Joan Muysken Lecture | Contradictions of Capitalism: Past and Present | Prof. Wolfgang Streeck

foreign good evening welcome to this uh seventh your Mouse collection and let me start with a particular word of Welcome to a few special guests so first of all of course we have uh Joel Marie here that's great that they join us and of course we have an eminent speaker that is Professor Wolfgang Shrek who is sitting here and who will take the floor in a few minutes we have our new D Maria la helges I'm very happy that she also is present and of course I'm very happy that the audience almost fills up this hola so welcome to all of you my name is Clement school I hold the chair in macroeconomics and international monetary economics here at the School of Business and economics and I'm also the head of the department in which my chair is located it is a pleasure to host you tonight for this your magical lecture and the aim of this yearly event is to honor the work of your mashka Johan played a key role in building the school he was the first professor of Economics appointed at school he served as head of department but also as Dean and he did had many official and more informal functions here in in the school however at some point everybody has to retire so Johan had to retire and and we we installed this annual lecture as a tribute to him and after the retirement however he remained active as a researcher he's still here in the faculty three or four times a week so I'm I'm very pleased that he is also here tonight and the research that John always did was to combine deep theoretical insights with applied research and More in particular he has always been very open to let's say policy implications and to non-orthodox non-mainstream economic lines of thought and the the Johannesburg lecture tries to follow in in his footsteps so we always try to get somebody here as a speaker who has earned his his reputation expertise by doing work that is not only excellent but also is slightly away from from the mainstream and tonight that is a professor Wolfgang strike he's well known social scientists and and he perfectly fits so I'm grateful that he is here uh before I start a few words to introduce Professor streck I would like to extend also special thanks to studio kinagala and its representative yapiance because this lecture is made possible also with the corporation of years started years ago of Studio and of course the people who really did all the work to organize this and then I'm thinking especially to Tom from Fame and Savannah the Sanctus but let me now introduce Our Guest Professor streak is a German economic sociologist and Emeritus director of the Max Planck Institute in Cologne he studied sociology at the go to university in Frankfurt and at Columbia University for his studies he started his career as an assistant professor in sociology at the University of Minster and finished his habit as shown in sociology at bielefeld from that point on between 1988 and 1995 he works as a professor of sociology and Industrial relations at the University of Wisconsin medicine and after that he returned to Germany to take up the post of director of the Max Planck Institute for the study of societies and to work again as professor of Sociology at University of cologne he retired from their directorship in 2014 becoming an Emirates his work is centered around analyzing the political economy of capitalism he has written extensively on the political economy of Germany and more recently has involved himself in debates on the politics of austerity the rise of what he terms the dead State as a result of the neoliberal revolution of the 1980s and the future of the European Union to the public Professor strike is perhaps best known for his 2016 book how will capitalism end and in the book he shows that because contemporary capitalism is beset by five disorders declining growth oligarchy starvation of the public sphere corruption and international Anarchy it won't get any merrier tonight and for which at present no political agency exists to confront them and it will continue to regress in his view until at some point it might end well we are still alive today and in his Spirit um Professor Drake will give a lecture on contradiction of capitalism past and present the lecture will take approximately one hour now normally then afterwards there is a q a here in this hallway in the hola but unfortunately Putin extends his arms even into a Maastricht due to the energy crisis we have to close the building by 10 o'clock which means that we have decided to to merge the Q a with the informal reception that is I will close off when Professor Shrek finishes with a few words and then we all move down to the place where drinks are served and at that point everybody should feel free to ask questions to Professor Shrek um professors take we are very happy to have you here in Maastricht and we look forward to your lecture the floor is yours please come up foreign thank you very much this is a first for me in that usually I give lectures before dinner now it's after dinner it reminds me a little bit of the high table tradition in in Oxford or Cambridge where first you have a lavish dinner and then someone gives the speech which sometimes sort of Miss mishapans because they had to too much wine I I I I tried to be very very reluctant with the wine because the lecture is is difficult enough um I'm a sociologist who is not an economist I'm a sociologist who is not too much interested in the micro level of society individuals acting in society but the macro Level Society is comprising acting individuals and interacting with them now in particular you can because there are all sorts of societies but the societies that I've been working on are modern societies that is societies with States and politics and formal institutions at their Center