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Capitalism is a one size fits all economic ideology. But what happens when great swathes of the world reject the anarchy that capitalism really brings. Today we stand at a crossroads where more and more people refuse to accept the neoliberal recipe of half baked economic ideas.

With the global political class in crisis and the markets on the cusp of another crash, sociologist, Wolfgang Streeck joined with Renegade Inc. to discuss capitalism’s ongoing lurch from crisis to catastrophe and where this unsustainable system predicated on growth, consumption and hyper individualism is likely to go next.


Between 1929 and 1935 during his incarceration by Mussolini’s fascist regime, Italian Marxist philosopher, Antonio Gramsci, wrote more than 30 notebooks and 3,000 pages of history and analysis. Widely regarded as an original contribution to 20th century political theory, his Prison Notebooks today read like a prescient analysis of the crisis in capitalism.

“The crisis consists”, he wrote, “precisely in the fact that the old is dying and new cannot be born. In this interregnum a great variety of morbid symptoms appear.”

Arguably the most morbid of these symptoms has been the human intervention in the physical world. Engels imagined that humans would, with the help of the natural sciences, be able to remedy these consequences when they proved to be damaging. But this process is greatly inhibited by the current domination of capitalist relations of production, which as professor of Politics, Alex Callinicos remarks, “encourage the employment of scientific knowledge to render the physical world as comprehensibly fungible and usable. The logic of competitive accumulation thus not merely causes profound economic crisis; it is the main force behind the increasingly threatening process of environmental destruction. Trapped in the competitive struggle to gain an edge over their rivals, capitalists are driving collectively towards an outcome that portends planetary disaster.”

The suspension of normal government and the fading of hegemonic ideologies where there is no idea what the new order is going to be to counteract this competitive logic, is indicative of the current neoliberal epoch of uncertainty. Famously, anti-war activist and revolutionary socialist Rosa Luxemberg in the early part of the 20th century conceived the transition from one form of society to another as the bourgeois at the crossroads between socialism or regression into barbarism.

Wolfgang Streeck opines that the former, Leninist concept of revolution, is more likely:

“In fact I think this is the normal case of a major historical transition because in a way the idea of change is like there’s a party committee that comes together and they announce that now capitalism is over and from tomorrow on we have socialism.”

Streeck continues:

“The only case that something like this actually happened was when communism was abolished by Boris Yeltsin who declared socialism over and now we have capitalism. That works because communism was a centralized regime. Capitalism is an anarchic and more or less it needs governance. But at the same time it always has to expect that things are changing on their own and then controlling these changes and restoring some sort of order among the normal accidents that happened on the way. That’s the political problem of capitalism, coping with unexpected change. And there are periods in which this wouldn’t work at all.”

This is because:

“Where we are now, the political system itself is in turmoil. You can locate this more precisely by saying that the neoliberal recipe of how to run a global capitalist world is failing. Neoliberalism has lost its support in the political system. There was a time 20/30 years ago when everybody thought that the revitalization of capital accumulation would require the opening up of national economies, the withdrawal of social protection in order to introduce more competition in a global market where the market discipline would force people to be more productive and thereby restore profitability and economic growth. And now we see that people in many countries object to exactly that recipe.”

Streeck adds:

“In a sense what we see is the interruption of a global capitalist rationalization process – or the process of disciplining people so as to make them more functional in a capitalist system.” 

Given that Streeck refers to communism as a centralized or centrally planned system, this is ironic. “The main agencies of governance are the central banks. But I think they don’t know what they are doing. They are desperately trying to keep the thing going. Nobody knows where their senseless policy of producing money endlessly is going to end. We live in a world of zero interest rates, but there’s no economic growth stabilized by zero interest rates”, says Streeck.

In a scenario of rocketing public and private debts, and the existence of virtual zero inflation against a backdrop of incredibly inflated asset prices, the resulting uncertainties appear to confirm Gramsci’s interregnum schema.

