The Future of Capitalism with Wolfgang Streeck

In this special edition of the CURA podcast we talk to Wolfgang Streeck, Director of the Max Planck Institute for the Study of Societies, about his works “Buying Time” (2013) and “How Will Capitalism End?” (2016). You can listen and download the podcast here , on soundcloud, itunes, and most major podcast platforms.

Drawing widely on classics from Schumpeter, Polanyi and Marx, Streeck offers an account of the lineage of democracy, capitalism and the state since the post-war period, identifying the deeply de-democratising and self-destructive trajectory in contemporary capitalist development. Against liberal received wisdom, Streeck argues that democracy and capitalism are anything but natural partners or easy bedfellows, but have in fact been in constant historical tension. The post-war social democratic settlement represents an unusual “fix” to this tension that was relatively favourable to the popular classes, or “wage dependent”, parts of the population. However, this fix unravelled in the 70’s as the capitalist, or “profit-dependent”, class rediscovered its agency and, with neo-liberal globalisation and financialisation, began to shape a world in its interests.

Streeck argues that these processes are putting in danger not only the existence of democratic politics, which is increasingly circumscribed by the need for states to appease financial markets, but also the future of capitalism itself. Streeck’s vision for what is to come is gloomy. Capitalism continues to erode the social foundations necessary for its own sustenance, as well as the resources needed to collectively construct an alternative order. Institutional and policy fixes to capitalist contradictions are running out. We can expect the result to be the development of an increasingly uncertain and under-institutionalised social order, reminiscent of a Hobbesian state of nature, where individual agency and creativity becomes fundamental to meet basic needs and achieve even minimal goals. Politics offers hope of rupture, but is itself increasingly constrained and defiled by capitalist development and rationality.

In this podcast CURA‘s Adrian Bua talks to Wolfgang about his work on the trajectory of capitalism and democracy.

Why network governance won’t stop climate change


In today’s post Professor Jonathan Davies draws on Gramscian theory to argue that network governance ideology fails to engage with real power structures, and that state-society partnerships cannot stop climate change. This post was originally published on the Innovations in Climate Governance (INOGOV) website and republished with their permission

The idea of “network governance” began to grip academics and policy makers as part of the turn to the “third way” in the 1990s. Enthusiasm for networks arose from a particularly influential reading of social change.  Confronted by dramatic processes of globalisation and de-traditionalisation, often associated with the passing of modernity, many thinkers reasoned that states could no longer exercise sovereign power and instead have to involve a multitude of other actors to govern successfully.  Governing systems, in other words, have to become de-centred, or polycentric.  As INOGOV research demonstrates, climate change governance has been strongly influenced by these ideas.

At the same time, with the decline of trade unionism in many countries, the language of “working class” disappeared from mainstream political discourse, to be replaced by “civil society”.  Civil society with its networks of voluntary and community organisations is a far more palatable partner for neoliberalising states than the unions. It can be incorporated into state projects, and provide links into dispossessed and alienated communities that are abandoning the institutions of representative democracy. Working through “civil society”, state-organised networks could focus on the practical business of problem solving within the parameters of neoliberalism: trying to balance competitiveness with social cohesion, while setting aside the structural foundations of inequality and injustice. Urban living labs seeking to innovate around smart cities and sustainability are a good example of this ideology in practice.  For the most idealistic thinkers, network governance ushers in a new, cooperative and communicative form of sociability capable of replacing the crumbling hierarchical edifice of modernity.

