CLASS UNITY  |  TRANSCRIPT

Wolfgang Streeck: Ukraine, Gaza, and the Current Crisis of Capitalism

Class Unity recently spoke with German economic sociologist Wolfgang Streeck about the current crisis of capitalism and its relationship to war, state power, and democratic politics. Their discussion traces Streeck’s intellectual development from industrial relations and institutional theory to political economy, then examines the successive crises of capitalism since the 1970s and the state’s role in sustaining accumulation. The conversation also considers globalization, labor’s declining bargaining power, NATO expansion, the wars in Ukraine and Gaza, Germany’s debt brake, military Keynesianism, fascism, and Friedrich Engels’s analysis of technology and warfare. Streeck is emeritus director at the Max Planck Institute for the Study of Societies, and his recent book Taking Back Control? States and State Systems After Globalism develops many of the themes explored here. The original Class Unity conversation, Streeck’s Max Planck profile, and the Verso page for Taking Back Control? offer the video, biographical information, and further reading.

Class Unity: Welcome, everyone, to another Class Unity discussion. Today we’re excited to speak with Wolfgang Streeck about the crisis of capitalism, the political economy of war, and the conflicts in Ukraine and Gaza. Wolfgang Streeck is director emeritus at the Max Planck Institute for the Study of Societies. Before his retirement, he was director of that institute and professor of sociology at the University of Cologne; before that, he was professor of sociology and industrial relations at the University of Wisconsin–Madison. He is one of the world’s leading thinkers on the political economy of modern capitalism. His many books include How Will Capitalism End? Essays on a Failing System (2016), which developed an influential 2014 New Left Review article of roughly the same title; Buying Time: The Delayed Crisis of Democratic Capitalism (2017); and, most recently, Taking Back Control? States and State Systems After Globalism, published in German in 2021 and in English in 2024.

As a basis for this conversation, we read chapter five of Taking Back Control?, “A Dual Crisis I: Capitalism,” which is paired in the book with “A Dual Crisis II: Democracy.” We also read “Notes on the Political Economy of War” from 2024 and “Engels’s Second Theory: Technology, Warfare, and the Growth of the State” from 2020. We’ll put links to these readings in the description for anyone who is interested. We’d like to begin by offering Professor Streeck an opportunity to open with some comments, so let me hand over to you, Wolfgang.

Wolfgang Streeck: I want to be sure and all I want to do is say something on the background of my own education that landed me where I am now. I studied sociology at the University of Frankfurt at the time when Theodor Adorno was still alive. I didn’t quite understand the Frankfurt School. And I must say that up to now I’m still puzzled what I actually learned apart from the general attitude which is that theory and the scholarly exploration of social life is something that is serious and that is to be taken seriously. It is not something that you can do sort of in quiet moments. It involves some very uneasy moments.

So my original subject was industrial relations and trade unions in the 1970s when everywhere it was the high point of leftist social democracy if you want in Olof Palme’s Europe and I was interested in how the postwar democracy accommodated or did not accommodate the class conflict between capital and labor institutionally and organizationally. My first projects had to do with trying to understand the political organization of classes in capitalist democracy. Now that was already something you could have spent a lifetime on. I worked then with my friend Philippe Schmitter on in the field of political science on the intermediary organizations in modern capitalist democracies corporatism and neocorporatism and the political prospects of those arrangements. Out of this arose a general interest in institutional theory—in historical institutionalist theory not an efficiency theory but a conflict theory of institutions generally. That sort of carried me to the University of Wisconsin–Madison where I worked with Erik Olin Wright and Joel Rogers and Leon Lindberg.

We had a wonderful time, and I was there for seven years when I arrived there. They had just been elected the number one sociology department in the United States and for all my seven years there I was afraid that next time they would end up number two or number three and then they would blame me. But so in 1995 I left to go to the Max Planck Institute for the study of societies in Cologne. That was the era when you when one began to see this enormous historical break the end of postwar democracy and the beginning of the neoliberal era the switch from the bipolar world of the cold war to the unipolar three decades. So, as it turned out, after the ‘end of history’, so to speak, and now we’re looking at the end of the end of history.

During this time it became clear to me that without some sort of understanding of international politics or international relations or the global economy and the global polity you could no longer do what I was happy to do namely comparative political economy. You had to add this additional element of interdependence and large imperial structures and all. I slowly began to realize that the problem to which Schmitter and I and others had contributed comparative institutionalist political economy you may call it or comparative economic sociology had to be thoroughly rethought in the light of the changing international situation, also in Europe in fact I became very much interested in the dynamics of European integration as you may know that is the building of the European Union and the European monetary union in particular. So those of you who are younger and going into social science, you see these things hang together and there’s literally no end to it.

The moment you have begun to understand something you see that there’s something else that you need to understand in order to understand what you understand and then you go on. So now I’m sometimes quoted by economists and of course by scientists. But I’m sort of trying to combine a sociological and political economy approach and I also think that we have to switch from a system approach to a historical approach. And what I’m really trying to do is to understand how one can look at systems as historically dynamic entities where sociological or political-economic theories need to be attached indices of time and place. That is to understand the uniqueness of our world in the context of a broader theory of historical change and without deterministic element in it. So that when the journal Social Research asked me to review my favorite book not from my discipline.

I had just read On the Origin of Species and that gave me the feeling that if you cleanse this of the reactionary biology that people read into the book then you have a chance to understand something about this strange thing which is called history that has some regularity to it but the regularity that you can see only by looking back from the present. Or and that’s what I’m struggling with and now we live in this period of unbelievably rapid change. Just do a thought experiment and think that one year ago you might have thought you would have an American president who is doing these things sending the National Guard into Chicago and that’s only one little snippet of all these very exciting things that are now happening literally every day.