State of flux

With society in a state of flux, the historical conditions are ripe for authoritarian political interventions of the kind that offer simplistic economic solutions. Streeck argues that such interventions are likely to fail and have ended badly in the past but he doesn’t believe history will repeat itself. Streeck points to the example of the first half of the 20th century to bolster his case:

“This was a period in which the British Empire had lost its capacity to control the global liberal economy as exemplified by the gold standard no longer being maintained”, says Streeck, who adds,

“The Americans were unwilling to take over the role of the British. And then you had two regional powers, Germany and Japan, which had to insure against the uncertainty in the world by a policy of autarky in two regions, Europe and Asia, where autarky unfortunately requires that you conquer your neighbouring countries in order to have access to captive markets for your own product and for the raw materials you need. That set in motion a process that inevitably led to global war. People in the 1920s couldn’t imagine that a massacre was coming to them only ten years later. Today the situation is different. The global economy is already globalized. Now we have two aspirants of global capitalist hegemony. Usually capitalism only had one hegemon.”

Rival capitalist hegemons

Streeck emphasizes the changing nature of capitalism in a globalized world:

“What we learn now is that when we talk about capitalism, politics, democracy in capitalism or against capitalism, we now have to really look at the global level. The future shape of the international state system is essential for the future shape of capitalism”, says Streeck, 

The sociologist refers to the divergent historical and cultural  traditions of the two main rival hegemons – China and the US – as an illustration of how this dynamic is likely to play out:

“If you look at China for example”, says Streeck, “it has no imperialistic tradition, whereas the United States now have special forces – I think about 100 of the 200 states in the world. China has, I think two or three soldiers stationed near Somalia. That’s all.”

Streeck adds:

“But what we also know about capitalist hegemons is that they need a periphery they control. This is why there is rivalry between the two. The world today is basically occupied by the United States. But now the Chinese need to develop their cordon sanitaire and their area for economic expansion.”

Unsure of what their response should be, the US has instead shifted their approach to using Russia as a form of bogey man enemy in order to keep the Europeans in the American camp. Streeck believes that eventually China will effectively force America’s hand into accepting that it is the real beast. It would appear that the former’s approach to stabilizing its Empire is – as a result of it’s One Belt, One Road policy – a commercial-led operation based on China’s use of its economic leverage over other countries by investing in their infrastructure in order to dominate them. This foreign policy approach is in stark contrast to the latter’s war-hungry strategy.

The foreign policy tradition of China has hitherto rejected the capitalist economic trajectory of its rivals. But if China does decide to adopt this economic system, then by definition it will be compelled – within the context of a finite resourced planet – to go for growth at all costs.

The strategy is fraught with danger. This is because, as Alex Callinicos points out, the destructive consequences resulting from war, “embrace not merely the economic struggle for markets, but military and diplomatic rivalries among states.” The logical end point of this madness, is a situation in which two main nuclear armed hegemons literally fight it out as their justification to secure a competitive advantage on the world stage.

Applying the breaks

 Wolfgang Streeck recognises that this growth-based system is not sustainable and in order to stop it we must apply the breaks. The problem is that a system predicated on credit and debt means you have to grow in order to repay the debts accrued. Streeck quotes Schumpeter: “The maximum speed of a car doesn’t depend on the engine, it depends on the brakes.” If you have weak breaks you can only drive that fast. “But capitalism”, says Streeck, “has no brakes” – a notion buried deep in the culture. “Capitalism”, says Streeck, “is a society not just an economy. People had to be re-educated from what you can call input minimizes to output maximize. It’s always about the end of a traditional attitude towards the economy in favour of a modern attitude.”

Streeck clarifies what he means:

“Traditional means, you have a traditional level of need that you need to satisfy and then you stop working. So Marx finds that when in the Middle Ages – in England – wages rose, workers didn’t appear, they went home. By Thursday evening, they didn’t go to work anymore. So it was understood that wages had to be artificially lowered and not be raised above a certain level because then workers would be willing to work until Saturday evening. In the modern world this is completely different. You look at the productive capacities that you have and then you make a rational calculation. If the mechanisms by which people continued to work are designed to use increasing productivity for maximizing output rather than for minimizing input, why do we work so hard?”

