Streeck – On the Euro

“Yet since 2013, an astonishing number of voices have been heard in favour of a flexible currency regime, one that could enable democratic politics to even out imbalances through less destructive means than internal devaluations. The suggestions made range from a return to national currencies, via the temporary or permanent introduction of parallel currencies, together with capital controls, right through to a Keynesian two-tier currency system.37 No nostalgia for the Deutschmark’ is required to see the urgent need for joint reflection on the reconstruction of the European single currency, in a way that might be beneficial for Europe, democracy and society. In principle, this theme might also emerge from the no less urgent search for a better global monetary system than exists at present – one that has become increasingly dysfunctional since
the definitive dismantling of the Bretton Woods regime in the early 19705, and almost brought the world economy to the point of collapse in 2008.  The failure of the euro is just one development among many to dispel the illusion that arose from the anomalously peaceful conditions of the post-war
period – the conviction that what money is and how it should be managed is a question that has been settled once and for all. Debates about a new global monetary and financial regime are now well overdue. Their task will be to devise a system flexible enough to do justice to the conditions and constraints governing the development of all societies participating in the world economy without encouraging rival devaluations, or the competitive production of moneu or debt, together with the geostrategic contests they foster. Agenda items would include the successor to the dollar as a reserve currency, the empowerment of states and international organizations to set limits to the
free movement of capital, regulation of the havoc caused by the shadow banks and the global creation of money and credit, as well as the introduction affixed but adjustable exchange rates. Such debates could take their cue from the astonishing wealth of ideas about alternative national and supranational monetary regimes produced in the interwar years by such writers as Fisher or Keynes. They would teach us at the very least that money is a constantly developing historical institution that requires continual reshaping, and must be judged as efficient not just in theory but also in its political
function. The future of the European single currency could in that way become a subordinate theme of a worldwide debate about a monetary and credit system for capitalism – perhaps even for a post-capitalist order of the twenty-first century. 
Or not, as the case may be. Now more than ever there is a grotesque gap between capitalisms intensifying reproduction problems and the collective energy needed to resolve them – affecting not just the necessary repairs to the monetary system, but also regulation of the exploitation oflabour-power and the environment. This may mean that there is no guarantee that the people who have been so kind as to present us with the euro will be able to protect us
from its consequences, or will even make a serious attempt to do so. The sorcerer s apprentices will be unable to let go of the broom with which they aimed to cleanse Europe of its pre-modern social and anti-capitalist foibles, for the sake of a neoliberal transformation of its capitalism. The most plausible scenario for the Europe of the near and not-so-near future is one of growing economic disparities – and of increasing political and cultural hostility between its peoples, as they find themselves flanked by technocratic attempts to undermine democracy on the one side, and the rise of new nationalist parties on the other. These will seize the opportunity to declare themselves the authentic champions of the growing number of so-called losers of modernization, who feel they have been abandoned by a social democracy that has embraced the market and globalization. Furthermore, this world, which lives under the constant threat of possible repetitions of 2oo8, will be especially uncomfortable for the Germans, who for the sake of the euro will find themselves having to survive without the ‘Europe to which they had once looked to provide them with a safe dwelling place, surrounded by well-disposed neighbours.”
Wolfgang Streeck, How Will Capitalism End? Verso, 2016


Streeck – Why Capitalism needs counter movements

“Capitalism, that is to say, is indeed always embedded in that it takes place in a society, subject to social constraints and opportunities. Also, capitalism in an important sense depends on remaining so embedded as it thrives on the rule of law, mutual trust, normative coordination and institutionalized cooperation, creative intelligence and the like. Nevertheless, and at the same time, capitalist actors always struggle to escape from their social containment and free themselves from obligations and controls. Ideas of solidarity and
institutions of social regulation are as a result at a permanent risk of erosion, with capitalist patterns of action spreading like cancer in the body social even though capitalism as such, pure and simple and liberated from social constraints, cannot exist. In this sense capitalism feeds parasitically on the society that it inhabits or befalls, with its expansion ultimately amounting to its self-destruction unless checked by social and political opposition.
Sometimes, as in the neoliberal era, the capitalist advance may capture the very politics that should contain it for its own good, and turn it into a vehicle of its own self-destructive progress; this, I believe, is what Polanyi meant when he described the expansion of ‘market society’ as a ‘frivolous experiment’ of states and governments.”
Wolfgang Streeck – How Will Capitalism End? (2016)

Werther, Goethe, 1774.

“The fools, who do not understand that actual rank does not matter at all and that he who occupies the top very rarely plays the chief role. How often a king is ruled by a minister; how many ministers by their secretaries! And who is then the first? I believe it is the man who knows his fellowmen at a glance and has sufficient power or shrewdness to harness their forces and passions to the execution of his plans.”

Immanuel Wallerstein on surplus capital

“The key to hiding this central mechanism lay in the very structure of the capitalist world-economy, the seeming separation in the capitalist world-system of the economic arena (a world-wide social division of labour with integrated production processes all operating for the endless accumulation of capital) and the political arena (consisting ostensibly of separate sovereign states, each with autonomous responsibility for political decisions within its jurisdiction, and each disposing of armed forces to sustain its authority). In the real world of historical capitalism, almost all commodity chains of any importance have traversed these state frontiers. This is not a recent innovation. It has been true from the very beginning of historical capitalism. Moreover, the transnationality of commodify chains is as descriptively true of the sixteenth-century capitalist world as of the twentieth-century. 