So now we’re living in a time in which another great break is taking place and the questions that you’ve sent me all in one way or other challenge our capacity to digest the daily news as well as our capacity to combine historical with the systematic understanding of the world as it is evolving now and I think this is what we’re going to try to explore a little further in our discussion and I look very much forward to it.

Class Unity: Great. Well, thank you very much for those comments, Wolfgang. And it was interesting to hear you talk about, you know, the history of your own work and your relationship to different disciplines and at one point you mentioned that you’re combining sociology and political economy is at least part of what you’re doing. As an outsider to both disciplines, I found that interesting. It was interesting to hear that because I immediately thought of certain passages and what we’ve been reading which seem to do that to combine them and I think it often provides just some fascinating insights and ways of looking at things. So thanks for those comments. We thought it might be a good idea to sort of start out by focusing on the crisis of capitalism the recent history of crises of capitalism and then move on to talk a bit about the political economy of war.

Perhaps in somewhat general terms and then to Ukraine and Gaza in a little bit. So I’d like to open by opening the questions by asking you to elaborate a little bit on the account you give of the recent history of capitalism in a couple of particular respects. So in that chapter that we read from taking back control, you present an account on which capitalism has faced a sequence of crises since at least the 1970s with each crisis in the sequence lasting on the order of 10 to 15 years. For people who haven’t looked at it yet, there’s a very helpful table on page 91. So, a couple of questions. Would you say that there’s one driving force that underlies this series of crises?

So for example, a traditional Marxian view might be that there’s a declining, you know, there’s a law about a declining rate of profit or a tendency of the rate of profit to decline and that drives things. So that’s one question. Do you think there’s any one thing that might be seen as driving the whole sequence of crises? And then a second question it would be whether you think all the crises in the sequence as you carve things up are crises both for capital and labor or whether some of them are crises just for the asset-owning class and for speculators.

Wolfgang Streeck: That goes to the core. If you read my work you’ll see that for me the role of politics and the state is important in understanding the evolution of the political economy to today and I would like to say that in my thinking politics is extremely closely linked to the economics or the economy as described in a sort of system theoretical approach in Capital, volume one, has—I’m a late comer to Marxism volume one has two different strands of argument. Well, one is at the beginning value theory and all of this. It’s basically sort of a kind of very cryptic mathematics and the other is a historical thing about the struggle over the working day about the how do you say the first accumulation? Yes, primitive accumulation. Primitive accumulation fixing the German thing.

These are the historical things and when I got really interested in this, I was really excited about how crucial in both cases the role of the state is for the historical narrative. There’s politics deeply involved in it and my I then became interested in the world system theory where it is quite clear that the expansion of capitalism as an economic system cannot be separated from the building of global empires and national states. They are and it’s absolutely understandable because in order to expand the range of your economic activities you need an army or a fleet that protects you as you set foot in the rest of the world. So my crisis analysis in the book which refers only to the years in which everything is sort of breaking apart.

My crisis analysis is very much an analysis that applies a principle that I read into Marx at his best, which is where he posits that the evolution of the capitalist mode of production involves a growing socialization of the economy. While the private nature of property is still being preserved that the crisis of capitalism comes with capitalism increasingly becoming a public affair in private hands so to speak. Depending on the public capacity of the state in order to make possible the private accumulation of capital and this is bound to produce one crisis after the other because these two things do not fit. Then, if you look at the literature you see suddenly a great number of crisis theories that basically deal with this problem. So for example what has greatly influenced me and influences this particular chapter that we’re talking about is James O’Connor’s work at the end of the 1960s early 1970s about the fiscal crisis of the state.

Capitalist production is becoming increasingly social production but the resources necessary for the state to make that possible remain in private hands and that is the sort of basic nature of politics. How does the government which acts in some way but not in all ways as the extended arm of capital, how does it extract from society the resources that are necessary and increasingly necessary to make capitalism work. So you can also say that what one is talking about here is a tension between capitalism as an economic system and capitalism or capitalist democracy as a social system and that is roughly like this. Capitalism is sort of a way of doing an economy. It depends on the unending accumulation of capital for the purpose of continuing the unending accumulation of capital.

That can happen in isolated places, but the moment that a capitalist society begins is when such a large part of the economic activities of the society is being done in a capitalist way. So that if that process of private accumulation no longer works then the society as a whole doesn’t work anymore. So that is when modern capitalism arises. There is a moment in which the society becomes dependent on the success of its capital and that means the success of the class that owns the means of production and the capital that is produced with it. And as this compound of capitalism and society forms, you can see where Marx’s analysis needs to be extended so to speak. He died about 1870 and what he saw in this process was sort of after the primitive accumulation and a working class had formed that took capitalism for granted. Society had formed.

They took everything and then they for this reason they sort of began to collaborate with the accumulation process. But now we see that from then on all sorts of other things happen and this configuration between society and private capital sort of is transformed from step to step. And here is where Engels comes in and where he sees that one stage in this process is the warfare state—but we’re going to talk about this. What I mean to say is that the crisis of capitalism as we observe it now is a crisis of the relationship between private appropriation and the socialization of production. And that generates one crisis of governability after the other. And in this particular chapter, I describe how these crises evolve with a sort of conceptual tool in the background which is the idea of a dilemma.

