The horizon is not so far as we can see, but as far as we can imagine

Review of Wolfgang Streeck’s “How Will Capitalism End?”, by Marku52

By Marku52

Streeck’s book “How will Capitalism End” is a collection of essays he wrote for the New Left Review almost a decade ago. It seems very prescient today. Much of his points are shared in the introduction, and first few chapters, and some of the points get repeated. Later chapters involve German politics, and are less useful to us. I find his idea that without corrective dialectics, capitalism will die of its own excesses, persuasive and I will go into more details in this review.

“The fact that capitalism has, until now, managed to outlive all predictions of its impending death, need not mean that it will forever be able to do so; there is no inductive proof here, and we cannot rule out the possibility that, next time, whatever cavalry capitalism may require for its rescue may fail to show up.”

For a while now, I’ve come to believe that capitalism must end. How can a system continue with such internal faults as:

  • There being no present economic value in staving off an apocalyptic disaster if it is far in the future.

  • Debt grows faster than income, which means eventually one entity owns everything. In the biblical past, debt “jubilees” reset the debt clock. But to Calvinistic capitalism, that is immoral. So capitalism has financial crises, revolutions, and periodic busts instead

  • Rewarding the search for “externalities”, which means profiting by moving a cost somewhere else-usually the ecosystem or society. An example of this would be the mine-tailings from a mine long closed, profits taken, destroying a fishery. But it also applies to party house AirBnBs that raise the rents for locals and disquiet a neighborhood. Or those Bird scooters that end up piled up all over the sidewalks.

Streeck posits that capitalism and democracy have an oil and water relationship, in that democracy favors a “moral justice” approach (“Everyone should have housing and health care”) and capitalism responds with “economic justice” (“You can have all of that you can afford”). Now that capitalism-and in particular extreme neoliberalism has vanquished all opposition. you would think that capitalism is secure. Instead Streeck proposes that this makes neoliberal capitalism’s status even more precarious.

Streeck’s hypothesis is straightforward. Capitalism requires a dialectic opposing force to save it from its own self destruction. In the past such forces existed -unions, functioning democracy, and public outcry. Now that all these forces are vanquished, it would seem that neoliberal capitalism is here to stay.

“The social world of the post-capitalist interregnum, in the wake of neoliberal capitalism having cleared away states, governments, borders, trade unions and other moderating forces, can at any time be hit by disaster; for example, bubbles imploding or violence penetrating from a collapsing periphery into the centre. With individuals deprived of collective defenses and left to their own devices, what remains of a social order hinges on the motivation of individuals to cooperate with other individuals on an ad hoc basis, driven by fear and greed and by elementary interests in individual survival.”

Streeck says that even without a competing narrative, capitalism will fall simply because its stops working.

In past times excesses of capitalism have been countered by opposing forces, leading to compromises like the New Deal. Capitalism’s destructive tendencies were reined in to some extent, and capitalism was “saved from itself”. However, Streeck points out that this was only possible in an era of high enough growth that both the owners of capital and the moral justice society could be content with their share. Once stagflation hit in the 1970s, there was not enough “pie” to go around, and capital went to war with labor.

Capital won, unquestionably. Unions crushed, regulatory agencies corrupted or co-opted, global capital strode the globe looking for arbitrage opportunities and labor took what abuse it had to.

“Socialism and trade unionism, by putting a brake on commodification, prevented capitalism from destroying its non-capitalist foundations – trust, good faith, altruism, solidarity within families and communities, and the like.”

“Capitalism without opposition is left to its own devices, which do not include self-restraint.”

Why do our “leaders” seem so incompetent and clueless?

“After a certain amount of time, it may no longer be possible to stop the rot: expectations of what politics can do may have eroded too far, and the civic skills and organizational structures needed to develop effective public demand may have atrophied beyond redemption, while the political personnel themselves may have adapted entirely to specializing in the management of appearances rather than the representation of some version, however biased, of the public interest.”

It seems governing has become performative, rather than actual. I’d describe a democratic government as one that implements policies voters have indicated they want. However, I’d argue, once neoliberalism has infested the government, that function changes. The government serves to protect the “Sacred Market” from interference by the desires of the voters. Look at FDR’s Social Security VS Obama’s Affordable Care Act (LOL, what a misnaming!)