the economy in this framework is a social economy it is historically and territorially specific embedded in a specific society as both a field of institutionalized social action as well as a product of institutionalized social action the economy in other words not as a machine servicing Society provided is it is correctly maintained by economists like those here in this room no it is a battlefield in in this framework not a machine the theory that is required for this is a historical and political Theory emphasizing change and conflict with open outcomes as distinguished from a functionalist system equilibrium Theory with outcomes basically close you know what it has to be like at least and then you do what you can in in order to rectify the thing and the human you see some applications of this General Principle as I continue with this with this lecture before I do so a word on capitalism now capitalism is something that people always talk about but they sometimes do not have a precise definition I I want to offer that definition because I think my definition opens up a particular view that might be intellectually productive capitalism in other words is a particular kind of a sociology of a society institutionalized which which originated in Western Europe during the transition from the Middle Ages to the early modern period and from then on spreading around the globe it has in other words a Territorial and logic and Territorial and uh historical specificity now sharper definitions are the following two of them capitalism is a mode of production geared towards the endless accumulation of capital suitable for investment in the production of more investable capital is this a machine going on or not whereas a capitalist Society is one whose prosperity and stability I can also say whose well-being depends on a successful capitalist economy it is dependent on this if you want to have good education in a capitalist Society the economy must produce Capital if that if it doesn't do that then you can't afford anything Adam Smith has in 1776 pointed out that if the owner of stock capital in his language removes that stock from a particular country than any activity is hopeless dead and you know the dependence on on the the capital Society is dependent on capitalism now the uh what I want to point out in this in this somewhat conceptually over heavy lecture is what I could call the improbabilities of capitalism here the title is contradictions of capitalism but that was when uh a year ago I was asked to to invent a title and and and this is what I had to offer but but I should have said the improbabilities of capitalism and there are three of them three of them that are important and on which I will elaborate in the course of the lecture the first is the commitment I'm going to say the cultural commitment to as an as a sort of ethic of economic behavior to Output maximization instead of input minimization requiring the suppression of what I call the subsistentialist temptation and that it's probably like this all over the world people sort of used to conduct the economy on the principle of input minimization uh they did just as much as they needed in order to maintain their current uh way of of of living the the um what Marx and they were described as the beginning of capitalism is the is another form of another goal of rationality now first the input minimizer sort of uses all rational uh calculation to to to make sure that they don't work more than they absolutely have to they are in other words lazy today we call them lazy but but most people in the history of the world were all lazy and we are sometimes also I'll say something and then comes This Moment In which people people's economic attitudes are revolutionized now it is you have resources and you have to squeeze the maximum out of them output maximization both are sort of forms of Russian operation reality you can apply mathematical calculus to to both of these things but whatever describes and what Max I I would go I will talk of this about this in a few minutes what what they describe is this sort of unique uh change in economic I think that was that's the one improbability you have to maintain this commitment the the other is secondly the social institutionalization of private ownership in a society's Collective capital why should people who are working leave the capital that they produce to a smaller oligarchy let's say five percent or two percent of the population in other words this class distinction and the third is the the Third improbability is the the question of the sustainability of the commitment to unlimited growth this endlessness of the of the capitalist perspective that is also improbable because the world is finite and we however in order to maintain a capitalist economy have to maintain this uh idea that there is that the sky is the limit and Beyond the sky there's another sky so my point is that these three improbabilities of capitalism are a source of continuous tensions conflicts and contradictions they make the capitalist configuration fragile and crisis prone and keep it in motion driving its continuous transformation these I mean if you look at the history of analysis of capital zombart believes in the 1930s that capitalism has ended yeah because he saw something happening that he couldn't combine with what he thought was late capitalism in the 19th so so each of the major of the major theorists of of capitalism beginning with Marx and not ending with schumpeter expected that capitalism would end in his lifetime in his lifetime I uh in my book I I say if I'm wrong I absolutely am in very good company yeah absolutely and and all this the reason why this series I like this is because of these improbabilities how can you maintain a system that is so so strangely constructed around these three assumptions so fragile