If the state does something to solve a crisis in this relationship now politics does something that sort of produces the next crisis because the solution of today becomes the problem of the future and that has something to do with a distributive sort of dynamic of capitalism. You have to do something for this. For example, you have to clean up the environment in order for capitalist production to be able to continue. But if you start cleaning up the environment then you divert resources from capital, as a result of which capital goes to some other place so on and so on so and before I continue, are there any further questions on this?

Class Unity: Well, some of what you were just saying, makes me think of a question that, we’d sent you—one of the questions we’d sent you that was going to come up a bit later, but perhaps is pertinent now. Although maybe you’ve sort of answered it, so I’ll just mention it that we are currently partway through a course called the capitalist state in which we’re looking at various questions about the nature of the state, including different theories of the state. And so I was originally going to ask, you know, do you think that your story about crisis of capitalism fits particularly well with any particular understanding of the nature of the state and its relation to capital or to the capitalist class. And some of what you were just saying seems to touch quite directly on that.

And one picture that is there in capital volume one in fact I think there are some great footnotes in chapter 10, on the working day where Marx describes that people were getting shorter because they were so malnutritioned and so the army couldn’t get soldiers who were in good shape and so on. There you can see the government coming in to with legislation about the working day to essentially stop the capitalist class from destroying its own central resource of labor. Right? And so one picture is that and Ralph Miliband describes this as one picture that rather than the state as just sort of carrying out the orders of the capitalist class. You could think of it as a more sort of paternalistic relationship almost where the state is trying to sort of make capitalism sustainable. We might almost say to use that word slightly ironic way.

So, acting in the long-term interests of capital or capitalism rather than in the interest of particular capitalist firms say and so and it’s just that some of the story you tell in that chapter about this sequence of crises made me think of that picture and I wondered if that sounded right to you but maybe you’ve kind of already addressed that in which case we could just move on.

Wolfgang Streeck: No, I would add something to this. The Miliband sort of sees this still as an agency relationship between capital and the state. That is in part true, but I prefer a slightly different conceptual framework which is the production of some kind of compromise between capital and workers. Capital needs labor, and as the structure of society changes the operations that are politically necessary to generate a halfway compliant workforce in the strange operation that these people have to perform, namely to work their butts off in order for others to accumulate enormous fortunes. Now, how do you do that? And then what you see is that for example after World War I and then after World War II with a temporarily changed distribution of power in these societies that you can describe as a period of capitalist democracy or democratic capitalism or whatever. Governments have to find a solution to the following problem.

Can they get workers to work for a wage that is low enough for capital to be ready to invest and high enough for workers to be ready to work and to work in the way that capital requires which is sort of sometimes involves not just working to rule but some sort of enthusiasm in your work because otherwise you can’t get done what is required and then this kind of thing historically the way in which states supplied labor to capital basically begins with slavery although slavery, interestingly, doesn’t play such a big role in capital volume one which always surprises me. Then primitive accumulation, the change in property relationships, then the workhouse. Then in the second half of the 19th century, suddenly governments, labor, and capital begin to see that there’s a process of political organization. Strikes and strike waves all over Europe. Then you see that governments have to do something in order to overcome this.

And you see first sort of compromise industrial democracy, the Webbs in England free collective bargaining as something that is better for capital than the direct control of labor over the means of production. So social compromises begin. Then interestingly the Treaty of Versailles after the first world war it’s the first postwar settlement what it includes is a lengthy paragraph which hardly anyone knows about the point that in our societies they say the winners of the war there’s so much injustice and there’s so much conflict and workers do not have proper representation As a result of which all these countries agree that they have to have something like tripartite negotiations between capital labor and the state. Yes. It’s in the treaty. Now you know that in the inter war period this was tried somewhere and then it broke apart and then came fascism or whatever. But that same thing was repeated after 1945.

Governments began to become mediators on the basis of the problem that workers had become so well organized that they could threaten not to come to work. That’s the strike, right? They could threaten not to come to work. So they had to be motivated to come to work. You can send the police. But as Winston Churchill sort of in the Second World War when the Welsh miners went on strike, although they were not allowed to do so, he said, “Well, yes, we can send them to prison, but then we don’t have coal anyway.” yeah, he says in Parliament, therefore they have to make concessions. So if you begin to see how the state sort of let’s say how in changing power relations the state becomes a force that has to mediate rather than impose.

You have a very good starting point for understanding what is happening now with the entry of neoliberalism namely that governments rather than using the army now use international competition in order to make workers pliant. Now they stop these tripartite consultations. They can do without trade unions because now they have something else that they can use namely liberalization of the markets. And I think the reason why I’m saying all this is to make clear that the role of the state in the stabilization of the capitalist mode of production changes with time and it is sensitive to the power distribution in society where the power distribution is affected by the presence of let’s say a social welfare state and the absence or disappearance of such a state and it all has to do with capacity.

To use exchange theory, in the second half of the 19th century workers learned to stay away from the work by inventing the social technology of the strike. Whereas industry was bound to remain within the national state. That gave workers leverage. Now capital has become mobile and can move easily in the globalized world. They can go anywhere especially with a global financial system. Workers have lost the capacity, or the social technology of organizing strikes because we have a very different production system. Now we have the service sectors, we have small firms, we have a government that is no longer supporting trade unionism as a counterweight quite to the contrary. So that so now we have locally stable labor and mobile capital where long before we had the opposite: mobile labor and capital that could not move. Let me stop here and say this is the perspective in which one can analyze the state.

