure. Great Britain (1974-76) had the highest inflation in Europe, the lowest rise in GNP, the highest unemployment and the lowest output per man/hour in manufacturing and was seen to fail on all counts.
The author is somewhat surprised that Germany still has a successful manufacturing sector and could maybe have incorporated this observation into a broader discussion of outsourcing. Outsourcing (complete international economic freedom) is a central plank of Neoliberalism and is arguably the root cause of structural Western unemployment (and record corporate profits) and the collapse of the Tax State. If COE's like Jack Welch have for years been applying his 70/70/70 rule (70% of research and development should be outsourced, 70% of that should be outsourced offshore, 70% should be outsourced overseas and sent to India) then surely this reduces employment and skills and generates budget and trade deficits.
The author seems to be too focused on Keynesian vs Neoliberalism when in reality the debate has probably moved on. For example Joseph Heath in his interesting book "Economics Without Illusions: Debunking the Myths of Modern Capitalism" suggests that the Left and Right have both developed a malignant form of their respective ideologies. The Left has extended costly government "care" to whole sections of the adult population that like it but shouldn't receive it. The Right tries to dispense with government all together and doesn't recognize that it is a vital framework for growth.
Heath also observes that at a fundamental level, societal/economic efficiency is not a Left/Right issue at all and is basically non-political. Your chosen system either gives you good value health care or it doesn't.
On page 172, Streek says that, "In the Social World one never steps in the same river twice", which is probably true but there are still some striking similarities between the USA of 2014 and Germany of 1918 and his book has a notable Spengler like feel in its opposition of Staatsvolk (social justice) and Marktvolk (market justice). Both countries had/have intractable debts, a dominant market class, democratic gridlock, out of control special interests and failed taxation and both are resorting/resorted to covering current spending with money printing.
The difference is that Streek sees salvation in a return to a Tax State whereas Spengler saw it in, "the final battle between Democracy and Caesarism, between the leading forces of dictatorial money-economics and the purely political will-to-order of the Caesars". An interesting difference.
With regard to Europe he seems unduly pessimistic. The EEC has brought peace, the free movement of labour and a single currency which do have some positive aspects which he ignores. Also, even the strongest critics of Europe (such as Nigel Farage of the UK Independence Party) are often not at all personally hostile to their fellow Europeans. They actually quite like Europe and only object to the grossly inefficient special interest Neoliberal Market Construction that has taken control of the project.
Nevertheless, this is certainly a key book in the conversation about the Debt State/ Democracy and is highly recommended. show less
Speaking of the West, the Tax State covers the post WW2 period to the late 1970's showing manageable budget deficits, government spending on infrastructure, balanced corporate and union power and general national unity policies with a leftist slant that he clearly approves of.
The Debt State is a different animal involving what he calls the financialization of society. show more Basically he sees a radically changed world of instant communication and enormously increased competition with Western states unable to afford the welfare commitments that date from their industrial leadership. So what to do?
Streek sees Neoliberalism giving birth to a Debt State in which private and government deficits are "financed" at low interest rates and savers are more or less obliged to take on more debt and speculate in the face of near zero returns on their capital. He records the way that public debt ballooned until 1993, private debt led to the internet (2000) and housing/banking (2008) collapses and how oceans of government QE credit are now giving us the current "recovery".
The core of the book is an interesting discussion of the way in which the Debt State interacts with Democracy.
Essentially debtors lose freedom whether they are individuals or governments, and he shows the neoliberal totemization of Market Confidence above all else, and the absolute abuse of this concept to cow politicians into accepting the whole neoliberal package of unrestricted movement of capital (with the associated threat), unlimited freedom to outsource, and the requirement that the public give 100% backing to the craziest leveraged Wall Street bets.
So far so good, but the author then suggests a dubious solution in returning to the Tax State when (in the opinion of this reviewer) he could have devoted more space to the fundamental issues of outsourcing and economic efficiency + a more positive views of the European Union. Just because it's been captured by "Marktvolk" doesn't mean that it's a bad idea.
This reviewer personally witnessed the Tax State of Great Britain in the early 1970's with high personal taxation, out of control government spending, Keynesianism, nationalization and a Social Contract in the context of an activist Socialist/ Marxist government. As Burk and Cairncross show in their interesting book "Goodbye, Great Britain: The 1976 IMF Crisis" it was a spectacular failure. Great Britain (1974-76) had the highest inflation in Europe, the lowest rise in GNP, the highest unemployment and the lowest output per man/hour in manufacturing and was seen to fail on all counts.
The author is somewhat surprised that Germany still has a successful manufacturing sector and could maybe have incorporated this observation into a broader discussion of outsourcing. Outsourcing (complete international economic freedom) is a central plank of Neoliberalism and is arguably the root cause of structural Western unemployment (and record corporate profits) and the collapse of the Tax State. If COE's like Jack Welch have for years been applying his 70/70/70 rule (70% of research and development should be outsourced, 70% of that should be outsourced offshore, 70% should be outsourced overseas and sent to India) then surely this reduces employment and skills and generates budget and trade deficits.
The author seems to be too focused on Keynesian vs Neoliberalism when in reality the debate has probably moved on. For example Joseph Heath in his interesting book "Economics Without Illusions: Debunking the Myths of Modern Capitalism" suggests that the Left and Right have both developed a malignant form of their respective ideologies. The Left has extended costly government "care" to whole sections of the adult population that like it but shouldn't receive it. The Right tries to dispense with government all together and doesn't recognize that it is a vital framework for growth.
Heath also observes that at a fundamental level, societal/economic efficiency is not a Left/Right issue at all and is basically non-political. Your chosen system either gives you good value health care or it doesn't.
On page 172, Streek says that, "In the Social World one never steps in the same river twice", which is probably true but there are still some striking similarities between the USA of 2014 and Germany of 1918 and his book has a notable Spengler like feel in its opposition of Staatsvolk (social justice) and Marktvolk (market justice). Both countries had/have intractable debts, a dominant market class, democratic gridlock, out of control special interests and failed taxation and both are resorting/resorted to covering current spending with money printing.
The difference is that Streek sees salvation in a return to a Tax State whereas Spengler saw it in, "the final battle between Democracy and Caesarism, between the leading forces of dictatorial money-economics and the purely political will-to-order of the Caesars". An interesting difference.
With regard to Europe he seems unduly pessimistic. The EEC has brought peace, the free movement of labour and a single currency which do have some positive aspects which he ignores. Also, even the strongest critics of Europe (such as Nigel Farage of the UK Independence Party) are often not at all personally hostile to their fellow Europeans. They actually quite like Europe and only object to the grossly inefficient special interest Neoliberal Market Construction that has taken control of the project.
Nevertheless, this is certainly a key book in the conversation about the Debt State/ Democracy and is highly recommended. show less
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