Capitalism Is Collapsing -- and the Weird Thing Is That Nothing Is Rising to Replace It
Some anonymous wise person once observed that it is easier to imagine the end of the world than the end of capitalism. But Wolfgang Streeck, a 70-year-old German sociologist and director emeritus of the Max Planck Institute for the Study of Societies, thinks capitalism’s end is inevitable and fast approaching. He has no idea what, if anything, will replace it.
This is the premise of his latest book, How Will Capitalism End?, which goes well beyond Thomas Piketty’s Capital in the 21st Century. Piketty thinks capitalism is getting back into the saddle after being ruined in two world wars. Streeck thinks capitalism is its own worst enemy and has effectively cut itself off from all hope of rescue by destroying all its potential rescuers.
“The end of capitalism,” he writes in the introduction, “can then be imagined as a death from a thousand cuts... No effective opposition being left, and no practicable successor model waiting in the wings of history, capitalism’s accumulation of defects, alongside its accumulation of capital, may be seen... as an entirely endogenous dynamic of self-destruction.”
According to Streeck, salvation doesn’t lie in going back to Marx, or social democracy, or any other system, because there is no salvation at all. “What comes after capitalism in its final crisis, now under way, is, I suggest, not socialism or some other defined social order, but a lasting interregnum — no new world system equilibrium... but a prolonged period of social entropy or disorder.”
Five developments, three crises
If we need a historical parallel, the interregnum between the fall of Rome and the rise of feudalism might serve. The slave economy of Rome ended in a chaos of warlords, walled towns and fortress-estates, and enclaves ruled by migrant barbarians. That went on for centuries, with warlords calling themselves “Caesar” and pretending the Empire hadn’t fallen. Streeck sees the interregnum emerging from five developments, each aggravating the others: “stagnation, oligarchic redistribution, the plundering of the public domain, corruption, and global anarchy.”
All these problems and more have grown through “three crises: the global inflation of the 1970s, the explosion of public debt in the 1980s, and rapidly rising private indebtedness in the subsequent decade, resulting in the collapse of financial markets in 2008.” Anyone of a certain age in British Columbia has vivid personal recollections of these crises and the hurt they caused. The strikes and inflation of the 1970s preceded the Socreds’ “restraint” era, and now we mortgage our lives for a foothold in the housing market. Streeck reminds us that it was nothing personal, just business. We weren’t just coping with one damn thing after another; given his perspective, we can see how it all fit together with an awful inevitability.
When the bubble pops
And it continues to fit together. Temporary foreign workers and other immigrants make unions’ jobs harder. “Recovery” amounts to replacing unemployment with underemployment. Education is an expensive holding tank to keep young people off the labour market. Women are encouraged to work so they can be taxed. But middle-class families need two incomes anyway to maintain their status, so they import underpaid immigrant women as nannies. At some point soon these nannies will be sent back to their home countries when Vancouver’s housing bubble pops.
Perhaps the middle-class families will then make their payments by taking in boarders. Streeck’s essays were written over the past few years, and are sometimes a bit dated. For example, he writes that “American oligarchs, unlike their counterparts in other societies like Ukraine or Russia, are of a ‘non-ruling’ type, since they are content to live alongside a public bureaucracy, a state of law, and an elected government run by professional politicians.”
That changed on Nov. 8, when the American oligarchs ousted noncompliant professional politicians and assumed direct power through Donald Trump and his cabinet. (We may yet see an analysis of Trump on Streeck’s blog.) In one essay, Streeck shows how the economic crisis of the 1970s led to the political crisis of today. Postwar Europe and America rebuilt the world by “Fordism” — mass production of durable goods at an affordable price, with few or no options. But Fordism eventually glutted the market with all-too-durable goods. In the 1960s, I wore the hand-me-down nylon socks my father had bought in the 1940s.
In 1972 my wife and I bought a washer and dryer that still run reliably in 2016, without repairs. That couldn’t last, especially as the baby boom tapered off. Capitalism’s solution was to offer customized, short-lived products that didn’t just meet your needs, but met your wants as well. That meant avocado-coloured refrigerators in the 1970s and granite kitchen countertops today, but nothing that really made life easier. It just let consumers express their changing personal tastes and status. And it wasn’t just consumer goods — it was information as well. Streeck notes that public broadcasting systems and a few private networks dominated the media for decades. Now we have hundreds of private channels competing for our attention (and our money).
Public media like the CBC have tried to compete with private radio and TV, with generally awful results: instead of classical music, CBC Radio 2 gives us Mozart’s greatest hits plus Mozart gossip. Radio 1 promotes the careers of inarticulate hip-hop artists and reports commuter woes caused by housing prices and the lack of decent public transit.
Politics as personal fashion statement
What Streeck calls the “individualization of the individual” has afflicted whole nations, including Canada. We no longer vote for a party because our family always has, or because we support most of its policies. We want avocado-coloured day care programs, and granite-counter “world-class” pipeline safety, and if we don’t get both in one party, we stay home and sulk. In effect, we prefer to be consumers of politics as personal fashion statement rather than actually take part in running the country. Marx thought communism would see the withering-away of the state. Instead, capitalism has reduced the state until its chief functions are protecting the rich and policing the poor.
But in the process, capitalism has killed off its rescuers. Who’s going to save the banks in the next collapse? Who’s going to bail out the masters of the financial universe when artificial intelligence takes their jobs? And who’s going to police the poor when taxpayers can’t pay for the cops and the rich are hiring cops for their own gated communities? Wolfgang Streeck sees neither a single cause of capitalism’s collapse nor any obvious successor regime.
The European Union may break up. Climate change may drown south Florida, including Donald Trump’s Mar-a-Lago. Refugees will keep coming north; they will eventually overwhelm the fences and guards and create new enclaves in Europe and the U.S.A. and Canada.
New pandemics will sweep unchallenged around the world. No coherent political communities will be there to respond to such disasters. Such communities may arise centuries from now, but if Streeck is right, capitalism has ensured that we and our children will never live in them.