Taking Back Control? – States and State Systems After Globalism by Wolfgang Streeck

Book Review by Mathew D. Rose

It is difficult to believe that it is just over thirty years since the establishment of the unipolar world under the US, the end of history, and the victory of global neo-liberal capitalism began. Those three decades have resulted in a wave of death and destruction under the “New World Order”, the abrogation of the rule of international law replaced by a USA determined “Rules based order”, and the systematic undermining of democracy worldwide. As a result we are today witnessing a political, economic, and moral crisis throughout much of the world, especially in the West,.

Wolfgang Streeck in his book “Taking Back Control? – States and State Systems After Globalism” that has recently appeared in Verso in English (it first appeared in 2021 in German, but the English version has been updated) analyses this period leading to the collapse of neo-liberalism and hyperglobalism, a process that has since the book was published, received a massive fillip with the election of Donald Trump as president of the United States. For Streeck this is a double crisis: of capital and democracy.

Streeck goes on to examine what could be an adequate responses to fill the vacuum that is being created, the potential of smaller nation states with strong sovereignty and democratic structures as a possible alternative to the current failed reign of the United States and supranational institutions.

Streeck concentrates his focus of the European Union and its political and financial hegemon Germany, a smaller version of the US led universal New World Order. Under a centralised bureaucratic, technocratic, marketocratic diktat we are witnessing the transition of the once celebrated ever closer, best of all worlds, supranational European Union into an economically declining, increasingly anti-democratic, and warmongering entity. The myth of the European Union is being inverted into that which it claimed its mission was to prevent.

The EU’s failure was that it underestimated that many Europeans were not willing to sacrifice their democracies and cultures at the altar of a free market as envisioned by the EU authoritarian liberal political elite and technocrats. This was already obvious with the ignominious defeat of the EU constitution. The democracy free legerdemain replacement of the same by the Treaty of Lisbon was the response of the EU political class. The turning point was probably Brexit in 2020, a clear articulation of this discontent with the EU’s jettisoning of national sovereignty and its basis: democracy. It also foresaw the termination of the postwar promise of a fair distribution of wealth, replacing this with the flow of wealth upwards to the newly created billionaire, soon to be trillionaire, class. As we know from Hayek and the globalists, the nation state and democracy are the anathema of capital. These were to be replaced by supranational institutions created by the US such as the IMF, World Bank, WTO, and of course the EU, debarring nation states as masters of their economies and finance.

With NATO the US has furthermore usurped the European nation states of control over their foreign affairs and defence. As Streeck so aptly points out, the EU has become the administrator of NATO policies in the European political and economic theatre. The silent acceptance of the US blowing up the Nordstream pipeline was the precursor of a new US militaristic era and the EU’s role in it. Trump’s demand that Denmark cede Greenland to the US as “necessary to US democracy” and his expectation that the EU foot the bill for NATO’s defeat in Ukraine has made clear to all the transition that has occurred. All of this of course has been at the expense of the people living within the EU.

It is interesting to note that while most Europeans are increasingly turning to their national governments to alleviate the never ending economic crisis and democratic deterioration that is effecting their existence, the EU political class – the left, centre, right, and far-right in Brussels is increasingly closing ranks to seek their political salvation. All are fleeing into that bastion of neo-liberalism, where they dogmatically celebrate their defunct economic ideology and NATO subservience. Gone is the postwar coalition of a progressive middle and working class. This has been replaced by a self-proclaimed meritocracy and expertocracy devoid of any democratic obligations due to its globalist neo-liberal mission. The people of the EU, according to Streeck, are being denied “its claim to equal civic competence and dignity” and knows it. It is in this stalemate that we currently find ourselves.

This “dual crisis” of capitalism and democracy is what Streeck analyses in his book and then leads to his search for a resolution. His thesis is that “globalist-capitalist Großstaaterei (large state format) of whatever kind cannot be governed democratically”. To secure its power it would need to create a “depoliticised technocratic social order”, a “marketocracy” as Streeck calls it. However the larger its size, the smaller the room for democracy and the greater its internal heterogeneity resulting in tension and conflict. The failure of global neo-liberalism has now freed the animal instincts of democracy, the most feared enemy of capitalism.

