Dr. Wolfgang Streeck: “We Are Being Governed by An Oligarchy”

8 June 2020 — American Herald Tribune

Wolfgang Streeck 412a0

Mohsen Abdelmoumen: Can Europe survive the Covid-19 crisis?

Dr. Wolfgang Streeck: It depends on what you mean by “survive“. Complex societies don‘t “die“; something always remains—the question is: what? If you mean the European Union or the European Monetary Union, will they still exist when the virus has left? Of course. If you ask if the virus is undermining them, I think one must not forget that both EU and EMU were already undermining themselves before the pandemic; remember Brexit? Also remember the tensions between Germany and the Mediterranean countries, and between Germany in particular and the new, peripheral member states in the East. The pandemic may or may not have accelerated the decay of “Europe“ as an international organization, or institution; but apart from this and more importantly, the virus has not derailed older tendencies of development that are too deeply rooted politically and economically to be undone by a tiny virus.

How do you explain the rise of the extreme right and the fascist and neo-Nazi movements in Europe?

There is an extreme right in all countries, and the same applies to fascist and Neo-Nazi movements. Obviously, their strength has increased in Europe, or better: in most European countries; but not just there. To the extent that they have common origins, I suggest that they are to be sought and found in the enormous loss of economic and cultural security that came with “globalization“, or more precisely “hyperglobalization“: the neoliberal internationalization and de-nationalization of the economy in particular. People felt betrayed by the political parties of the center that had for such a long time organized and dominated political life in capitalist democracies. Most people expect their governments to protect them from, or insure them against, too rapid social and economic change. When they were told in the 1990s that they were now on their own and better adjust to a new reality, people lost confidence in mainstream politics, in particular the center-left of the Third Way. Emphasizing their national citizenship as an entitlement to political protection was a natural response; as a result, many of them fell into the hands of the old Right, which had until then been waiting for new supporters in vain.

In your excellent book “Buying Time: The Delayed Crisis of Democratic Capitalism” you are asking very important questions related to democracy and the seizure of power by financiers at the expense of politicians. This very serious observation raises several questions, namely the usefulness of elections and the usefulness of politicians. Aren’t we facing an oligarchy that rules the countries? Is it not dangerous for the existence of states to give power in the hands of an oligarchic financial minority?

Of course, we are being governed by an oligarchy, if you want to use this concept. I prefer to say that the structural power of those commanding money and the production of money in financialized capitalism exceeds the structural power of those commanding just votes and the production of politics through left parties and trade unions. Yes, this is dangerous for the existence of states, but only to the extent that they are, or aspire to be, democratic states. Then they must mediate between the demands of their creditors, the international financial industry, and the demands of their citizens, which can be extremely difficult. The financial crisis has shown that such mediation is highly precarious and doesn’t always work to everyone’s satisfaction. Today the states are about to yield their right to govern to their central banks, a technocracy if there ever was one, and one shielded completely from electoral pressure. There are good reasons to believe that this, too, will be a precarious arrangement, precisely because political decisions with distributional consequences require some form of political legitimation, of anchoring in the societal community being governed. Legitimation can be replaced with violence, as it was when Chile was forced into neoliberalism. But this is not always feasible. So yes, a lot of discontent, of unrest, of conflict is to be expected, and the fate of Macron, who seems to have lost all respect among the ordinary people in his country is looming everywhere in Europe and the United States.

Hasn’t the transformation of capitalism into financial capitalism allowed it to gain a little time when it is condemned to disappear?

History doesn’t “condemn”; it is not an agent with a will but a process, and a contested one. Yes indeed, financialization was a way to defend capitalist society against its self-undermining tendencies. Time can always be gained, but I do feel that the intervals between crises are becoming shorter. The virus was able to travel so fast because of the dense international integration of societies and economies, and it was so successful in killing people because the countries affected had enjoyed the advantages of globalization (not all citizens but some) but had not made provisions to protect themselves from its disadvantages, or risks. When the virus arrived most had undersized public health systems, not up to the challenge of a worldwide pandemic. Moreover, some had in the meantime developed employment systems that were unable to protect workers from a sudden breakdown of economic activity, like the weakness of public health systems a result of competitive “austerity“, the cutting of labor costs and of public expenditure. In the meantime, debt exploded, both public and private, the balance sheets of central banks grew longer and longer, inequality rose to the level of the early twentieth century, tax evasion flourished, growth never really came back etc. We cannot make exact predictions. But what we can be sure about is that there will be more financial crises, and the next virus may already be looking at the map to determine where it will travel first. What will we do then? Another lockdown, with billions and billions needed for “recovery” and “reconstruction”?

In your works, we observe that you often return to the fundamental antagonism between democracy and capitalism. Why?

Simply because this antagonism is a driving force in den development of modern societies. Democracy, unless it is reduced to liberalism and the rule of law, is egalitarian and, to the extent that it has consequences for social structure, redistributive, or market-correcting. While democracies are governed by the principle of one-man-or-woman-one vote, in capitalism the rule is one-dollar-one-vote. As a result, capitalism is the opposite of egalitarian; markets reward the haves, not the have-nots. Historically capitalism and democracy coexisted more or less peacefully only in the postwar era, after 1945, and then just for three or four decades as long as capitalism was “state-managed”. Before the Second World War the Left was typically afraid of capital ganging up with the old aristocracy, the army, the fascist movements where they existed, to unhinge democratic institutions and replace them with more or less authoritarian rule. Or, vice versa, the capitalists, or the bourgeoisie, however you want to call them, feared the working classes winning a majority in democratic parliaments – mind you there are many more non-capitalists in a capitalist society than capitalists! – and then use the legitimacy of democracy and the law to end private property or curtail its predominance in the political economy (not to mention armed revolution Lenin-style). That antagonism, in modified form, is very much alive today. Where capitalism and democracy exist side by side, keeping capitalist patterns of distribution of life chances intact necessarily requires some sort of neutralization of democracy; here bourgeois politics can and must be creative. Today, under neoliberalism, the neutralization of democracy is achieved by a wide variety of means, importantly the “globalization” of value chains and production systems. The question for the Left is, as it has been throughout the history of modern capitalism, how it can insert its egalitarian bent into the operation of an oligarchic economy whose owners work hard to immunize it to protect them against democratic political intervention.

Interview realized by Mohsen Abdelmoumen

Who is Dr. Wolfgang Streeck?

Dr. Streeck is a German sociologist. He was Director of the Max Planck Institute for the Study of Societies from 1995 to 2014 and is Director Emeritus since 2014. He has taught sociology and industrial relations at the University of Wisconsin – Madison. He has published several books including How Will Capitalism End?; Buying Time The Delayed Crisis of Democratic Capitalism.


Mohsen Abdelmoumen is an independent Algerian journalist. He wrote in several Algerian newspapers such as Alger Républicain and in different sites of the alternative press.

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