The state sort of responds to the problem of how to organize cooperation between the two because the society now depends on capitalism as I said at the beginning on capitalism working. And because otherwise that society falls apart and the state can no longer govern. Mind you, I think we in the United States are approaching a point where we can see that problem. If I see the National Guard in Los Angeles, I think, yeah, well, they seem to have the feeling that they are losing control. The state remains important not just as an agent of capital securing physical resources. It becomes the procurator so to speak of the willingness of workers to work and in that sense in that sense democracy as it as it came about in the 20th century is a productive force from the perspective of the state. It is a concession made to labor for its willingness to work.

But if labor can no longer refuse to work there’s no reason to expect that there will be democracy. In this particular chapter I say that my colleague Jens Beckert has written a beautiful book on the expectation value of a system. As long as workers have the feeling that with trade unionism and political democracy, they can improve their position this otherwise dangerous cooperation with capital. They may be willing to play. The moment that this hope goes there’s a problem and the government has to invent something.

Class Unity: Thank you very much. That is a theme that came through from that chapter and it’s not a happy thought. But it’s a fascinating one. Thank you. I wanted to bring Daniel in to ask a question. All right. Thank you very much Wolfgang. This is a very fascinating discussion. We really appreciate you joining us to talk about these very important and disturbing I guess questions. My question for you has to do with how your view may have changed and I don’t mean this as a sort of critical question or a sort of gotcha question but so we read your recent account of capitalism from 2024 and I was wondering so I’d read we’d read your some of us had read your 2014 view in how will capitalism end which I find very compelling and I was just curious how it may have changed.

So some of the things that you highlight there which I think are really important in this context to consider this is continuing on the previous discussion as well. You suggest that capitalism’s defeat of its opposition all of its opponents might have been a Pyrrhic victory because in some sense it came to depend on them to restrain it and now we’re sort of watching capitalism die on an overdose of itself is the way you put it which is very vivid image. You then present there are at least five worsening disorders for which we see no cure at hand. One is declining growth. Another is oligarchy. Another is the starvation of the public sphere, corruption and international anarchy. And then you suggest that what we should expect are basically intensifying frictions, fragility and uncertainty and more and more normal accidents.

Basically a long protracted implosion in which there’s a collapse but without the expectation that anything else would come along and replace it. And so I was just wondering I suspect you think most of this still holds but I would be curious just to hear the details also because you say that one solution to one crisis lays the groundwork for the next crisis. What changed between 2014 and now?

Wolfgang Streeck: Daniel, first I allow myself to say if you look at these five points in the list I think they were pretty good list for what we’re seeing now absolutely excellent I mean yes and now I would say that I’m coming back to the to my initial remarks on the you can say the spontaneity and creativeness of history. That did what I could not see at the point was that they had another card in their in their sleeves which is the warfare state. The now in this article that you quote there a steady succession of normal accidents not necessarily but quite possibly on the scale of the global breakdowns of the 1930s. That’s what I say in the thing. Normal accidents and now we’re seeing you can say maybe the ultimate answer to this extreme fragility is an attempt to again integrate societies in a with this very proven instrument which is international warfare.

We the proxy war in Ukraine and if you look at Europe, the European Union is was in an absolutely dismal condition three years ago. The COVID recovery program 750 billion euros for the first time in debt. They don’t know how to repay it and it didn’t work anything. It didn’t do anything. It was seen as a sort of general rescue of the Italian economy. There’s no that what you see is public debt going up, growth going down. The 700 billion didn’t make any difference. In fact now you saw three years ago you saw a European Union that was on the verge of breaking apart because there were all these exacerbating the differences in the interests of member states. Now suddenly you have a final attempt to sew this together again in this sort of around the proxy war in Ukraine.

So my answer to your question would be that consider the historically proven capacity of warfare to integrate a polity and an economy. And maybe this was the last straw that they that they saw. The now for example we are hearing in Germany and in Europe generally things like the following if we build up our arms industry then our normal industry gets access to new technology especially artificial in intelligence in a way that we would never have been able to get from the Americans before. Then we’re hearing promises of renewed economic growth. We are also hearing that the legitimacy the legitimacy crisis that has is going through all these countries where suddenly pariah parties like I’ve leen and so on sort of rising up in all these kind now we may be able to either expel them as traitors or integrate them into the common front against the Russians.

So my answer to this is that when I wrote this, I had a pretty good idea of what was going on, but I didn’t know that this was still in the cards. One could have thought about it, but had I said that at the time, people would have thought that’s absolutely incredible. That can never happen. Now, now we’re talking about a possible war of the United States against China in the South China Sea. And what I hear in the American discussion I would not preclude that the United States sort of try to find a solution to its problem by going onto a major military adventure. Why is that? And why would I say why would I say that this is a possibility? And since we’re going to talk about wars, that would be my introduction to the subject so to speak. If you look at the history of capitalism and the capitalism is a system of continuous transformation.

It is never stable. The Schumpeter spoke of creative destruction. But not just in the economy, also in the political regimes. The state of the French Revolution and the state of England at the time of the French Revolution compared to today is something that looks really very different. The state has grown with it and changed with it. What can we say about war and capitalism? They are inextricably linked and all the major transformations of capitalism as a global or international then global system are linked to wars and great wars. The Dutch sort of took over from the Italians as the center of capitalism. Then the Brits or the English at the time sort of defeated the Dutch in the Dutch Brit and then the center of capitalism moved to London and it always took on new forms new organizational forms.