This failure Streeck attributes to three factors: the loss of faith in capitalism offering a better future, emancipating the capitalist economy from democratic influence, and the failure to convince people to sacrifice their national sovereignty for an international unity. The postwar settlement where governments mediated between workers and capital has been replaced by a capitalist reign of greed and fear.

The transition away from the US unipolar world having been expedited by America’s loss of any legal or moral credibility has advanced rapidly since Streeck’s original version appeared in German. BRICs, Israel’s genocide (supported by the US and EU hegemon Germany) in Gaza (“Auschwitz live in Tik Tok” as Gabor Mate´fittingly describes it), and NATO’s defeat in Ukraine are just a few of the latest developments that are rapidly accelerating this process. Now there is Trump.

Globalism and neo-liberalism could only succeed if democracy was replaced by global governance. As already adopted by the EU this would allow for freedom from state interventionism, guaranteeing the free movement of goods, persons, services, and capital within the EU. The national state has been reduced to executor and guarantor of these policies, otherwise managing local matters, national folklore, and if in NATO, following commands of the US.

In the West this resulted in an identikit profile of the authoritarian liberal political parties, fulfilling Margaret Thatchers’s prophesy of “There is no alternative”, which has since also been accepted by European far-right parties, but also so-called far-left parties such as Syriza. Citizens withdrew from the political process as they saw no chance of influencing it. Instead they have turned to spontaneous uprisings as we have seen with the “Yellow Vests” in France and more recently by farmers throughout Europe. This has been reversed since the Great Financial Crisis of 2008, with voters returning to the ballot boxes, but they are selecting new ‘populist’ parties opposed to the authoritarian neo-liberal dictate – at least initially.

The EU has the problem that under the domination of Germany it has been manoeuvred itself into a cast iron political and economic corset – into Hayek’s “isonomy, meaning identical market-liberal laws in all states included in a supranational state system”, as Streeck points out. Since 2008, which has resulted in the decline of this system, the EU it has resorted to what is a very German solution: cheating and lying, while ignoring its own laws and regulations. For member states that deviate from the German/EU technocrat’s common values however, penalties and the withholding of fiscal handouts are imposed.

For Streeck this has resulted in the destruction of democracy, the political battlefield for the distribution of wealth in a nation, being replaced by “a wonderland of post-industrial, and post materialist, indeed post-political and post-capitalist politics, driven by values instead of power, home to citizens rather than classes, with problems instead of conflicts, and pragmatic solutions instead of rigid ideologies.” In this crisis the authoritarian liberal political class appears to be resorting to militarisation of the EU, which is being driven by delusional claims of Russian intentions of invading Europe.

Parallel to his deconstruction of the EU and the failed globalist and neo-liberal order, Streeck considers what the alternatives for states and state systems could be. Besides the abandonment of US established supra-national institutions this includes the re-establishment of national sovereignty and prioritising regional planning. Interestingly this was something that had already been foreseen in 1945 by Karl Polanyi in an article entitled “Universal Capitalism or Regional Planning?”. Polanyi had assumed that the end of the gold standard and the financial crises of the interwar years marked the termination of economic and financial universalism. He surmised this would be followed by economic units of “limited extent”. Each nation would be autonomous and unique, but the institutions with which they dealt with foreign trade would be “practically identical”. Of course Streeck turns to Keynes as an architect for such a system.

This is the starting point in Streeck’s search for the concept of a small state. He surprisingly then cites to the English historian Edward Gibbon’s “The History of the Decline and Fall of the Roman Empire” from 1776. Gibbon attributed this event to an empire that was simply too large to govern and was constantly battling to avoid its own disintegration. Streeck marshals innumerable examples of the past three decades of similar failures that exposed the looming disintegration we are witnessing in the New World Order and evolution of a multipolar world.

The terrain that Streeck covers – four years ago! – is increasingly entering the mainstream as became evident in the reaction to Branko Milanovic´’s recent article “How the mainstream abandoned universal economic principles”. Streeck’s book has already done much of the heavy lifting for the necessary political and economic discussion that lies before us.

Taking Back Control? – States and State Systems After Globalism by Wolfgang Streeck

Translated by Ben Fowkes and Joshua Rahtz

Publisher: Verso

ISBN: 9781839767296

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