and Christ is prone that means that this configuration entails a historical political dialectic with no endpoints with open outcomes there's always something going on and it is it is essentially historical in the sense that it is unpredictable there's agency in it we are not able to say that imagine 20 years ago what could you have imagined sort of our communication systems absolutely impossible we could not have predicted this and and we're looking at this there's something going on here which escapes prediction yeah um and then that's the one sort of point of of these improbabilities and then the other is making Capital possible against the odds suspending its improbabilities requires permanent creative intervention of states and government acting as managers of discontent and troubleshooters as go betweens mediators arbitrators that means that without the state capital capital capitalism can't exist it is it is absolutely essential for it um historically the spread of capitalism in the world is associated with the uh the uh states of let's say Genova begins and then comes Amsterdam then comes London then the United States all sort of meriting powers who are able to impose the capitalist Logic on other parts of the world where it had to be imposed because it doesn't come naturally to people yeah um so this is um by way of introduction and and what I want to do now is walk you through 8.7 points uh ex the the concept of contradiction then back to this behavioral program of capitalism as culture using the marxian analysis in capital volume one on the origins of capitalism as my as my background then the role of the state in the management of the contradictions of of capitalism after which I would want to apply this logic to the segments of crisis that we observe since the end of the Golden Era since the 1970s in in our developed societies I I use this crisis sequence thing in in the book on on buying time this was written 10 years ago and I had only three stages now I have five stages because things have have developed further then I would point to the fact that what we've seen in the in recent years is that there is apart from all the change something very strange going on in the fate of this economic system and that can be briefly exemplified in the response or non-response of advanced capitalism to both the natural disaster the the deep penetration into nature sort of hitting back covid and then the final disruption of the international order that was after 1990 installed in the in terms of the so-called New World Order the war the end of political wisdom let me refresh myself because at the end you will see a pretty sad picture so be strong it will be it will not be pleasant um contradiction just to to suggest a few the conceptual tools to to deal with this contradiction is a configuration of forces or groups or purposes that cannot for conflicts inherent in it remain the way it is or contradictions generate dynamically unstable temporary settlements be set with self-transforming internal tensions so whatever you do it will it will give rise to new problems in in short Solutions become problems uh and uh the the analysis of contradictions that is why this requires a historical perspective one that can cause conceive of open-ended processes that's a different perspective from a system perspective the system has no history the system has has properties this thing has a history in other words what comes next is not clear to what uh what happens now it's only that history works with a material that it has produced in the past and turns it into a future that is not a predetermined the process is driven by contradictions up political ah it's better they are not functional by conflicts not by systemic needs this equilibrium is the term I will now say something on the first improbability of of capitalism as a social formation in uh in the in in volume one uh Marx discusses after after these first four or five sort of hegelian chapters that nobody can can really understand when they when you read them today then Marx begins that marks the uh the economic historian begins to ask the question uh when when did this whole capitalism thing start but because in order to have capitalism we have to have Capital but but where does the curve and then the then the process generates the capital uh further but there must be a moment primitive first moment in which there must be some capitals from somewhere uh you you have to find something and and then then he points to to various uh to various um developments in the in the history of of Europe including for example the uh the conquest of uh of America and the and the bullion that you found there that you could introduce in the European economy to create uh demand for example now even the effect of creating demand and then uh I'll I'll go to this in the in the in the next step then if this involves the turn from input minimization to Output maximization you could also say from a sort of natural laziness uh to uh Protestant ethic yeah how can you maintain this and what what I will show is that there is an enduring subsistentialist Temptation in our societies people people sort of always tend to to to think that at the present stage I mean why should they why should they work more they can basically live with with what they have but you have to explain to them that this is not an acceptable attitude and that they should sort of do something more max then gives a long list of of mechanisms that are that are needed to do this as an aggravating condition of course the accumulation of the collectively produced Capital takes place in private hands on this a little more uh in a moment Max then in the historical chapters of of volume one shows how various mechanisms were used in the history of Europe to re-educate people in a sort of as Weber would say Protestant