The recent work of the German social scientist Wolfgang Streeck provides a powerful and salutary analysis of the recent history, and likely future trajectory, of capitalism. Building on his long-standing and highly influential writings on political economy, corporatism, and European integration, Streeck has produced a provocative series of interventions that incisively challenge the conventional wisdom about the global economic crisis and the travails of the eurozone. Streeck traces their origins to a fundamental tension between democracy and capitalism, a tension which he sees as being decisively resolved in recent years in favour of capitalism. His writings offer no quarter to those who hope to see a more egalitarian model of capitalism emerging from the crisis, but they pose fundamental questions about the left's prospects that demand the closest attention from social democrats. In this interview Streeck discusses his analysis of the financial crisis, his concerns about the neo-liberal implications of European integration, and his criticisms of the 'varieties of capitalism' school.
The neo-liberal turn
In your new book Buying Time (Streeck, 2014) you take as a starting point the theories of authors such as Jurgen Habermas, Claus Offe and James O'Connor from the 1970s. Such authors wrote about an emergent crisis of legitimacy for capitalism, but their arguments were undermined by the apparent popular capitalist revival of the 1980s and 1990s. Why do you think it is worth returning to these authors and how do you want to adapt their ideas to analyse the present conjuncture?
Failed theories can be instructive, provided they are well-structured and conceptually transparent. From the crisis theories of the 1970s we can learn that it is a mistake to under-estimate the agency of capital while over-estimating popular demands under capitalism for substantive legitimacy. With hindsight we can see that the capitalist economy, rather than having been transformed into a technocratic wealth-producing machine as the Frankfurt School had come to believe, had remained a site of class struggle from above, with highly class-conscious and profit-conscious capitalists.
And we can also see that the new consumerism that began in the 1970s went a very long way, and still does, to procure, if not legitimacy, then at least compliance with the laws of capital accumulation. Neither the re-awakening of capitalists as a class nor the rise of consumerism was on the radar screen of 'Critical Theory'.
You suggest in Buying Time that the rise of 'neo-liberalism' marks a decisive shift in the history of capitalism after the 1970s. What do you mean by the term 'neo-liberalism'?
In short, it is the idea, and the corresponding practice, that it is the duty of governments to install, impose and enforce market relations wherever possible. Political intervention in the economy must refrain from redistribution, except from the bottom to the top, to create 'incentives' for growth. The assumption is that people at the top work more if they pay lower taxes on higher incomes, whereas people at the bottom work more if you take away their social security and lower their wages. It also means that public provision should be replaced with private purchases, so people work more. Whereas under Keynesianism economic growth was expected to come from the allocation of spending power to people with low incomes, under today's neo-liberalism, or what I call Hayekianism, growth is to be the result of income flowing to the already rich.
An important consequence of the rise of neo-liberalism on your account is a shift in the character of the state, from a tax-based to a debt-based state, and ultimately to a consolidation state dedicated to fiscal retrenchment. How did this transformation come about? Does the emergence of the debt state in effect preclude the pursuit of a more traditional social democratic politics?
The rise of the debt...