Social Security was a simple act of a few pages, implemented by a competent civil service. The ACA was negotiated over a year of wandering farther and farther away from “Affordable” or “Care” (advocates of Single Payer were excluded) and ended up being over 300 pages. Nobody knew what it did, or how it worked. But it created yet another Market and derailed any other reform of health care for decades while insuring the profitability of the entirely parasitic health insurance industry. Responding to the needs of the voters? No. Creating yet another market? Check.

Another damning case was when Jen Psaki, Biden’s spokeshole, was asked why, if people were finding it hard to get Rapid Covid Tests, the government didn’t just give them out. She was speechless. “The government would just Give Them Away?”

The neoliberal rot on full display. That program was one of the few effective Covid policies that Biden implemented.

Look at the government response to Covid in the western countries. Initially, public health measures were taken: quarantines, travel bans, shutdown pay, mandatory masking. This lasted a short while until the neoliberals regained control, and those efforts are unlikely to be seen again. (“Won’t someone think of the Economy!?”)

When neoliberals infest your government, their sole qualification is that they will look good in front of a camera and ensure that the government will never interfere with the operation of the Sacred Market. Hence a typical election will ask you to choose between two neoliberals with different color Culture War coats…..

Streeck posits that capitalism confronts five challenges that it cannot solve by itself.

The capitalist system is at present stricken with at least five worsening disorders for which no cure is at hand: declining growth, oligarchy, starvation of the public sphere, corruption and international anarchy.

Declining growth has been apparent since the first oil crisis, way back in the 70’s. Capitalism depends on growth to be able to pay back the debt that it creates. But without new fields to plunder, that growth is impossible (Heinberg calls this “Peak Everything”) Much of the alleged “growth” in the past 30 years is just counting fictitious digits in the ever more hypothecated financial economy, completely divorced from real production.

Inequality (oligarchy) is one of the basic productions of capitalism. It can’t and won’t solve this by itself, and all corrective forces, like government redistribution, have been banished.

Starvation of the public sphere is everywhere evident. Particularly in the US, where some municipalities no longer have safe drinking water. Potholes, libraries closing, public heath abandoned. There is no money to be made in the public works, so they either aren’t performed or sold off and performed poorly.

Ah, corruption……Like the entire US political electoral finance system. Or Big Pharma drug testing. But also finance itself.

“Finance is an ‘industry’ where innovation is hard to distinguish from rule-bending or rule-breaking; where the pay-offs from semi-legal and illegal activities are particularly high; where the gradient in expertise and pay between firms and regulatory authorities is extreme;”

Capitalism grows by creating markets where there never was one before. Why can’t I make a market in cocaine, human organs, or children? And since capitalism owns the government, many of these immoral “markets” do get established, or ignored where they do appear.

“Capitalism’s moral decline may have to do with its economic decline, the struggle for the last remaining profit opportunities becoming uglier by the day and turning into asset-stripping on a truly gigantic scale.”

In the US, Pirate, er, Private, Equity is now buying up veterinary offices and cosmetologists. Just proving that there is almost no interaction left that does not have Wall Street’s corrupt hand in the middle of it.

International anarchy was barely on the horizon when Streeck wrote back around 2014. International capitalism requires a hegemon to provide a stable currency for trade, to police the trade ways for safe transport, and an enforcer (like the IMF) to ensure national debts get paid. You may have noticed that this is all very much up in the air these days. The US’ poorly conceived war in Ukraine has upended all this. The US basically stole $300 billion of Russian assets, and attempted to interfere with all their trade. The world is now dividing into blocks affiliated with one side or the other, and alternative trade regimes are being put into place. The US can no longer be viewed as a safe haven for assets, when one’s asset can be confiscated at the whim of the hegemon.

“Before capitalism will go to hell, then, it will for the foreseeable future hang in limbo, dead or about to die from an overdose of itself but still very much around, as nobody will have the power to move its decaying body out of the way.”

So, to bring up Stein’s Law “If a thing can’t continue, it won’t…..”


Covid Variants Continue Immune, Vaccine and Treatment Resistance Evolution


Open Thread


  1. Willy

    But leftism always leads to Venezuela, Cuba, or Soviet gulags, they say. Norway and mixed economies I reply. So why do you support Putin then? No, I tried to explain Putin’s viewpoint while also criticizing his invasion. Ha! I’ve always said that leftist views are inconsistent and therefore irrational……

    I try to keep it simple for the ignorant: If capitalism is a competitive battleground, then it will inevitably favor sociopathy over ethicality and the unethical winners will always try to coopt Rule of Law to maintain their superior position. I’ll let others make it complex for the rest.