way we all sort of sometimes learn in our in our lives that people tell us you have a talent and you must make the most of that talent that is sort of the whereas in in the sort of more natural thing as well yeah if you if you can live with it then why why why why should you exert yourself all the time yeah but but that's a different sort of logic the max shows that people first of all had to be forced to uh to do then he describes for example the enclosures movement in the in in in Britain the in England this this was sort of um pulled by a new as he says a new generation of the Gentry that had survived the wars uh the the French recital Wars and then sort of saw that there were um these uh textile factories in Belgium that needed War and you could sort of by driving The Peasants from the land replace them with sheep and then the Sheep sort of could be used to produce wool and you could get money rather than the 10th or 20th part of or or fifth part of what the peasants were producing in their in their Villages you could in other words move to a to a money economy partly with the money that had been taken out of the South American gold piles where where goat was never used for money it was just used for sort of the the the the people that looked at it and enjoyed it and it was the the the Inca showed them his gold Supply whereas the Spaniards turned them into money yeah um so then he shows how then there is this sort of fantastic chapter about maximum wages and minimum working hours after the after the great uh the the the plague the Black Death um suddenly in England wages went up because there were fewer workers it turned out however that these workers once they had earned the same money as they had earned before the before the wage increase let's say Friday evening they went home rather than continuing in order to make more money they were happy with what they were used to and then the the king in this case the the first Elizabeth had to impose both maximum wages and minimum working hours on the English economy the absolute opposite Mark says of minimum wages and maximum working hours that the unions in the 19th century tried to get yeah but but this was to to keep them working that there's an inverse labor supply curve behind this the which is that at a certain point if you lower the wage people work more that rather than less because they need to feed themselves yeah um and then here comes the uh where where he sort of analyzes how violence slowly goes away and is replaced with a particular way of life with a culture the advanced the advance of capitalist production develops the working class which by education tradition habit looks upon the conditions of that mode of production as self-evident laws of nature that's what we're doing the organization of the capitalist process production once fully developed breaks down all resistance the dull compulsion of economic relations completes the subjection of the laborer to the capitalist direct Force outside economic conditions is of course still used but only exceptionally there are no workhouses anymore there nobody is anymore put to prison for vagabondage as they were in the early 19th century when when they had to get used to working in the in the new way in the ordinary run of things the labor can be left to the Natural laws of production that is to his dependence on Capital a dependence bringing from and guaranteed in perpetuity by the conditions of production themselves I I should think that this is one of the most enlightening Eddies to me one of the most enlightening chapters in in this in this uh fascinating world um let's go let's go back here no no anyway I was here and yeah a yeah so then in the history of the work ethic so to speak one this was written in in 1867 one can now try to develop uh a catalog of the ways in which the modern work ethic was maintained in spite of the fact that in the Western countries levels of of prosperity were continuously Rising uh people kept working their butts off although they were doing better with time and then you can try to to develop the welfare state for example uh welfare state becomes a mechanism of making people work uh if you don't work you don't get uh or do you have a pension insurance and so on trade unionism Promises of Full Employment and the rising standard of living uh the post-war situation a better life for the Next Generation and the idea of maybe a post-capitalist Beyond now you would say nobody dreams of this but I maintain everybody does and in the in the following way this became clear to me only only a little time ago when I when I became a retired Professor yeah the capitalist is someone who who doesn't have to work who lives off Capital accumulated Capital yeah well of course we will never never be as rich as Abramovich or whatever these people are but when we get retired we suddenly get an income without having to work for it yeah on the basis of what more or less fictionally we are said to have accumulated during our lifetime as our capital for the rest of our lives now then if if you look at this in Germany for example when Bismarck introduced the the old age pensions the average life expectancy of an industrial worker was exactly 65 years and at age 65 you'll receive the pension so that wasn't she that wasn't expensive for the state because on on average they were all dying by that time yeah but now we're getting 20 years older and then we get for 20 years something that we believe is our well-deserved yeah what interest on our capital testing this how important this is you only have to think about attempts to to cut pensions because these pension systems are all uh now overblown in Germany I think one quarter of the federal budget goes into subsidizing the the the the pension system yeah if you wanted to actually either raise the uh the age of retirement or lower