The British the Dutch invented the trading company, the British in the British invented banking and or no but the insurance banking and so on. All of these forms had to do with victorious wars where the center shifted. Then be then you had the shift to the United States in the first half of the 20th century as a result of the attempt of two regional powers to escape from the sort of global order by the British the Japanese and the Germans. Trying to set up their own regional empires out of which resulted the postwar world with the great powers with nuclear arms having to do with the development of technology as a second story.

Then you have basically the end of a war namely the cold war in 1990 where a war was avoided only because of this unique character Gorbachev who basically gave in but the idea of out arming the Soviet Union was very much in the Now in the United States the discussion on the future new world order which I call the new world order Roman 2 following on the new world order of George Bush I in 1990 that’s what he now the debate is actually about the Thucydides problem and the Thucydides problem in short is like says the Greek historian Thucydides analyzing the Peloponnesian war between Athens and Sparta wonders why Athens this great power lost the war and the answer is they saw Sparta grow yeah and they didn’t do anything about it they should have attacked much earlier and at this point they could have won the war.

Now the I sometimes read what the American strategists are discussing to create this plays a very important role and the question is when is the right time the last possible moment in which we can attack China and be sure that we win the war. Very interesting in this context just to say that the this intertwined complex of capitalism and state power. Has its own rep problems of reproduction. They need to capitalism needs the state. The big American companies need the American state as something that covers their back when they move in the world and if that state loses power, you have to do something about it. And then the question becomes what is the right time to make sure that the United States continue to be as they say in their own military doctrine the power in the world that cannot be challenged by any other power in the world. That’s on the record.

That is the idea of United States in the world. For that they have 750 military bases abroad, not in the United States, abroad. It’s a it’s a global system. And the Chinese have two military bases and the Russians have four or five. The Russians are beginning to build more in the in Africa. Just to say that if we look at the history of capitalism then the preparation of the ground for capitalism in its respective shape because as I said it changes all the time now it’s finance capitalism and high-tech capitalism or whatever the preparation of the territorial political ground for capitalism to function is something for governments to do and states are the only power that can use physical violence for the purpose. And last remark on this the since 1990 there’s not a single day there has not been a single day in which the United States were not involved in some military operation somewhere on the globe.

Why should they give up on that habit in a moment in which things get really serious?

Class Unity: Thank you. That’s right. Sorry, Daniel. Thanks. So, we were thinking that, maybe what would make sense is to, ask you a couple of questions that, allow you to kind of, extend some of the lines of thought you were just presenting a little bit further, sort of specifically on Ukraine and on Gaza. And then perhaps we could come back to questions about the political economy of war and fascism. If that’s if that sounds good. Okay, great. So yeah, first of all, and this is I think along lines you were starting to develop there. There’s a point in the chapter we read from taking back control at which you describe the war in Ukraine as a more or less exogenous crisis for capitalism. But then in other places it seems that you want to say well like we can leave open the question of whether this is something from outside capitalism or capitalism played a role.

So I just wanted to invite any further thoughts on that question fairly specifically in the case of Ukraine. So for example you know it seems clear enough that NATO expansionism played a role in bringing about the war in Ukraine a significant role. And so one question is was that was that NATO expansionism itself driven by some crisis in capitalism or maybe just by the inherent imperatives the inherent contradictions if you will of capitalism.

So that’s one question is there some you know can we see the conflict in Ukraine as having arisen from at least in part or in some important part from problems in capitalism the state of capitalism crisis in capitalism and then along and then sort of to pair that with the question about Gaza you know more or less the same question about Gaza but there perhaps framing it slightly differently do you think there are connections between the crisis or crisis of capitalism in the situation in Gaza? Or is Gaza perhaps instead a manifestation of some very particular set of or a result of some very particular set of historical conditions and more anomalous perhaps? Maybe that sounds like a leading question, but I really don’t know what to think. So briefly on Gaza and then more on Ukraine.

Wolfgang Streeck: In the historical perspective that I suggest you have to factor in the possibility of unexpected opportunities that come up although they are not systematically required so to speak. And then politicians and governments and the machineries of government governments are very good at discovering accidental opportunities to do something to learn something. The question is what can we do with this? And the United States for domestic political reasons are sort of hooked to Israel. And then suddenly you see that there are certain things that you can benefit from even from this absolutely human fanaticism that has now taken control of the Israeli state. Namely, you can deploy the most advanced individual surveillance technologies in the world. Because this population for 16 years now has no rights at all. You cannot make you cannot even go to the loo without the Israeli secret police knowing about which raises an interesting question incidentally how they could not have known about all these tunnels.

So that’s one thing and I’m absolutely sure that the American general staff or the American military is there to watch these technologies in operation for domestic or other purposes. The same. Now, a recent article in the New York Times about the apparently the American military has a legal department which interprets humanitarian and international law and informs the general staff or the three- or four-star Joint Chiefs on what they can do what is risky what is risky for them doing and what they should rather not do or not let other people know. Yes. And it appears that they now have specialists in Israel watching and advising I think the Israeli army as they talk down the genocide theory about what they are doing trying to collect arguments why this is not genocide so for future uses for the American military. I’m not making this up.

It there was a longish article in the New York Times about six or seven very sort of skilled specialists in international law sort of basically sitting where the where the Israeli army is planning their operations in Gaza and its operations. So making use of an unexpected opportunity is something that governments like to do. For example, one question in this article is if you starve a population when does it begin to be genocide? And they sort of develop all sorts of reasons, excuses and so on that up to a certain point it is not. Now you can say that is just sort of empty words because it doesn’t matter. I mean it looks like a genocide. It is one. But it seems to be important for these for these people in these military apparatuses to reassure each other that they are somehow still inside the boundaries of international and humanitarian law. And this is something that you can learn there.