    That’s why I like repeating memetic phrases like “late stage capitalism”. It plants a seed for whenever an ignorant falls down economically and asks “Why me?” Hopefully, the ones who don’t fall down yet again into some ideological rabbit hole will then be moved to find information a bit more objective.

    Unfortunately big media typically won’t tell them, and neither will many small media sources which try to profit from the angst (obvious example Alex Jones who rails against “the globalists” while selling “supplements” as a solution). The sociopaths running big business have made it so lucrative for anybody carrying their water, that political elites will lie and use whatever psycho-social technique they can to keep the ignorant confused.

  2. Art

    Capitalism is just a tool. It can, and has been, misapplied and over-applied. This is like figuring out using a horse to pull a plow or draw a wagon is much more effective then using human power alone but then overextending the lesson and putting the horse in charge of the farm.

    Capitalism is just optimization for profits and investors. Yes there are libraries of books explaining the nuance and application, and another set of libraries just for apologetics. But these flow from the basic principle.

    Nations need to get beyond thinking of economic systems as either/or or lifetime commitments. We can mix and match. We can emphasize one and downplay another without committing to only one or giving up on the other.

    Capitalism is just a system of optimizations. There are diminishing returns and perverse incentives, and results, if the paradigm is pushed too far. Once the low hanging fruit has been picked and you start running up against the laws of physics, and human decency, it is time to take your foot off the gas.

    Capitalism, as an economic tool, and analytical method, is just one of many tools. We need to learn how to observe situations and learn when any particular tool is appropriate.

    Healthcare seems to be an obvious place where the profit motive is largely counterproductive. IMHO most of what is wrong with healthcare in the US comes down to the system being optimized for profit. As opposed to say … I don’t know … getting people who need medical care treatment.

    No, absolutely not, capitalism isn’t going anywhere. Neither is socialism, or communism, or libertarianism. They are ideas and operating principles, and as such, they are essentially indestructible.

  3. StewartM

    Excellent article.

    The deviation from capitalism-as-theory (as justified by libertarians and conservatives) vs capitalism-as-practiced is that by economic theory, profits are plowed back into creating tangible improvements that eventually (supposedly) make peoples’ lives better. They are invested to create real, tangible, products and services.

    That has increasingly NOT been the case since the 1980s, and maybe starting before then. Instead, firms that actually do make real, tangible, useful things or offer real, tangible, and useful services were gutted and cannibalized for additional paper profits. Why do the hard work of devising and building a better mousetrap when you can simply shift paper–buy back stocks, acquire the competition to achieve a near monopoly, and/or bribe the government to allow your IP to continue to stand long past its termination date, all which will force consumers to hand over ever-larger portions of their diminishing incomes to you? Libertarians/conservatives seem to forget that capitalists hate the free market and want to get rid of it, capitalism has not fealty to free markets but only fealty to maximizing profit.

  4. marku52

    “Once the low hanging fruit has been picked and you start running up against the laws of physics, and human decency, it is time to take your foot off the gas. ”

    And what if you don’t?
    There is nothing left to make you. That’s kind of the point of the book

  5. Art

    “And what if you don’t?
    There is nothing left to make you. That’s kind of the point of the book”

    Pretty much regardless of system, what happens when you push it beyond its natural limits? Undesired results, consequences, and waste products are produced. Some entirely predictable, some not so much. Avoid sleep long enough and you go nuts. Your body breaks down. Some with nuclear reactors, and weightlifters, and economic systems. Every adult should intuitively know this principle.

    I am sure, I would hope, the writer goes into much more depth and detail, but the point is obvious. Nothing against this book. The writing and sales are a nice pairing. I have a book on the care and feeding of three-phase motors that covers the same material, just twice removed. Several chapters on bearing life analysis using a contact mike and the finer points of core hysteresis but the basic point is always the same: systems have inherent limits. Asking too much without offsetting support and things break.

    It isn’t as if capitalism is the only choice. IMO it isn’t capitalism that is the problem. The problem is a buildup of waste product. The system is constipated. Capital has been allowed to build up and concentrate to toxic levels. It has put the entire system at risk. Eliminate the top one thousand billionaires, including Putin and Musk, and all sorts of wider problems go away. Lance the boil.

    Consider a game of Monopoly. What is the end of the game. If you said that one person owns everything you get half credit. That isn’t the actual end. The game ends where the next game starts: with the money sorted in the box. After one person owns everything they have to give it all up to start the next game. The spice, er … money must flow.