the pension you would be in very very bad shape as a politician like like macron it is in in American political jargon uh uh Social Security as they call it the old age pension is the third rail now if you've ever lived in New York you know what the third rail is the the Subway has two rails for the for the wheels and then there's another rail in the middle which is basically electricity comes from and and you should never hit you if you hit the you're dead yeah and and the political wisdom has never never hit the third rail yeah because that ends your political life but that's interesting so so I I would think that this idea of being uh so of being able to live without having to work for money is deeply uh present uh as a sort of Pro capitalist desire for the non-capitalists yeah and and if we were to do a theory of the subsistentialist uh temptation which is which is let's just continue and and we don't need more than here is something where we can begin to uh to to think now now uh one other thing suspending the substantial is Temptation is consumerism a rising conception or consumption Norms product of obsolescence innovation and if there is anything that uh sort of is uh driving the present uh capitalist economy consumer capitalism then it's innovation uh you you have to innovate you have to you have to to tell people that the bathroom that they have is no longer up to standards they need a different bathroom they need to go shower not just this old shower and so so and then financialization consumer credit and debt bondage I will say something on on credit in in a few minutes but just to give you to give you an example from my own research something that sort of stuck with me for the rest of my life when when I was in in America doing um research on the automobile industry and and how they were setting up new smaller plants to to be able to control the workforces matter then the near Wisconsin that I think it was General Motors was setting up a new plan for I think 1 000 workers at the beginning and I went there to see how they selected these workers and talked to the to the manager to the Personnel manager and they had 100 000 applications for the Thousand jobs and and I said why what do you do how do you how do you find out who who comes on the short list yeah and then he said well first of all we have some lists of union members and and they of course have no chance I I I said okay okay I can't I couldn't understand that but what uh what's next and then he said yeah they need to be they need to be married and have children I say and what else yeah and they need to have a mortgage I I said not evening I said why a mortgage and he said someone who has a mortgage to pay off will never go on strike maintains the work I think yeah so that that was quite that bonded and then of course the inverse labor labor supply curve austerity lowering wages can lead to a higher participation rate also indirectly in in the United States wages have not increased real wages have not increased since the 1970s but what does in what did increase Is the participation rate especially of married women the if the family income stagnates then the family has to sell more labor to the labor market in order to increase its income although the nominal although the real income for the individual has declined yeah so so all of these are mechanisms by which this temptation to sort of rest for the while can be can be fought no [Music] um now I will go to another of these contradictions and and tensions and and locate them in the development of capitalist Society since the end of the postwar settlement and and I will not in in detail outline what that settlement was it basically rested on Full Employment policies a growing welfare state um the the very strong role of trade unions and collective bargaining all in the with the fear that workers who had come out of the war empowered would otherwise turn to a good communist opposition or something like this yeah the uh in in America it was fairly clear that for example the the American blacks had fought in the War in Black how do you say companies and there was the idea that they had learned to shoot and so you had yes they knew how to use guns so you had to incorporate them into the welfare state and generally you can say that all these Wars the first world war and the second world war ended in all countries the winners and the losers with a strengthening of trade unions and social Democrats among the winners because workers came back from the battlefield and demanded a reward for them having fought for their country this long was we have so exposed ourselves and our lives put our lives in at risk and now we want to have a better deal New Deal uh in in the loser countries the elites including the capitalists were discredited something that very few people know is that in Japan after 1945 there were almost 80 percent Trade union members and there was even a socialist prime minister the Socialist Party won the 1949 election until General MacArthur told them that this this drove the Democracy too far and and and and then that government was deposed yeah by the military by the American Military government so since the end of this period roughly in the late 1960s governments had to come up with ever new ways of politically generating resources above and beyond what the capitalist economy or made available the problem was to make to enable Capital to remain profitable and at the same time encourage labor to continue cooperating in the accumulation of privately owned capital so that's a problem the two things are not easily combined yeah and and then you can see how States governments indispensable for the stability of this regime develop ever new ways from then on to to solve this problem to insert fictional resources into a Distributive struggle which would have been or