Event Highlights: How Will Capitalism End: Reflections on a Failing System – A Lecture by Wolfgang Streeck
Director Emeritus at the Max Planck Institute for the Study of Societies in Cologne, Wolfgang Streeck gave a lecture at the Center for the Study of Europe on Tuesday, April 4th about his recent book. While his book is about the failings of the contemporary capitalist system and not specifically about the European experience, Streeck began by emphasizing how any discussion of Europe today must embed the subject of the general transformations of global capitalism in recent years. He warned that simple solutions, such as blaming the Germans for imposing austerity, are dangerous as “it’s not that easy – capitalism is more complicated and we [Europeans] are dealing with one of the embodiments of the general crisis of the capitalist system.”
Streeck explained how his book is not a systematically built grand theory, but instead a raw collection of essays. It is an attempt at explaining “to my colleagues in the social sciences that today our disciplines can no longer be productive unless we work in a good part of political economy and unless we begin to understand…the process of material production in its modern form, and that is modern capitalism.” He continued by explaining how his overarching goal is to demonstrate that a return to the late 19th century tradition of blurring the disciplines of economics, political science, and sociology would promote greater analysis of the current world order.
To summarize the book Streeck said “capitalism is an unlikely social formation – it took, and takes, a lot of effort to institutionalize it and make it work,” and continued by underlining how capitalism is simply “the infinite accumulation of accumulating capital.” He explained how there is no end in sight, as monetized transactions continue to replace traditional transactions and how the process has expanded both horizontally (moving from the center toward the periphery and absorbing as the system spreads) and vertically (as more spheres of life are being identified as potential sites for commodification and monetization).
The lecture then moved to a discussion on the complexities of capitalist dynamics, as Streeck returned to the previous summary of his book, adding that the infinite accumulation of capital is accumulated for the sole purpose of further accumulation. He noted that all major theorists of capitalism have struggled to capture this trend in a conceptual framework, including Marx who described capitalism as a system that is permanently restive, replacing subsistence with maximization. Streeck identified proof of capitalism being an ‘unlikely’ social formation in the theoretical attempts to explain it, noting that “all major theorists of capitalism expected that during their lifetime capitalism would come to an end,” including John Stuart Mill, Karl Marx, and Max Weber.
He highlighted his personal interpretation of what he identifies as the ‘three-and-a-half crises of capitalism’ since the 1970s. Beginning with the inflation crisis, Streeck explains how his analysis links this original global financial challenge to the public debt crisis of the 1980s, the private debt crisis of the 90s and early 2000s, and finally to the collapse of the private debt mechanism in 2008. He described how each of these periods had mechanisms which were inventions created to keep the system going after the end of post-war growth and the breakup of the post war regime, and then continued with a discussion of how each crisis transitioned into the next in the past 45 years. Streeck warned that the ‘rule of the central bank’ is limited in time, arguing that we are in the early stages of a fourth period of crisis, in which central banks are dangerously buying up debt and in turn becoming the primary owners and “creditors of last resort” in many countries.
Streeck then began broader discussion of the historical emergence of central banks and the evolution of capitalism in an era of increasing globalization. He added an analysis of the linkages between current political leadership and global capitalism, and explained how many countries have bought into the mentality that “there is no alternative – we have to open up we have to liberalize you have to struggle you have to fight and in the end you’ll do better.” Streeck noted that the reality has been much different, as large chunks of the world population did not flourish but instead suffered, both culturally and economically. He highlighted how in less than 2-3 years he witnessed a strong reversal in opinion in many countries (including the U.S.) as there was a backlash against – and ultimately a destruction of – center-left moderates by the working class population who felt betrayed by the global capitalist system. Streeck then went through the varying experiences of different countries in managing this reaction to modern capitalism, transitioning the conversation to a more specified discussion of the challenges facing Europe.
He ended by asking “where is this beast to be governed?” questioning the role of national sovereignty in the future and the interplay between the managerial positions of political and economic institutions. Streeck described some of the different perspectives and opinions on the fundamental problem of “what is the optimal size of government in the world in which capitalism is global but politics is local or regional or national?” He claimed that no nation has figured out a solution to this major question, and concluded by saying “the interregnum is a time in which the dead body of capitalism is still lying around, but nobody has the power to push it out of the way so that there is a new future.”
The event then transitioned into a Q&A portion, which began with two questions from the moderator Cornel Ban, Assistant Professor of International Relations and Co-Director of the Global Economic Governance Initiative at Boston University, and then opened to the audience.
You can watch the entire lecture on the EU for You channel on YouTube:
This event takes place as part of a new initiative entitled “Interferences,” a series of events on issues pertinent to democratic politics in the US and Europe. Organized as part of EU Futures, a series of conversations exploring the emerging future in Europe. The EU Futures project is supported by a Getting to Know Europe Grant from the European Commission Delegation in Washington, DC.