You can learn from the Israeli military. How you dress up your operations and the language about those operations in order to evade this verdict. Yes. Now, on Ukraine, the word exogenous is probably I would have to read this again it’s probably misplaced. Everybody knows that from the beginning from 1990 on from the Clinton administration on the question in the United States was how to let’s say cut down Russia so that it becomes a little smaller. And then you have all these Russian provinces around and republics and so on. Ukraine was always at the center of this because if you look at the map, it’s really big. Not just in terms of population, but in territory. Kiev is about 500 miles away from Moscow. That’s nothing. And it’s huge. It also controls a huge part of the Black Sea, which has been since Napoleon on the even earlier a very important hot bed of European military and politics.

So, don’t forget that Biden, as vice president in two Obama administrations was the, the representative of the president of the United States for Ukrainian affairs. He ran the Ukraine operation out of the White House as vice president. And as you know his family was also active there. His son, presented as an energy specialist, was sitting on the board of an energy company and collecting I think $50,000 a month for his operations without ever having been in Ukraine without ever having set foot there. That was corruption. That was something that in the United States nobody bothered about still today. It’s like did whether he had pornographic pictures on his laptop is much more important than whether he was drawing $50,000 from a Ukrainian energy company. No, no.

I think I think it was very then of course in Europe if you look at this particular war in Europe you see a particular problem which is this there are sort of small countries around Russia who have a long-term anti-Russian tradition. They also have Russian minorities which they don’t treat very well because they are afraid that they would be sort of fifth column or whatever you call it in inside their inside the very tiny countries the Baltic countries they cannot go to war with Russia because that so they need others to do it for them, and this is why they are so happy about the European Union. Now in Europe, there’s only one country that could put up the ground forces, conventional ground forces that could fight Russia and that is Germany. The French don’t have good ground forces because they have a military with nuclear capacity and nuclear weapons cost a lot of money. The Germans cannot have nukes.

Under the Nuclear Non-Proliferation Treaty and because the Americans are providing or providing them with sort of secondary nuclear capacity they have a lot of nuclear bombs on German territory plus 40,000 American soldiers. So Germany is not an independent country in this respect. It can however invest in conventional forces and German tanks have already once been close to Moscow. Why not try again? Now the European Union has a has a representative for foreign affairs which is a woman named Kaja Kallas. Nothing to do with a singer. Kaja Kallas from one of the Baltic states. And you don’t believe it that she has she has in her younger years when she was prime minister of Estonia, you see that she sort of moved up to Brussels because her homestead was so small that she had this idea that it would be a good idea to cut Russia in four or five different states then because then that problem would be solved forever.

Now it is hard to imagine that her army from Estonia or wherever she is from could do the job. So someone else has to do the job for her. And this is where today’s tricky politics between the west European countries, Russia, East European countries and the Baltics and plus Finland and the United States in the background where this very complicated game is being played on what sort of peace settlement you can have in Ukraine which would allow the Germans and basically the Germans to send ground troops into Ukraine as a sort of security guarantee and at the same time arm the Ukrainian army to be able to start any sort of provocation that they want and then involve the German troops into a war with Russia. Here’s the good news. Sometimes even people who we think are not very smart when it really gets hot they show insight.

Yesterday our new chancellor in Germany Merz publicly let it be known that there was no reason at all to talk about German ground troops in Ukraine because that was not an issue. That was the first time, and I think someone had explained to him what it means to have German troops in Ukraine and at the same time let me say one more and I mean these are these historical contingencies that are extremely important and that can result in major breaks in the system so to speak. Yes, that’s why I’m elaborating on them. Ukraine was in the inter war years basically divided between two factions. One was pro-Russian, the other was pro-German. Don’t forget that after Germany had conquered Ukraine there were six or seven SS divisions with Ukrainians that fought on the side of the Germans. While at the same time on the side of the Soviet Union there were several Ukrainian divisions were Russian speaking Ukrainians.

Whereas the Ukrainian speaking Ukrainians led by a notorious antisemite who, once the Germans were there, initiated several pogroms in western cities and was also anti-Polish that’s why the Poles are not enthusiastic about Ukraine. So Ukraine was always divided between these two and right now one also has to say in addition to the Ukrainians that were fighting on the side of the Soviet Union. After Stalin the majority of the members of the Politburo were Ukrainians including Khrushchev, whom people joked about because he spoke Russian with a Ukrainian accent but he didn’t care about it. That was quite normal. And mind you that Khrushchev was the commander of the ideological department so to speak or the propaganda department of the Red Army in Ukraine on the Ukrainian front. He was not just this fat guy. No, he was a real figure.

But he was someone who had drawn the conclusion from the second world war that you would not want to repeat the experience which is a conclusion that others had not drawn. The leader of the fascist of the fascist Ukrainian half so to speak ended his life in Munich because after the war the Germans helped their friends who had fought on their side escape. Incidentally, he lost his life because he was killed by a by an Russian or Soviet agent after a secret trial. They gave him a trial in Moscow where he was sentenced to death and then in sort of 1953 or so he was shot he’s buried in Munich and the Ukrainian ambassador to West Germany before and during the war sort of went to Munich to the cemetery once a year on the day of his assassination to lay down a wreath.