might have been a threat recital had it been Limited to the resources that were available the workers and unions were too self-confident at the end of the 1960s for example to to agree to lower wages in order for profits to remain high and I I will show you how one can distinguish five periods in which states start in different ways to secure cooperation between capital and labor and thereby maintain social operation social integration and the the trick is that the solutions found in each period worked only for a limited time until they became problems themselves forcing new policy priorities and new Solutions abandoned as well after a time as the dysfunctions matured yeah and here we go We Begin very sort of briefly I can't walk you through the whole thing we begin with the inflation state in the 1970s the policy goal was Full Employment the problem labor militancy hanging over from the 1950s and 1960s the solution the political deals with uh with labor and however it resulted at the end in stagflation in the sense that there was still inflation but the but the inflation discouraged investment uh so for 10 years roughly this thing worked and then with the American in in the in the 90s and in 1970s early 1980s was the American High interest rate policy the United States began to kill inflation in order to to set in motion industrial restructuring for international competitiveness the result was de-unionization but also the public debt began to increase you have a sort of like uh communicating uh pipes system where inflation goes down uh public debt goes up because because the end of inflation meant high unemployment de-unionization and very high costs of a welfare state that could not yet be cut down for political reasons so public debt begins to begins to to rise until the mid-1990s when creditors became concerned uh that states would not be able to repay their their debt then you see from the mid-1990s to roughly 2008 the shift to what I call the consolidation State the consolidation statement basically globalization restoration of creditor confidence public austerity deregulation of private debt privatization neoliberal real estate reform at this time it was politically possible but the result was Financial instability 2008 and you had this long series as a result of the deregulation of of Finance this long series of financial crisis beginning in the mid 1990s Asia crisis uh and then 2008 uh in 2008 a new world begins namely the as what I call the Central Bank Fiat money state which fights uh Financial instability uh tries to address the problem of secular stagnation as Larry Summers called it and the and the fear of that deflation the solution was monetizing State expenditures low and negative interest rates and the creation of money and how do you say um quantitative easing yeah you need to go back here uh the result asset price inflation Rising inequality and after and after 2019 this whole thing sort of begins to uh we begins to show that that the problems were not solved social stability becomes a very much a concern because we see this Rising inequality disintegration at the lower end of the of the scale deglobalization beginning as a supply chains breakdown surprise inflation begins which even in 2019 was we were told that inflation was completely out of the question it it could not return uh and what is the solution increased interest rates but at the same time in order to maintain social stability cost of living subsidies cost of producing subsidies and rapidly growing uh Public public debt I sorry for working for working you so fast through this thing you could spend an entire evening on it but I I try to I try to make you understand that this is a sort of movement where ever new problems are created by the solutions so adopted for the old problems and and and then you uh and then you see that in spite of all these changes perceive problems in spite of changes in possible in of Applied Solutions and new problems cause growth kept declining public debt kept increasing private debt kept growing same with inequality while money production went rendered and I will just show you a few things growth rates sliding five-year averages we we end here at 2019 in the last three years you can imagine that the decline continued yeah public debt in 20 oecd countries in percent of GDP and this starts in 1995 with the with the end of of capital of of of Communism goes to 27 but then with the world economic crisis all the or everything that was done in the in the consolidation state which was to bring down a public debt while offloading it to private debt uh was completely wiped out and and now you are and now with the uh response to kovid and the war you can imagine how how this will look in uh subsequent years for example in Germany we are not we now have a sort of a cheating system like we this year 250 billion knew that which is not counted as in that which is sort of stashed away in some special budgets yeah uh private debt and you can see that in the 1950s up to 1970 there was literally nothing like this households and long but now you see since 2000 the 2008 crisis sort of a little bit less but after this it again goes up there are similar statistics about the the household that in the United States compared to the entire debt of the Chinese economy it's basically similar uh then this I take this from from Pika T it's sort of pretty uh uniform for all major societies uh we look at 1980 and 2010 1980 is probably the point that spqt shows where wealth inequality is lowest since the end of the 18th of the 19th century but then there is exactly in in this at this time uh 2010 a change from then on it becomes worse and you see that for example the United States 46 percent of the wealth of the top ten are held by the top one but by the Yeah Yeah by the top one and and it goes through all of