Much of my work has been concerned with the critique of this exaggerated and normatively charged theory of change (see [1], [2], [3], [4]). I argue that the idea of network governance as an “innovation” transforming the way we are governed is hopelessly idealistic. At best it is the vague premonition of a post-capitalist society incubating within the bowels of a nasty, authoritarian neoliberal conjuncture.  There are multiple reasons for skepticism about “network governance”.  First, there is nothing new about it.  Any brief survey of early 20th century literatures show that the kinds of institutions considered “innovative” by network enthusiasts have been around for a very long time. Second, when studied close-up, “networks” look very much like the “hierarchies” they are supposed to replace.  Participatory networks, like urban living labs, tend to be cosmetic.  States and corporations are by far the biggest drivers of climate change, and they determine how it is governed through duplicitous practices like carbon trading.  Moreover, networks entrench inequalities of wealth and power – the very reason they are attractive to elites.  They leave the dispossessions and human disasters of climate change untouched and require us to think about injustice in de-politicized vernaculars of “innovation”, “adaptivity”, “inclusion” and “sustainability”.  They promise relentless “change”, but always within the parameters of the present.  Like a washing machine, we are in continuous motion but never move.

To try and put network governance in its place, and situate it in a better understanding of historical continuity and change, I turned to the work of Italian revolutionary, Antonio Gramsci (see [1], [2]).  Gramsci developed a theory of politics, in which state and civil society are deeply enmeshed.  He argued that the coercive and consensus-building tactics and strategies of government play out on the terrain of civil society.  Gramsci’s definition of civil society was much broader than the rather benign world of voluntary organisations depicted in democratic theory.  He included the media and education systems, while today’s Gramscian scholars also point to the power of charitable foundations. Much of what we call “civil society” is either closely linked to corporations and the state, or depends on them for donations, grants and contracts.  Swathes of civil society are hierarchical, predatory and conservative. Gramsci called this deep web of entanglements and inter-dependencies “the integral state”, Lo Stato Integrale.  He argued that government “educates” civil society through a myriad of coercive and consensus-building techniques.  When states are threatened with revolution, he said, a well-organised civil society turns out to be their best protection.

Studied through the lens of the integral state, what we call “network governance” looks very conventional and not at all “innovative”.  States may be shedding their postwar welfare and redistributive functions, but its coercive functions have not disappeared.  On the contrary, they are coming to the fore. When we look at the anatomy of state-organised governing networks, we find coercive managerialism everywhere.  In participatory mechanisms state managers control agendas, while those seeking to politicize an issue are often quickly marginalized.  Informal networks, on the other hand, reinforce the power of governing elites and corporate interests, which dominate climate change decisions.  Under austerity, participatory mechanisms are either set aside or tasked with advising on where the state should make its cuts. Even the much-vaunted participatory budgeting mechanisms of Latin America are widely recognized to be in decline.  And, in hindsight, they didn’t exercise that much control over the governing apparatus to start with.

The point is not that public participation is bad, or that polycentric systems do not exist in some circumstances.  It is rather that branding unremarkable practices as new, radical or innovative can be dangerous because it conceals deep continuities and asymmetries in the structures of power.  In the age of authoritarian neoliberalism, network governance is little more than a sticking plaster for the gaping wounds of late capitalism, of which climate change is among the worst.

Jonathan S. Davies is Professor of Critical Policy Studies and Director of the Centre for Urban Research on Austerity at De Montfort University, Leicester, UK

Workshop: Resistance and Alternatives to Austerity

Adam Fishwick and Heather Connolly report back on a workshop they convened for CURA on Resistance and Alternatives to Austerity.

On 18th May CURA hosted our one day workshop on ‘Resistance and Alternatives to Austerity’ engaging with a range of distinctive – and innovative – strategies that have emerged in Europe and Latin America that are challenging the dominant turn to austerity. Papers delivered during the panel sessions were grouped around three key themes on workplace occupations, migrant workers’ protest, and alternative ‘grassroots’ mobilisation. The day ended with keynote presentations from Lisa McKenzie and Phoebe Moore that illustrated the sheer range of opposition that the workshop presenters touched upon – from working class neighbourhoods in the UK to the tensions over technology in the workplace.

The panels generated lively debate from participants and speakers (some of which was broadcast on social media via #CURAresistance) with debates centring on the viability of bottom-up forms of resistance, on the role of institutional actors and the state, and the possibilities for developing new subjectivities and forms of agency.