Class Unity: So, perhaps I could just follow up a tiny bit. We would like to move on to general questions about the political economy of war and talk about fascism and so on, but just to follow up a little bit for a moment on what you were just saying. It seems pertinent to bring up the debt brake in Germany. So especially because it connects so nicely to the discussion in the chapter from the book, right? Because you talked there about the fact that in the wake of the failures of the neoliberal austerity measures to sort of right the ship. There was a shift towards what you nicely call or at least your translators nicely called a twice bastardized Keynesianism. To sort of reassure everyone that public debt is fine after all and so on.

But then you sort of note that the exception was the German state that’s traditionally been very concerned to the point of a having a constitutional restriction on debt. But then of course since you wrote that and you know again this is not supposed to be a gotcha question it’s just a sort of it’s a striking development right against the backdrop of that history that in I think March of this year my understanding is and maybe I’ve got the legal situation wrong or something but the German lawmakers voted to essentially amend the constitution or at least to create an exception to something in the constitution about debt ceiling and it seems like the motivation was primarily to be able to continue to prosecute the war in Ukraine. So, I just wondered if you had any thoughts on that before we move on and how that fits in with the things you were just saying.

Wolfgang Streeck: It’s something that is important in the following sense. Many things that we think are cast in stone can now, in a crisis, suddenly become contingent and suddenly something that you would not have ever expected suddenly happens and people just say oh well like the national guard in Washington DC here in this case when I think I mentioned at the beginning that one of the things that I really think are a key to many things that we see is this tension—you can also put it like this—between the public cost of capitalism of the maintenance of capitalism and the private appropriation of surplus. In this case the government was certainly at the end of its capacity to provide for what capital and Germany’s allies, with their influence over German politics, what they were asking for it was a fiscal crisis. It still exists.

Now, after this we to our surprise not I but others to their surprise sort of see that the government is now fighting over another 30 billion an additional deficit they have discovered which cannot even be covered from what they did when they came into office. And that’s only six or seven months after they came into office. The costs of maintaining the political-economic regime. The costs of maintaining that regime and the resources that the public institutions can extract from the system in order to pay for this. These two are sort of moving apart. That’s what you call a fiscal crisis of the state. In situations like this when they really are underwater, they do astonishing things. That is not necessarily something to celebrate. The astonishing thing can include going to war. And I really urge you not to think that this is a momentary obsession.

In my generation we did comparative political economy without ever thinking about this possibility because, without thinking it through, we thought that this was over and out of the question. Now we’re learning that this never was out of the question. We’re now looking back and we’re seeing that there were things that we hadn’t seen like for example the military side of decolonization after 1945 or after the second world war the intervention in the Suez War the role of Israel in this context and so on. We now see that it was always present but we didn’t notice it. Now we have noticed it and we’re looking forward in the other direction and suddenly it becomes to me like we should not repeat that mistake. Sometimes they mean what they say.

And Brzezinski and all these people in the 1990s who told the Americans that they had to go into Ukraine in order to turn it into a NATO member and a part of the American alliance. Now we are reading these things again. We can now see this was not fun. They meant it. They meant it. And the presence of Joe Biden as the point person for Ukraine in the eight years of Obama. Now we see it was not like he was no that was serious. When the war began in 2022, the American high command, let it be known that in the past eight or so years, they had been able to bring the Ukrainian army to full compatibility with a NATO command structure. They’ve been working hard. That was no accident. We are now hearing that this idiot this madman Putin sort of somehow didn’t like Ukrainians and as a result he out of the blue attacked them.

No, that thing had a long preparation and it was in the context of the stabilization of the new world order which was to be unipolar and where it was not allowed for a country like Russia after Yeltsin had gone the 1990s were the worst time for Russia ever they had inflation rates they had all sorts of things suicides, everything, every bad indicator. In 1999, Yeltsin ran away and handed the thing over to this guy Putin who as a nationalist sort of began to try to recover some sort of independence from that system because he was afraid that system was going to suck him up.

Class Unity: I wanted to bring in Daniel to ask this question about fascism and political economy of war and so on. So Daniel, thanks. Okay. Yes. So I had a question about how you understand fascism the concept and how we could use the word today because it is being thrown around a lot especially when people say Putin’s a fascist and so forth. These easy labels which are just so convenient and opportunistic. So we have courses that we run on fascism and then recently the political economy of war in which we read your work and in both we read a lot of Michał Kalecki and Alfred Sohn-Rethel’s writings on how capitalism can come to depend on armament production for profits that certain decisive sectors need and we you know we’ve been exploring military Keynesianism and such topics and So your writings on Engels’s ideas and the capitalist mode of production seem very similar.

So what I want to ask you about is how do you think we should use the word and I guess whether the following idea seems productive to you. So the impression that some of us got from reading Kalecki and from reading Sohn-Rethel is that a common idea of fascism is wrong and that common idea is this. Fascists are basically something like violent nationalistic bigots. They get together, they do bad things, they start wars. If that’s what you mean, then we could disagree, but at least that’s in the ballpark of plausibility. Maybe Putin’s a fascist, maybe Trump’s a fascist, maybe Orban’s a fascist, and so on. Maybe Biden’s a fascist. Okay, but any rate, that definition is not adequate. They give a different definition of fascism in which it’s a political economic system in which the state guarantees profits for certain monopolistic sectors namely weapons manufacturers and adjacent types of corporations in a way which you know C.

Wright Mills called the privately incorporated permanent war economy. Now if this is true fascism never really was defeated. It never really ended. From 45 through Korea, through Vietnam, similar conflicts in former colonies, the arms race, the Cold War, right up to today’s multipolar struggle, multipolar geopolitical struggles. And so, do you see any value in redefining fascism such that it really is just a sort of system of a permanent war economy and maybe in that sense never really ended? Or what do you think about that idea?