    How you accomplish that, taxes are one option, torches and pitchforks another, is above my pay grade but that is what needs to happen. China, France and Russia have handled this narrow issue quite effectively in their past. No mystery why we seem to be stymied.

  6. VietnamVet

    This is a good article on the effects of the triumph of neo-classical political economics. Basically, “making a profit outweighs human life”.

    The one thing it avoids is the seizure of mass media by corporations and the spewing of “big lie” propaganda that makes its own reality interspaced with weather reports. The internet is schizophrenic – a bastion of lies and misinformation dotted with the truth in a few web sites like this one. It seems that most would say that the West is the guardian of liberal democracy when in truth it is the exact opposite. Since the invasion of Panama in 1989-90, the Western Empire has conducted a series of armed regime change campaigns that continue to this day.

    A dialectic debate perhaps would be possible if there was diplomacy. But WWIII is already underway between Ukraine/NATO and the Russian Federation and no one is talking to the other; except the militaries “very sporadically”, since Boris Johnson scuttled an April Armistice. Without dealing with the truth and reality; for example, who exactly destroyed three of the four natural gas pipelines from Russia that powers German industry, this world war will end exactly the same way as the last one. The conflict will keep escalating until one side crosses the nuclear threshold by using tactical nuclear weapons. Then most likely, one or the other will fire its strategic ICBMs to avoid losing them intentionally in a first strike or by a mistake in the fog of war. Surviving land based and submarine ballistic missiles will finish the bouncing of the rubble and the spreading of radiation, smoke, and dust that ends human civilization including the oldest, China.

  7. bruce wilder

    I object in principle to reifying the emergent global political economic system as an ill-defined abstraction. It encourages a political discourse more conservative of intellectual conceit than productive of insight, never mind productive institution-building. That can result in no more than a demur to Streek’s acute observations.

    If politics is the polity trying to “think”, it should be said that the social and economic forces that carry societies and civilizations in their collective choices past the edge of very visible cliffs, seem to consist of unconscious instincts driving behavior. I was trained as an economist and am, frankly, as much a master of the rhetoric of neoliberalism as anyone manning the political and policy machinery as we hurtle forward righteous in policy intentions and resistant to actual reason. Neoliberalism is a miracle, really, as a coordinating mentality. Not an ideology anyone advocating in its framework would voluntarily “die for” as Ian has argued is required. But, quite effective as a disguise, and also in disarming those who might want to organize politically to oppose the designs and outcomes of neoliberalism. Neoliberalism confounds its potential opponents, diverting their energy and analyses. That there is a right and left neoliberalism means a centrist consensus of furious disagreement with no alternative allowed.

    I have watched the spectacle of U.K. politics reach a high point of melodrama as the Tory Party shuffles thru Chancellors with strangely foreign names, given the Tory electorate’s reputation, all with the apparent intent to make Keir Starmer, the leader of the Parliamentary Labour Party, the head of a government of authoritarian repression. I say “ intent” with no very specific idea of whose intent. Surely, the partisan Tory politicians fronting this game have little idea of such an intent, fond though they be of authoritarian ideas, I am sure they prefer to act as their own chefs in the kitchen. But, it is the game — indeed a long game played over several years — which put Corbyn and with him any turn to popular enthusiasm for a “left” agenda of reform out of reach — and elevated Starmer as Plan B.

    Does even Starmer, willing tool that he is, even know what is going on?

    Is this “intent” casting long shadows over recent history, lodge in some “Deep State” establishment? The role of the Governor of the Bank of England in making short work of Liz Truss and her Chancellor of several days indicates it might. The coordination of this afternoon of the long knives is not like the clubby consensus of neoliberal eurocrats. But, it is interesting for relying on the English electorate to do their duty to legitimize the chosen successor to a short-lived series of Tory governments few want, even among conservatives.

    This smarmy business is what we get instead of reform in policy when no opposition on policy is allowed and the electorate is rarely consulted and never respected for what little that electorate can do to make something from the “choices” allowed them.

  8. marku52

    “This smarmy business is what we get instead of reform in policy when no opposition on policy is allowed and the electorate is rarely consulted and never respected for what little that electorate can do to make something from the “choices” allowed them.”

    Yes, once neoliberalism has infected the political parties, you don’t get any meaningful choice. Just some culture war noise. “Do you want Red or Blue Austerity and Elite Looting?”