these uh statistics I've just taken a few from from the picket book you you can enrich this uh in any possible way uh at the same time as a center as as a public that went up private that went up growth went down the Central Bank assets that is the production of fresh money Fiat money by the central banks buying up debt paper from either governments or firms those are absolutely unbelievably from 2007 where it was in the range of 10 of of of of of of of of 10 trillion dollars now to 25 in very very short year this is this is the world not not not the U.S advanced economies it's even worse as you see in the blue months and then the Federal Reserve is one of them sort of since 2020 it is it is uh the the the the the trend is just unreal uh assets of four leading central banks in percent of GDP and the worst is the Bank of Japan but the European Central Bank is fighting to to catch up with to Japan yeah broad money supply we can always discuss what money supply means but the in terms of our GDP there's more and more money in the world partly it is sort of kept in some places where you don't know where it is and what it does is it builds up uh liabilities someone that you have claims to something if you sit on them so at some point these claims will be represented and here's my sort of final uh remark on this crisis segment the emergency state to exogenous super crisis find States exhausted and desperate hyper globalization breaks down as Supply chains break up due to institutional ungovernability and political fragmentation of the U.S led New World Order you could write this history in terms of 1990 begins this moment when when the Elder Bush announces a new world order with the United States at the center if you look at the history of this formation is now now three decades there's not a single year in which the United States were not at War not a single year and and uh in uh five years ago the military on the armed spending of the United States was 150 percent of what it was at the high point of the Cold War measured in constant dollars of 2020 yeah it's simply unbelievable uh what governments you know how this sort of disorder uh is reflected in these horrendous statistics the return of inflation this time non-negotiable non-negotiable in the sense that the old inflation you could sort of call the trade unions in and the employers and make some sort of rate moderation deal but that inflation is not caused by trade unions it is caused by uh by the shortened supply lines partly because they were disorganized and not governable partly because for military reasons we are now sort of fragmenting the world economy with a result of uh of course it increasing prices um and the and inflation coming back with austerity or austerity in a much more precarious Society at the limits of Fiat money production then finally now you read in newspapers interesting stories about people who have understood that the promise of Rising prosperity in the future if they only work hard enough cannot be kept maybe for environmental reasons maybe for reasons of the of the organization of the global economy now the question becomes is the state can save me from covet by sort of injecting 200 for example I'm I'm drawing an American pension for my time in the in the in the United States and suddenly I had 1 200 dollars in my uh in my uh post box mailbox because every pensioner in the United States two years ago in order to make them feel better brought a check 1200 my wife also draws a small American tension she also had 1200 that that money is simply sort of produced there is there seems to be no limit anymore yeah and and and it's similar in France where where the government is scared stiff of the yellow vest and and and then sort of they get now in Germany at the end of this year uh the government will in a very complicated process uh pay uh the next installment of our gas bills and and so rich and poor me others will not have to pay that installment because the government takes over yeah and so on and so on so so I think they are they are scared stiff and the reports now can be read about people who begin to think not just that they could do with what they have but now it is the point that they have learned that they can do with less and that there is no Prospect of them having more in the future and suddenly you see sort of in many Industries uh where workers are no longer to be found because they think that uh with with the new emergency help they can do without yeah a new generation that has become much much less environmental reasons the reasons of economic prospects and so on the capitalist nightmare of a subsistentialist temptation to spend less and work less declining demand and declining labor Supply is now something that is maybe imagined but it is on the horizon of economic uh policy making in many many countries yeah thank you very much I I hope that wasn't too fast and and I hope I could convince you especially with the final overview on the main parameters of the national economies of advanced capitalism that we're in for some pretty difficult time the moment when those who own the who own the death purpose want to get something for them I I don't know how we will pay them off thank you very much Dear Professor stake um I would really like to thank you for a challenging and thought-provoking lecture it reminded me a little bit of the ancient Egypt where the Pharaoh had to go through seven plagues before he changed his mind so and but you at least you end it with hopeful words that we might change our minds so let's let's at least have a drink to cheer one another up and then that also allows people to address you with any questions they might have so thanks again for a great speech I think

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Length: 63min 5sec (3785 seconds)

Published: Tue Dec 06 2022