Not with a bang ....but a whimper......

Last year I drew attention to the fact that, despite their prolific output, economists seemed to have some difficulty in making sense of more global trends – 

It’s significant that the best expositions of the global economic crisis and its causes rarely come from economists……..somehow the framework within which the modern economist operates precludes him/her from even the vaguest of glimmerings of understanding of the complexity of socio-economic events. Their tools are no better than adequate for short-term work…..

For real insights into the puzzles of the modern world, think rather David Harvey (a geographer) and his A Brief History of Neoliberalism (2005); John Lanchester and James Meek (novellists and writers); Susan Strange, Susan George or Colin Crouch (political science); or Wolfgang Streeck – a Koeln Professor of Sociology. All have extensive and eclectic reading; a focus on the long-term; and the ability to provoke and write clearly. 

"Eclectic" is the key word; few economists are trained these days in political economy - which roots the study of economics in the wider context of history and political analysis...... 

Wolfgang Streeck is Director of the Max Planck Institute and an unlikely scourge of capitalism – but his texts are becoming ever more apocalyptic. He has just published another - How will Capitalism End? - a summary of whose basic thesis can be found in this 2014 New Left Review article

The NLR is the favoured outlet for Streeck’s long, clear and incisive articles eg one in 2011 on “The Crisis of Democratic Socialism”  which led to the short book Buying Time – the delayed crisis of democratic capitalism (2013). 

His latest book, however, explodes any idea of the inevitable arrival of a socialist paradise –On the contrary, his is a dystopian vision in which capitalism perishes not with a bang, but a whimper. Since, he argues, capitalism can no longer turn private vice into public benefit, its “existence as a self-reproducing, sustainable, predictable and legitimate social order” has ended. Capitalism has become “more capitalist than is good for it”. 

The postwar marriage between universal-suffrage democracy and capitalism is ending in divorce, argues Streeck. The path leading to this has gone via successive stages: the global inflation of the 1970s; the explosion of public debt of the 1980s; the rising private debt of the 1990s and early 2000s; and the subsequent financial crises whose legacy includes ultra-low interest rates, quantitative easing, huge jumps in public indebtedness and disappointing growth.

Accompanying capitalism on this path to ruin came “an evolving fiscal crisis of the democratic-capitalist state”. The earlier “tax state” became the “debt state” and now the “consolidation state” (or “austerity state”) dedicated to cutting deficits by slashing spending. Three underlying trends have contributed: declining economic growth, growing inequality and soaring indebtedness. These, he argues, are mutually reinforcing: low growth engenders distributional struggles, the solution too often being excessive borrowing.  

The book finishes by exploring five systemic disorders – “stagnation, oligarchic redistribution, plundering of the public domain, corruption and global anarchy…..” which Streeck talks about here and which are (very briefly) defined in this summary

Curiously, however, the book seems to give little coverage to automation…on which a recent article called Four Futures offers an insightful perspective – reviewed in the Los Angeles Review of Books – a review which also carried a good piece on The Supermanagerial Rich

Other Relevant Reading

http://averypublicsociologist.blogspot.bg/2016/11/the-end-of-capitalism.html

https://www.ft.com/content/7496e08a-9f7a-11e6-891e-abe238dee8e2

Buying Time http://www.panoeconomicus.rs/casopis/2015_1/08%20Book%20Review.pdf

https://regulation.revues.org/11925

David Harvey eg

https://citizenactionmonitor.wordpress.com/2016/06/13/the-end-of-capitalism-part-1/

https://citizenactionmonitor.wordpress.com/2016/06/14/the-end-of-capitalism-part-2/

https://citizenactionmonitor.wordpress.com/2016/06/15/the-end-of-capitalism-part-3/

https://vimeo.com/91747532

https://www.econstor.eu/bitstream/10419/107091/1/81811505X.pdf

https://www.theguardian.com/books/2016/dec/09/wolfgang-streeck-the-german-economist-calling-time-on-capitalism

http://salvage.zone/in-print/neoliberalism-as-the-agent-of-capitalist-self-destruction/ (Neil Davidson on Neoliberalism)

student reading list;http://www.brianmilstein.com/pdfs/syllabus-TheorizingCrisis-final.pdf

Some readings on the crisis

It may not have been evident from recent posts that one of my central concerns is the identification of an agenda for social change which is capable – by its appeal, relevance and clarity – of uniting a significant block of change agents in Europe at least. Two of my common moans are the insular nature of so much of the writing about this which one finds in the English language; and the failure of so many of the writers to build bridges to others writing on relevant subjects.
These faults were very evident in a Noreena Hertz pamphlet entitled Coop Capitalism just published by Cooperatives UK. Hertz is, apparently, one of these young celebrity Economists who have been taken up by the mass media and one of whose faults is to present ideas as if they were new. I’m not sure, for example, if her use of the term "gucci capialism” adds to our understanding of the crisis we face – and her references to examples of cooperatives are highly selective and superficial (Mondragon gets no mention). She allows this blurb about her to appear in the pamphlet -

many have described Professor Hertz as a visionary and she is one of the most influential economists on the international stage. Her work is considered to provide a much needed blueprint for rethinking economics and corporate strategy. For more than two decades Noreena Hertz’s economic predictions have been accurate and ahead of the curve. In her number one best-selling book “The Silent Takeover”, Hertz predicted that unregulated markets and massive financial institutions would have serious global consequences whilst her 2005 best-seller, “IOU: The Debt Threat”, predicted the 2008 financial crisis. Her books have been translated into 17 languages

Here is an example of how the media treat her – but here a more serious treatment of her ideas . I realise, of course, that such a comment could be taken as an example of how the left tear one another part – but change agents need to show more modesty and generosity in their referencing of relevant work.

Labour Left has published a 300 page Red Book which can be downloaded here. Labour Left’s ambition is 

to generate ethically socialist policies for inclusion in the next Labour General Election manifesto. We aim to intellectually reclaim what it means to be left and we wish to help Ed Miliband steer a course away from Neo-Liberalism. It is clear from the surge in new members, especially younger ones since the General Election in 2010, that there is an appetite for socialist policies that tame the excesses of capitalism and re-balance the UK economy in a way that is fairer to the have-nots

Unfortunately, like all collections, the book’s contributions are ad-hoc (if worthy) presentations of various ideas relating to health, education and environmental issues – with no wider analysis of policy contexts nor argument as to whether the particular ideas would be supported let alone successful.

At the other end of the analytical and geographical spectrum is a major publication from the European Trade Unions Institute which, in 300 pages, looks at the changes in the infrastructure of each of the main European economies in the last 20 years. It takes as its starting point Colin Crouch’s insight about the strange non-death of neo-liberalism and is entitled A Triumph of Failed Ideas – european models of capitalism
It made me realise how seldom I have referenced the valiant efforts of various European Trade Unions and their research bodies in their tracking developments of the past decade eg the fantastic public services international research unit of the University of Greenwich which has been giving great briefings on the consequences of privatisation for more than a decade; NHS policy briefings ; European Services Strategy Unit.
But I have just come across what, for me, is the best source of radical thinking and activities in Europe – the Transform network which issues a biannual journal.