  9. somecomputerguy

    I would only argue with the characterization of the end of the New Deal. We had stupendous growth at the New Deal’s height. Simultaneously, foreign trade was only 5% of GNP.
    All that growth, all that prosperity was created here, by domestic policy, by the New Deal.
    The oil shock, and Johnson’s overheating of the economy over Vietnam created stagflation. But as a crisis, I would take stagflation over what we have any day.

    That growth was created by redistribution and high taxes.
    People who never had money did, and used it to make sure their kids grew up healthier, and better educated, and used it to get higher degrees, and invented new products, and started small businesses. That was how the economy grew. There was plenty more redistributing that could have been done.
    A 98% marginal rate meant that you could become a billionaire, but you could only keep 1.6 million or so. So why bother? Instead, since you couldn’t keep it, you might as well let your firm spend it on research or worker pay, or find a worthy cause to contribute to.

    Neither could you gratify a thirst for control by establishing a monopoly. It was just flat out illegal. That is why 50% of veterans were able start businesses.

    If capitalism cares about growth why does it hate redistribution?

  10. Trinity

    “If capitalism cares about growth why does it hate redistribution?”

    Because redistribution minimizes their power. They need that power to do exactly what they are doing today: purchasing politicians to get the policy they need that prevents redistribution, reduces their taxes, eliminates regulation, etc.

  11. Jim Harmon

    sc guy,

    Outstanding summary of what we had and how and why it worked so well for us. What damn fools we were for letting them take it all away.

  12. capelin

    Is what we have even capitalism anymore, or just a front brand for wide-open looting and money-printing?

    It has very little resemblance to produce-a-product-or-service, sell it at a profit (to reward one for one’s time, effort, idea, etc). Certainly, money (capital) allows for easier accumulation of assets and thus inequality, as opposed to say, adding to your cattle herd. But there’s still some checks and balances -“wha? I ain’t payin’ that much! – says the invisible hand.

    Seems that hand has been lopped off awhile ago.

  13. Harry Haller

    Thank you marku52 for an excellent review and summary of a very important book.

    What people like Art who say “Capitalism isn’t the problem” don’t want to understand is that capitalism’s ability to reform and adapt to dynamic economic and political realities is terminally constrained by its rather massive ideological blind spots. The New Deal, the European welfare state and other successful attempts to temper capitalism’s most destructive instincts were politically imposed on it from forces situated outside of its ideological framework. Without an external opposition to keep it in check, capitalism’s intrinsic inconsistencies predispose it towards cannibalism and slow self-destruction.

    Western “democratic” capitalism is still sold by its proponents as a system that is aligned with human nature and in effect humanity’s “natural” method of economic organization and distribution and thus not an ideology at all. This delusion makes it especially prone to ideological inflexibility and sclerosis. In contrast when post-Mao China realized that its socioeconomic system was brittle and inflexible and would need to be seriously reformed for it to survive into the future, and deliver the development and prosperity its people were promised, it took steps to do just that.

    But western capitalism eschews introspection and lacks a similar internal corrective mechanism that would allow it to reinvent itself when needed. It is stuck in an ideological trap of its own making that it can’t overcome. Even as its internal contradictions intensify and the system’s limits and shortcomings manifest themselves it cannot do anything except double down on denying or externalizing its problems. So it lurches from crisis to crisis in a downward spiral that will eventually lead to its collapse.

    Without a coherent ideological opposition that can articulate a popular alternative to capitalism, Streeck contends, mass discontent as conditions worsen can only amount to impotent expressions of anger and dissatisfaction. The collapse phase could take a long time and as the system’s breakdown intensifies western capitalist democracies will become increasingly chaotic and unpredictable. The state will respond to citizen discontent with increasingly repressive and authoritarian measures and aggressively seek external and internal scapegoats onto which to project the system’s failings.

    Sneer at Streeck all you like but he called it correctly and everything he predicted is playing out right now in real time.

  14. Ian Welsh

    I’ll note that Streeck isnt the first to say that a countervailing force is needed or that capitalism had gutted democracy’s ability to act as that countervailing force.

  15. marku52

    Ian, Where did you see that? Is it in the Post Marxian tradition?

  16. Ian Welsh

    Can’t find references at the moment, but I know I’ve read it many times before in the sociological literature, presumably including Marxists. It’s also a common assertion that FDR saved capitalism from itself.

  17. different clue

    I can’t remember the exact quote, but FDR once said something like this . . . ” The rich people who condemn me are like the drowning man who berates the lifeguard who saved him for not saving his hat as well.”

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