Thursday, 19 July 2012

Immanuel Wallerstein and the end of the world.

This is a review of an address made by leading historian Immanuel Wallerstein at York Uni in June 2012.
I did not envy Professor Wallerstein. As he stood up to make his lecture at the “Festival of Ideas” last week, I thought of all the many other equally capable thinkers and academics who had predicted the certain demise or change of such and such a system or regime and been proven wrong.

Even the title “Structural crisis of the capitalist world-system: How serious? How long? Endpoint?” extolled a certain audacity that so haunted the works of Karl Marx and so many other great minds on the left. This was reflected in the vast amount of interest the event generated, the lecture theatre was packed full of academics and students alike to see the world-famous American historian, sociologist and founder of the 'World Systems' approach to social science.

So it was to my pleasure and relief that Wallerstein delivered a masterful outline of the nature of economic systems and their rise and fall that seemed to justify the certainty of his predictions. Whereas most other predictors of capitalism's downfall base their visions on the exploitative nature of capitalism and how this would eventually engender revolutionary opposition amongst the oppressed, Wallerstein uses capitalism's own logic against it.

By showing that the costs of capital accumulation, based on labour, input and taxation, gradually yet inevitably increase in the long term, he argued that capitalism would fail because it would no longer become profitable for the capitalists themselves. By “2050” a new system would have emerged and replaced capitalism.

Tis mirrors the “hegemonic cycle”- the rise and fall of leading nations. Just as in the period from 1945-1970 capitalism expanded to an unthinkable extent, this was also the time when the US got its way “on 95% of things, 95% of the time”. Since 1970, capitalism has faced a long, gradual crisis and demise, as debt and costs spiral out of equilibrium with the rest of the system and “financialisation” occurs, based on unstable speculation replaces the more reliable basis of physical products.

At the same time the US has faced a demoralising decline in power, with a huge army on paper, but one that is much less effective in practice. Therefore both capitalism as a world system and the superpower hegemony that has underpinned it, face a questionable future.

Meanwhile he also criticised the “fantasies of capitalism” that have so underpinned lberal economic theory. It is a myth that capitalism is about markets, but rather it concerns monopolies and vast corporate empires. Truly free markets, argues Wallerstein, would undermine the profits of the capitalist elites. Further, it is for this reason that the other “fantasy” of capitalism is flawed- capitalists need state intervention in the economy to uphold the system that so rewards them with profit and capital accumulation.

Indeed the failure of the ideologies of capitalism as a world system also mean it cannot sustain itself. After the French Revolution, Wallerstein sees ideologies as being formed by the system to protect itself against radical ideas such as popular sovereignty. Conservatism and then later “Centrist Liberalism” formed the ideological centrepiece of capitalist dominance. The ability of these ideologies to reinvent themselves was also key, for example in the 1950s Wallerstein remembers Milton Friedman as being considered “a joke” but later the needs of the system had reinvented him as a great scholar.

However the key year for Wallerstein is 1968. Here non-system ideologies such as social democracy and left-liberalism were ascendant in one third of the world while Soviet style communism ruled another third. Despite this grasp of the majority of seats of power in the world, the “radicals” still could not change it, and this effectively destroyed the notion of creating a better world within capitalism. Those who dreamed of a better tomorrow were irreconcilably divorced from the capitalist world system.

Another refreshing difference between Wallerstein and other prophets of the demise of capitalism, is that he does not try to envision its idyllic replacement. Rather, the chances are “50/50” that the replacement will be better than capitalism. This was expressed as a possible shift to either the “spirit of Davos”, the locale of the World Economic Forum, where the rich capitalist elites would no doubt forge an equally exploitative and profit-driven system, or the “spirit of Porto Alegre” home of the World Social Forum, whose mainly NGO and social movement based members would favour an entirely new and untried system based on egalitarianism and democracy.

Any more than this, Wallerstein refused to tell us. This is because of the “butterfly effect”-that such grand changes are in fact the product of a mass cumulative accumulation of tiny, seemingly insignificant and even unrelated actions across the globe. Thus he ended the speech urging us all to “go out and be little butterflies in the spirit of Porto Alegre”.

For me, that was the beauty of Wallerstein's address. Despite all the empirical and practical analysis, there was still room for a great deal of idealism. The vision of our generation each as a small butterfly, our seemingly minor roles and actions in life contributing to the building blocks of a better world is far more appealing than a revolutionary vanguard or leadership doing it for us.

Regardless of whether one agrees with the logic of Wallerstein's theory, few could deny this force underlying his argument; it is not up to the academics, the elites, or the leaders to make a better world, but each and every one of us ordinary human butterflies.