Wolfgang Streeck: What’s in a word? I am hesitant to use these sort of very emotionally laden concepts. I say this because I’m in a world in which especially in this country, which is the second major supporter of Israel left in the world. They are discussing the question whether what is happening in Gaza is genocide or not. My god. For the people being killed, that makes no difference. Nor for me. I function on the assumption that if it walks like a duck, if it swims like a duck, if it quacks like a duck, then very probably it is a duck. That’s a sort of pragmatic theory of terminology. As for the concept of fascism.

In my own language I reserve it for a place where you have a Führer, a charismatic individual where you have a disciplined society that sort of lines up when the Führer comes, where you have biologistic concepts of racial purity where you kill people because they have a different view of what of what a painting is and this sort of thing. I grew up in Germany in a world in which the memory of this kind of place was very much present and I still think it had some unique features which make it advisable to have a unique term for it. As far as the permanent war economy, I absolutely think that C. Wright Mills did this; he was an incredibly good sociologist. I really admire the acuity of the things that he saw that other people didn’t see at the time.

And I also think that incidentally if you look back at the 1950s and, as I said, I was not born a Marxist I was a sort of social democratic leftist the only people whose writings on political economy make real sense in the 1950s and 1960s were these famous Marxists like American Marxists. I’m getting 80 years old and names are always disappearing. But you know what I mean. That these people really knew what a world is like in which you have states, in which you have capital and in which you have militaries. Now let me also say that one of the few things that I’m really proud of in the sense that I think I’ve really discovered something is when I was asked at a commemorative anniversary of Engels in Wuppertal where he was born to give a lecture on Engels and then I began to read Engels. And “Engels’s Second Theory” this title was not mine.

It was invented by this absolutely fantastic editor of the New Left Review Susan Watkins who read it and said ah that’s Engels’s second theory and the second theory in the sense that it adds to the economic theory of development a theory of the development of states in parallel and in interaction with the development of the capitalist economy. And there the role of arms, warfare, and the arms industry is inextricably sort of intertwined with the development of capitalism but in a multicausal relationship, not a one-way direction. So for example one of these fascinating historical things as we all know the Fordist economy depends on the invention of the idea of interchangeable machine parts. And the invention was made by a man named Colt who produced Colt revolvers for the American military in the American Civil War. Very often, important industrial innovations were invented for military purposes.

And one reason why the North defeated the South was that the north had access to modern manufacturing of military equipment. Yes. I then began to look at Engels after Marx was dead. There is a story that Marx had asked him to contribute a chapter to capital one on the military and Engels could write very quickly, but he refused to do this. My theory if this is true is that he knew that squeezed into the schematism of the Marxian theory of capitalism it wouldn’t really fit. It was not in conformity with the systemic idea because in my view when you talk about the war you talk about Machiavelli when you talk about capitalism you talk about Marx but Machiavelli is sort of agency planning politics Marx is the logic of evolution and squeeze these two in one and it gets difficult.

Maybe Marx would have been able to do it had he been able to write the second book after capital which was called the state and then he had three or four other books which he also wanted to write but he got stuck in the first one in capital. When I looked at what Engels was doing after Marx had died, it turned out that he spent almost all of his time apart from translating Marx and doing research on the weaponry of European states at the time. He had long lists of what kind of pistols the Russian army had, the British army had and he was positivistically absolutely fascinated with these technologies and then he came to the conclusion which I would write in this article that what he was seeing was an arms race.

Comparable to the competitive race of national industries and that arms race was extremely dangerous because it might get out of control and then in sort of in the early 1880s I think he wrote in a letter to a friend what I see coming is a global war with about I think 30 million dead and the working classes will have to fight on the side of their rulers. But after the war when the war is over they will rise up in revolt and they will bring the socialist forces. What he had not understood was that in that war the socialists of all countries would sort of side with their government not with the socialist international. In the article I say that the reason is relatively simple because under capitalism you could have an economic crisis and many people would starve many people would die.

In a war, it was absolutely clear that if you lost the war, even if you won, the sacrifice would be much bigger, much more was at stake. For the Belgians to be conquered by the Germans, they would rather have a big economic crisis. Yes. And so I began to understand when I gave that lecture which I later translated into English for the New Left Review. When I gave that lecture, it became clear to me that I would have to spend much more time thinking about this intertwinement of economic development and state development. But that assigns a role to the state which is not just an instrument in the hands of capital. It has its own role. The good news is that peace can be made between states on the basis of the separate interests of states not just the economic interest in economic conquest.

There is something here with a logic of its own, which could lead to war but also to peace Diplomats explain that you have to set everything else aside and look at the interests of states One lesson I learned is that the moment one side says the other is morally wrong and we are right, negotiation is over. You can’t do this. What you can do is you can talk about interest and then see whether you can align these interests in a way that excludes warfare. That’s something that Engels didn’t know yet or something that he thought was improbable because he thought technology-driven arms races will finally end in the war that then actually came.

Class Unity: Thank you so much Wolfgang. We’ve already run a little longer than we said we would. And there are so many more questions we’d love to ask you. We’ve had a great deal of your time and we’re extremely grateful to you for taking the time. We would love to talk to you again sometime about other topics perhaps about the state of the left and the current political moment and perhaps invite you to play the prediction game a little bit. In any event, thank you so much for making the time today. And on behalf of all the members of Class Unity, we’re very grateful and we were honored that you would join us. So thank you so much.

Wolfgang Streeck: Bitte, bitte.

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