In the first panel, David Bailey and Saori Shibata presented findings from their research in ‘low-resistance’ societies of the UK and Japan and argued that only with what they termed ‘militant refusal’ were austerity measures successfully challenged and reversed. Lucia Pradella discussed the centrality of new migrants in resistance within and against the traditional trade unions in the logistics sector in Italy – highlighting the dynamism of new actors in a sector crucial to global capitalism. Nick Kiersey, finally, drawing on his research into anti-austerity protests in Ireland challenged us to think about the possibilities of developing a ‘left governmentality’ in the ‘slow exit’ from neoliberalism and austerity.

In the second panel, Heather Connolly returned to the theme of migrant workers within and against traditional trade unions in France, presenting her research on the Sans Papiers movement in France and the innovative models of resistance it adopted. Adam Fishwick argued that, despite the return of a bleak period of austerity in Argentina, resistance could still be found in what Ana Dinerstein has termed the ‘concrete utopias’ in the country. Focusing on the recuperated factories, he showed how they offered a distinct alternative beyond the constraints of state. To close the panels, Stuart Price presented some of his findings of a workplace occupation in Spain, discussing tensions between the closing of space for protest and the potential/limitations of new, seemingly spontaneous forms of resistance.

Lisa McKenzie – alongside Stuart Price – brought a powerful visual component to the day, combining images collected in the course of her fieldwork and everyday life in Nottingham and London with ethnographic narratives on working class life under austerity. Her keynote presentation demonstrated the lived realities of austerity from navigating unemployment, to homelessness, to the pervasive class stigmatisation that, in her words, ‘does the work of the policies of austerity’. Running through her talk was a sense of the need to think concretely about the impacts of austerity in order to confront it – to engage directly with the lived, everyday impacts of the assault on the most marginalised and stigmatised communities and individuals. Closing her presentation, two resonant images of young working class men on top of the roof of an elite private school in Nottingham during the 2011 riots and a homeless man under a new luxury development in London neatly captured this sentiment.

Phoebe Moore took us in a different, but related, direction with a vision of the new workplace and the role of technology in reinforcing the lived conditions of austerity, but also in potentially offering ways to confront and resist in uniquely innovative ways. In her presentation, the new techniques in the measurement and management of working life – from worn technologies to new monitoring and surveillance devices – were shown to be a central component of the micro-level practices overseeing workplaces across a range of sectors. But her work also highlighted the means by which this key component of the new discipline of austerity can be confronted. Technology – as much as it represents a mechanism of control in the workplace – was also shown to provide mechanisms for overcoming that control. From the everyday challenging of its use in the workplace, to re-purposing it in practice, to the development of more organised forms of resistance, the potential for subversion was clear.

Overall, the presentations and discussions throughout the day made clear that if austerity is to proceed, it will not continue unchallenged. Drawing on research and expertise in a variety of settings and contexts, the speakers and participants offered a clear sense that the precarious, impoverished futures proposed and practiced by advocates of austerity are not the only future available. Moving forward, the plan from this workshop is to develop a published collection of the papers that consolidates these themes of resistance to the increasingly pervasive practices of resistance, with the aim of continuing collaboration in to resisting austerity.

Dr. Adam Fishwick is Lecturer in Urban Studies and Public Policy and Dr. Heather Connolly Senior Lecturer in Human Resource Management at De Montfort University, both are core members of CURA.

Blazing the Neoliberal Trail: Tim Weaver’s Response to Jonathan Davies

In this post Tim Weaver responds to Jonathan Davies’ review of his recent book ‘Blazing the Neoliberal Trail’.

I would like thank Jonathan for his stimulating reactions to my book and the opportunity of offering this response. I will focus primarily to two key points he raises. The first concerns the question of periodization. As Jonathan rightly points out, I suggest that the 1970s was the “pivotal decade”—to borrow Judith Stein’s phrase—for the shift to neoliberalism. However, Jonathan notes that “the break with the post-war order was implicit in the emerging political and economic zeitgeist of 1960s for both left and right.” He is right to argue that neoliberal ideas were beginning to take root in the 1960s and that business mobilization occurred in the U.K. and the U.S. in the 1960s and 1970s, as elites were forced to consider alternatives to the Keynesian regime of capital accumulation.