The conditions today aren’t dissimilar to what Marx was describing in the 15th century in England. What we have today, though, is the glorification of busy. Everyone’s busy. This is reflected in the lack of children’s playtime which is all scheduled. Streeck perceives this as being akin to a secular religion in terms of the way we view work in society:

“It’s the sort of sacrifice that you make for something, for some higher entity which is not necessarily capital”, says Streeck. “So for example”, continues the sociologist, “you listen to people who have children in their 20s or early 30s and they describe a kind of life which is sort of rigidly organized around a tight timetable. And they are proud of it. They see this as a challenge like I have to show that I am able to stand all this.”

The fact that young parents rarely question why they act this way is, according to Streeck, “asking a very fundamental or even fundamentalist question about the human being who in a very general sense is different from other biological beings by not having an actual programmed repertoire.”

Streeck adds:

“We are not programmed. We have to invent our way of life. And there we have so many possibilities that if we would think them all through we would never get to doing anything. So institutions and societies are mechanisms by which you eliminate alternatives. As Marx says,

‘The human being is the only being that can be an individual only in a society.’ What that means is, you’re born into a society with a sort of institutionalized repertoire of activities and you can critically distance yourself from it. Young people often do it, but the pressure to live the kind of life that the others are living is enormous.”

However, with the advent of neoliberalism into the cultural sphere, it is clear that the rationale underpinning this undertaking is the politicians’ abrogation of their responsibilities for the protection of wider society and the environment. Indeed, neoliberalism is incongruous to the notion of sustainable societies that have the best interests of communities at heart. This is because, ultimately, the establishment deems that the ends justify the means. In other words, the rationale justifying the emergence of neoliberalism in the late 1970s was that a failing economic system needed fixing in order to boost profitability and rejuvenate capitalism.

But the politician’s failed to deliver on their promises. As a consequence, many countries are a lot worse off than they were before because the social protections that enveloped the capitalist core of these societies until the 1970s are all gone. They have been deliberately destroyed as part of the process of disaster capitalism.

Back to Africa

It is encouraging that many economists and activists in the US appear to be acknowledging many of the political tendencies opposed to the kind of triangulated policies that have helped normalize neoliberalism in the public mindset, are now being rejected in favour of socialism. This has not come as a surprise to Streeck whose optimism is premised on the notion that humans are ultimately guided by rationality. This is predicated on the ‘back to Africa’ idea that if you want to go quickly, go alone. If you want to go far, go together. 

“Politics is the provision of opportunities for people to get together and be productive with each other. But you need politics for this, not just the market. You also need collective decisions on how we want to live together. I think that is the core of a socialist left agenda”, says Streeck, who adds:

“We’re rediscovering that as individuals we depend on society. That means, for example, we are rediscovering the need for an education system that gives people access to education. Because if the other guy isn’t educated but I am because I happen to have the money to go to university, in the end that society will deteriorate.”

 The neoliberal attacks that have augmented the deterioration of society, is precisely the basis for gilets jaunes (yellow vests) protests that are happening throughout France. The movement seems intent on undermining the smooth functioning of the system and rejects outright the hegemonic ‘there is no alternative’ (TINA) to neoliberalism’ notion. More broadly, what they are able to do is to indicate that the way that country is governed cannot continue forever. By so doing, their actions have come to symbolize the interregnum which historically – as Streeck outlines – has taken both positive and negative turns:

“It’s astonishing how people can be culturally creative in many very difficult moments and they can invent something else. After the end of the Western Roman Empire in the 5th century, it took 300 years to invent feudalism. Now that’s the positive answer. The negative answer is that the sacrifices on the way can be enormous. After the end of the Western Roman Empire in what is now France, you had to expect that any day some sort of German marauding band would come by and take your daughters and your harvest away.”

In the end, Streeck’s pragmatism prevails:

“In the 20th century we have this experience of the transformation of the modernizing global system which culminated in the second world war. I always have this figure in mind – which is 50 million people dead – and strange that so few people know this because we also seem to be able to forget things which may be the only way of carrying on. So maybe our problem is to prevent the costs of the transition to something else, to be too high, to do something to make the transition less costly for people. But the transition may come with considerable disturbances and disadvantages for people. Of that I’m convinced.”

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