How did this unequal exchange work? Starting with any real differential in the market, occurring because of either the (temporary) scarcity of a complex production process, or artificial scarcities created manu militan, commodities moved between zones in such a way that the area with the less ‘scarce
item ‘sold’ its items to the other area at a price that incarnated more real input (cost) than an equally-priced item moving in the opposite direction. What really happened is that there was a transfer of part of the total profit (or surplus) being produced from one zone to another. Such a relationship is that of coreness-peripherality. By extension, we can call the losing zone, a ‘periphery’ and the gaining zone a ‘core’. These names in fact reflect the geographical structure of the economic flows.  

We findunmediately several mechanisms that historically have increased the disparity. Whenever a ‘vertical integrationof any two links on a commodity chain occurred, it was possible to shift an even larger segment of the total surplus towards the core than had previously been possible. Also, the shift of surplus towards the core concentrated capital there and made available disproportionate funds for further mechanization, both allowing producers in core zones to gain additional competitive advantages in existing products and permitting them to create ever new rare products with which to renew theprocess.  The concentration of capital in core zones created both the fiscal base and the political motivation to create relatively strong state-machineries, among whose many capacities was that of ensuring that the state machineries of peripheral zones became or remained relatively weaker. They could therebypressure these state-structures to accept, even promote, greater specialization in their jurisdiction in tasks lower down the.,hlrerarchy ,of commodity chains, utilizing lower-paid work-forces and creating (reinforcing) the relevant houTehoİd structures to permit such work-forces to survive. Thus did
historical capitalism actually create the so-called historical level of wages which have become so dramatically divergent in different zones of the world-system.”

Historical Capitalism, Immanuel Wallerstein, pg. 31-32, 2011, Verso.

Housing in Switzerland

From Swiss Watching, by Diccon Bewes.

“Ironically, the recent economic crisis affected the Swiss far less than many G20 members, mainly because the housing market is as stable as the franc. No big booms or crashes because most people rent not buy. Only 35 per cent of Swiss own their own home, a figure that drops to 11 per cent in cities like Bern,25 almost exactly the opposite of the British market. It’s partly a cultural thing – owning property is not the be-all and end-all of life – but it’s also practical, as you need a 20 per cent deposit. Some people rent the same flat all their lives, but that’s seen as a risk-free, sensible option not a waste of money.  

Everyone renting has its advantages. No property ladders mean no snakes, so while you might not make a fortune in houses, you’re unlikely to lose one either. Negative equity, what’s that? Estate agents are not ten a penny on the high streets, newspapers are not full of property ads and television isn’t packed with endless variations ofmakeover, developing or relocation programmes. You have to watch German TV for those. To buy or not to buy is a question the Swiss ask about lots of things but rarely houses. 
The best thing is that roads are not blighted by a forest of For Sale signs. Instead, you can see what look like four anorexic Martian spaceships sitting in vacant plots of land. These giant wooden or metal tripods show the dimensions of any new building, with their height and position corresponding exactly to that of the proposed building. This rule applies  to every construction project in Switzerland, including highrises, which need special Meccano-style pylons tethered with wires to show how tall they will be. It might look odd, but it gives everyone a good idea of what’s planned and a chance to complain if they object. Planning permission not just by committee but by common consent.”

Edward Luttwak on the logic of peace leading to war in late 19th century 

“Peace can be the origin of war in different ways, even though peace is only a negative abstraction that cannot contain any s elf-destructive phenomenon, as war contains the destruction that eventually destroys war itself. Nevertheless, the condition of peace, that is the absence of war, can create the precondition of war, for example by dissuading the peaceful
from maintaining persuasive defenses, encouraging potential aggressors to plan war. Often in history, peace led to war because its conditions allowed demographic, cultural, economic, and social changes that upset the balance of strength that had previously assured peace. Having no substance of its own, the state of peace cannot disturb anything, but it does indifferently favor the diverging evolution of human capacities and inentalities, without regard to the factors that inhibited war. It was thus that
the famously pacific Germans came to regard themselves as a warrior nation by 1870, in unfortunate symmetry with the French, who had yet
to outgrow their martial self-image. In the crisis of that year, Bismarck’s German government wanted war in confidence of victory, while the French government of Napoleon III could not avoid war, because it could not admit that Germany had become the stronger power.”

Edward Luttwak, Strategy: The Logic of Peace and War, Harvard University Press, 2001, pg 67.

Tony Judt and the liberation of the will

“But at least war, like racism, offers clear moral choices. Even today, most people know what they think about military action or racial prejudice. But in the arena of economic policy, the citizens of today s democracies have learned altogether too much modesty. We have been advised that these are matters for experts: that economics and its policy implications are far beyond the understanding of the common man or woman—a point of view forced by the increasingly arcane and mathematical language of the discipline. 

Not many ‘lay people’ are likely to challenge the Chancellor of the Exchequer, the Secretary of the Treasury or their expert advisors in such matters. Were they to do so, they would be told—much as a medieval priest might have advised his flock—that these are questions with which they need not concern themselves. The liturgy must be chanted in an obscure tongue, accessible only to the initiated. For everyone else, faith will suffice. 
But faith has not sufficed. The emperors of economic policy in Britain and the US, not to mention their acolytes and admirers everywhere from Tallinn to Tbilisi, are naked. However, since most observers have long shared their sartorial preferences, they are ill-placed to object. We need to re-learn how to criticize those who govern us. But in order to do so with credibility we have to liberate ourselves from the circle of conformity into which we, like they, are trapped. 
Liberation is an act of the will. We cannot hope to reconstruct our dilapidated public conversation—no less than our crumbling physical infrastructure—unless we become sufficiently angry at our present condition.”
Tony Judt, Ill Fares the Land, Penguin, 2010.