That said, my aim in the book—as Jonathan anticipates in his review—was to locate the period at which neoliberal ideas became politically consequential, that is when they became reflected in institutionally and ideologically durable ways. There were examples of experiments with neoliberal policymaking in the 1960s and the book might have been strengthened by illuminating of the connective tissue that links the proto-neoliberal efforts of the 1960s with those that came later as Jonathan suggests. That said, these neoliberal experiments, often proved abortive as leaders of both main parties in both countries became ultimately unwilling to jettison Keynesian approaches to economic policy until well into the 1970s, which drew sharp rebuke from neoliberals. Examples include Nixon’s wage and price controls and Heath’s retreat from proto-neoliberal macroeconomic policy in 1972 when unemployment hit one million—it was not yet a “price worth paying.” Heath’s famous U-turn illustrates the degree to which neoliberal remedies were perceived to be politically untenable by British elites into the 1970s, even on the right. Anecdotally, it is worth noting that Richard Nixon averred in 1971 that “I am a Keynesian in economics” and that Keith Joseph maintained that he was only “converted to conservatism” in 1974. Moreover, in the U.S., redistributive urban spending and all manner of urban programs accelerated markedly during the Johnson administration, with federal aid to cities reaching its apotheosis in the late 1970s, all developments I would characterize as at odds with the neoliberal turn that would follow.

The second major point that Jonathan raises concerns my characterization of the state. He points out correctly that my book draws a distinction between the capitalist class and state actors, who I suggest enjoy a degree of autonomy from societal interests. As such, my analysis allows that the state within the capitalist system may not necessarily operate as “the capitalist state.” By contrast, Jonathan maintains that it may be more fruitful to think about the state as an inherent part of the capitalist system. While this issue regrettably does not receive detailed treatment in the book, my position is that the state under capitalism does indeed act disproportionately in the capitalist interest. However, despite this bias, there is nevertheless space for state actors—operating from their own ideological convictions, or from pressure from anti-capitalist groups (such as trade unions)— to pursue policies that are contrary to the interests of capital. Moreover, I view the state itself as a multifaceted set of institutions that operate in a variety of domains to advance different interests, some of which might not be characterized as capitalist. This is especially evident with respect to the American state, with its multiple, overlapping nodes of authority and cross-cutting purposes. To give an example, in the 1980s, the same “state” was issuing social security checks to the elderly and food stamps to the poor while attacking the air traffic controllers, slashing urban spending, and using monetarism to squeeze the life out of the economy. These contradictory positions risk elision by the “capitalist state” characterization. The theoretical orientation I have followed demands that researchers spell out the processes by which certain policies become adopted and institutionalized rather than assuming that they are necessary a reflection of capitalist imperatives.

On a related note, it is important to consider that even within the capitalist class there is likely to be disagreement about the most effective mode of capital accumulation, especially during periods of uncertainly such as that which emerged in the 1970s (or, for Jonathan, in the 1960s). Hence, even if one were to grant that the state operates throughout the post-war period as an integral part of the capitalist system, the shift from a Keynesian capitalist state to a neoliberal is one that requires examination and explanation. Given the uncertainly among capitalists about how to deal with falling rates of capital accumulation, material explanations of why the neoliberal variety of capitalism took hold fall short. As Mark Blyth has shown a complete account requires an ideational dimension.

My position on the state and the role of ideas brings us finally to the question of whether my analysis might be compatible Marxist analysis. I am not certain. I maintain that politically consequential ideas can emerge independently of material interests. I am leery of accounts that reduce ideology to its function of reflecting materially derived imperatives, though it very often works in this way.  Thus, to the extent that political development can be propelled by ideas that are, or become, unmoored from capital, my account is compatible with Marxist analysis. But would this move not be antithetical to the materialist foundation on which Marxism rests? I hope in future projects to probe this question far more deeply and may enlist Jonathan’s help as I do!

