The End of Capitalism?

Endism is on trend. Brexit, Trump, the collapse of the liberal establishment, the eclipse of reason. These aren't the end times, but for some it sure does feel like them. Let's throw another thing that might be coming to an end into the mix: our jolly old friend and companion, capitalism. Yup, it's on its way out (and might already be dead) according to Wolfgang Streeck in the latest issue of Juncture, the journal of the IPPR. This has to be located in the recent spate of end-of-capitalism-isms, usually associated with Paul Mason in this country, and more generally with the line of work coming out of the Hardt/Negri/Boutang stable. Whereas these folks concentrate on the objective growing power and capacity of labour power vis a vis capital and emphasise its potential to grow something new within the womb provided by the increasing dependency on immaterial labour and high technology, Streeck takes a different tack.

His argument is an iteration of the breakdown theories of capitalism, that its contradictions mount and amplify each other to such a degree that it undermines itself, resulting in a wind down of the system and, if we're unlucky, social collapse. Thankfully, that isn't what Streeck has in mind. Instead, he thinks we can look forward to a "prolonged period of social entropy, of radical uncertainty and indeterminacy" (p.69). Given what's going on here and over there, the interregnum might already be with us. And what it looks like is the breakdown of macro regulation and integration of the state, capitalism, and the institutions and industrial sectors that compose the whole political economic ensemble. The state withdraws and the collective responsibility of social risk is offloaded onto individuals. This process, long identified with neoliberal economics and governance leads to the under-institutionalisation of society, a reduced capacity for government to discharge its functions, and manifests symptoms of "ungovernability". This presents a big problem for capital because it too is disciplined and conditioned by regimes of accumulation. Because regulation was worried away by governments, the institutional architecture isn't there any more for sustainable growth. Capital is entering a cycle of unstable boom and bust.

For Streeck, the hole swallowing capitalism is an outcome of the accumulating contradictions associated with the previous implementation of solutions to what looked like conjunctural crises. 1970s inflation was tackled by wage squeezes and throwing people out of work. The 1980s was the decade of big deficit spending, thanks primarily to huge tax cuts for capital to keep the accumulation show on the road. But with saturated markets and stuttering wage growth across the advanced economies, public indebtedness was matched by private indebtedness. Thatcher's boom and bust in the 1980s was a petri dish preview of what was to happen 20 years later: the pyramid of debt fell in and almost dragged the global economy with it. Each solution multiplied contradictions and stored up a crash in the future. The problem is the crisis hasn't flushed the system. Debt, private and public, is up. Deficit spending remains. Cuts and more deregulation have hindered, not aided growth. Unemployment has stabilised, but job growth is not a like-for-like replacement of those destroyed by the crash and austerity-happy governments. Instead underemployment has helped keep the official jobless tallies low, and all the while central banks are printing money, handing it to banks, and fuelling another round of speculation and lending. Madness.

Want more problems? Capitalism has them. For Streeck, for the last 200 years capitalism has depended on a powerful, global order-making state, a great power among great powers with the financial clout and military projection to make the world safe for profit making and profit taking. That hegemon in the 19th century was Britain, and after 1945 it was the United States. Through the Marshall Plan and overweening military dominance, Washington imposed a new order on Europe's exhausted, broken states that integrated them into a new world economic order. It was premised on containing the threat imposed by the Soviet Union and its client states, up to and including "suspect" independence movements in the former colonies. It survived the oil and inflation shocks of the 1970s and the neoliberal turn, but once the USSR went under and China was increasingly integrated into global capitalism, what was left were unstable, frail/failed states, civil wars, and repressive governments. Because the US rolled back its own institutional capacities, it and its allies were largely uninterested in the goings ons at the fringes of capital's domain. That is, until, the violence of these territories were exported back as terrorism. The hegemon cannot impose its will, and that is now open to contest from rising powers and two-bit tyrannies.

Politically, the breakdown has had two political consequences. Displeasure with this chaotic state of affairs first manifested itself as indifference/apathy to politics, but is now working its way through political participation. Usually (but not always) it tilts to the right. It rejects established political elites and grasps hold of the ideological resources to hand. In America and Britain, with weakened and almost politically invisible labour movements, that has meant the nation is the preferred crutch of choice. As internationalism and the market is associated with remote, socially liberal but condescending politicians, the temptation is to write this movement off as irredeemably bigoted. Yet the core political content, hidden beneath layers of irrationality was succinctly expressed in the Leave's 'take back control' slogan. It's a confused and confusing expression of the desire to ground accountability, of exercising direction over the invisible processes that promote social anxiety and empower institutions that can make this happen.

Streeck certainly makes a lot of sense. Politics is volatile to the point that those used to talking about it don't know what they're talking about anymore. Global capitalism's political economy is in a mess, and will get messier if President Trump (let that sink in for a second) pursues a tariff war with China. Theresa May seems to have an inkling about what what needs to be done, but the Tories cannot be trusted to pull British capitalism out of the woods - especially as they're the ones that got it lost there in the first place. That said, I don't think this is a case of too little too late. Leaving aside the export of Putinism to the United States, Eastern Europe and, possibly, France next May there are a number of long range stabilisers due to kick in. As Toby Nangle points out in his piece, Inequality's Inflection Point (in the same volume), 40 years of neoliberalism and all it entailed (chiefly, the breaking of the labour movement's political clout) was made possible by the entry of two billion workers into the global labour market. Now we're reaching the point where their integration is putting pressure on wages. The remaining untapped pools of labour, chiefly in rural India and sub-Saharan Africa can't be so easily wired into capital's circuits. Part of it is infrastructural, and part of it is, from capital's standpoint, a lack of basic formal education and skill. Second, the baby boomer generation in the West will vacate occupations as they move into retirement, allowing the smaller X, Y, and Millennial cohorts more in the way of job opportunities. Therefore, demography favours a balance back to labour in the long run, and gives capital the impetus to invest in more automation to offset wage pressures.

The second issue with Streeck is the writing out of politics. It can and likely will force change on capitalism. Those voting for Trump hoped for a more paternalist economics, but already his tax cuts plans which, shock, benefit the top the most will exacerbate the problems American (and world) capitalism has. Yet necessity has to kick in at some point, and his support are expecting something more than bluster and bullshit. The same is true with the petty Putins looking to make their move all over Europe. They are stoking a hell of their own making if the same old crap carries on under new management. In a way, May (at the level of rhetoric, at least) shows these populist movements and politicians-elect their future - a restored state that intervenes to undo the great disaggregation and promote new markets, even if only for their political survival. The second comes from the politically conscious among the constituency identified by Hardt, Negri, and friends. Appalled by the idiocies of Brexit and Trump, opposed to authoritarianism and the xenophobia, racism, and hate they've stirred up, they too will impact on politics. It's happened and is happening in Britain. Spain, Greece, and America have felt its presence. It's a new international coming into being, and one that capital accumulation is increasingly dependent on. The job of the left is to deepen its politicisation, connect with what remains of the labour movement, and push out into the base of sundry populists, Putinists, and nationalists. The act of doing so can transform capitalism, restore its vigour and, who knows, lay the grounds for its supercession by something better.