Dr. Timothy Weaver is Assistant Professor in Political Science at the University of Louisville.

Blazing the Neoliberal Trail: Review by Jonathan Davies

Professor Jonathan Davies continues our second installment of CURA’s book debates by share’s his thoughts on Tim Weaver’s recent book ‘Blazing the Neoliberal Trail‘. This post will be followed by a final reply from Tim int he forthcoming weeks.

It was a great honour to debate Tim’s new book at the annual meeting of the Urban Affairs Association earlier this year.  The book announces Tim as an important new thinker in the field or urban political economy.  It was a pleasure to read a deeply learned piece of work presented with erudition and lightness of touch.  Perhaps the most interesting thing I learned from the book concerns the dynamics and temporalities of policy transfer.  We tend to assume that because the UK likes to borrow (ever more right wing) policies from the USA, that the USA was the main trailblazer in neo-liberal urban policy.  In fact, Tim shows that the UK was able to outpace the USA, because its centralized and hierarchical political traditions made this easier to accomplish.  More broadly, these differentiations show why an urban focus is so important for getting to grips with the epidemiology, variegation, hybridity and contestation of neoliberalism.

The main question I have about the book concerns the way different disciplinary perspectives open up different temporal understandings of neoliberalism.  I pick up on a striking phrase in Tim’s conclusion in relation to the class politics of neoliberalism. He argues that the “bourgeoisie was not knocking on doors”, demanding enterprise zones and urban development corporations.  These initiatives were driven politically, and hence Marxist conceptions of capital and class do not really help us understand them.  Tim accordingly emphasizes the role of policy ideas and entrepreneurs, and the way in which different configurations of institutions and traditions were more or less open to change.  These factors undoubtedly matter a great deal, but I do not think they are incompatible with a Marxist analysis, rooted in the ideas circulating and gathering force during the emerging social and economic crises of the 1960s.

From a sociological perspective, Boltanski and Chiapello argued in The New Spirit of Capitalism, that by the 1960s, the bourgeoisie was indeed clamouring for change, hankering to be free from the stultifying command structures associated with Fordist development and the Weberian political order.  But, it is notable that similar ideas were also incubating in the British Labour Party and US Democrats, through Harold Wilson’s “white heat of the technological revolution”, and John. F. Kennedy’s “new frontiers”. So, from the standpoint of ideas, the break with the post-war order was implicit in the emerging political and economic zeitgeist of 1960s for both left and right.  Ultimately, for reasons beyond the scope of this discussion, the neoliberals succeeded in appropriating this spirit and translating it into the policy agendas Tim discusses at length in the book.  Two points follow.

First, governments and corporations were both influenced by proto-neoliberal ideas and sentiments well before the 1970s and 80s and sought to organize around them.  It is here that we find the roots of the crisis of the post-war order and of neoliberal transformation.  Tim might respond, correctly, that neoliberal ideas did not fully grip on the terrain of politics and policy until much later – and after many brutal struggles.  However, the second and crucial point is that looking at the 1960s shows that neoliberalism was indeed a class project and why a sharp analytical distinction between state and capital is problematic. There is a tacit pluralism in Tim’s approach, which does not sit easily with his general political orientation. If instead we treat capitalist states as part of the capitalist system, it is easier to see why “progressive” political leaders would be dazzled by a “new spirit of capitalism” promising social and economic renaissance – and for reasons that have little to do with political pressure from the bourgeoisie.  Of course corporations try to influence governments, but the absence of such lobbying does not mean class power is not central. Class operates in many more-or-less subtle ways.  My argument is that an appreciation of how different classes responded to the burgeoning crises of the 1960s is critical for understanding the ideas and policies of later trailblazers of neoliberalism, so deftly analysed in this important volume.